August 13, 2007
JANET I. YOUNGBLOOD, PLAINTIFF-RESPONDENT,
ALBERT S. YOUNGBLOOD, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Union County, FM-20-1252-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 25, 2006
Before Judges Stern, Collester and Messano.
Defendant Albert S. Youngblood appeals from a post-judgment order of August 12, 2005, directing the sale of the former marital home to satisfy a condition of the property settlement agreement (PSA) with plaintiff Janet I. Youngblood which was incorporated into a final judgment of divorce dated December 9, 2004. We affirm in part and reverse in part.
Under the terms of the PSA the parties waived their right to alimony and settled equitable distribution of the two main assets, the marital home in Linden and defendant's retirement accounts. In paragraph 10 of the PSA it was agreed that plaintiff would transfer her one-half interest in the marital home and would received fifty percent of its value, which amounted to $89,193.46. With respect to their remaining assets, it was stated in paragraph 11 that defendant was to pay plaintiff the sum $128,000 as equitable distribution of his retirement assets. Paragraph 10 also stated that defendant agreed to pay a portion of these monies as part of his refinance of the mortgage on the marital home. The defendant was to obtain an $25,000 from refinancing the mortgage which would be paid to plaintiff to reduce the amount of $128,000 to $103,000. Paragraph 11 further provided:
Payment of the balance he owes her of $103,000 plus a twenty-five percent (25%) surcharge for a total of $128,750 will be paid by way of Qualified Domestic Relations Order (QDRO) rollover from the husband's pension within 45 days after the final judgment of divorce. If this has not or cannot be effectuated, then the property will have to be sold and wife will receive $103,000 from the net proceeds and there will be no payment of the 25% surcharge. The parties will equally share all the costs that are reasonable and necessary in effectuating this including preparation of the QDRO.
Following the entry of the final judgment of divorce, defendant refinanced the mortgage, removed plaintiff's name from the mortgage, and paid her $89,193.46 for her one-half interest in the home. Defendant also satisfied the requirement of paragraph 11 that he pay $25,000 from the refinanced proceeds toward plaintiff's interest in the retirement account.
Paragraph 11 therefore gave the defendant two options to pay the remaining $103,000: (1) payment of $103,000 plus a twenty-five percent (25%) surcharge totaling $128,750 by way of a QDRO rollover from defendant's pension within forty-five days or (2) sale of the marital home with plaintiff to receive the total sum of $103,000. Defendant sought to pay the total amount inclusive of the twenty-five percent surcharge through the option of a QDRO.
Shortly after the entry of the judgment of divorce, defendant contacted Pension Appraisers, Inc. for the purpose of preparing a domestic relations order (DRO) which was subsequently prepared and submitted to plaintiff. He then submitted it to Peter Gorman at the New Jersey Division of Pensions and Benefits since defendant's pension was for public employment. The response from Gorman was that if a court order inclusive of the DRO was executed, it would be implemented after defendant retires and begins to receive monthly retirement payments or after defendant terminated his employment and applied for a withdrawal. Mr. Gorman also pointed out that under DRO in the event of defendant's death, plaintiff would no longer receive distribution from the pension.
Plaintiff responded through counsel objecting to the fact that since defendant's pension could not be "rolled over," plaintiff would not possess survivorship benefits and could well receive less than the proper amount for equitable distribution. Plaintiff asserted that she never agreed to receive monthly payments to limit her equitable distribution depending on defendant's life or her own life.
Efforts to settle the matter, including assistance of an outside attorney experienced in dealing with QDROs and DROs, were unavailing, and on June 30, 2005, plaintiff moved to compel the sale of the marital home. Defendant responded with a cross-motion to enforce the DRO, certifying that it was never the understanding of either party that plaintiff would receive the remaining amount of equitable distribution owed to her under the PSA immediately since the money would not be available until the defendant retired. He further stated that the fact that the $103,000 was increased by twenty-five percent evidenced the understanding of the parties that plaintiff would not be receiving the funds immediately. In response, plaintiff argued it was the understanding of all parties at the time of the execution of the PSA that the purpose of paragraph 11 was to enable plaintiff to gain control of all equitable distribution funds to her by way of a QDRO.
The Family Court judge stated that defendant's pension could only be placed into a DRO and not into a QDRO and that under the DRO it would not be possible for a rollover. The judge then determined that the marital home would have to be sold. The court further rejected defendant's argument that a plenary hearing was necessary because the judge found that the language of paragraph 11 in the PSA, mandating that the funds be placed in a QDRO and rolled over, clearly stated that placing funds in a QDRO or DRO would not be sufficient if the funds could not be rolled over. Therefore, the court determined that the PSA mandated sale of the marital home. Finally, the judge awarded a counsel fee to plaintiff in the amount of $925 for her counsel as well as an additional counsel fee of $375 for the fees of the outside attorney, finding that defendant was acting unreasonably in resisting the sale of the marital home in light of the clear language of the PSA. This appeal followed.
Defendant argues that the trial judge interpreted paragraph 11 of the PSA in a way that does not reflect the original intent of the parties. He asserts that the terms QDRO and DRO are often used interchangeably and that the only significant difference between the two terms is that a QDRO is prepared for private pensions with a DRO is prepared for public pensions. He further asserts that under either a DRO or a QDRO, the alternate payee would be paid on a monthly basis, consistent with the intent of the parties. He claims that the parties never intended for the plaintiff to receive an immediate rollover since a rollover would generally not require the construction of a QDRO, and paragraph 11 of the PSA makes no reference to rolling over the funds into a separate account in plaintiff's name as would be normally stated with the rollover of an account. He further argues that the fact that plaintiff was offered an additional twenty-five percent payment through the QDRO evidences the parties' understanding that plaintiff was not to receive the funds immediately, since there would be no reason for plaintiff to be paid an additional twenty-five percent if she was to receive the payment in forty-five days. Furthermore, he asserts that the original letter from plaintiff's counsel objected to the proposed DRO only for the reason that he did not provide survivorship benefits, and did not claim that an immediate rollover was required under the PSA or that the plaintiff objected to the monthly payments.
In response, plaintiff argues that trial judge properly recognized that the language of the PSA was clear and that because a rollover was not possible, defendant was required to sell the marital home. She contends that the purpose of paragraph 11 was to provide defendant with a way to avoid selling the marital home through completing a rollover of his pension. She states that the twenty-five percent surcharge that would be added to the amount owed to plaintiff in the event that his pension was rolled over into a QDRO was factored into the agreement in recognition of the fact that she would not be receiving current dollars and would suffer tax consequences and other penalties in the event she wished to access the funds.
We note initially that consideration of previous settlement negotiations is not evidence of an interpretation of the language of the PSA since N.J.R.E. 408 specifically excludes evidence of statements or conduct of parties or their attorneys in settlement negotiations with or without a mediator.
We next turn to the language of the agreement. It is a cardinal rule that to determine the meaning of the terms of an agreement by the objective manifestation of the parties' intent, the terms of the contract must be given their plain and ordinary meaning. Nester v. O'Donnell, 301 N.J. Super. 198 (App. Div. 1997). However, "a court should not torture the language of a contract to create ambiguity." Id. at 210; see also Stiefel v. Bayoy, Martin & Fay of Conn., Inc., 242 N.J. Super. 643, 651 (App. Div. 1990). Where the terms of a contract are clear and unambiguous, there is no basis for a court to consider any interpretation or construction other than the terms as written and to enforce those terms. Schor v. FMS Financial Corp., 357 N.J. Super. 185, 191 (App. Div. 2002) (quoting Carl's Sales & Service, Inc. v. Gimbel Bros. Inc., 249 N.J. Super. 487, 493 (App. Div.), certif. denied, 127 N.J. 548 (1991).
We agree with the motion judge that the terms of the PSA are clear and unambiguous and require the sale of the marital home. Since the defendant did not or could not deliver the rollover of the monies via the QDRO or the DRO, the alternative contained in the PSA of the sale of the marital home with proceeds to be paid to the plaintiff in the amount stated was required. We also concur that since the language is clear on its face, there was no error in the decision of the motion judge denying defendant's application for a plenary hearing to discern the intent of the parties.
However, we disagree with that portion of the order entered by the motion judge stating that:
To the extent that the proceeds [from the sale of the marital home] are not sufficient to pay the balance due to the plaintiff, then the balance shall be distributed to her from the defendant's Defined Contribution Pension Plan, and if that is not sufficient, then the balance shall be paid from a Domestic Relations Order against the defendant's retirement benefits.
Defendant argues that the trial judge erred in making this order because in doing so, she expanded the terms of the PSA by requiring defendant to make payments to plaintiff from his pension or DRO if the sale of the marital home does not yield enough equity. Plaintiff responds that the motion judge did not abuse her discretion by directing payment to her from sources that were not listed in paragraph 11 of the PSA since it is clear that defendant would have insufficient equity from the sale of the marital home to pay the required amount and that the judge thereby avoided further post-judgment motions.
The assumption by the motion judge that the forced sale of the marital home would not yield sufficient money to pay defendant's obligation under the PSA presents a situation that was not considered in the PSA. We cannot predict the amount of proceeds to be realized as a result of the sale of the marital home. Assuming the amount is insufficient, defendant should have the opportunity to set forth his position on the consequence of the silence of the PSA. Accordingly, we reverse this portion of the motion judge's order and remand for consideration by the motion judge after the house is or was sold and if there exists a shortfall.
Finally, we affirm both the award and the amount of counsel fees for the reasons stated by the motion judge.
Affirmed in part. Reversed in part.
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