January 13, 2009
JUDITH W. BARBATO, PLAINTIFF-RESPONDENT,
RICHARD BARBATO, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-1626-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued November 19, 2008
Before Judges Parrillo, Lihotz and Messano.
Defendant Richard Barbato appeals from that portion of the Family Part's order of August 21, 2007 denying his request for counsel fees, and two subsequent orders of March 3, 2008 that granted plaintiff's request for child support and arrearages, and denied his request for credit for alleged overpayments of child support and college expenses. We have considered the arguments raised by the parties in light of the record and applicable legal standards. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.
Defendant and plaintiff Judith Barbato were married for twenty-five years and had two daughters, one born on June 30, 1980, and a second on January 23, 1987. Plaintiff filed for divorce alleging extreme cruelty by defendant, and on April 29, 2005, represented by counsel, she obtained a default judgment of divorce (JOD). The JOD incorporated by reference a property settlement agreement (PSA) executed by both parties on July 22, 2004. Plaintiff was represented by counsel and defendant, although having initially retained counsel, had discharged him and signed the PSA pro se.
On April 27, 2006, defendant moved to set aside the PSA claiming it was the product of duress, coercion, and undue pressure which rendered his execution of it involuntary. The judge conducted a trial, commencing on June 25, 2007 and extending over several days thereafter. As stated in her comprehensive, supplementary written opinion, the judge identified the three issues to be resolved at the trial as:
1. Whether the parties' property settlement agreement should be set aside because of the husband's mental illness at the time he entered into the [PSA] and the unconscionabiity of that agreement[;]
2. If the agreement is set aside, what portion of the marital assets should each party receive[;]
3. Whether either party should pay the other party's counsel fees.
The judge concluded that "[g]iven the [defendant's] mental illness, pro se status at the time the agreement was entered into, and the extreme one-sided nature of th[e] agreement for a 25 year marriage . . . the [PSA] [was] not enforceable." On August 21, 2007, she entered an order that vacated the PSA, equitably divided the parties' property, and, in paragraph twelve, denied "[b]oth parties' requests for counsel fees[.]" Defendant filed his notice of appeal.
In January 2008, plaintiff moved for an order 1) "[d]irecting [d]efendant to pay $169.00 per week in child support for the unemancipated child of the marriage, retroactive to August 21, 2007"; 2) "[d]irecting [d]efendant to pay 100% of uncovered and unreimbursed medical, dental, prescription, hospital, counseling, and any other such expenses of the unemancipated child of the marriage"; and 3) counsel fees for the application. Defendant responded and cross-moved seeking a credit "for overpayment of support" made while the PSA was in effect and an order directing plaintiff to pay that amount from the proceeds of the sale of the former marital home, or applying the overpayment to any current support obligations the court might otherwise order.
On March 3, 2008, after oral argument, the judge entered two orders. One denied defendant's cross-motion for credits. The other granted plaintiff's motion and set defendant's child support obligations at $118 per week, retroactive to August 21, 2007, the date the PSA was vacated; fixed defendant's arrears at $3304, and ordered payment toward same at $50 per week; ordered defendant to pay one-half of all uncovered medical and associated expenses for his youngest daughter after the first $250 per year; and denied plaintiff's counsel fee request. We granted defendant's motion to amend his notice of appeal to include his challenge to the orders setting his support obligations and denying his request for credits.
Defendant contends that the judge erred in not awarding him counsel fees because plaintiff and her trial counsel were obligated to "notify the court" of defendant's mental condition prior to the entry of the JOD and in failing to do so violated the Rules of Professional Conduct (R.P.C.); 2) that plaintiff's and her counsel's failure to advise the judge of defendant's disability at the time of the entry of the JOD violated defendant's rights under the Americans with Disabilities Act (ADA), 42 U.S.C.A. §§ 12101 to 12213, and 3) that the judge impermissibly "applied guilt" to defendant's conduct leading up to the divorce, despite "the fact that [she] had found him to be incompetent." Defendant and amicus, Seton Hall Law School Center for Social Justice, argue that Rule 4:43-2(b) which provides, "No judgment by default shall be entered against a minor or mentally incapacitated person unless that person is represented in the action by a guardian or guardian ad litem who has appeared therein[,]" should apply to Family Part matters. It urges us to so hold in order to "provid[e] guidance to trial courts to avoid this issue in the future." We address defendant's arguments seriatim.
Rule 5:3-5(c) governs the award of counsel fees in a matrimonial action and defendant conceded at oral argument before us that his entitlement to any award must find support within the analytic framework of the Rule itself. The award of counsel fees lies within the discretionary authority of the trial judge. Ibid.; Addesa v. Addesa, 392 N.J. Super. 58, 78 (App. Div. 2007). Accordingly, we will not disturb the trial judge's determination absent a showing of an abuse of that discretion. Chestone v. Chestone, 322 N.J. Super. 250, 258 (App. Div. 1999).
We need not engage in an extended discussion of the factors to be considered under Rule 5:3-5(c), under Rule 4:42-9, which it incorporates, or under R.P.C. 1.5, incorporated by reference into Rule 4:42-9, because defendant does not contest the judge's comprehensive analysis except in limited fashion. He claims that because plaintiff and her counsel knew of his mental illness and incapacity at the time of the entry of the default JOD, they violated R.P.C. 3.3(a)(5), "Candor Toward the Tribunal." As a result, defendant claims they acted in "bad faith" and with "unclean hands," see R. 5:3-5(c)(3)(in deciding a fee application, the judge "should consider . . . the reasonableness and good faith of the positions advanced by the parties"), thus entitling defendant to an award of counsel fees.
In her lengthy written opinion, the judge noted "elements of bad faith by both parties in th[e] case," though "[n]either party litigated the case solely in bad faith." She further found that plaintiff "reasonably relied on the PSA as a valid contract since the [defendant] had prepared a similar abandonment of his property rights to the marital assets about one month earlier." Yet, "[o]n the other hand, [plaintiff] knew that [defendant] was mentally ill." The judge also noted that defendant "also acted with elements of bad faith," having "engineered" a division of his pension under the terms of the PSA that permitted him to keep a portion on a monthly basis while at the same time not jeopardizing Social Security disability benefits he was to receive. The judge found defendant "behaved abusively to his wife by flaunting an extramarital affair[,]" and "tormented her with his persistent leaving and returning[.]" Defendant had to "be in control," and it was he who "proposed the grossly unequal arrangement of a division of their assets and [plaintiff] followed his lead." The judge found that "[t]he husband's imposing physical presence and anger issues contributed to his wife's acquiescence."
Against the backdrop of these comprehensive and well-supported findings, defendant's reliance upon an alleged violation of R.P.C. 3.3(a)(5) as evidence of plaintiff's bad faith is unavailing. First, defendant cites no authority for the proposition that the canon of conduct applies to plaintiff herself. Therefore, plaintiff's actual knowledge of her husband's condition is irrelevant for purposes of this analysis and it was adequately considered by the judge in the context of whether plaintiff's conduct was reasonable and evidenced good faith. Second, there is no proof that plaintiff's counsel violated R.P.C. 3.3(a)(5), which prohibits an attorney from "[f]ail[ing] to disclose to the tribunal a material fact knowing that the admission is reasonably certain to mislead the tribunal." At trial, plaintiff and her counsel contested defendant's claim that he was in fact mentally ill, and that whatever his mental status was, it somehow vitiated his competency regarding the terms of the PSA. Just because the judge ruled otherwise is not evidence of counsel's bad faith. Indeed, we note some intuitive appeal to plaintiff's argument because the judge, while finding defendant's mental illness was known to plaintiff, also found defendant proceeded in bad faith himself by "negotiating" the terms of the PSA so as to maintain his disability eligibility and payments and by controlling plaintiff's conduct. Third, plaintiff did not seek to hide the facts regarding defendant's mental state from the judge because her complaint included allegations of his repeated psychiatric interventions and hospitalizations as a basis for her cause of action. And, lastly, even if there was some duty on the part of counsel to disclose the issue more explicitly before proceeding to a default JOD, we have long separated the consequences of the attorney's conduct from that of her client so as to avoid "visiting punishment upon an entirely innocent client for the attorney's acts." Brundage v. Estate of Carambio, 195 N.J. 575, 603 (2008). In sum, the mere fact that the judge concluded that plaintiff knew of her husband's mental illness does not translate into bad faith in her prosecution of the default divorce, nor does it support a violation of R.P.C. 3.3-5(c) by her attorney.
The other two bases for defendant's challenge to the denial of counsel fees are equally unpersuasive. He claims that plaintiff and her counsel "surreptitiously violated respondent's rights under the [ADA]." While defendant may have raised in argument the alleged violation of the ADA as further support for his request for fees, it is undisputed that he never expressly made a claim for relief under the statute. We find no basis to conclude that the argument in anyway enhances defendant's "bad faith" claim under Rule 5:3-5(c), and, as an independent ground for relief, we refuse to consider it having not been raised below. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (citations omitted).
Lastly, in considering "any other factor bearing on the fairness of an award[,]" R. 5:3-5(c)(9), the judge noted,
[Defendant] thought up the grossly unfair arrangement and this began the sad saga of litigation that resulted. The wife was used to following his direction and knew he was consumed by guilt. He had behaved very badly toward his wife and thus his guilt was not without a rational basis. She may well have thought he wanted to provide more than legally required for his family due to his guilt.
Defendant argues that having determined he was mentally ill at the time of the execution of the PSA and entry of the JOD, it was improper for the judge to attach any rational motivation to his conduct and use this as a basis to deny an award. He argues the judge "impermissibly applied guilt to [defendant]" and "demonstrated a bias in favor" of plaintiff in considering the fee request. We disagree with these characterizations of the record.
With the cited language, the judge was expounding upon the reasons for her earlier finding of bad faith by both parties and further explaining plaintiff's motivation, not defendant's. Indeed, it was plaintiff's essential argument at trial that defendant designed the one-sided PSA because he felt guilty for the way he had treated plaintiff, and because he wanted to preserve his eligibility for disability benefits. Defendant's own expert testified that he was in fact "guilt-ridden" during this time frame, and defendant admitted to his open and notorious affair with another woman.
Defendant points to no other example of the judge's alleged "bias." Moreover, the judge considered all the relevant factors contained in the Rule in deciding whether to award any counsel fees to defendant. We are satisfied that there was no mistaken exercise of her discretion and find no basis to overturn paragraph twelve of the August 21, 2007 order. We therefore affirm.
Defendant next challenges the two orders entered on March 3, 2008. He contends that plaintiff's motion to set child support and fix arrearages should have been denied because she "failed to abide by the [R]ules of [C]court," specifically, she failed to supply a current Case Information Statement (CIS) with her motion. He further argues that the judge erroneously denied his motion for a credit against current and future support obligations based upon payments he made under the previously-held unconscionable PSA. Though we reject defendant's argument that the judge improperly granted plaintiff's motion and thus affirm that order, we are constrained to reverse the second order that denied defendant's cross-motion for a credit. In light of this, we leave to the trial judge's sound discretion on remand whether the provisions of the order granting plaintiff's motion should be revisited subject to further financial disclosures by both sides.
Our review requires some explication of the proceedings below. As we noted, plaintiff's motion and defendant's cross-motion were made after defendant filed his appeal from the earlier August 2007 order that vacated the PSA. Under its terms, defendant was to pay $293 per week in support of his two children, "until an alternate agreement is reached, the parties agree that the children are emancipated, or [o]rder of the [c]court." Also under the PSA, defendant was to pay $1500 per month "to offset the children's college and graduate school expenses" with "[t]he sum [to] be paid directly . . . from [defendant's] pension checks." Medical expenses for the children were to be covered by defendant's insurance, with all unreimbursed expenses to be plaintiff's responsibility.
When plaintiff moved for an order of support, she certified that she was working part-time, had earned $13,106 in 2006, and was paying $8424 per year for medical coverage. Her younger daughter, then twenty years old, resided with her and was a full-time college student. As a result of the judge's earlier decision vacating the PSA, plaintiff claimed she no longer received child support from defendant, and she attached copies of her pay statement, tuition bills, her 2006 tax return, and a Child Support Guidelines Worksheet, including her income and that of defendant, all in support of an order awarding weekly child support of $169. In his cross-motion, in addition to seeking a credit for alleged overpayments he made under the PSA over the years, defendant noted he "could not comment on [p]laintiff's financial status" because requests for financial data had gone unanswered and plaintiff had failed to file a CIS.*fn1
When the parties appeared at argument on March 3, 2008, the judge began by noting "[t]his issue of child support was not raised during the plenary hearing[,]" further indicating that she had directed plaintiff's counsel to file a motion for the relief and "a long time ha[d] passed[.]" She further took note of the parties' consensual agreement to "divide the college expenses."*fn2
When defense counsel objected because of the lack of a CIS, the judge asked if defendant "disagree[d] with any of the information provided by plaintiff with regard to her income, or his income[.]" He responded, "Not necessarily[,]" but further explained that plaintiff was claiming she was paying various amounts "on behalf of the daughter[,]" and these were not documented. Defendant objected to any retroactive application to the order based upon plaintiff's delay in bringing the request, but did not disagree with the amount plaintiff requested, save the credit he claimed he was entitled to for overpayments made under the PSA.
The judge concluded that plaintiff was not required to file a CIS because she was not seeking "modification of an order or judgment for . . . child support[.]" R. 5:5-4(a). Instead, after making an adjustment pursuant to the Guidelines based upon the parties' daughter's part-time employment, the judge set the amount of support, computed the arrearages from the date of her August 2007 order, and ordered the parties to share equally in unreimbursed medical and associated expenses after the first $250 annually.
We need not decide whether the judge's interpretation of the Rule was appropriate for two reasons. First, plaintiff supplied substantial financial data in support of her motion, none of which was disputed by defendant. Second, defendant essentially agreed with the Guidelines calculation and plaintiff's entitlement to the support award, objecting only to its retroactivity to August 2007 and insisting he was entitled to a credit. Therefore, while the better practice given the unusual procedural circumstances presented may have been to demand each party file a detailed CIS, we doubt that it would have mattered or changed the outcome in any meaningful way. Defendant was fully aware of his child support obligations, and even before us he has pointed to no specific error in the calculations made below. Therefore, we find no basis to reverse.
In his cross-motion, defendant contended that he had overpaid his child support obligations while the PSA was extant, i.e., from July 22, 2004 to August 21, 2007. He certified that during that time, his total support obligations should have been $146 per week resulting in an overpayment of $23,260. He also claimed that he was entitled to a credit for monies he paid on behalf of his eldest child's college expenses because his daughter paid her own tuition and plaintiff did not.
The judge did not "accept th[e] overpayment theory[.]" She further noted that "when [she] made [her August 2007] decision [she] indicated . . . the contribution of the parties to the misunderstanding or unfortunate consequences of having this agreement[.]" The judge noted that she was not "asked at that time, nor was it in [her] mind, that [plaintiff] was going to owe [defendant] money beyond what [she] had determined was appropriate." She noted that "there was a decision made as to what should happen to that period of time[,]" i.e., during the life of the PSA, and in her view it was improper for defendant to now seek a credit. The judge noted this was not "the right way to look at it, because [she] understood very well how much everybody paid and how much everybody got" during the term of the PSA and as a result of her August 2007 ruling as to equitable distribution.
The judge also viewed the matter of support paid under the PSA as something before "the Appellate Division" as a result of defendant's already-filed appeal. Although defense counsel objected, noting "that issue was not on appeal," the judge nonetheless viewed her August 2007 decision as "tak[ing] care of whatever happened prior to the plenary hearing and up until the time of [her] decision."
In this regard, we respectfully disagree with the judge's reasoning. Defendant's initial appeal was limited solely to the issue of paragraph twelve of the August 2007 order that denied his counsel fee request. It did not challenge the other aspects of the order or any of the judge's rulings with respect to those issues. Moreover, the August 2007 order is silent as to child support obligations, and, indeed, that silence is what necessitated plaintiff's motion in the first instance.
We have reviewed the original motion filed by defendant to set the PSA aside, as well as the transcripts of the proceedings and the written summations of counsel. We fail to see anything indicating that the parties agreed that the judge's decision on the viability of the PSA, and the equitable distribution that would follow if it was set aside, necessarily encompassed the issues presented by defendant's cross-motion.
The judge's decision on the distribution of the marital estate may have informed her decision not to re-visit what transpired with respect to child support payments while the PSA was in effect, but we simply cannot tell from the paucity of reference in the transcript what her reasoning was in this regard. Plaintiff conceded before us that the judge did not make specific findings or reach specific conclusions on the subject. R. 1:7-4; Fodero v. Fodero, 355 N.J. Super. 168, 170 (App. Div. 2002).
We specifically do not imply that the judge committed error by denying defendant any credit based upon the equitable distribution provisions of the August 2007 order or other equities presented by the circumstances. For example, having noted plaintiff's good faith belief in the operation of the PSA, the judge might conclude it would indeed be inequitable to charge plaintiff now for amounts that defendant claims he overpaid, particularly in light of his undisputed present obligation to support his youngest daughter. In short, we reach no conclusion about the merits of defendant's request, and remand the matter to the judge for further proceedings.
The final point of defendant's brief, and the entirety of the brief filed by amicus, raises an issue that defendant admits is "not part of [his] appeal." Specifically, he and amicus contend that we should take this opportunity to address a "pervasive problem that effects how the disabled are treated in the New Jersey courts." In particular, defendant and amicus urge us to hold that Rule 4:43-2(b) should apply to actions in the Family Part. We decline their invitation.
The Rule provides in pertinent part,
After a default has been entered in accordance with R. 4:43-1, . . . a final judgment may be entered in the action as follows:
(a) By the Clerk.
(b) By the Court. In all other cases, except Family Part matters recognized by Part V of these Rules, the party entitled to a judgment by default shall apply to the court therefor by notice of motion pursuant to R. 1:6 . . . . No judgment by default shall be entered against a minor or mentally incapacitated person unless that person is represented in the action by a guardian or guardian ad litem who has appeared therein.
[R. 4:43-2(b)(emphasis added).]
Contrary to the argument raised by amicus, the Rule expressly does not apply to Family Part matters. In our view, any suggested amendment to the Family Part Rules should be addressed to the Supreme Court's Family Practice Committee. Moreover, defendant and amicus have not demonstrated how the adoption of such a rule would have avoided the result that occurred here. Defendant knew the divorce complaint was pending and indeed had consulted, and then discharged, counsel. Plaintiff, meanwhile, did not believe defendant was mentally incompetent at all. The trial judge proceeded without actual knowledge of defendant's condition, much less with the certainty that he was "mentally incapacitated" as contemplated by Rule 4:43-2(b). Conversely, we have little doubt that if the issue had been properly raised below, and addressed fully at the time, the trial judge would have been empowered to appoint a guardian ad litem to represent defendant's interests, even in the absence of a specific Rule to that effect.
Affirmed in part; reversed in part; remanded. We do not retain jurisdiction.