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Kay v. Kay

April 21, 2009

GRACE KAY, PLAINTIFF-APPELLANT,
v.
GEORGE KAY, DEFENDANT-RESPONDENT.



On appeal from Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-309-06 and C-457-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued April 1, 2009

Before Judges Payne and Newman.

Plaintiff Grace Kay appeals from an order denying her motion to vacate the settlement she entered into with her former husband George Kay. She contends that the trial judge should have vacated the settlement because she did not enter into it freely with informed consent, and further that the judge's findings were not supported by adequate, substantial or credible evidence. We reject her contentions and affirm.

The facts may be summarized as follows. The parties divorced in 1993. The matrimonial separation agreement was entered in the State of New York. The current issue arises from a dispute over legal ownership of a condominium.

Defendant purchased the Cliffside Park condominium after he and plaintiff divorced. Defendant had been using the condominium as his sole residence for the past several years. In 2003, he transferred title of the condominium to his son, James Kay ("James") for no consideration. James subsequently transferred the deed to his mother, again for no consideration. Defendant and James had actions pending against each other in New Jersey. However, pursuant to the settlement, all claims were withdrawn, and James is not involved in the appeal now before this court.

Following the transfer of title, plaintiff filed a complaint in order to obtain clear title to the condominium. A court order was subsequently entered directing that the parties engage in mediation. Retired Judge Gerald Escala conducted the mediation sessions which were ongoing for months leading up to the trial date, set for October 15, 2007. From the initial discussions, Judge Escala recommended the pursuit of a global settlement in order to resolve the New York matrimonial case and also the Chancery case in New Jersey regarding title to the condominium. In furtherance of the mediation sessions, defendant's counsel sent plaintiff's counsel a letter dated September 17, 2007, proposing settlement terms. At the trial date, counsel requested time to continue negotiations which the trial judge granted. Following a three-hour negotiation, a settlement was reached and was placed on the record before the judge, dismissing all pending actions with prejudice.

Prior to the settlement, defendant was obligated to pay five years of alimony at $30,000 per year to be paid to plaintiff on a monthly basis. Defendant was also obligated to maintain $700,000 in life insurance, naming plaintiff as the beneficiary. Defendant had filed a notice of appeal from imposition of the life insurance requirement. Defendant further intended to file an application in New York based on changed circumstances to reduce or terminate alimony as he had since lost his Asian travel business.

Under the terms of the settlement, the parties agreed that the litigation pending in New Jersey and New York was to be settled for the total amount of $262,500. This amount was to be paid from the proceeds of the sale of the condominium.

Specifically, the separation agreement was to be modified such that all past and future alimony was to be deemed fully and completely satisfied by the provisions of the settlement agreement. It was further agreed that the disbursement would be structured not as alimony or maintenance but as equivalent to equitable distribution such that plaintiff would not have to pay taxes on the proceeds.

To implement the settlement, plaintiff was to convey a quit claim deed or equivalent deed to defendant so that he could convey clear title. The deed was to be held by defendant's counsel in trust. Following the sale, said payment would be transferred to the trust account of defendant's counsel. Counsel was then responsible for paying the $262,500 to plaintiff's counsel, who upon receipt was to distribute the payment to plaintiff. It was agreed that the payment was to take care of any legal fees owed to counsel by plaintiff or James.

Additionally, defendant agreed to maintain life insurance, consisting of two policies, on his life for the benefit of plaintiff. The first policy was for $500,000 and was to be maintained by defendant until May 18, 2009. The $200,000 policy was to be maintained by defendant through 2011. At the conclusion of those respective years, plaintiff would have the option of continuing payments on the policies, with defendant executing the proper documentation permitting her to do so. As a result, all life insurance obligations under the separation agreement were to be deemed satisfied by the provisions of the settlement agreement.

The settlement was placed on the record by counsel on October 15, 2007, before Judge Robert P. Contillo. When asked by the judge if she understood the terms of the settlement placed on the record, plaintiff responded "yes." Judge Contillo ...


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