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Ward-Gallagher v. Gallagher

August 13, 2010


On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Union County, Docket No. FM-20-0960-09G.

Per curiam.


Argued June 8, 2010

Before Judges Lihotz and Ashrafi.

Defendant Stephen Manus Gallagher appeals from a Family Part order denying his motion to vacate a default Final Judgment of Divorce (FJOD) entered April 6, 2009, based on the complaint of plaintiff Mary Josephine Ward-Gallagher. Defendant contends he was not served with the complaint and had no notice of the divorce proceedings. Additionally, defendant seeks to set aside a May 21, 2008 marital settlement agreement (MSA), incorporated into the FJOD, alleging it was executed under duress and is otherwise unenforceable because of fraud and its unconscionable terms.

On appeal, defendant argues the motion judge erred in denying his request without benefit of a plenary hearing to determine disputed facts.

Based on our review of the arguments presented, in light of the record and applicable law, we conclude the trial court erred in failing to conduct an evidentiary hearing to determine whether defendant was properly served with the complaint for divorce. Accordingly, we reverse and remand.

The parties were married in a civil ceremony on March 16, 1988, which they confirmed in a subsequent religious ceremony in June 10, 1989.*fn1 The day before their civil ceremony, plaintiff requested that defendant execute an ante-nuptial agreement designed to protect her $212,250 in pre-marital assets, which had been accumulated predominately through her ownership in a family real estate development business.

Plaintiff owned fractional interests in five properties with her relatives. Pursuant to the pre-nuptial agreement, the parties waived all claims to "property owned prior to the marriage" by the other. During the marriage, many of plaintiff's originally held real estate interests were sold and the proceeds reinvested in other properties. Also during the marriage, defendant independently formed East Commercial Construction Company (ECCC), which performed construction and maintenance work on realty owned by plaintiff and her family. Defendant contends plaintiff's family and he combined their business efforts for the betterment of all family members and that he worked for the real estate entities without compensation throughout the marriage.

Sometime after the Fall of 2007, plaintiff discovered defendant had engaged in an extra-marital affair, from which a child was born. At this time, the parties had been married nearly twenty years and the total of their accumulated assets exceeded sixteen million dollars.

On February 29, 2008, plaintiff insisted the parties execute a post-nuptial agreement. Plaintiff explained to defendant that she wanted to protect her pre-marital assets from possible future claims made on behalf of defendant's newly born child. In the February 2008 agreement, defendant waived "his potential right to share in the real estate and other related assets accumulated by [plaintiff] before and during the marriage with her [f]amily [m]embers." In exchange, plaintiff waived any right, title or interest in defendant's corporation, ECCC, and in real property situated in Ireland valued at $1.6 million, which defendant received from his mother and re-titled to the parties jointly.

Defendant asserted that when plaintiff presented him with the February 2008 agreement, he expressed a desire to consult counsel. Plaintiff's attorney provided the names of three attorneys with whom he might consult. Defendant chose a name from the list and hired counsel to review the proposed February 2008 agreement. After his review, the attorney sent defendant a letter advising that its execution was "contrary to [his] legal and financial interests" and would unfairly require him to "give up approximately $4,350,000, not counting any further increases [in] the value of the real property" interest held by plaintiff. Specifically, counsel stated the February 2008 agreement sought "to make the $15.13 million in real estate held by your wife her separate property" and required defendant to waive any right of inheritance in plaintiff's estate, including the taking of an elective share.

Defendant asserts he never received his attorney's letter, as plaintiff frequently intercepted his mail. Defendant admits he executed the February 2008 agreement in an effort "to preserve [the] marriage," but claimed he did so without benefit of counsel's advice. Defendant supports this contention by noting plaintiff attached the original letter to her certification in opposition to his motion.

In early June 2008, plaintiff presented defendant with a draft of the MSA, which differed in pertinent respects from the February 2008 agreement. The MSA provided that each party waived any future right to alimony. Moreover, it stated the legal rights enunciated in "Lepis v. Lepis, 83 N.J. 139 (1980), and Crews v. Crews, 164 N.J. 11 (1999), shall not apply to any post-judgment application made to the court seeking financial support." It additionally required the transfer to plaintiff of the entirety of the parties' joint interest in Ward & Gallagher Realty, LLC, which owned the apartment building where the parties resided. The MSA allowed plaintiff, at her discretion, to require defendant to vacate the ...

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