On appeal from the Superior Court of New Jersey, Chancery Division, Union County, Docket No. C-20-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued February 14, 2011 - Decided
Before Judges Lisa and Sabatino.
On leave granted, we review the Law Division's June 11, 2010 order vacating an earlier consent order to enforce a settlement of this intra-family trust litigation. The order appealed from was based upon the trial court's determination that defendant Steven Lindner had not consented to the settlement. In finding defendant's lack of consent, the trial court was presented with and apparently considered a series of confidential e-mails that defendant had sent to the attorney who had been representing him at the time of the consent order. Defendant's new counsel subsequently tendered the attorney-client e-mails to the trial court, under seal, in support of the motion to vacate, and the e-mails were not divulged to opposing counsel.
For the reasons that follow in this opinion, we reverse the June 11, 2010 order and remand for a plenary hearing, upon which the trial court shall make credibility findings concerning whether defendant had, in fact, withheld his consent to the settlement. The trial court shall also determine, in light of the expanded proofs adduced at the plenary hearing, whether defendant should be estopped or otherwise equitably foreclosed from having the consent order vacated because of his actions and inactions in the months following its entry. In addition, in advance of the plenary hearing, plaintiff's counsel must be provided with copies of the tendered e-mails, after the trial court makes appropriate redactions to cull out any portions that are unrelated to the pivotal issue of defendant's alleged non-consent.
Plaintiff Susan Lindner-Panster and defendant are siblings and co-trustees of an irrevocable trust ("the Trust"). The Trust was established on October 12, 2001 by their mother, Gerda Lindner,*fn1 to provide for her financially during her lifetime. Gerda charged plaintiff and defendant to make payments from the Trust to provide for her health and welfare, "in their unanimous, sole and unreviewable discretion." Upon Gerda's death, the remaining balance of the funds from the Trust would be distributed to Peter Lindner, (Gerda's other son and a non-party*fn2 to this action), to plaintiff, and to defendant, in equal shares.
In January 2007, plaintiff filed a verified complaint in the Chancery Division to remove defendant as co-trustee of the Trust, alleging that he had withdrawn funds from the Trust without her approval and that he had misappropriated some of those funds. Defendant counterclaimed, reciprocally seeking to remove plaintiff as co-trustee of the Trust for various reasons. Fundamentally, the parties' disagreement in this matter appears to stem from their difficulties in cooperatively discharging their duties as co-trustees under the Trust.*fn3
On September 17, 2008, the parties entered into a written agreement ("the Mediation Agreement"), following a session that day with a mediator. The Mediation Agreement consists of eleven paragraphs set forth in three pages of text, all apparently handwritten by the mediator. On the last page of the Mediation Agreement, the word "Agreed" appears immediately beneath the mediator's signature. Below the word "Agreed" are the signatures of plaintiff, the attorney for plaintiff, defendant, and the attorney who was then representing defendant.
Thereafter, plaintiff moved on several occasions to enforce certain aspects of the Mediation Agreement. Consequently, on December 19, 2008, on December 24, 2008, and on February 6, 2009, the trial court entered successive orders requiring that defendant comply with the provisions in the Mediation Agreement respecting visitation and the shared custody of Gerda.
Following the execution of the Mediation Agreement, the parties and their respective counsel endeavored to reach a more comprehensive and formal settlement agreement, the last apparent version of which is dated "May 2009" (the "Settlement Agreement"). The Settlement Agreement contains twenty-four numbered paragraphs and runs fourteen typewritten pages. There are several blanks within the body of the Settlement Agreement, for such items as account numbers, addresses, rental costs, and the name of a mutually-designated auditor. The Settlement Agreement is not signed by the parties or by their attorneys, despite the blank lines within the document that contemplate such signatures.
On June 18, 2009, plaintiff's counsel submitted the Settlement Agreement to the trial court, as well as to opposing counsel via overnight delivery, under the "five-day rule," Rule 4:42-1(c). Counsel also enclosed a proposed form of consent order. The proposed consent order stated in its two operative paragraphs that: (1) "the Settlement Agreement attached hereto as Exhibit 'A' shall be enforced between the parties," and (2) "the parties shall take all necessary steps to comply with the Settlement Agreement."
The proposed consent order contained a signature line only for the trial judge. It did not contain the signatures of either the parties or their respective counsel. It contained no recital that the parties had each assented to the terms of the Settlement Agreement, except that it recited that the matter had been "opened to the [c]court" by both counsel, and that the proposed consent order was to be entered upon "good cause shown." Nor did the cover letter from plaintiff's counsel expressly represent that the parties had agreed to the terms of the Settlement Agreement. The cover letter simply states:
With respect to the Settlement Agreement and the instructions of your law clerk, enclosed please find an Order for enforcement thereof, submitted under the five (5) day rule. Thank you for your courtesies extended in this matter.
Defendant's counsel did not present to the court any objection to the proposed order within the prescribed five-day period.
On June 25, 2009, the trial court entered an order dismissing the litigation. In that court-generated order, a box is checked indicating that the case had settled before trial. On the following day, June 26, 2009, the court entered a consent order (the "Consent Order") requiring the parties to comply with the terms of the Settlement Agreement. The Consent Order entered by the court ...