On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Passaic County, Docket No. FM-16-1599-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Graves, Sabatino and Newman.
This case involves the enforceability of a second-marriage antenuptial agreement entered into between the parties twenty-three years before their divorce. After hearing five days of testimony, the Family Part found the agreement enforceable, under the applicable common-law standards of Marschall v. Marschall, 195 N.J. Super. 16, 29-31 (Ch. Div. 1984). Because the finding of enforceability is supported by substantial credible evidence and comports with the law, we affirm the Family Part's decision. We likewise affirm the trial court's denial of counsel fees, as well as the other rulings that have been challenged on appeal.
The following procedural history and relevant facts, as they were presented to and determined by the trial judge, guide our analysis of the issues raised on appeal.
The parties were married on February 8, 1986 in Wayne. At the time of their marriage, plaintiff Susan B. Hiemstra (formerly Susan Rogers) was forty-two years old and employed in the typesetting equipment business. Defendant Robert J. Hiemstra, Sr., was fifty-seven years old and retired from the construction business. Both parties had been previously married, and had children from those prior relationships.*fn1 The children are now long emancipated.
According to defendant, three days prior to the wedding, the parties executed an antenuptial agreement ("the agreement") witnessed by two other individuals. Defendant testified that the agreement had attached to it two schedules that set forth the parties' comparative financial positions at the time. Plaintiff acknowledges that she presented the drafted agreement to her attorney for review. However, she claims that she never saw the financial schedules when she signed the agreement, and that she did not sign the agreement until the day of the wedding.
The agreement treats separately-owned property differently from joint property acquired by the spouses during their marriage. As to property owned by the parties prior to the marriage "or which may be acquired separately by them" afterward, paragraph three of the agreement recited that the parties "waive[d] and release[d] any and all rights with respect to such property of the other insofar as the same might otherwise be included or considered property subject to equitable distribution under [N.J.S.A. 2A:34-23.]"
Paragraph five of the agreement, which further addresses the subject of joint property, states that:
It is the intention and purpose of the parties that the provisions of this [a]greement shall not apply to property that they may acquire in joint ownership during their marriage even though any of their respective separate property shall have been used in connection with the acquisition of any such jointly owned property so acquired or to any other acquisitions of property during their marriage and which the parties mutually and expressly confirm in writing as intended to be excluded from the effect and provisions of this [a]greement.
The addendum to the agreement, which the trial court found was also executed prior to the wedding ceremony, further distinguishes the treatment of joint property versus separately-owned property. Specifically, in paragraph two of the addendum, the parties agreed "that all assets acquired subsequent to the marriage shall be considered joint assets, unless the source of the asset is derived from assets acquired prior to the marriage."
Paragraph nine of the agreement, which is the provision most centrally implicated in this case, provides for two alternative treatments of the issue of alimony, hinging upon which party instituted a divorce action. Specifically, paragraph nine requires defendant to pay "$50,000 per year for a period of three years" to plaintiff as "rehabilitative support," in the event that defendant successfully "institutes an action for divorce" against plaintiff. The provision further provides that such rehabilitative support "shall be considered in full payment of any claim for any alimony, and shall be reduced by the value of [plaintiff's] interest in any property held jointly by the parties."
By contrast, paragraph nine further states that, "[i]n the event [that plaintiff] institutes a divorce action against [defendant], and obtains such divorce, [plaintiff] shall be entitled to no interest in the separate property and estate of [defendant], whether for support or otherwise." The provision specifically exempts "property jointly held by [plaintiff] and [defendant]" from its reach.
Apart from these pertinent substantive provisions, the addendum to the agreement provided that "[t]he provisions of this agreement shall be subject for review two years from the date of this agreement. However, this agreement shall continue in full force and effect unless changed in writing by mutual agreement of the parties."
The agreement was signed by both parties, and by two witnesses, Barbara Stein and Gregory Wright, neither of whom is related to the parties. Stein notarized defendant's signature on the agreement on February 5, 1986. The documentation reflects that Wright notarized plaintiff's signature on the same date, although Wright's trial testimony supports plaintiff's contention that she did not sign the agreement until the wedding day, February 8.
The addendum indicates on its face that both parties signed and dated it on February 7, 1986. However, plaintiff disputed at trial that her signature on the addendum was genuine.
Defendant testified that two financial schedules were contemporaneously attached to the agreement, detailing the assets and liabilities of both parties. Plaintiff, on the other hand, disputed that either schedule was attached at the time that the agreement was signed. Defendant's schedule listed more than $7 million in assets*fn2 and more than $1 million in liabilities.*fn3 Plaintiff's schedule, meanwhile, listed nearly $220,000 in assets*fn4 and more than $60,000 in liabilities.*fn5
Plaintiff filed a complaint for divorce from defendant in the Family Part in Passaic County on May 17, 2007, on the grounds of irreconcilable differences. In her complaint, plaintiff requested dissolution of the marriage, equitable distribution of marital property, spousal support, counsel fees, and a declaration that the agreement "signed by [plaintiff] on February 8, 1986 is null and void and of no effect[.]"
Defendant answered the complaint on July 31, 2007, counter-claiming and alleging extreme cruelty by plaintiff as grounds of divorce. He sought enforcement of the agreement, and opposed plaintiff's assertion that it is null and void.
After almost a two-year period of discovery and pretrial proceedings in the divorce action, the Family Part began hearings in July 2008 addressing the enforceability of the agreement. The parties mutually recognized that the enforceability of the agreement was a pivotal threshold issue in their divorce case, given the agreement's alimony waiver triggered by plaintiff's filing of the first complaint for divorce, and also because of the agreement's limitations on marital property that could be subject to equitable distribution.
Defendant, who bore the burden of proving the agreement's validity, presented as his first witness Leonard Witman, Esq., his tax attorney and the custodian of what defendant asserted was the original copy of the agreement.
According to Witman, he and defendant met concerning the agreement on September 9, 1999, more than thirteen years after the parties married. Witman testified that, in anticipation of that meeting, defendant forwarded him the original of the agreement with the attached financial schedules and the addendum. Witman stated that he then maintained the document in his office file from the date that he received it from defendant in September 1999 through November 2007, when defendant requested the document back from him to use in this litigation.
On cross-examination, Witman acknowledged that he had no first-hand knowledge of when the agreement and addendum were signed. He further acknowledged that he had no first-hand knowledge of whether the agreement that he possessed in his office files was the original or not. Witman also stated that he had no memory of whether the schedules were attached to the agreement when he received it from defendant in 1999. The documents from Witman's file, the note that defendant included with the documents, and a photocopy of the documents were all introduced as evidence by defense counsel, with no objection from plaintiff's counsel.*fn6
Defendant next called his son, Robert Hiemstra, Jr. ("Bob, Jr.").*fn7 Bob, Jr., testified on direct examination that, prior to the wedding, he drove with his father to the reception hall to "pick up the [agreement] from [plaintiff]." He testified that when he entered the reception hall, he "walked over to [plaintiff] and [Wright]. They were there together with the agreement on the table in front of them . . . . [Plaintiff] proceeded to sign the agreement with [Wright] in turn signing the agreement." Bob, Jr., acknowledged that he did not see either plaintiff or Wright review the document in his presence before signing it.
On cross-examination, Bob, Jr., admitted that he never saw defendant sign the agreement or the addendum. He could not remember the date that he picked up the signed agreement from plaintiff. He also could not remember if plaintiff signed the document in one or two places. Bob, Jr., did, however, recall that defendant had told him that his attorney did not prepare the addendum, and that, in fact, plaintiff's attorney had prepared it.
Defendant then testified on his own behalf on two consecutive trial days. During the course of his testimony, defendant identified the document previously introduced during Witman's testimony as the agreement that he had signed before his marriage to plaintiff. Defendant identified as authentic his signature and that of plaintiff appearing on both the agreement and the addendum.
Concerning the financial schedules attached to the agreement, defendant noted that Waterfall Village, a 154-unit housing complex, was one of his main assets at the time of the marriage. He stated that he had constructed the Waterfall Village complex with his business partner, Richard Van Harken, in the early 1970s, with the building being completely finished in 1973. Defendant stated that, although he personally maintained an office at the complex, he hired a superintendent to manage it for him throughout his marriage to plaintiff. Additionally, defendant explained that, in 1995, he sold an office building that he partially owned in Wayne, which he and Van Harken had built in 1974. Defendant deposited his portion of the proceeds from that sale into a bank account.
Defendant further testified that he sold a condominium in Atlantis, Florida during the marriage, and used those proceeds to purchase a residence in Greenport, New York. He also stated that he bought a condominium in Jupiter, Florida at plaintiff's behest, but then sold it when "she decided it wasn't big enough for her children to come there." Defendant claimed that he deposited most of the proceeds from this sale into his bank account, but that he "gave [plaintiff] some of . . . the excess money over what [he] had paid [for the condominium originally]."
Defendant further indicated that he purchased a lot in Estero, Florida in 1990, and had a house built on it. In addition, defendant testified that he maintained a residence in Charleston, South Carolina, which he purchased entirely with his own money. Both of these properties and the New York property were titled jointly in the names of both parties.
Defendant admitted that plaintiff occasionally paid utility or monthly maintenance bills for these three properties, but he asserted that she did so with money that he gave her during the marriage. He also indicated that he had sold the other properties listed on his financial schedule and likewise, placed the proceeds in his bank accounts.
As to his racehorse business, defendant admitted that he continued to race horses during the marriage and that he "made money some years and . . . lost money a lot of years" in the business.
During defendant's direct testimony, his 1983 and 1984 individual federal tax returns were moved into evidence. The returns reflected his income for the respective tax years from three years and two years prior to the marriage. The returns reflected no wage income to defendant during those tax years. Instead, both returns showed only combined income to defendant from rents and investment income from Waterfall Village, and the office building in Wayne, totaling more than $300,000 each year.
Defendant also moved into evidence the parties' joint federal tax returns from 1988 and 1989, for the periods two and three years after the wedding, respectively. These two tax returns showed nearly-identical amounts as the individual returns from 1983 and 1984. Specifically, the returns all reflected no wage income, but showed rental and investment income of more than $300,000 for each year.
Defendant also moved into evidence the parties' joint 2005 and 2006 federal tax returns. Again, these returns had no wage income recorded. On the 2005 return, the parties again listed more than $300,000 in income from the Waterfall Village property, but none from the Wayne office building, as it had been sold prior to this date. The 2006 return listed more than $450,000 as income from Waterfall Village. Defendant explained that the Waterfall Village revenue had increased due to the rectification of prior mismanagement of the property by defendant's business partner in a previous year, thereby allowing defendant to draw a larger share of the profits in 2006. Defendant again introduced his individual ...