March 6, 2009
CARY TINFOW, PLAINTIFF-APPELLANT,
DEBORAH TINFOW, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-1488-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 21, 2009
Before Judges Fuentes and Gilroy.
Plaintiff Cary Tinfow appeals from the April 25, 2008 order of the Family Part. For reasons that follow, we affirm.
Plaintiff and defendant Deborah Tinfow were married on June 15, 1991, and divorced on June 19, 2007. Two children were born of the marriage: a son in 1993 and a daughter in 1995. On the day of divorce, the parties entered into a Matrimonial Settlement Agreement (the agreement). The agreement contained provisions directing the immediate sale of the parties' marital home in North Caldwell; a summer home in Lavallette; and a condominium unit in Dover Township.
On March 14, 2008, defendant filed a motion seeking to have the future sale proceeds from the North Caldwell and Lavallette properties placed in escrow. Plaintiff cross-moved, requesting reimbursement of the principal he paid against the mortgages on those properties between June 2007 and April 2008.*fn1 On April 25, 2008, the trial court entered an order resolving the issue of monies plaintiff owed to defendant and denying plaintiff's motion for return of the principal he paid against the two mortgages. It is from this order that plaintiff appeals.
Pursuant to section X of the agreement, entitled "Distribution of Property," the parties' agreed to sell their three properties. As to the home in North Caldwell, the property was to be "immediately listed and sold", with each party "receiv[ing] 50% of the proceeds." With regard to the home in Lavallette, the property was also to be immediately listed for sale and the proceeds shared equally. In addition, the properties were to be sold "at a price suggested by the realtor[s]." If the parties could not agree to a reduction in sale price for either home, the matter was to be submitted to a retired judge for a binding determination; however, under the agreement, the parties were to cooperate with the sale of the properties and not "act in any way which would adversely [a]ffect the value of the propert[ies]."
The third property was a condominium unit, with plaintiff and defendant individually owning a one-third interest, and defendant's mother owning the remaining interest. Upon sale of the condominium unit, plaintiff and defendant were each to receive one-third of the sale proceeds.
Section II of the agreement, entitled "Support until First Parcel of Real Estate Sells," provided in relevant part:
Until the closing of the marital home, the pendente lite support orders dated February 24, 2006 and November 3, 2006 shall remain in effect. Thereafter, the alimony and child support provisions herein shall be in effect. If the closing of the marital home takes place prior to the sale of the beach house, the [plaintiff] shall continue to pay all schedule A expenses relative to the beach house until its sale.
The February 24, 2006 pendente lite order provided that plaintiff "shall pay Schedule A [and] B for the parties. Plaintiff will pay his Schedule C expenses." In addition, plaintiff was directed to pay defendant $900 per week in pendente lite unallocated support, and an additional $1,000 on the first day of each month.
Further, the November 3, 2006 pendente lite order required plaintiff to pay defendant $2,300 each month "so that she can pay her Schedule A [and] B expenses not [paid] directly by plaintiff as per the order of February 24, 2006." Pursuant to the Family Part Case Information Statement contained in Appendix V of the N.J. Court Rules, the monthly expenses specified in Part D, Schedule A include payment of any mortgages, in addition to real estate taxes, homeowners insurance, home equity loans, and other household maintenance expenses.
Upon the sale of the North Caldwell home, plaintiff was to commence paying defendant permanent alimony at $165,000 per year for the first three years, and $150,000 per year thereafter. According to plaintiff, before the sale of the North Caldwell property, he paid significantly more per month, pre-tax, to defendant, then he paid after the sale.
The condominium unit sold shortly after the agreement was executed and is not the subject of this appeal. However, the North Caldwell and Lavallette properties became the subjects of considerable litigation after the parties executed the agreement. The first issue concerned the Lavallette property. On July 25, 2007, the court granted defendant's order to show cause (OTSC) seeking to de-list the beach house for a period of ten days "to allow the defendant to obtain a home equity loan on the property . . . pursuant to paragraph 38 of the parties [agreement]." Defendant, however, never proceeded with the loan application.
The second issue concerned the realtors' recommendations to lower the listing sale prices on the two properties. Because the parties were unable to agree on price reductions, plaintiff filed a motion on September 12, 2007, seeking, among other matters, an order compelling such reductions. However, before the hearing date, defendant agreed to reduce the listing price on the North Caldwell home. By order of October 19, 2007, supported by an oral decision, the court denied plaintiff's motion for an immediate reduction in the listing price of the Lavallette home, subject to review in the spring of 2008.
On November 29, 2007, plaintiff appealed the October 19, 2007 order denying his motion for a reduction in the listing price of the Lavallette home, but he later withdrew that appeal when the court scheduled the parties to appear for a further hearing on the issue. On February 6, 2008, the trial court entered an order providing in part that "[t]he parties agree to list the shore home . . . at a listing price of [$]1,349,900." On March 14, 2008, shortly before the Lavallette home was scheduled to close, defendant filed a motion seeking to place plaintiff's share of the sale proceeds from both the North Caldwell and Lavallette properties into escrow, until plaintiff paid her monies owed under the agreement and pendente lite orders. Plaintiff cross-moved, requesting, among other matters, that he be paid first from the proceeds of the sale of the two properties the sum of $55,600, representing the amounts he paid toward the mortgage principal for the two properties between June 19, 2007 and April 15, 2008, as the payments reduced the amount owed on the mortgages at the time the properties sold.*fn2
At the April 25, 2008 hearing on the cross-motions, the parties resolved the issue of monies owed to defendant. After disposing with unrelated issues in plaintiff's cross-motion, the court heard argument on the issue of the mortgage pay downs.
When first prompted by the court, plaintiff conceded that he was not entitled to repayment of the mortgage pay downs pursuant to the agreement or any order. However, plaintiff argued that it was not addressed in the agreement because "it wasn't a marital issue. This is post-judgment."
Defendant countered that plaintiff was not entitled to all of the mortgage pay downs and that an equal split of the sale proceeds would not result in her being unjustly enriched. Defendant contended that the requested repayment was not negotiated in the agreement; "there was a $250,000 loan taken from the [Lavallette] house which was used until it was exhausted to pay for expenses"; and, plaintiff was only "maintaining a marital asset." The court agreed with defendant, stating:
It's not here. And I'm not going to make a new agreement. There's no provision whatsoever in the foreseeable event that I saw that said he gets a credit.
And now after the fact and after we've paid it and we've gone through this with multiple motions, multiple orders, it never shows up once, not once. Now today, two months before the closing, it's a claim we want to make and I'm suggesting to you since you've used the word deal twice, that when you made your deal, you should have included that, you didn't, I'm not transplanting it for you. That's the ruling.
A confirming order was entered on that same day. On April 28, 2008, the Lavallette home closed; the North Caldwell home closed in August 2008.
In Point I, plaintiff argues that, "[b]y allowing [defendant] to share in the mortgage principal pay down, the trial [c]court effectively gave her a better agreement than that for which she bargained." Plaintiff contends that the agreement did not address distribution of the post-judgment mortgage pay downs because the parties had agreed to the immediate sale of the properties and did not contemplate creating an asset "consisting of the post-judgment principal pay down." Plaintiff asserts that the court: 1) improperly created a new agreement by granting half of the post-judgment mortgage pay down to defendant when the agreement did not so provide; and 2) should have filled the missing provision in the agreement by providing full repayment of the principal to plaintiff.
"The scope of appellate review of a trial court's fact-finding function is limited. The general rule is that findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). Moreover, "[b]ecause of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding." Id. at 413. However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
"This state has a strong public policy favoring enforcement of [marital] agreements." Massar v. Massar, 279 N.J. Super. 89, 93 (App. Div. 1995). "Marital agreements are essentially consensual and voluntary and as a result, they are approached with a predisposition in favor of their validity and enforceability." Ibid. Although "'contract principles have little place in the law of domestic relations[,]'" Conforti v. Guliadis, 128 N.J. 318, 323 (1992) (quoting Lepis v. Lepis, 83 N.J. 139, 148 (1980)), martial agreements are enforceable only if they are fair and equitable, ibid. See also Schiff v. Schiff, 116 N.J. Super. 546, 560-61 (App. Div. 1971) ("When a contract has been fairly procured and its enforcement will work no injustice or hardship, it is enforced almost as a matter of right.").
Further, "it is settled law in New Jersey that, unlike an award of alimony or support, property division or equitable distribution provisions may not be adjusted after divorce to reflect unanticipated changes in the parties' circumstances, because the finality of a property division precludes any modification based on such changed circumstances." Schwartzman v. Schwartzman, 248 N.J. Super. 73, 77 (App. Div. 1991); see Pressler, Current N.J. Court Rules, comment 6.1 on R. 4:50-1 (2009) ("Applications for relief from equitable distribution provisions contained in a judgment of divorce and property settlement agreements are subject to this rule and not, as in the case of . . . other matters of continuing jurisdiction of the court, subject to a 'changed circumstances' standard.") (citation omitted). Generally, "'[s]ubsequent events which should have been in contemplation of the parties as possible contingencies when they entered into the contract will not excuse performance.'" Id. at 78 (quoting Schiff, supra, 116 N.J. Super. at 561).
However, "[t]here is no dispute that courts possess the equitable authority to modify privately negotiated property settlement agreements." Addesa v. Addesa, 392 N.J. Super. 58, 66 (App. Div. 2007). We have "recognized that an application for modification of a property settlement agreement could be considered under [Rule] 4:50-1(f)." Ibid. That rule permits a court to modify a final judgment or order when it would be equitable to do so. R. 4:50-1(f). Simply put, "relief can be obtained under the rule only if the party requesting it can demonstrate that enforcement of the [judgment] would be unjust, oppressive or inequitable." Schwartzman, supra, 248 N.J. Super. at 77.
Thus, "relief is granted sparingly[,]" Eaton v. Grau, 368 N.J. Super. 215, 222 (App. Div. 2004), and "is not available absent a showing of 'exceptional and compelling circumstances[,]'" Schwartzman, supra, 248 N.J. Super. at 77 (quoting Baumann v. Marinaro, 95 N.J. 380, 392 (1984)). Further, "a motion under paragraph (f) is addressed to the sound discretion of the trial judge[,]" Rosen v. Rosen, 225 N.J. Super. 33, 37 (App. Div. 1988), and "the judge's decision should not be overturned unless there was a clear abuse of discretion[,]" Schwartzman, supra, 248 N.J. Super. at 77.
It is also generally accepted that "the court will not draft a new agreement for the parties." Massar, supra, 279 N.J. Super. at 93; see Aarvig v. Aarvig, 248 N.J. Super. 181, 185 (Ch. Div. 1991) ("[O]nce the parties have reached an agreement, no court may create a 'new or better' contract for them.") (citation omitted). Yet, "if the agreement is silent as to a circumstance which thereafter arises, the parties may not be left without an agreement." Id. at 186. In that instance, the court can fill the gaps in the agreement "to achieve a fair and just result." Ibid. It is against these principles that we consider plaintiff's arguments.
The first inquiry is whether the agreement addressed distribution of post-judgment mortgage payments. Ibid. If so, the agreement is presumptively valid and the question becomes whether, pursuant to Rule 4:50-1(f), the court abused its discretion by determining that it was not inequitable or unjust to enforce the agreement as written. Schwartzman, supra, 248 N.J. Super. at 77.
Plaintiff argues that the agreement "was silent with respect to the distribution of the pay down on the mortgage principal that occurred . . . between the entry of the [f]inal [j]udgment of [d]ivorce and the date of the sale of the parties' properties." He contends that the court should have filled the gap in the agreement to achieve a fair and just result. We disagree.
Paragraph 2 of the agreement provides that, "[u]ntil the closing of the [North Caldwell] home, the pendente lite support orders dated February 24, 2006 and November 3, 2006 shall remain in effect." The February 24, 2006 order states that plaintiff "shall pay Schedule A [and] B [expenses] for the parties[,]" and, as previously discussed, mortgage payments are included in the Schedule A expenses. See Pressler, Current N.J. Court Rules, Appendix V at 2314 (2009). Thus, the agreement, which was entered into on the same day as, and incorporated into, the judgment of divorce, specifically provided that plaintiff alone was to pay the mortgages on both the North Caldwell and Lavallette properties until such time as the North Caldwell home was sold.
Furthermore, as to each property, the agreement provided in section X:
31. The parties own real property . . . known as the marital residence. The property shall be immediately listed for sale by [the realtor]. The property shall be immediately listed and sold at a price suggested by the realtor with an effort to maximize the sale price. If the property is not sold within 90 days from the date it is listed, the realtor and the parties shall adjust the sale price with a view towards selling the property . . . [and] maximizing the proceeds to be received by the parties from the sale. If the parties cannot agree on a reduction of the price in this regard, then this issue shall be submitted to [retired] Judge Fall for a binding determination . . . . The net proceeds shall be held in Trust by Budd Larner P.C. Each party shall receive 50% of the proceeds. From each party's respective share of the proceeds, offsets shall be made pursuant to this [a]greement. The parties outstanding fees and costs shall each be paid from their respective shares and then the balance of the proceeds shall be available to the parties. Until such time as the property is sold, the pendente lite Orders of February 24, 2006 and November 3, 2006 shall control.
33. The parties also own property located [in] Lavallette, New Jersey. This property shall immediately be listed for sale by the Schlosser Agency. The property shall be immediately listed and sold at a price suggested by the realtor and the parties with an effort to maximize the sale price but sold as soon as possible. The parties agree that the closing shall not take place prior to August 1, 2007. If the property is not sold in this regard, and if the parties cannot agree on a reduction of the price in this regard, then this issue shall be submitted to [retired] Judge Fall for a binding determination . . . . The net proceeds shall be held in Trust by Budd Larner P.C. Each party shall receive 50% of the proceeds; from their respective proceeds, the offsets shall be made pursuant to this [a]greement. [(emphasis added).]
There is no provision in the agreement, or in either of the pendente lite orders, providing a credit to plaintiff for post-judgment monies paid by him against the mortgages until the properties sold.
Contrary to plaintiff's assertion, the agreement was not silent as to the post-judgment mortgage pay downs. In fact, the agreement addresses both the party who was to pay the mortgages during the period in question, and the distribution of the sale proceeds for each home. If plaintiff had wanted to recoup the post-judgment mortgage payments, he could have provided as much in section X, paragraphs 31 and 33 of the agreement, or he could have inserted a date on which, if the North Caldwell home was not sold, the parties would then contribute equally to the mortgages or that he would recoup all of the payments after that date. Instead, after significant negotiations, the parties agreed that only plaintiff would pay the mortgages for an undetermined length of time, and that each party would receive "50% of the proceeds;" that agreement is what the court enforced.
Moreover, because the agreement was executed the same day as the judgment of divorce, and because it was the agreement which provided that plaintiff would pay the mortgages until the North Caldwell home sold, plaintiff knew that any mortgage payments made thereafter would be post-judgment payments. Therefore, the agreement sufficiently addressed the issue of mortgage payments and the ultimate distribution of the sale proceeds of the two properties.
Because the agreement was not silent as to the issue of mortgage payments and distribution of sale proceeds, the relevant inquiry becomes whether, pursuant to Rule 4:50-1(f), plaintiff made a showing of "exceptional and compelling circumstances" so as to warrant modification of the agreement by the court. Baumann, supra, 95 N.J. at 392. Plaintiff argues that because he was paying spousal and child support during the time in which he was paying down the mortgages on the properties, it would be unfair and inequitable for defendant to also receive the benefit of half of the mortgage pay downs.
Plaintiff's payment of $55,564 toward the mortgages during the relevant time period does not qualify as an exceptional and compelling circumstance under Rule 4:50-1(f) to warrant modification of the agreement. Schwartzman, supra, 248 N.J. Super. 75-78. In Schwartzman, the parties' property settlement agreement "provided that defendant was to pay plaintiff the sum of $52,000 over a period of 20 years at $50 per week which sum represented payment in full of plaintiff's interest in defendant's business." Supra, 248 N.J. Super. at 76. When the business failed, the defendant sought a modification of the agreement, relieving him of his payout responsibility. Id. at 75.
Affirming the trial court's refusal to relieve the defendant from his payout obligation, we explained that, "the possibility of the failure of a business over the 20 year period of the payout was a contingency which the defendant could have provided for in the agreement had he chosen to do so. His lack of foresight is not an exceptional circumstance beyond his control." Id. at 78 (emphasis added); see also Eaton, supra, 368 N.J. Super. at 223 (refusing to modify a provision of a property settlement agreement pursuant to Rule 4:50-1 where "both parties were represented by counsel" during the drafting of the agreement and "[n]egotiations were extensive and occurred over the course of several months"); Rosen, supra, 225 N.J. Super. at 38 (where permitting prepayment of money owed under a settlement agreement "would constitute a material change in the distributive scheme agreed upon by the parties and in the circumstances would be inequitable").
As in the above cases, plaintiff could have included a provision in the agreement providing for the return of the post-judgment mortgage pay downs, but he did not do so. Further, both plaintiff and defendant were represented by counsel during the negotiations and execution of the agreement. Additionally, granting plaintiff all of the post-judgment mortgage pay downs would constitute a material change to the agreement, as it would shift at least $27,782 from defendant to plaintiff. Accordingly, the trial court did not abuse its discretion in refusing to modify the agreement to grant plaintiff all of the post-judgment mortgage pay downs. Schwartzman, supra, 248 N.J. Super. at 77.
Plaintiff further asserts that, because of defendant's interference with the immediate sales of the properties, he paid significantly more in support than he would have paid had the properties been immediately listed and sold in accordance with their agreement. In that regard, he asserts that the issue of the mortgage pay down was not addressed in the agreement because he believed the properties would be immediately listed and sold and that the parties would cooperate with such a sale in good faith.
Additionally, plaintiff alleges that "[t]he ensuing facts show that [defendant] did not cooperate in good faith[,]" and as such, he contends that "[a]warding [defendant] with [a share of] the mortgage principal pay down for the period during which she intentionally delayed selling the properties is the embodiment of unjust enrichment." We find this argument is not supported by the record. Indeed, in light of the market conditions during the relevant period and the time it would take to close on a property once a contract for sale is executed, plaintiff's claim that, "[h]ad the properties been properly priced and sold at the time of the entry of the [f]inal [j]udgment of [d]ivorce as the parties intended, there would have been no additional principal pay down," is suspect.
However, that is not to say that the properties would not have sold sooner had they been listed at a much lower price directly after the divorce. Nevertheless, the judgment of divorce was entered on June 19, 2007. The Lavallette home closed in April 2008, just ten months after being placed on the market, and the North Caldwell home closed in August 2008. We cannot conclude that the elapsed time between the listings and sales of the properties was unreasonable in length or was caused solely by the actions of defendant. It is noteworthy, given the trial court's history with the parties' divorce, that at no time did the court conclude that defendant intentionally stalled the sales of the two residences. In fact, in October 2007, the court agreed with defendant's position not to lower the listing price of the Lavallette property and denied plaintiff's motion accordingly, without prejudice to readdress the issue in the spring of 2008.
Accordingly, we are satisfied that Judge Zampino did not abuse his discretion in refusing to grant plaintiff a credit for the post-judgment mortgage pay downs. Ibid.
Plaintiff argues in Point II that post-judgment earnings "are exempt from equitable distribution," so "the mortgage principal pay down cannot be distributed equally between the parties." Because we determine that the post-judgment mortgage payments are not subject to equitable distribution, we disagree.
The court did not award equitable distribution but instead incorporated into the judgment of divorce a property settlement agreement voluntarily entered into by the parties. As such, and contrary to plaintiff's assertion, N.J.S.A. 2A:34-23.1, the statute addressing what factors courts should consider in equitably distributing property, is inapplicable. While property subject to equitable distribution is generally governed by the date a divorce complaint is filed, Brandenburg v. Brandenburg, 83 N.J. 198, 210 (1980), it does not follow that post-judgment earnings are exempt from a voluntary agreement to make payments to maintain a marital asset.
The fact that the payments of principal toward the mortgages were made after the date of divorce is of no consequence. Plaintiff entered into a contract with defendant on the day of divorce. As such, he was put on notice that any payment made pursuant to that agreement would be from post-judgment earnings. The court merely enforced that which had been voluntarily agreed to by the parties, and therefore, the net proceeds of the sales of the two properties were properly divided equally between the parties.
Finally, plaintiff argues that "[t]he trial court should have conducted a plenary hearing" on this matter. In this regard, he asserts that "the parties submitted conflicting certifications with respect to the intent of the parties at the time they entered into the . . . [a]greement, the recommendations of their realtors, the intent of the parties with respect to the listings of their properties, and [defendant's] actions creating delays in the sale of the parties' properties." We again disagree.
"A party is entitled to a plenary hearing on [his or] her motion where the evidence shows the existence of a genuine issue of material fact that [he or] she is entitled to relief." Eaton, supra, 368 N.J. Super. at 222. In support of his argument that a plenary hearing should have been held by the trial court, plaintiff cites to various cases where the courts "remanded for [a] plenary hearing to resolve conflicting factual contentions in certification[s]" to the court.
For example, the Court in Conforti remanded because "the material facts presented by the conflicting affidavits [we]re sufficiently in dispute to warrant a plenary hearing." Supra, 128 N.J. at 328-29. However, Conforti concerned a party seeking reformation of a property settlement agreement, which contained a lease, because of mutual mistake of the parties and the fact that the agreement was unfair as written. Id. at 319. Pursuant to the agreement, plaintiff received the fifteen-year lease and her ex-husband received the building subject to the leasehold interest. Id. at 319-20. However, the lease included a termination provision upon sale of the building. Id. at 321. plaintiff sought reformation of the agreement after the building sold, and she was notified of its termination. Ibid. In remanding for a plenary hearing, the Court explained that:
Conforti's claims fairly pose[d] factual issues relating to the intent of the parties in reaching their property settlement agreement, the degree to which strict enforcement of the rider provision would be inequitable and unfair, and whether the property settlement agreement implicates concerns of alimony and child support, as well as the existence of mutual mistake and fraud. Her certifications of fact . . . must be examined with an appreciation that if supported by competent evidence they would establish a prima facie cause of action. [Id. at 328.]
Similarly, this court reversed and remanded for a plenary hearing in Fusco v. Fusco, holding that "disputes implicating the welfare of a child and involving conflicting contentions and opinions of lay and expert affiants must be submitted to a plenary hearing." 186 N.J. Super. 321, 329 (App. Div. 1982). We found that the "visitation decision obviously should not have been made on the basis of filed documents consisting of self-serving certifications by the parties, conflicting psychiatric reports, and an unseemly and irrelevant barrage of attorney certifications and inadmissible expressions of community sentiment." Id. at 327.
However, this court recently decided Barblock v. Barblock, where we affirmed the decision of the trial court, determining that a plenary hearing was not required when one parent contested the permanent removal and relocation of children outof-state. 383 N.J. Super. 114, 124 (App. Div. 2006). No genuine issue of fact existed "bearing upon a critical question under the removal standards to warrant a full-blown trial." Ibid. (internal quotations and citation omitted). Simply put, "[t]he trial judge heard extensive oral argument on the motion, considered all of the written submissions of the parties and evaluated those proofs in light of the applicable law." Ibid. As such, the "plenary hearing was unnecessary because the defendant had failed to muster adequate reasons to forestall the plaintiff's move to Buffalo." Ibid.
For the reasons discussed supra, no material issue of fact existed regarding distribution of sale proceeds in the agreement. The agreement failed to include a provision providing plaintiff a credit for the post-judgment mortgage payments made by him, and the equities do not weigh in plaintiff's favor so as to mandate the agreement's modification. Accordingly, we conclude the facts here analogous to Barblock, ibid., in that no plenary hearing was required.