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Kruse v. Kruse

February 1, 2008


On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Passaic County, FM-16-861-03.

Per curiam.


Submitted January 8, 2008

Before Judges Fuentes and Chambers.

Defendant appeals from the denial of her post-divorce judgment motion seeking to increase her alimony award. She contends that plaintiff misrepresented his income when the property settlement agreement was negotiated, and that as a result, she is entitled to an increase in alimony. Because no factual basis is present to support an increase in alimony, we affirm.

The parties were married on September 2, 1978, and had three children, born in 1982, 1986 and 1988 respectively. Two earlier complaints for divorce had been filed. The first complaint was withdrawn. The second complaint was dismissed pursuant to a stipulation entered by the parties on July 2, 2002, providing that the filing date of that complaint, namely, June 28, 2001, would be the effective date for subsequent divorce complaints "with respect to all issues, including but not limited to, the valuation date for equitable distribution." The complaint in this action was filed a few months later on November 21, 2002. As a result, June 28, 2001, was the date used as the relevant financial date in these proceedings. Defendant hired financial experts who explored plaintiff's financial status on her behalf.

A Judgment of Divorce was entered on January 29, 2004, and a property settlement agreement, executed by the parties in June 2004, was incorporated into the Amended Dual Judgment of Divorce, dated July 14, 2004. The provisions of the property settlement agreement provide defendant and her children with substantial financial support. Plaintiff must make the following payments on defendant's behalf: $65,000 per year to defendant in alimony; the full lease payments on defendant's automobile until the expiration of the current lease then in effect, followed by $600 monthly payments for an additional thirty-nine month lease; insurance payments of $1,400 per year on her automobile for the duration of both leases; and all expenses on the marital home until it was sold. With respect to the children, plaintiff is required to pay child support in the sum of $15,000 per year for the youngest child, as well as the children's college expenses, automobile expenses, and medical expenses.

In the property settlement agreement, the parties acknowledged that they owned the following real estate assets, with the following stipulated net values: a Delray Beach, Florida property, worth $171,522; a Boca Raton, Florida property, worth $248,301, and two properties in Paterson, New Jersey, worth $8,508 and $100,000 respectively. In addition, the parties owned their marital home in Wayne, New Jersey. Plaintiff's business was valued at $547,000, and the cash surrender value of plaintiff's life insurance was valued at $85,000. The property settlement agreement effectively distributed these assets equally between the parties.

In the property settlement agreement, both parties represented that "the financial provisions provided herein, including equitable distribution and alimony, will enable each of them to maintain a reasonably comparable style and standard of living to that which was enjoyed by them during the marriage."

In June 2006, defendant filed a motion to increase her alimony by an additional $27,000, contending that plaintiff had misrepresented his income when the property settlement agreement was negotiated. She maintains that the property settlement agreement was negotiated based on plaintiff's representation that his income for 2003, including business perks, was $240,000, and would be similar for 2004. However, defendant asserts that she has reason to believe that plaintiff's adjusted gross income for 2004 was $343,000, and as a result, she is entitled to an additional $27,000 based on the formula that the parties had used to calculate alimony.

Defendant contends that she should be relieved of the alimony provisions of the final judgment of divorce by application of Rule 4:50-1(c), which allows a judgment to be set aside if it is the result of "fraud . . . misrepresentation, or other misconduct of an adverse party," and Rule 4:50-1(f), which allows a final judgment to be set aside for "any other reason justifying relief." Indeed, a property settlement agreement may be set aside where there has been fraud or overreaching or mistake by one party and concealment of material information by the other. Capanear v. Salzano, 222 N.J. Super. 403, 407 (App. Div. 1988).

The trial judge denied the application. His reasons for doing so are set forth in a handwritten note at the foot of the order of November 6, 2006, denying the motion. That note states:

As to Defendant's motions, Defendant failed to establish [that] she was entitled to relief per R. 4:50-1. [The] parties' PSA contained [a] specific representation by Defendant that [the] amount she received as alimony enabled her to maintain [a] similar lifestyle. That lifestyle and need [was] established by [the] parties during [the] litigation through discovery and [the] employment of forensic accountants by both parties. Plaintiff's CIS from 2003 also reflects total income (gross) of approximately $270,000. [The] fact that he [plaintiff] earned more after [the] divorce does not entitle Defendant to share in those earnings (as compared) to child support.

This case is clearly distinguishable [from one] where a spouse hides assets that are later discovered. Here Defendant acknowledged that [the] amount Plaintiff paid to her satisfied her needs. If it did not, she did ...

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