July 21, 2009
CHRISTOPHER F. HASTY, PLAINTIFF-APPELLANT,
OLGA P. HASTY, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division - Family Part, Mercer County, Docket No. FM-11-993-07-B.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: June 3, 2009
Before Judges Axelrad, Parrillo and Lihotz.
Plaintiff Christopher Hasty appeals from a final judgment of divorce (FJD) incorporating a mediated settlement agreement reached by the parties resolving all major issues concerning alimony, equitable distribution and payment of their daughter's educational loan. On appeal, plaintiff argues the trial court erred in failing to hold a hearing as to the existence of an agreement between the parties, and in enforcing the incomplete document as final and without making any finding that its terms were fair, equitable and reasonable. Appellant further challenges the court's award of counsel fees to defendant as an abuse of discretion. We affirm substantially for the reasons articulated by Judge Mary Jacobson on the record on December 21, 2007, following oral argument on defendant's motion to enforce the agreement.
Appellant is a tenured professor at Harvard University acknowledging an annual base salary of $143,000, and defendant is a tenured professor at Princeton University earning about $107,000 annually. After about thirty years of marriage, appellant filed for divorce. About four months later, on August 8, 2007, the parties agreed to participate in a voluntary mediation with retired judge Graham T. Ross. Prior to the mediation, defendant furnished appellant with a copy of her case information statement (CIS) and all requested information relating to the parties' finances. Appellant provided a copy of his CIS and an appraisal of the parties' Cambridge, Massachusetts property.
The mediation lasted more than four hours, during which the parties were accompanied by counsel. During the session appellant did not request any additional information from defendant. According to defendant, the mediator handwrote a three-page document entitled "Christopher Hasty - Olga Hasty Agreement," which set forth the terms to which the parties had agreed. This document provided as follows:
l. Each party to keep premises in which he or she is presently residing. 1/2 the difference in value will be credited to the party who has the lesser equity. Amount to be determined by a joint appraisal for each property (Cambridge & Princeton). Each party to sign all documents to give the other title free of any claims by that party.
2. All bank accounts, including but not limited to PUCU (Princeton University Credit Union) accounts (4), Merrill Lynch accounts (1), Harvard Credit Union Accounts (3) to be divided equally (by credit to the other) as of 4/24/07.
3. [The parties' daughter's] educational loan (approximately $100,000) to be satisfied as follows: Merrill Lynch custodial account [approximately $44,000.000] to be applied immediately to reduce amount of loan; 2/9 of . . . [approximately $30,000] to be applied when received (anticipated summer '08); balance to be satisfied by Olga sending 40% of monthly payment until 2/9ths amount is applied at that time to be satisfied (60% Christopher - 40% Olga).
4. All pension, IRA, annuities, stocks/bonds to be valued as of 4/24/07 and QDRO'd so that each party receives 1/2 of the value of these accounts, Pension appraisers to provide this QDRO service, the cost of which shall [be] paid equally by the parties.
5. Personal Property: Each party to retain items in his/her residence (including rugs) with the following conditions: Christopher to remove all items in Princeton formerly owned by Phoebe Hasty. Olga to buy Steinway Baby Grand Piano for $10,000, to be paid by cash or credit, if applicable. Each party entitled to 2 Keuggerants and 1/2 silver coins.
6. Each party keeps vehicle currently being operated by him/her.
7. Visa signature rewards to be equally divided.
8. Each party waives now, and in the future any/all claims for alimony.
9. Each party to be responsible for his/her own legal fees in connection with this matter.
Defendant recalled that the mediator read the terms of the agreement aloud and asked the parties, who were still in the presence of their attorneys, if they understood the terms and agreed to them. Defendant insisted that both she and appellant answered affirmatively. The mediator then asked the parties to read and initial each of the three pages of the agreement, which they did. No further mediation was scheduled.
Defendant's attorney subsequently prepared a formal, typewritten property settlement agreement incorporating the terms of the August 8, 2007 agreement, plus additional "boilerplate language,"*fn1 and forwarded it to appellant's counsel on August l6, 2007 for appellant's signature. Despite repeated inquiries over the next two months, appellant's attorney did not respond to the request, indicating his client was not responding to his inquiries. Appellant, however, appeared to be acting in reliance on the agreement by retaining an appraiser approved by defendant to value the parties' Princeton home, which his attorney confirmed in emails of September l8 and l9, 2007.
On September 6, 2007, defendant filed an answer and counterclaim for divorce, requesting the court incorporate the terms of the parties' August 8, 2007 agreement into the FJD. Appellant did not file an answer to the counterclaim. A month later, he changed attorneys.
In November 2007, defendant filed a motion to enforce the agreement and requested counsel fees. Appellant filed a cross-motion opposing enforcement and requesting the scheduling of a case management conference for purposes of discovery. In a supporting certification, appellant contended he "agreed to attend the mediation with the understanding it was not binding."
He further asserted that the terms of the agreement were not "agreed upon terms" but merely "suggestions" or "proposals" that he was requested to initial "so that we had some record of what was discussed in order to continue settlement discussions." He insisted he was never advised this was a final agreement to which he would be bound. As evidence of his position, appellant claimed that at the conclusion of the session, the mediator "stated that he hoped [the parties] would be able to resolve the issues and that he would not have to see [them] again." Appellant further maintained that the document was not comprehensive, and further that he had rejected the terms as not being fair and equitable.
At oral argument on December 21, 2007, appellant argued the agreement was unenforceable because it was incomplete, unsigned and inequitable. Appellant contended the certifications presented factual disputes as to whether a settlement had been reached and urged the court to hold a plenary hearing pursuant to Harrington v. Harrington, 281 N.J. Super. 39 (App. Div.), certif. denied, 142 N.J. 455 (1995).
Judge Jacobson was satisfied that appellant's certification did not create an issue of material fact warranting a plenary hearing. Moreover, the nine paragraph initialed document, which was specifically designated as an agreement, could not in any way be viewed a preliminary list of issues. As the court pointed out, each of the paragraphs resolved with great specificity the particular issue raised, as did for example, paragraph eight, which expressly reflected a waiver of alimony. The court then made the following additional findings, concluding that appellant's self-serving declaration was belied by the clear and actual content of the document, that the record reflected a bargain was clearly struck by the parties and that there was no legal or equitable basis to preclude enforcement of the agreement:
So even though I have a certification from Christopher saying that . . . he didn't understand this to be an agreement [i]t's a self serving certification that flies in the face of what I have in front of me that's headed an agreement, that's initialed . . . by both parties. Initials connote acceptance. And the fact that a signature is not included here is not to me fatal to this being viewed as an agreement, because as I just read into the record, you can have an oral agreement that . . . binds an individual if the intent was to put it into writing at some time in the future. And so the absence of a signature is not determinative. We couldn't find any case law in our checking that said that the absence of a signature is something that kills the agreement. . . .
So even though we have Christopher saying he's entitled to a plenary hearing, the Court has to look and see whether the record is such that a reasonable fact finder would find a dispute of fact. And I don't believe [there is], given the specificity of this agreement, that it does address equitable distribution, alimony and how they will handle [their daughter's] educational loans. The fact that there may be some other additional issues that . . . one would normally address through boilerplate is I don't believe any reason not to enforce this agreement.
As I mentioned, I did look at some of the case law, and I find this is distinguishable from Harrington . . . where a plenary hearing is required. There was no writing in Harrington. Here there was a writing prepared by a mediator after a four-hour mediation session where the parties were both represented by counsel. Thirty-year marriage, elected to proceed with mediation in the absence of full and complete discovery and whether it's now advisable in retrospect or not, to me this document, called an agreement entered into at the end of the four-hour session is a binding contract that will be enforced against Mr. Hasty.
I'm satisfied from the review of the record that a bargain was clearly struck. And the fact that a later reflection -- if we were to allow later reflections or second guessing of parties to allow the abandonment of agreements, it would undermine the whole settlement process. And that's the gist of a lot of the case law that was cited by Olga Hasty. . . . Bistricer and Tower Investments v. Bistricer[,] 23l N.J. Super. 143, a Chancery Division decision from November l4th, 1987, and Pascarella v. Bruck[,] 190 N.J. Super. 118 . . . a[n] Appellate Division decision from l983. And I don't find that there was any fraud or duress here, and . . . in terms of its being unfair, there was nothing in the record for me to suggest that there was something unconscionable about the agreement. There was no showing of artifice or deception, no showing of a lack of independent advice, no abuse of any confidential relation or any similar indicia which would lead me not to enforce this agreement. I'm just paraphrasing from the Pascarella case for example.
And again, there's only need for a plenary hearing when there's a material dispute of fact, and I don't find that the certification of Mr. Hasty rises, you know, in light of the overwhelming evidence to show there was an agreement here. . . . I don't find that it does create the kind of dispute of fact that's necessary. I have his initials, I have a document called an agreement. I have specific provisions that are quite detailed and reflect an understanding of the parties' situation, and I believe that it does constitute a marital settlement agreement and should be enforced[.]
The court also awarded defendant counsel fees based on the belief the parties had an agreement that should have progressed to an uncontested divorce without defendant's having had to file the enforcement motion and incur "unnecessary" expenses "given the facts of the case."
The court's decision was memorialized in an order of the same date: (1) granting defendant's motion to enforce the August 8, 2007 agreement and to schedule the matter for an uncontested hearing; (2) awarding defendant $4,775 of the requested $7,970 counsel fees; and (3) denying appellant's motion to find the August 7, 2007 document unenforceable, to schedule a case management conference and for counsel fees.
On January 9, 2008, appellant filed a motion for permission to file an answer to defendant's counterclaim nunc pro tunc. Defendant cross-moved for denial of appellant's motion and for counsel fees. Following oral argument on February 8, 2008, the court denied appellant's request to file an untimely answer to defendant's counterclaim, ruling the issue was moot since it had previously ruled in favor of enforceability of the agreement. The court also ordered appellant to pay an additional $500 towards the $1,770 counsel fee requested by defendant. The court was satisfied the rationale for fee-shifting applied in this instance, emphasizing that the December 21, 2007 order established the court's view of the challenged agreement and set forth defendant's right to its enforcement. Therefore, defendant should not have been compelled to re-litigate the issues.
Defendant appeared with counsel for her uncontested divorce hearing on March 31, 2008. Appellant's counsel appeared, representing that he directed his client that he could not proceed to an uncontested hearing on his complaint because of his position that all of the issues between the parties were not resolved. Over appellant's counsel's objection, the court allowed defendant to place her understanding of the agreement on the record and answer the "typical" questions about it for incorporation into the FJD. On that day, Judge Jacobson granted defendant a judgment of divorce and incorporated the August 8, 2007 agreement therein. An FJD was issued in June 16, 2008.
The trial court signed an order for a stay of the FJD pending appeal on July 9, 2008, and this appeal was filed about a week later. On December 5, 2008, we granted appellant leave to supplement the record with Judge Ross' unsigned retainer agreement, which appellant claimed he did not possess at the time of the enforcement motion. The agreement provides in pertinent part that:
l. All documents, reports or other materials submitted to Judge Ross in connection with this proceeding shall be deemed to be privileged and confidential and shall not be distributed, revealed or shared with any other party or entity except upon written authority by the parties.
3. All discussions, communications and exchanges between the parties and Judge Ross shall be deemed privileged and confidential and may not be revealed or published to any third party or any tribunal except upon written consent by all parties or order issued by a Court of competent jurisdiction.
Appellant renews the arguments made to the trial court, and additionally suggests that if the trial court had the benefit of the retainer agreement, with its confidentiality language, it would not have considered the handwritten document or, alternatively, would have viewed it as simply the mediator's notes summarizing the non-binding mediation session.
We first address appellant's argument about the necessity for a plenary hearing. Although material factual disputes cannot be resolved by the trial court based solely upon conflicting affidavits and certifications, "not every factual dispute that arises in the context of matrimonial proceedings triggers the need for a plenary hearing." Harrington, supra, 281 N.J. Super. at 47; accord Adler v. Adler, 229 N.J. Super. 496, 500 (App. Div. l988). In Harrington, the parties had engaged in mediation which, although somewhat successful, did not result in a written settlement agreement. 281 N.J. Super. at 43. At issue was whether the parties had actually reached a binding oral property settlement agreement with only the mechanics of putting it into writing left for the attorneys, or whether the parties had simply agreed to have their attorneys draft a proposed settlement agreement for them to read and, if found acceptable, to sign. Id. at 43-46. We found that, while agreements do not necessarily have to be reduced to writing to be enforceable, the existence of an agreement must be established. Id. at 46-47. Given the conflicting certifications and submissions on this point, a plenary hearing was warranted. Id. at 47.
As noted by Judge Jacobson, unlike the situation in Harrington, the parties here initialed a comprehensive written document entitled "agreement" that resolved all of the key areas in dispute. The trial court was correct in disregarding appellant's certification as creating an issue of material fact that would require a plenary hearing. Although appellant attempted to downplay the document as a mere "Mediation List" of issues discussed, but not resolved during the four-hour session, Judge Jacobson appropriately characterized appellant's certification as entirely "self-serving" and "fl[ying] in the face" of the actual content of the detailed document he had endorsed by initialing each of the three pages.
We further note that appellant's conduct immediately following mediation and execution of the agreement further undermines his characterization of the handwritten document as a non-binding preliminary list of proposals. During the next two and one-half months, appellant did not indicate in any way that a binding agreement had not been reached; rather, he acted consistently with the terms of the August 8, 2007 agreement. After receipt of defendant's proposed formalized property settlement agreement shortly after August l6, 2007, appellant did not respond by denying that an agreement had been reached and request further mediation or return to the litigation track with discovery requests. Nor did he file a timely answer to defendant's September 6, 2007 counterclaim that requested the agreement be incorporated in the FJD. Instead, appellant acted in reliance on the agreement by retaining an appraiser to value the Princeton home. It was not until appellant obtained new counsel in late October that he first expressed his current position disputing the enforceability of the mediation agreement. Appellant's changing his mind about the agreement reached at mediation does not create a genuine issue of material fact as to its creation and enforceability that would warrant a plenary hearing.
Next, appellant argues for the first time on appeal that the confidentiality language in Judge Ross' unsigned retainer agreement is consistent with his understanding of the mediation process and his belief that the handwritten "Mediation List" was a non-binding and non-admissible document. We disagree. The purpose of the confidentiality provisions is to encourage the parties to be open and honest about all issues so that an agreement can be reached. It confers confidential status on any admissions a party might make in the course of mediating or documents exchanged during the process, not to the actual agreement ultimately reached in mediation. Appellant's reliance on Lehr v. Afflitto, 382 N.J. Super. 376 (App. Div. 2006), is misplaced. The document there deemed confidential and unenforceable as a settlement agreement was merely a post-session letter to counsel for both parties prepared by a mediator, without input or endorsement by the parties, summarizing the issues he believed had been resolved, as well as three significant disputed financial items along with his recommendations for resolution. Id. at 379-80. Unlike Lehr, the handwritten document in the present case was clearly not just the mediator's notes or assessment of issues discussed during the session. Rather, the document was a final settlement agreement as evidenced by the fact it was entitled "agreement," it raised and resolved all major issues between the parties in comprehensive terms and it was initialed by both parties. It is unclear as to why the mediator did not require the parties to formally affix their signatures to the document; however, in the context of the entire record, the absence of their signatures is not fatal to the creation or enforceability of the agreement.
Appellant, represented by counsel, elected to proceed with mediation in the early stages of his divorce litigation. He was aware there had not been a formal exchange of discovery and was apparently satisfied that defendant had provided him with sufficient financial documentation to resolve all major marital issues concerning equitable distribution, payment of their daughter's educational loan and alimony at the mediation session. Essentially, the agreement reflects an equal division of the parties' property and a waiver of alimony by defendant despite appellant's greater earnings. Appellant knew he had deposited an inheritance from his mother's estate into the parties' Merrill Lynch account in 2006 and he presumably chose not to make an issue of it. As the parties' marital settlement agreement that was voluntarily entered into following mediation is not tainted by "unconscionability, fraud, or overreaching in the negotiations of the settlement," we agree with the trial court that no legal or equitable basis exists not to enforce it. See Miller v. Miller, 160 N.J. 408, 419 (1999).
We turn now to appellant's challenge to the counsel fee award. According to appellant, the court abused its discretion in that it did not consider any of the factors set forth in Rule 5:3-5(c), but simply made the award based upon the fact that defendant had prevailed in both her motion to enforce and in her opposition to appellant's motion to file an answer to the counterclaim nunc pro tunc. We disagree. Contrary to appellant's contentions, Judge Jacobson clearly found that defendant had been forced to bring her motion to enforce as a result of appellant's unreasonable refusal to submit to the terms of the August 8, 2007 agreement. The court further found that appellant had acted even more unreasonably in bringing his motion to file an answer nunc pro tunc in complete disregard of its earlier rulings, which had rendered his motion moot. The court also implicitly took into account the parties' financial circumstances and respective abilities to pay by requiring appellant to pay only a portion of the fees incurred by defendant. Accordingly, we are satisfied the court acted within its discretion as to the award of counsel fees and the quantum, and discern no basis to second guess the determination. See Williams v. Williams, 59 N.J. 229, 233 (1971); Addesa v. Addesa, 392 N.J. Super. 58, 78 (App. Div. 2007); Chestone v. Chestone, 322 N.J. Super. 250, 258 (App. Div. 1999); R. 5:3-5(c).