January 14, 2010
CANDY H. RENDINE, PLAINTIFF-APPELLANT,
WILLIAM RENDINE, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Passaic County, Docket No. FM-16-1714-01.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 7, 2009
Before Judges Yannotti and Chambers.
The parties were married on December 29, 1984; two children were born of the marriage; and on April 28, 2003, the parties were divorced. The two aspects of the Judgment of Divorce involved in this appeal deal with the marital home and the Qualified Domestic Relations Orders (QDRO).
The Judgment of Divorce allowed plaintiff to live in the marital home with the parties' two children until their son was a senior in high school. Plaintiff was responsible for the mortgage payments and other expenses associated with the marital home. The agreement also contained a provision allowing plaintiff to refinance the marital home. The house was to be listed for sale in April of the son's senior year in high school, but the closing of title could not take place before the first week of July in that year, after the son's graduation. The net proceeds from the sale of the marital home were to be divided equally between the parties.
In the alternative, the Judgment of Divorce permitted plaintiff to buy out defendant's interest in the marital home at fifty percent of its fair market value less the balance due on the mortgages. If plaintiff desired to exercise this option, she was required to obtain an appraisal of the marital home. If defendant disagreed with that appraisal, he could obtain his own appraisal. In the event the parties continued to dispute the value of the marital home, the Judgment of Divorce provided that "either party shall have the right to apply to a Court of competent jurisdiction to resolve this issue."
The Judgment of Divorce also provided that defendant's 401(k) plan acquired during coverture was to be divided equally between the parties by way of rollover or QDRO. In addition, the pensions acquired by each of the parties during coverture were to be divided equally by way of QDROs.
The son's senior year in high school ended in June 2007. As a result, under the terms of the Judgment of Divorce, the house was to be listed for sale in April 2007. Defense counsel wrote to plaintiff's counsel on March 29, 2007, April 19, 2007, and June 12, 2007, requesting that the marital house be listed for sale. In response to these letters, plaintiff's counsel wrote defense counsel on June 14, 2007, that plaintiff "would like to buy out" defendant's interest in the marital home, and stated that "before she can finalize this, I need to know what the value of Mr. Rendine's 401(k) plan was at the time the Divorce Complaint was filed." On July 12, 2007, defense counsel again wrote plaintiff's counsel, pressing for sale of the marital home and indicating that a motion would be filed if plaintiff did not sign a listing agreement. In response, plaintiff's counsel reiterated that plaintiff was interested in purchasing defendant's interest in the marital home but she needed missing pages from defendant's 401 Incentive Savings Plan Statement to finalize this.
In August 2007, defendant brought a motion seeking to compel the sale of the marital home, among other relief. While the motion was pending, plaintiff's counsel wrote in a letter dated September 7, 2007, that plaintiff had elected to buy out defendant's interest in the marital home, and enclosed an appraisal indicating that the fair market value of the property as of August 23, 2007, was $570,000. Plaintiff's counsel also asked if defendant would "agree to a credit against his interest in the former marital home in an amount equal to the value of Ms. Rendine's interest in his retirement accounts."
Plaintiff also filed a cross-motion seeking, among other relief, to compel defendant to convey his interest in the marital home to her based on the appraised value fixed by her appraiser and to credit against defendant's interest in the marital home an amount equal to the value of plaintiff's interest in defendant's pension and 401(k) plan. Notably, the Judgment of Divorce does not provide for such an offset. In his responding papers, defendant objected to this offset, noting the difference in liquidity between the proceeds from the sale of the marital home and the pension and 401(k) plan.
In her cross-motion, plaintiff also alleged that defendant failed to cooperate with the preparation of the QDRO, without specifying what he had failed to do. In response, defendant said that he had filled out the form requested by plaintiff's counsel to complete the QDRO for the pension and 401(k) plan. His responding papers also indicate that the delay in preparing the QDRO after the divorce was due to plaintiff's inaction. Two years after the divorce and before the need to sell the marital home arose, in a letter to plaintiff dated March 9, 2005, defense counsel wrote that plaintiff had failed for two years to take steps to have the QDROs prepared. He set forth his understanding that plaintiff's counsel was going to prepare the QDRO, but since this had still not been accomplished, he offered to undertake the task. On May 31, 2005, defendant also wrote to plaintiff indicating that he and his attorney had communicated with her to begin the procedure to distribute the pension and QDRO and that she has been unresponsive.*fn1
The trial court issued an order on November 2, 2007, holding that plaintiff was in violation of litigant's rights, requiring that the marital home be immediately sold or in the alternative, allowing plaintiff to buy out defendant's interest in the marital home pursuant to the provisions of the Judgment of Divorce. Defendant was permitted to have the property appraised at his expense and if the parties could not thereafter agree upon the property's fair market value, then "the court shall appoint an appraiser and both parties shall be bound by the value determined by this appraiser." By order dated November 15, 2007, defendant was awarded counsel fees of $525.
Defendant obtained an appraisal which gave the marital home a fair market value of $700,000 as of November 16, 2007. Plaintiff moved in December 2007 for reconsideration of the counsel fee award. Defendant filed a cross-motion requesting the court to fix the fair market value of the home or appoint an appraiser to do so. He also sought an order to set a date whereby plaintiff must buy out defendant's interest in the marital home, and if she did not do so, then the property must be immediately listed for sale. He also requested that plaintiff pay him a reasonable sum representing rent for her continued occupancy of the marital home and to pay him a reasonable amount of interest on the sum due for his equity in the marital home.
While the motions were pending, plaintiff's counsel advised defendant's counsel in a letter dated January 7, 2008, that plaintiff would agree to list the property for sale at $700,000 provided that the sale price would not be reduced for six months. No agreement was reached on this proposal.
The trial court entered an order dated April 10, 2008, denying plaintiff's motion for reconsideration; appointing an appraiser; giving plaintiff ten days from the receipt of the appraisal to notify defendant of her intent to buy out his interest; allowing plaintiff to buy out defendant's interest in the marital home within sixty-days of receipt of the appraisal; and providing that if she failed to do so, then she "shall forfeit her right to buyout the Defendant's interest in the marital home and the marital home shall be immediately listed for sale."
Thereafter, in June 2008, plaintiff sought defendant's cooperation in refinancing the marital home.*fn2 The record indicates that there were negotiations through counsel in an attempt to reach an agreement whereby the house would be put up for sale and defendant would agree to the refinancing, but in the end an agreement was not reached.
By letter dated August 8, 2008, plaintiff's counsel advised defense counsel that plaintiff "is anxious to list the former marital premises for sale and in view of this, it is my opinion that there is no need for the parties to expend additional funds for an appraisal."
In December 2008, defendant made his third motion to compel plaintiff to immediately list the marital home for sale. He also sought to compel plaintiff to pay rent for her continued occupancy of the marital home. In her certification in response to this motion, plaintiff stated "I continue to have absolutely no objection to listing the house for sale once my mortgage is refinanced and as long as it is listed for its fair market value." Thus, she was making her cooperation in listing the house for sale contingent upon defendant agreeing to the refinancing. She also stated that in September or October 2008, defendant left a voice message on her answering machine stating that he wanted to discuss the sale of the house with her because "with the way things are going it is very stupid for us to be selling that house," apparently referring to the declining real estate market. She indicates that she responded by asking him what he wanted to do but he never got back to her. Defendant contends that his statement was made in the context of suggesting to plaintiff that she might be better off buying out his interest in the marital home.
Plaintiff also filed a cross-motion, seeking, in part, to compel defense counsel to execute a QDRO with respect to defendant's pension and to provide the necessary documentation in connection with the QDRO for his 401(k) plan. She also sought an order to compel defendant to cooperate with the refinancing of the marital home.
The trial court entered two orders dated March 17, 2009, resolving both motions. The trial court denied plaintiff's request to compel defendant to cooperate with the refinancing. The trial court also required plaintiff to immediately list the marital home for sale. The order further provided that defendant's share of the marital home proceeds shall "be determined by the court prior to closing which is a sum that the Defendant would have received had the marital home sold in the summer of 2007 when it should have been sold in accordance with the terms and conditions of the Final Judgment of Divorce." In addition, the trial court directed that defendant immediately authorize his attorney to execute the QDRO with respect to his retirement plan and to provide any required documentation regarding his 401(k) plan to Pension Appraisers Inc. The trial court stayed this ruling pending appeal.
We granted leave to plaintiff to file an interlocutory appeal of the trial court's ruling. In this appeal, plaintiff contends that the trial court erred in compelling the immediate sale of the marital home, in determining that defendant is entitled to the sum that he would have received had the marital home been sold in 2007, in denying plaintiff's request to require defendant to cooperate in the refinancing of the marital home, and in reserving on defendant's request for counsel fees.*fn3
Plaintiff argues that the trial court erred in compelling the immediate sale of the marital home without affording her the right to buy out defendant's interest as provided in the Judgment of Divorce. This argument is patently without merit. While plaintiff did express her intent to buy out defendant's interest in the marital home in her attorney's letter to defense counsel dated September 7, 2007, she thereafter formally indicated that she agreed that the marital home should be sold.
Specifically, after the trial judge entered the order of November 2, 2007, providing the mechanism for the buyout to take place, including provision of a court appointed appraiser, plaintiff's counsel wrote a letter dated August 8, 2008, to defense counsel stating that plaintiff wanted to list the marital home for sale and, as a result, there was no need to undergo the expense of an appraisal. At oral arguments on the motions that form the basis of this appeal, while plaintiff's counsel did argue that defendant delayed paperwork with the QDROs to prevent plaintiff from buying out his interest, he then went on to say that "we have gone beyond that. We have said on numerous occasions list the house, sell the house, we don't care." Indeed, in her certification to the court on these motions, plaintiff herself stated that she had no objection to the sale of the marital home once the refinancing took place. From this record it is clear that by the time the orders on appeal were entered, plaintiff had made plain to defendant and the court that she agreed to sell the marital home.
Plaintiff also contends that the trial court erred in finding that she was at fault for the delays in selling the marital home, that the trial court should have had a plenary hearing on fault, and that the court erred in determining that defendant's share of the proceeds from the sale of the marital home should be determined as though the home had been sold in the summer of 2007.
Not every factual dispute requires a plenary hearing; rather a plenary hearing is only required where the dispute involves a material fact. Harrington v. Harrington, 281 N.J. Super. 39, 47 (App. Div.), certif. denied, 142 N.J. 455 (1995). Here the material facts were readily determined from the letters, motion practice, and court orders that demonstrated that, while plaintiff initially sought to explore buying out defendant's interest in the marital home, she thereafter abandoned that effort but nonetheless failed to place the house up for sale. As the trial judge noted, defendant brought three applications to sell the marital home; whenever plaintiff agreed to do so, she placed conditions on her agreement to do so. We find no error in the trial judge's decision to resolve this issue without a plenary hearing or in finding plaintiff at fault for delaying the sale.
As the trial judge noted, due to plaintiff's delay in selling the marital home, the value of the home has presumably gone down due to the declining real estate market. In order to make defendant whole, the trial judge determined that defendant's share of the proceeds from the sale of the marital home should be determined as though the property had been sold in the summer of 2007, as contemplated by the Judgment of Divorce.
The general rule is that where the value of a marital asset has increased or decreased from the valuation date to the distribution date due to market forces or inflation, both parties will share equally in that change of value. See Bednar v. Bednar, 193 N.J. Super. 330, 333 (App. Div. 1984) (stating that under equitable principles, the parties should share equally in the increase in value of a marital asset where the increase was due to market factors or inflation). However, where the marital asset has increased in value "due to the diligence and industry of a party in possession of an asset, independent of identifiable market forces," then that increase in value accrues to the benefit of the party in possession of the asset. Ibid. Here while the change in value of the marital home is due to market forces, the delay in the sale of the marital home was caused by plaintiff's obstructionist conduct.
Further, during the period of delay in selling the marital home, plaintiff had the use of the marital home, and defendant was deprived of his share of the proceeds. Indeed, we note that in motions before the trial court, defendant had sought rent and interest payments from plaintiff. These requests were denied.
Under these circumstances, the trial court had the discretion to decide on the manner to ameliorate the harm defendant experienced by plaintiff's delay. See Kingsdorf v. Kingsdorf, 351 N.J. Super. 144, 157 (App. Div. 2002) (stating that "a judge sitting in a court of equity has a broad range of discretion to fashion the appropriate remedy in order to vindicate a wrong consistent with the principles of fairness, justice, and the law" (quoting Graziano v. Grant, 326 N.J. Super. 328, 342 (App. Div. 1999))). Allocating the loss in the value of the marital home to plaintiff under the circumstances here fell within the equitable powers of the family court. We do not find that the trial court abused its discretion when it did so by fixing the valuation date as the time for sale contemplated by the Judgment of Divorce.
We find no merit in plaintiff's argument that the trial court erred in denying her application to compel defendant to cooperate in her refinancing of the marital home, noting that the marital home was to be sold, nor do we find any merit in plaintiff's contention that the trial court erred in reserving on the counsel fee issues. See R. 2:11-3(e)(1)(E).