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Newell v. Hudson

March 16, 2005


On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, L-2763-01.

Before Judges Newman, Axelrad and R.B. Coleman.

The opinion of the court was delivered by: Axelrad, J.T.C. (temporarily assigned).


Submitted February 2, 2005

Defendant Dora Hudson ("Hudson") appeals from two orders for summary judgment in favor of plaintiff Paul E. Newell, Charles S. Adubato*fn1 and their law firm (collectively referred to as"Newell"), dismissing her counterclaim for legal malpractice and awarding attorneys' fees and costs to Newell on his affirmative claim for services rendered to defendant in her divorce litigation.

At issue in this appeal is whether a litigant who either lied, or later claimed she lied, about her understanding and voluntary acceptance of the terms of her property settlement agreement, in order to induce the court to accept and incorporate it into a judgment of divorce, is judicially estopped from asserting a claim for malpractice against her matrimonial attorney based on the settlement. The trial court found she was. We agree and affirm.


Hudson, an accountant, retained Newell to defend her in a matrimonial action filed by her then-husband Mark Hudson. The parties had a nine-year marriage with no children. On the trial date, January 31, 2001, after lengthy negotiations and discussions with her attorney, Hudson signed an Inter-spousal Agreement. The settlement agreement provided, among other terms, for Hudson to receive limited duration alimony of $3,000 per month for four years*fn2 "based upon an annual income to [husband] of $175,000 base pay plus discretionary bonus and an annual income to [Hudson] of $60,000." The agreement also provided for an even distribution of non-personal property assets, including the marital home and investment accounts. The agreement contained the following pertinent language:

6.1 Knowledge of Facts

[Husband] and [Hudson] expressly acknowledge that this Agreement has been prepared without exchange of financial statements, records, and other documentation pertaining to his or her financial status, income, expenses, assets, and liabilities, as each party is satisfied that he or she is aware of the other's financial circumstances. The parties have exchanged Case Information Statements and waive their right to further discovery, including interrogatories and depositions, as each is satisfied that the financial condition of the parties is as stated in the Case Information Statements. Each party represents to the other the completeness, truthfulness, and accuracy of representations made by the other party, with the understanding that the other party is relying thereon in accepting the terms of the settlement contained herein and execution of the within Agreement. In the event that either party has willfully misstated his or her financial status, income, expenses, assets, or liabilities, the other party shall be entitled to file an appropriate application with the court.

6.3 Voluntary Execution

The parties each acknowledge and represent that this agreement has been executed by them, and each of them, free from persuasion, fraud, undue influence, or economic, physical, or emotional duress of any kind whatsoever exerted by the other party. Prior to Hudson signing the agreement, Newell had given her a copy of our Supreme Court's decision in Crews v. Crews, 164 N.J. 11 (2000), and explained the concept of alimony and advised her that the amount of alimony she received might depend, in part, on the marital standard of living. When Hudson told Newell she wanted permanent alimony, he advised her she would likely only receive limited duration alimony and suggested they attempt to negotiate the amount.

After entering into the agreement, Hudson and her husband each testified that they understood and voluntarily consented to the terms of the agreement. Paraphrasing her testimony, Hudson further stated:

The limited duration alimony would permit her to maintain the standard of living she enjoyed during the marriage for at least the next four years; She understood that if the divorce went to trial she might get more or less alimony than provided by the agreement; The agreement was a compromise but was a fair deal; and She had discussed the settlement with Newell at great length throughout the course of the day and he had answered all of her questions.

Based upon this testimony, Judge Locascio approved the agreement which was incorporated into a final judgment of divorce.

On or about February 1, 2001, Hudson wrote a letter to Newell in which she stated she felt "pressured and intimidated by [her husband's counsel], the Judge, and [Newell]," and took issue with the adequacy of Newell's preparation and legal representation. Newell replied in a February 3, 2001 email, expressing his belief that Hudson would have received less alimony had the case proceeded to trial. He noted that she had reviewed the settlement carefully over approximately eight hours of negotiations between the parties and that she had testified under oath she understood the terms of the settlement agreement and voluntarily entered into it.

Hudson retained different counsel who filed a motion to modify or set aside the divorce judgment on the grounds that her husband had misrepresented his income in that his bonus was not discretionary but was guaranteed. The following colloquy transpired at oral argument on April 12, 2003:

[HUDSON'S COUNSEL]: My client would just like me to point out, Your Honor, that her main contention... is that the salary stated in the property settlement agreement from Mr. Hudson at [$]175[,000] wasn't entirely accurate, that his salary is actually [$]260,000.....

[MARK HUDSON'S COUNSEL]: First of all, Judge, there's no mistake whatsoever. If you look at her own case information that she had filed the previous year, she knew what my client's income was... She said $290,000... In addition, on the day we were coming in for trial her attorney had... sent the proposal for resolution of this matter [stating]..."Your client will be free and clear to enjoy his $225,000 per year income."

I mean, all along we've discussed this based upon my client making more income. The only thing was that [$]175[,000] was his base. There was no mistake here, absolutely not... I attached the previous certifications [6/7/00] that were filed with the Court in her pendente lite motion. She was fully aware of how much income [her husband] made.....

THE COURT: Let me see. Paragraph 2. ["] He described his income as [$]175[,000] annually, plus a discretionary bonus. The Court should be made aware that this discretionary bonus has been as high as [$]50[,000]..." So she knew that.....

[HUDSON'S COUNSEL]: She's saying that it's not discretionary, the property settlement agreement is wrong.....

THE COURT: She knew about a bonus of every year of $50,000 in her own certification. She's playing fast and loose with semantics, counsel. She's jumping on the word discretionary when her own certification indicates she knew darn well he got it.

Following oral argument, Judge Locascio denied Hudson's motion and awarded her husband $1250 in ...

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