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Catto v. Catto

April 13, 2009

AYNUR CATTO, PLAINTIFF-RESPONDENT,
v.
KEMAL CATTO, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-1343-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted January 6, 2009

Before Judges Wefing and LeWinn.

Defendant Kemal Catto appeals from the December 21, 2007 order of the Family Part, requiring him to pay to plaintiff Aynur Catto $21,426.29 in interest imposed as a result of his failure to make timely payment to plaintiff of $780,000 in equitable distribution pursuant to the Property Settlement Agreement (PSA) incorporated into the parties' judgment of divorce. For the reasons that follow, we reverse.

The parties were divorced on June 7, 2006. Their PSA contained an equitable distribution provision requiring defendant to pay plaintiff the sum of $780,000 by July 1, 2006. The PSA further provided that, commencing on or about July 1, 2006, assuming defendant had made payment in full by that date, he would pay plaintiff monthly child support of $1,148.33 and monthly alimony of $2,000. The PSA further provided that, until defendant paid plaintiff the full amount of $780,000, he would be obligated to continue to pay plaintiff the support amount entered in a pendente lite order on March 18, 2005, which required him to pay plaintiff unallocated support of $6,500 per month.

Defendant was unable to meet the July 1, 2006 deadline for payment of the $780,000, due to financial reversals. With the assistance of his brother, defendant ultimately paid that amount in full to plaintiff in five payments between May 8 and August 2, 2007.

Plaintiff had brought a series of motions to enforce litigant's rights in an effort to secure her equitable distribution payment. On August 21, 2006, plaintiff filed a motion seeking payment of the $780,000, "together with interest at the rate of 5% per annum from July 1, 2006 . . . ." In his opposing certification defendant stated:

It would be grossly unfair if I were required to pay: (a) the full amount of $6,500.00 per month (non-taxable) and (b) interest on the $780,000.00, inasmuch as I am already paying approximately $3,300.00 per month in excess of my obligation after the $780,000.00 is paid.

Defendant contended that plaintiff "would be unjustly enriched" if she received "five percent interest in addition to the extra $3,300.00 per month . . . ." Nonetheless, on November 20, 2006, the trial court entered judgment against defendant in the amount of $780,000 and calculated interest on that amount from August 23, 2006.*fn1

On May 25, 2007, the court entered an order requiring defendant to make final payment on the $780,000 no later than June 22, 2007; however, the order made no mention of interest payments. Thereafter, on December 21, 2007, the court entered the order which is the subject of this appeal, calculating interest on defendant's $780,000 obligation to plaintiff at $21,426.29.

On appeal, defendant contends that he should not be required to pay interest on the $780,000, since the PSA required him to pay plaintiff a monthly unallocated support amount that was $3,351.67 higher than the alimony/child support amounts that became effective upon full payment of that obligation. Since defendant had paid the pendente lite support amount for a total of thirteen months after execution of the PSA, he had paid plaintiff $43,571.89 in excess of the PSA support levels.

Therefore, defendant argues, he incurred a "penalty" for his delay in paying the $780,000 by July 1, 2006, through his increased monthly support payments to plaintiff. Defendant further contends that the trial judge "made a different contract from" the parties' PSA, which did not contain a provision for interest on the $780,000 in the event of late payment; rather, as noted, the PSA provided for continued support payments at the pendente lite level.

Plaintiff contends that she is entitled to interest on the $780,000 because she was "deprived of the use of [that money]" until defendant paid it. Plaintiff further contends that the $6,500 pendente lite amount was not a penalty; rather, it was an "interim arrangement until ...


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