August 19, 2010
BRUCE N. ANTON, PLAINTIFF-RESPONDENT,
LAURIE ANTON, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-2340-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 26, 2010
Before Judges Rodríguez and Reisner.
Defendant Laurie Anton appeals from the denial of her motion seeking relief from the July 10, 2008 judgment of divorce, which incorporated a Property Settlement Agreement (PSA). Laurie moved pursuant to Rule 4:50-1, alleging that plaintiff Bruce N. Anton did not disclose certain marital information, specifically that on August 29, 2005, Bruce sold the assets of Robison-Anton Textiles (Robison-Anton) and related entities for approximately $13 million and did not disclose this information in the PSA. Thus, the PSA was fraudulent. We affirm.
These are the salient facts. The parties were divorced on July 10, 2008, after twenty-seven years of marriage. They retained separate attorneys, but agreed to jointly retain the services of Hubert Klein, C.P.A. of Ampler, Politziner & Mattia, P.C. to conduct the forensic analysis of the marital assets. Laurie eventually obtained independent appraisals of Bruce's commercial properties.
On April 15, 2008, the parties entered into the PSA. Bruce was required to pay Laurie approximately $4.5 million in liquid assets. The PSA was incorporated into the judgment of divorce.
Thereafter, Laurie hired Valerie D. Solimano, Esq. to review the PSA. Solimano advised Laurie to employ the services of a certified public accountant. Laurie hired C. John Miliotis, C.P.A. and he reviewed the files of Laurie's prior counsel, Mitchell S. Arons, Esq. and Klein. Miliotis's review revealed that documents pertaining to the location of the Robison-Anton sale proceeds were absent. Miliotis "reconstructed" the proceeds from the sale. This disclosed that $3,939,535 in liquid assets was unaccounted for in the PSA.
Almost one year after the entry of the judgment, Laurie moved seeking relief from the judgment, or alternatively, limited discovery and a plenary hearing. Bruce opposed the motion and filed a cross-motion requesting the denial of Laurie's motion. Laurie filed an opposition to Bruce's cross-motion.
Laurie submitted certifications from Solimano, Miliotis and herself. These certifications alleged that their discussions with Klein revealed that Bruce's counsel limited the scope of his review of the marital assets and Klein did not trace the assets derived from the sale of Robison-Anton. However, Klein submitted a certification denying such conversations and stipulated that he traced the proceeds from the Robison-Anton sale and was satisfied that all the proceeds were located. Laurie certified that she did not choose Arons herself. Instead, Bruce presented her with a list of attorneys and she selected Arons from that list.
Laurie alleged that she was under "extreme stress" and felt pressured to resolve the property settlement pursuant to Bruce's schedule. Laurie's emotional state caused her to rely on Arons, who in turn relied on the truth and accuracy of Bruce's disclosures. Laurie indicates that Arons was not provided with "any schedule of assets" until ten or eleven days prior to the meeting to discuss the property settlement. Consequently, Laurie alleges that she was "pressured" to accept the PSA settlement, which was "incomplete" and agreed to the settlement under stress and duress following a thirteen hour meeting.
Laurie argued that the overreaching of Bruce is demonstrated by a provision in the PSA. In particular, the provision provides: the parties shall file joint federal and state tax returns for calendar year 2007.
The wife shall cooperate with respect to the preparation and signing of said joint tax returns prepared by the parties' accountant, Konisgsburg, Wolf, & Co., P.C. If the wife does not cooperate with respect to the signing of the aforesaid tax returns, then the husband shall have the right to sign the wife's name on the aforesaid tax returns, as well as on any and all refunds received in connection with the aforesaid tax returns.
The marital assets shall be used to pay the taxes due and owing in the calendar year 2007 tax returns. Any net refund received in connection with the calendar year 2007 tax returns shall be divided equally between the parties.
Laurie offered as further support a letter dated October 12, 1997, indicating that Bruce refused to provide discovery and withheld payment on Laurie's new residence until Laurie accepted the PSA.
Miliotis concluded that a substantial amount of marital assets were not accounted for in the PSA, at least $4.3 million. This review revealed that certain documents were missing from the files of Klein and Arons, including: Case Information Statements from both parties; tracing of marital assets from the sale of Robison-Anton; proof of the whereabouts of the proceeds from the sale; depositions of Bruce regarding the sale; no tax returns for the fourteen Anton family businesses.
Moreover, Solimano and Miliotis certified that their discussions with Klein revealed that he was "constrained and directed" by Bruce's attorneys to limit his work. Klein's examination of the parties' spending was also limited to thirteen months. Klein revealed that he was directed not to perform valuations on any of the limited partnerships or any tracing of the marital assets or the assets from the Robison-Anton sale.
Miliotis certified that his review of the files of Klein and Arons revealed that there was at least $4.3 million missing from the marital balance sheet. Miliotis was therefore required to reconstruct the proceeds from the sale based on the cash on hand, accounts receivable and accounts payable from the audited financial statements. This revealed net proceeds of $6,592,936. Comparing this amount to the liquid assets set forth in the PSA further revealed that $3,939,535 of liquid assets were unaccounted.
Klein submitted a certification to "deny and/or clarify" the allegations set forth in the certifications of Laurie and Solimano. Klein denied having a "meeting" with Laurie or her counsel regarding the issues set forth in their certifications. Instead, Klein stated that his interaction with Laurie and Miliotis was limited to waiting for the file to be retrieved from storage, which lasted ten minutes.
Further, Klein denied informing Laurie, Solimano or Miliotis that Bruce did not disclose certain assets. Klein informed the parties that Bruce provided him with the requested documentation and information pertaining to his businesses. These documents included tax returns and documentation of the accounts receivables. Klein did not make copies of the reviewed documents for his file because Bruce's businesses were winding down and the asset sale occurred three years earlier.
Further, Klein informed the parties that he performed a "basic search" of Bruce's business interests as requested by the parties. The documents reviewed verified the net proceeds received from the sale and where the funds went. Klein "had no concerns that any funds had not been adequately accounted for."
Bruce indicated that Laurie, Arons and Klein were fully aware of Robison-Anton, its subsidies, related entities, the sale of the business and its net proceeds at the time the PSA was negotiated. All relevant financial records and documents were made available to Laurie's counsel. Further, Klein or his associate conducted an examination of the records relating to the business, sale of the business and disposition of the proceeds of the sale at Bruce's office. Thus, Bruce disputed Laurie's contentions that such records were not made available and further denied pressuring Laurie to use Arons as her marital counsel.
Bruce certified that he was the President of Robison-Anton, which was founded by his father. Bruce owned the business prior to the parties' marriage. Three years prior to the divorce, Bruce sold the assets of Robison-Anton and related entities for approximately $13 million. BNA Enterprises, Inc. (BNA) was the successor name to Robison-Anton. The entity held the remaining proceeds from the sale of Robison-Anton during the winding down of the business, including accounts payables, accounts receivables, and other winding down expenses. BNA also held $1.2 million in tax-free Wachovia auction rate securities, which were transferred to Laurie pursuant to the PSA.
According to Bruce, on August 23, 2007, his attorney hand delivered Arons's office a letter and two folders containing all the information and documentation requested by Arons. Attached to the letter was the closing statement. This information included:
a. total sales price in 2005 was $13,429,709.18;
b. $8,347,291.21 of the purchase price was paid to Wachovia Bank for the outstanding loans on the assets that were sold;
c. $5,082,417.97, the balance of the purchase price after repayment of the loans, was wired to trust account of Bruce's attorney;
d. the Table of Contents for the Asset Purchase PSA regarding four books of documents, which included the asset purchase PSA and exhibits and all schedules; closing PSA and all exhibits (including outstanding accounts receivables); etc.
Bruce stated that the requested information was provided within the first month or two of the "divorce negotiations" and approximately eight months prior to the execution of the PSA. On January 2008, Bruce forwarded to Arons a "packet" containing information pertinent to the Robison-Anton sale. Arons did not dispute this.
Correspondence between Bruce's counsel and Arons indicate that Arons reviewed the entire 1,400 pages of the Robison-Anton Asset Purchase Agreement and related entities. The letter dated August 23, 2007 was attached with the closing agreement. The letter indicated that the entire 1,400 page original closing agreement was available at Bruce's office for inspection. Further, a letter dated January 2, 2008 from Bruce's counsel to Arons indicated that Laurie's counsel was provided with copies of the portions of the asset agreement that Arons requested subsequent to his review of the entire closing agreement.
The signed PSA acknowledged that the parties entered into the PSA "voluntarily" and with the knowledge of the income and property of the respective parties. The PSA covered all issues in connected with the dissolution of their marriage. The PSA acknowledged that Bruce supplied financial information to Laurie, her counsel and the accountants and the information was complete. Additionally, the parties agreed to waive formal appraisal or evaluation of the assets distributed pursuant to the PSA.
Judge Lisa Perez Friscia heard oral argument and denied Laurie's motion for relief from judgment. She found that Bruce disclosed the proceeds from the sale of Robison-Anton. Laurie appeals essentially contending that Bruce failed to make full disclosure of BNA's assets. Laurie's argument is premised on allegations that the files of Klein or Arons did not contain information pertaining to the BNA assets, in particular Schedule A to the Asset sale of Robison-Anton. We are not persuaded.
Rule 4:50-1 provides in pertinent part, that relief from a judgment or order may be obtained for the following reasons:
(a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under R. 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.
Moreover, "[t]he equitable authority of courts to modify property settlement agreements executed in connection with divorce proceedings is well established." Miller v. Miller, 160 N.J. 408, 418 (1999). Any PSA may be set aside "when it is the product of fraud or overreaching by a party with the power to take advantage of the confidential relationship." Guglielmo v. Guglielmo, 253 N.J. Super. 531, 541 (App. Div. 1992).
An order for relief from judgment based on any one of the grounds set by Rule 4:50-1 should be granted sparingly and all motions for relief are addressed to the sound discretion of the trial court, whose determination will not disturbed unless it results from a clear abuse of discretion. Morristown Housing Auth. v. Little, 135 N.J. 274, 283-84 (1994). We should accord deference to the family court fact-finding due to its special jurisdiction and expertise in family matters. Cesare v. Cesare, 154 N.J. 394, 413 (1998).
Here, Judge Friscia's findings are based on evidence that the parties' joint forensic expert, Klein, certified that he was aware of the proceeds and was satisfied that all funds had been adequately accounted in the records supplied. Applying the standards mentioned above, and because the record contains sufficient, credible evidence to support the judge's finding that Bruce did not misrepresent the whereabouts of the proceeds from the sale or conceal records pertaining to the proceeds, we affirm the judge's decision.
We note that Klein certified that Bruce complied with all his requests to produce information pertaining to the sale of Robison-Anton and his businesses. These documents included documentation of the account receivables existing after the sale of Robison-Anton. Further, Klein certified that Bruce made all information pertaining to the sale readily available at Bruce's place of business.
Additionally, correspondence from Bruce's counsel to Laurie's counsel demonstrate that Bruce provided Laurie's counsel with all requested information pertaining to the sale of Robison-Anton and made such documents available for inspection. Further, following inspection, Laurie's counsel requested copies of certain documents that he deemed relevant for further review. Thus, Klein's certification and the correspondence between the parties' attorneys support the judge's findings that all relevant information was provided to Laurie and Bruce did not conceal the proceeds of the funds. Laurie's contention that only the table of contents was provided to Laurie's counsel lacks merit.
We also note that Laurie did not produce any competent evidence to support her allegations that Bruce committed equitable fraud. Laurie did not present the certifications of Klein or Arons stating that they were unaware of the whereabouts of the proceeds from the sale. We note that the failure of a party to produce evidence which would serve to clarify the facts in issue supports an inference that the party failing to produce such evidence fears that the exposure of those facts would be unfavorable to him. Nisivoccia v. Ademhill Assocs., 286 N.J. Super. 419, 425 (App. Div. 1996). The judge, therefore, could properly infer that Laurie's failure to present certifications from Klein and Arons was the result of the likelihood that both would have certified that they reviewed evidence pertaining to the sale.
Laurie also argues that Klein did not fully review "all of the financial documents relevant to the sale of Robison-Anton." Laurie asserts that Klein reviewed only those documents that Bruce deemed relevant and this evidence was not discoverable prior to the JOD. We disagree.
To warrant relief, Rule 4:50-1(b) required Laurie to demonstrate that she discovered new evidence after the entry of the judgment, which could not have been discovered earlier through the exercise of due diligence. State v. Speare, 86 N.J. Super. 565, 581-82 (App. Div.), certif. denied, 45 N.J. 589 (1965). The new evidence must be: (1) material to the issue and not merely cumulative or impeaching; (2) discovered subsequent to the trial and must be such by the exercise of due diligence could not have been discoverable prior to the expiration of the time for moving for a new trial; and (3) be of such a nature as to have been likely to have changed the result if a new trial had been granted. DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 264 (2009).
Here, the judge found that the parties considered BNA's assets before executing the PSA because Klein traced the assets from the sale. The judge noted that Laurie had ample discovery time to assess the parties' financial documents. We agree with the finding that Laurie did not offer any new evidence.
Finally, Laurie's contention that the trial court improperly placed the burden upon her to investigate Bruce's asset and uncover fraud lacks merit. Laurie points to the language in Judge Friscia's August 7, 2009 order which provided that "Laurie had the complete opportunity and ample discovery time to assess the parties' financial documents." This finding, however, was in regards to Laurie's contention in her certification that she was "pressured" to resolve the property settlement pursuant to Bruce's time schedule. The fact that Laurie did in fact hire an independent appraisal of the properties renders Laurie's contention incredible. Consequently, the judge's finding that Laurie had the ability to "dispute and investigate the parties' financial positions" is supported by sufficient, credible evidence contained in the record.
Laurie also contends that she "is entitled to a plenary hearing or at the very least, discovery as the evidence shows the existence of genuine issues of material fact." Alternatively she argues that due to the existence of issues of material fact, a plenary hearing is necessary.
Although all material factual disputes must be resolved by testimony, the moving party must demonstrate a prima facie case to obtain a hearing on a motion for relief from the terms of the PSA. Dworkin v. Dworkin, 217 N.J. Super. 518, 525 (App. Div. 1987). Where the affidavits do not present a genuine issue of material fact, oral testimony is unnecessary and the trial judge may decide the motion without a plenary hearing. Barrie v. Barrie, 154 N.J. Super. 301, 303 (App. Div. 1977), certif. denied, 75 N.J. 601 (1978).
Here, Judge Friscia denied Laurie's application for discovery and a plenary hearing based on Laurie's failure to make a prima facie showing that there were contested issues of fact. The judge found from the certifications submitted that Arons was apprised of the whereabouts of the proceeds of the Robison-Anton sale and Bruce disclosed the existence of BNA's assets, making made such information readily available to Klein and Laurie's counsel.
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