May 21, 2008
WILLIAM K. FOERSTER, PLAINTIFF-APPELLANT,
SUSANN S. FOERSTER, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-538-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted May 7, 2008
Before Judges Simonelli and King.
Plaintiff, William K. Foerster, appeals from a post-judgment order holding him in violation of litigant's rights for failing to pay defendant Susann Foerster, pursuant to the parties' property settlement agreement (PSA), incorporated into the final judgment of divorce. Plaintiff also appeals from the denial of his cross-motion, pursuant to Rule 4:50-1, seeking relief from the PSA and a credit against the amount due to defendant as a result of her alleged non-disclosure during discovery of all of her financial assets. We find no legal error or abuse of discretion and affirm.
On October 27, 2004 plaintiff filed a complaint for divorce. Trial was scheduled for January 22, 2007. On the trial date, the parties engaged in extensive settlement negotiations, which resulted in a proposed agreement. The judge granted the parties' request for additional time to prepare and execute a written settlement agreement, and instructed them to return on January 29, 2007 to formalize the case as uncontested.
On January 29, 2007 plaintiff objected to the proposed PSA because defendant failed to disclose during discovery the full extent of her financial assets. He contended that his agreement to settle had been based on the information obtained during discovery. He requested an adjournment to investigate the true extent of defendant's financial assets subject to equitable distribution.
The judge denied plaintiff's request, but suggested that the settlement agreement contain a "carve out" clause giving them the right to engage in post-judgment discovery on the issue plaintiff had raised. The parties agreed and the suggested "carve out" clause was placed on the record. They also modified and executed the PSA which then provided:
Both parties are entitled to engage in post judgment discovery to determine if additional accounts exist at any banking institution which were not disclosed in discovery and which were subject to equitable distribution. In that event, either party is entitled to have the issues resolved on plenary hearing or motion with fees, if appropriate.
The judge entered a final judgment of divorce on January 29, 2007 which incorporated the terms of the PSA. Pursuant to the PSA, plaintiff was required to pay defendant approximately $39,500 within thirty days. The exact amount was to be determined at a "closing," with each party required to exchange all documents pertaining to the credits claimed with the calculation of the final amount due at least five days prior to the closing. Based on the documents provided to her by plaintiff, defendant calculated the amount due to her under the PSA as $38,130.21.
The closing did not take place and plaintiff did not pay defendant the sum as required by the PSA. On March 28, 2007, thirty days after payment to defendant was due under the PSA, plaintiff served subpoenas on Sovereign Bank and Investors Savings Bank, two banks where defendant had accounts.
On May 3, 2007 defendant filed a motion to enforce litigant's rights -- to compel plaintiff to pay her $38,130.21 pursuant to the PSA. Defendant requested oral argument on her motion. On May 18, 2007 plaintiff filed his opposition to the motion, and a cross-motion pursuant to Rule 4:50-1, seeking relief from the PSA and a credit in an amount between $12,000 and $24,000, which represented the amounts in defendant's allegedly undisclosed bank accounts, which plaintiff claimed were subject to equitable distribution. Plaintiff's supporting certification was twenty-five pages long, the page limit permitted by Rule 5:5-4(b), and although certain exhibits were referenced in the certification, those exhibits were not attached to it; he did not request oral argument on his cross-motion.
On May 21, 2007, without seeking leave of court, plaintiff filed a supplemental certification containing the missing exhibits which was not received by defendant until May 24, 2007. Defendant filed her opposition to the cross-motion on May 22, 2007.
On June 8, 2007, without holding oral argument on the parties' cross-motions, the judge issued two orders; one granted defendant's motion and directed plaintiff to pay the sum of $38,130.21, the other denied plaintiff's cross-motion. The judge placed his statement of reasons on the record.
Plaintiff appeals from the denial of his cross-motion for relief from the PSA. In his point A, he contends that the trial judge abused his discretion by not entertaining oral argument both because defendant requested oral argument on her motion to enforce litigant's rights, and because his cross-motion raised substantive issues deserving argument. He contends in his point B that the judge abused his discretion by not considering his supplemental certification, filed before the return date of the parties' cross-motions. In his point C, he contends that the judge erred by not providing sufficient findings of fact and conclusions of law supporting his denial of the claim for credits. In point II of his reply brief, he responds to defendant's opposition by arguing that she is equitably estopped from claiming he is not entitled to credits.
In denying plaintiff's cross-motion, the judge found that he offered no valid defense to his obligation to pay defendant the amount required under the PSA. He provided only an unsupported claim of non-disclosure or fraud by defendant. The judge did not consider his supplemental certification with supporting documentation, filed without leave of court, out-of-time, and in violation of the page limits in Rule 5:5-4. The judge did not address the merits of plaintiff's request for a credit other than to observe that he did not provide any evidentiary support for that claim.
Plaintiff first contends that the judge abused his discretion by not entertaining oral argument on the parties' cross-motions. Rule 5:5-4, consistent with Rule 1:6-2, provides that "the court shall ordinarily grant oral argument on substantive and non-routine discovery motions[.]" While the decision to grant oral argument is discretionary, "there is a strong presumption favoring argument of motions other than calendar matters and routine discovery applications." Pressler, Current N.J. Court Rules, comment 1.1 on R. 5:5-4 (2008). See also Mackowski v. Mackowski, 317 N.J. Super. 8, 14 (App. Div. 1998) (holding denial of oral argument is an abuse of discretion where significant substantive issues are implicated and argument is requested).
Oral argument may be denied, however, if the court is satisfied that the motion is based on unsubstantiated allegations, is frivolous, repetitive, or is intended to harass the former spouse. Kozak v. Kozak, 280 N.J. Super. 272, 274-76 (Ch. Div. 1994), certif. denied, 151 N.J. 73 (1997). See also Raspantini v. Arocho, 364 N.J. Super. 528, 531-32 (App. Div. 2003) (request for oral argument of substantive motion may be denied provided that reason for denial is set forth in record). Similarly, a plenary hearing is not mandated merely by the filing of a motion. Barrie v. Barrie, 154 N.J. Super. 301, 303 (App. Div. 1977), certif. denied, 75 N.J. 601 (1978). Rather, a moving party must make out a "sufficient prima facie case" to warrant a plenary hearing. Skillman v. Skillman, 136 N.J. Super. 348, 350 (App. Div. 1975).
Here, plaintiff did not request oral argument on his cross-motion. While defendant did request argument on her motion, the substance of her motion was decided through the consent of the parties. Thus, her motion was appropriately decided on the papers. The better course might have been to entertain oral argument on both motions. However, because defendant simply sought to enforce the PSA, and plaintiff's application was based on unsubstantiated allegations, deciding both motions without oral argument did not constitute a clear abuse of discretion in these circumstances and was not reversible error.
Next, in his point B, plaintiff contends that the judge abused his discretion by not considering plaintiff's supplemental certification, filed prior to the return date of the parties' cross-motions. Plaintiff's original certification was missing the exhibits which allegedly substantiated his claim of non-disclosure by defendant. This supplemental certification rectified that error.
A trial judge has discretion to permit supplemental certifications, and that "discretion should be exercised to increase, not limit, the likelihood that the information before the court reflects the facts that could be adduced" at a hearing. Sholtis v. Am. Cyanamid Co., 238 N.J. Super. 8, 17 (App. Div. 1989). "It is a mistaken exercise of judgment to close the courtroom doors to a litigant whose opposition papers are late but are in the court's hands before the return day for a motion which determines the meritorious outcome of a consequential lawsuit." Tyler v. N.J. Auto. Full Ins., 228 N.J. Super. 463, 468 (App. Div. 1988). "Of course, if the additional information made no difference in the ruling, then the admission or exclusion of the material is of no moment." Sholtis, supra, 238 N.J. Super. at 18.
The judge's failure to consider plaintiff's supplemental certification did not act to "close the courtroom doors" on his motion. In deciding the cross-motions on their merits, the court properly considered plaintiff's timely opposition and cross-motion, together with his supporting letter memorandum and certification. The judge merely refused to consider his supplemental certification, filed without leave of court, out-of-time, and in violation of the page limits in Rule 5:5-4(b), since the original certification reached the twenty-five page limit. Plaintiff did not attempt to explain his failure to seek leave of court, or why the information contained in the supplemental certification was not provided in his original certification.
Further, as defendant argues in her opposition brief, the information contained in the supplemental certification would not have entitled plaintiff to the relief he sought because it consisted of unsubstantiated allegations. "The equitable authority of courts to modify property settlement agreements executed in connection with divorce proceedings is well established." Miller v. Miller, 160 N.J. 408, 418 (1999). "[A]pplications for relief from equitable distribution provisions contained in a judgment of divorce and property settlement agreements are subject to [R. 4:50-1] . . . ." Pressler, Current N.J. Court Rules, comment 6.1 on R. 4:50-1 (2007) (citing Miller, supra, 160 N.J. at 418).
Relief from a final judgment under Rule 4:50-1 is not granted lightly. "A motion under Rule 4:50-1 is addressed to the sound discretion of the trial court, which should be guided by equitable principles in determining whether relief should be granted or denied," and "the decision granting or denying an application to open a judgment will be left undisturbed unless it represents a clear abuse of discretion." Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994). "[I]n reviewing the exercise of discretion it is not the appellate function to decide whether the trial court took the wisest course, or even the better course, since to do so would merely be to substitute our judgment for that of the lower court. The question is only whether the trial judge pursue[d] a manifestly unjust course." Gittleman v. Cent. Jersey Bank & Trust Co., 103 N.J. Super. 175, 179 (App. Div. 1967), rev'd on other grounds, 52 N.J. 503 (1968).
Plaintiff here sought relief from the terms of the PSA pursuant to Rule 4:50-1(b), (c), or (f), which provides that:
On motion, with briefs, and upon such terms as are just, the court may relieve a party or the party's legal representative from a final judgment or order for the following reasons: . . . (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under R. 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; . . . or (f) any other reason justifying relief from the operation of the judgment or order.
Plaintiff failed to meet his burden under this rule because the information contained in his supplemental certification was not "newly discovered" evidence, did not establish fraud by defendant, and did not demonstrate truly exceptional circumstances warranting relief from the terms of the PSA.
To warrant relief under Rule 4:50-1(b) plaintiff was required to show that he discovered new evidence after entry of the PSA, which could not have earlier been discovered through the exercise of due diligence. State v. Speare, 86 N.J. Super. 565, 581-82 (App. Div.), certif. denied, 45 N.J. 589 (1965). See also Pressler, Current N.J. Court Rules, comment 5.2 on R. 4:50-1 (2008). To qualify, the new evidence must also have been likely to have changed the result. Speare, supra, 86 N.J. Super. at 581-82.
In his supplemental certification plaintiff did not present any evidence which was not available to him through the exercise of due diligence. The "newly discovered" bank account statements were in plaintiff's possession at all relevant times, and were admittedly discovered by him in his residence. Also, defendant had disclosed the bank accounts in her May 16, 2005, response to interrogatories, in her 2005 and 2006 Case Information Statements, and at her deposition.
In his supplemental certification, plaintiff did not provide any support for a conclusion that the funds in those bank accounts were subject to equitable distribution, or that the funds were improperly spent or taken by defendant. Thus, the supplemental certification did not contain information of the nature that entitled him to relief under Rule 4:50-1(b). Speare, supra, 86 N.J. Super. at 581-82.
The supplemental certification did not support plaintiff's claim for relief from the PSA under Rule 4:50-1(c), that defendant perpetrated a fraud upon him by failing to disclose all her bank accounts during discovery. The elements of common-law fraud are: "(1) a material misrepresentation of a presently existing or past fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance thereon by the other person; and (5) resulting damages." Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997). Reliance is essential to any claim of fraud, and the party claiming fraud must demonstrate that reliance upon any representation was justified and reasonable. Nappe v. Anschelewitz, Barr, Ansell & Bonello, 189 N.J. Super. 347, 355 (App. Div. 1983), rev'd in part on other grounds, 97 N.J. 37 (1984). For example, reliance is justified when "facts to the contrary were not obvious or did not provide a warning," or where the relying party did not "reasonably pursue further investigation" that "would have revealed the falsity of the representation." Ibid.
Here, there was no fraudulent concealment or non-disclosure of defendant's bank accounts because plaintiff was aware of their existence prior to executing the PSA. There was no fraud and plaintiff would not be entitled to relief from the terms of the PSA under Rule 4:50-1(c).
Finally, the supplemental certification did not support plaintiff's claim for relief from the PSA under Rule 4:50-1(f), the "catchall" provision that grants relief when "truly exceptional circumstances are present" and when no other subsection of the rule applies. Baumann v. Marinaro, 95 N.J. 380, 395 (1984). The purpose of subsection (f) is to afford relief when enforcement of a judgment would be unjust, oppressive, or inequitable. Lawson v. Mardon Wheaton, Inc. v. Smith, 160 N.J. 383, 404-07 (1999). See also Connor v. Connor, 254 N.J. Super. 591, 601 (App. Div. 1992) (substantive modification of negotiated equitable distribution scheme pursuant to Rule 4:50-1(f) required showing of fraud, misconduct or mistaken negotiation, or a showing of fundamental inequity or unfairness in the agreement).
Here, plaintiff's supplemental certification does not support a conclusion that enforcing the PSA would be unjust, oppressive, or inequitable, because plaintiff was aware of defendant's bank accounts when he executed the PSA. Although the better course might have been to consider plaintiff's supplemental certification, the judge's refusal to do so was not a clear abuse of discretion capable of contributing to an unjust result. R. 1:7-5. And, in any event, consideration of the supplemental certification would not have entitled plaintiff to relief under Rule 4:50-1.
Next, plaintiff argues in his point C that the judge committed reversible error by not providing sufficient findings of fact and conclusions of law supporting his denial of plaintiff's claim for a credit of the amount owed to defendant, in violation of Rule 1:7-4. Plaintiff also argues that he was not provided proper notice of the time and location the judge intended to place its findings on the record under Rule 1:6-2(f). These arguments also are without merit.
In his notice of motion, plaintiff sought a credit of between $12,000 to $24,000, which represented the amounts which had been in the bank accounts defendant allegedly failed to disclose and that he claimed were subject to equitable distribution. The judge stated that it would not address the merits of plaintiff's request for a credit because he did not provide evidentiary support for that claim. This satisfied the judge's obligation under Rule 1:7-4.
On appeal, plaintiff argues for a credit in the amount of $1,810.66 and asks that we exercise our original jurisdiction under Rule 2:10-5 to award that credit. However, he provides no explanation on how he calculated that amount, nor does he provide documentary evidence to support his claims. There is no basis for us to grant this request. Tomaino v. Burman, 364 N.J. Super. 224, 234-35 (App. Div. 2003) (original jurisdiction should be exercised sparingly and is ordinarily inappropriate where further fact-finding is necessary to resolve matter), certif. denied, 179 N.J. 310 (2004).
Additionally, plaintiff's Rule 1:6-2(f) argument is without merit because the rule only requires notice of the time and location the judge intended to place his findings on the record if a motion is argued. In this case, the parties' cross-motions were not argued. The rule is inapplicable.
Finally, plaintiff argues in point II of his reply brief that defendant should be estopped from contesting the merits of his cross-motion. Responding to defendant's argument in opposition to his appeal, that he failed to meet his burden under Rule 4:50-1(b), (c), or (f), plaintiff contends the doctrine of equitable estoppel precludes her from opposing his application because he relied on her willful non-disclosure of all of her assets during discovery. We disagree.
To establish a claim of equitable estoppel, plaintiff must provide proof that defendant made a misrepresentation or concealment of facts that was: (1) known by her and unknown to him; (2) done with the intention or expectation that it will be acted upon by him; and (3) on which he relied to his detriment. First Union Nat. Bank v. Nelkin, 354 N.J. Super. 557, 568-69 (App. Div. 2002). First, equitable estoppel does not apply because plaintiff did not establish a misrepresentation or concealment of facts by defendant. Plaintiff was aware of defendant's bank accounts prior to executing the PSA; he did not reasonably rely on any fraudulent misrepresentation or non-disclosure by defendant. See Nappe, supra, 189 N.J. Super. at 355. Second, equitable estoppel does not apply because defendant did not conceal the existence of those assets; rather, defendant revealed those assets in discovery. And, third, equitable estoppel does not apply because the equities weigh against plaintiff. "The maxim that he who seeks equity must do equity applies 'in every kind of litigation and to every species of remedy.'" Barry, Inc. v. Baf, Ltd., 3 N.J. Super. 355, 360-61 (Ch. Div. 1949) (quoting Pomeroy, Equity Jurisprudence, § 385 at 52 (5th ed. 1941)).
According to his own calculations, plaintiff was required to pay defendant $36,319.34 pursuant to the PSA, but, without proper justification or explanation, he withheld that amount. Since plaintiff failed to do equity, he is not entitled to equitable relief.
Plaintiff also appeals from the judge's grant of defendant's motion finding him in violation of litigant's rights, compelling him to pay $38,130.21 pursuant to the PSA, and $530 in attorney's fees and costs. He contends in his point E that the judge abused his discretion in finding him in violation of litigant's rights without considering his supplemental certification. In his point D, he contends that the judge abused his discretion in granting defendant's request for attorney's fees and costs without applying the required criteria set forth in Rule 4:42-9.
We affirm the judge's order granting defendant's motion, including the award of attorney's fees and costs.
In granting defendant's motion, the judge found that most of the issues contained in her application had been resolved by consent of the parties. The judge also found that plaintiff had no meritorious or good faith defense relieving him of his obligation to pay defendant pursuant to the PSA.
As to the award of attorney's fees and costs, the judge found that plaintiff was in a better position to pay and awarded defendant $500, twenty percent of the $2500 in fees incurred by her to deal with the equitable distribution issue, plus $30 in costs for filing her motion. In so ruling, the judge noted:
I'm aware of the financial circumstances of these parties, by virtue of the [prior] hearing on the prenuptial agreement. [Plaintiff] is in a better position to pay.
He has no defense -- no good faith defense on the lump sum payment obligation, and . . . the parties have incurred tens of thousands of dollars in expense in this acrimonious battle that they've had, which by and large, should have been resolved on almost all issues.
Relief by way of motion to enforce litigant's rights under Rule 1:10-3 is "not for the purpose of punishment, but as a coercive measure to facilitate the enforcement of [a] court order." Ridley v. Dennison, 298 N.J. Super. 373, 381 (App. Div. 1997). "Clearly, before relief can be afforded, the court must be satisfied that the obedience to the order was not within the capacity of the party to comply with and hence was willfully contumacious." Pressler, Current N.J. Court Rules, comment 4.3 on R. 1:10-3 (2008). Accordingly, "before the contempt finding may be made, the court must be satisfied that the defendant is able to comply and had no good reason to resist compliance." Ibid.
The judge did not err in granting defendant's motion because plaintiff failed to comply with the express terms of the PSA, which provided that plaintiff was required to pay defendant approximately $39,500 within thirty days. Property settlement agreements are enforceable in equity. Petersen v. Petersen, 85 N.J. 638, 642 (1981). The judge was required to enforce the PSA as written and find plaintiff in violation of litigant's rights because he provided no meritorious or good faith defense relieving him of his obligation to pay defendant.
Finally, with regard to the issue of attorney's fees and costs, to determine whether counsel fees should be awarded, the judge should review the nine factors enumerated in Rule 5:3-5(c), which are:
(1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.
See also R. 4:42-9(a)(1) ("No fee for legal services shall be allowed in the taxed costs or otherwise, except . . . [i]n a family action, a fee allowance . . . on final determination may be made pursuant to R. 5:35-5(c)").
The assessment of counsel fees is discretionary, and will not be reversed except upon a showing of an abuse of discretion. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001). An abuse of discretion "[a]rises when a decision is 'made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" Flagg v. Essex County Prosecutor, 171 N.J. 561, 571 (2002) (quoting Achacoso-Sanchez v. Immigration & Naturalization Serv., 779 F.2d 1260, 1265 (7th Cir. 1985)).
As explained, the judge's decision to award fees and costs is supported by the record because plaintiff provided no meritorious or good faith defense. The judge awarded defendant only the fees and costs associated with the enforcement of the equitable distribution provision of the PSA. Also, the judge provided sufficient explanation of its reasoning. Contrary to plaintiff's contention, the judge considered the factors enumerated in Rule 5:3-5(c), as it made reference to factors (2), (3), (4), (7), and (8).
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