On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County.
Approved for Publication April 20, 1995.
Before Judges Pressler, Landau and Conley. The opinion of the court was delivered by Conley, J.A.D.
The opinion of the court was delivered by: Conley
These are two consolidated appeals by defendant arising from the trial Judge's factual determination, rendered without a plenary hearing, that on May 3, 1993 the parties had reached a binding oral property settlement agreement. As a consequence of that determination, on October 21, 1993 an order was entered directing that the parties' agreement was "hereby enforced", and various other more specific enforcement orders were entered on November 16, 1993, November 24, 1993, January 3, 1994, March 7, 1994 and March 25, 1994. In addition on January 3, 1994, a final judgment of divorce incorporating the unsigned disputed property settlement agreement was entered. Along the way, the trial Judge denied defendant's motion for reconsideration, motion to vacate the judgment of divorce pursuant to R. 4:50-1 and to modify the child support and alimony provisions of the alleged agreement pursuant to Lepis v. Lepis, 83 N.J. 139, 416 A.2d 45 (1980), and motion to stay all provisions of the judgment of divorce that required immediate payments. Defendant appeals these various orders and the entry of that part of the final judgment which incorporates the agreement. We reverse and remand for a plenary hearing to determine first whether there was an agreement. If not, all subsequent orders of enforcement must be vacated and the matter listed for trial. If it is determined that there was a binding agreement, then defendant's R. 4:50-1 and Lepis motion should be reconsidered after the filing of current case information statements and a plenary hearing. In the event of such a hearing, further enforcement of the agreement will be governed by the outcome thereof. *fn1
Married in 1978, a complaint for divorce was filed in May 1991. The parties have two young children and their married life style was apparently fairly comfortable, funded by the defendant's successful advertising partnership. The financial complexity of the parties' circumstances is not insignificant. The matter was listed for trial on May 3, 1993. Prior thereto, the only settlement effort we are advised of is plaintiff's attorney's statement in his initial certification that he had sent a "letter demand ... outlining our settlement position."
On May 3, 1993, both parties, their attorneys, and defendant's accountant were present and engaged in a settlement conference in the cafeteria of the courthouse for a number of hours. It is without question that substantial progress was made and all parties were optimistic. Whether there was anything more than an agreement to draft a proposed property settlement agreement for the parties to read and, if acceptable, sign, is the critical issue. Most assuredly, as far as we can tell, the parties did not report to the Judge or place on the record that a binding agreement had been reached.
The conduct of the attorneys subsequent to May 3, 1993 and up to June 15, 1993 when defendant's then attorney advised that defendant had fired him and would not execute the draft agreement, would suggest not. For instance, although, as pointed out by plaintiff's attorney in his initial certification, defendant's attorney on May 7, 1993 did forward "one-half of certain monies which he had been holding in a trust account ... pursuant to the settlement we had agreed upon," the attorney expressly stated in the May 7, 1993 covering letter "of course, the above payments are made without prejudice and shall be taken into consideration if the Property Settlement Agreement is not finalized by the parties." Moreover, although the parties dispute the materiality of various changes made to the initial proposed written agreement, it is undisputed that the document went through a series of revisions which do not seem insignificant to us. The agreement itself as it went through the revisions was variously referred to as the "proposed" property settlement agreement by defendant's accountant in his May 26, 1993 tax credit letter to defendant's attorney and as the "revised" property settlement agreement in a June 14, 1993 fax from plaintiff's attorney to defendant's attorney.
To be sure, in support of her July 1993 order to show cause seeking enforcement of the agreement, both plaintiff and her attorney filed certifications asserting that an agreement was reached "on virtually every single issue in the case." Counsel's certification outlined only one remaining issue, that concerning the manner of defendant's contribution to a purchase of a new car for plaintiff. As defendant's then attorney's responding certification pointed out, and as the various revisions to the proposed agreement themselves reveal, there were at least two other issues, one relating to termination of alimony in the event plaintiff commenced co-habitation, and one relating to the tax consequences arising from the sale of the marital home.
At the time of plaintiff's order to show cause application, counsel for defendant filed a certification which neither denied nor affirmed the existence of a binding agreement but simply asserted additional outstanding issues. Defendant, however, filed a reply certification in which he adamantly disagreed that the parties had reached a final and binding agreement on May 3. "What was decided was that plaintiff's attorney would draft the proposed settlement agreement documents so that we could see the proposal in print, however, it was never stated that the oral agreement was final and binding ... I understood that the agreement was not binding until signed or put on the record."
If the parties critical disagreement as to the existence of a binding agreement on May 3, 1993 was at all unclear at the time of plaintiff's initial order to show cause, the certification subsequently filed by defendant's former attorney in support of the subsequent R. 4:50-1 application could not be clearer. Because plaintiff has made much of this attorney's initial certification, not so much for what it says but for what it does not say, we set forth verbatim the critical portions of the February 3, 1994 certification:
2. There is no question in my mind that we did not reach an agreement on May 3, 1993. We sat in the cafeteria and talked about a number of issues but never reached an agreement. Many issues were discussed primarily between the attorneys, subject to further Discussion. At the end of the day, we agreed that we had progressed to the point where Mr. Nagel could draft a proposed document which was to be forwarded to me, subject to my review and the review of my client and Mr. Nagel's client.
3. All of the Discussions regarding equitable distribution which occurred on May 3rd contemplated that Mr. Harrington's business would continue to function as it has in the past. Our Discussion relating to support contemplated that Mr. Harrington would continue to receive a yearly bonus which would enable him to pay the plaintiff weekly support.
4. Indeed, although everyone wanted to settle the case, we contemplated the possibility that the case might not be settled. Accordingly, when I forwarded certain funds to Mr. Nagel, I specifically provided that in the event that no property settlement agreement was finalized, the funds would be a credit against Mr. ...