On certification to the Superior Court, Appellate Division.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
Donald C. Sachau v. Barbara Sachau (A-33-10)
Argued March 29, 2011 -- Decided May 11, 2011
The issue before the Court is the value of a marital home subject to sale pursuant to a final judgment of divorce, when that judgment is silent regarding the value to be ascribed if the marital home is not sold upon the triggering event -- the emancipation of the youngest child.
Plaintiff, Donald Sachau, and defendant, Barbara Sachau, were married in 1964 and divorced in 1979. At the time of their divorce, the parties' two children, Donald and Hilary, lived with Barbara. Pursuant to the final judgment of divorce dated February 21, 1979, Donald was to pay Barbara $225 per month per child and Barbara was to remain in the marital home with the children. The home was to be appraised and listed for sale within 30 days of the youngest child reaching the age of 18 and graduating from high school. The judgment further provided that, after applicable costs and fees, "the proceeds shall be allocated in the following manner: (i) [Barbara] shall be paid $10,000; (ii) [Donald] shall be paid $15,000; (iii) the remaining balance shall be divided equally."
In 1984, Hilary, the youngest child, reached age eighteen and graduated from high school, triggering the sale provision. However, for the next twenty-two years, neither party took action to enforce their rights under the judgment. Barbara remained in the marital home, and starting September 1990, began making inconsistent payments to Donald, at irregular intervals, totaling $79,415, through October 2004. In mid-2005, Donald became unable to support himself solely on social security payments and became partially dependent on charity. As a result, he sought the balance of his interest in the marital home from Barbara. Receiving an unsatisfactory response, Donald filed a motion on March 6, 2006, to compel the sale of the marital home and division of the proceeds in accordance with the judgment.
Without holding an evidentiary hearing, the trial judge ruled that the marital home should be sold and that Barbara should receive full credit for payments that she made. Barbara filed a motion for reconsideration, which was denied and she was ordered to sign a listing agreement. Barbara then filed a motion for leave to appeal, which was granted by order dated September 21, 2007. On November 7, 2007, the Appellate Division remanded the case to the trial judge, with detailed instructions, for an evidentiary hearing. Of particular relevance, the Appellate Division instructed the trial judge to determine "in the absence of an agreed price, the value of the premises as of November 28, 1984 (see Pacifico v. Pacifico, 190 N.J. 258, 269 (2007)), one-half of which plus $5000 shall constitute [Donald]'s interest in the premises . . ."
On remand, after a plenary hearing, the trial judge concluded that there was no agreement between the parties in respect of the valuation date and that the 1984 value of the home was $120,000. In accordance with the Appellate Division's instructions, Donald's share, based on that value plus interest, was $144,915.62 and Barbara's $417,472.64. The judge further determined that Barbara would be credited for payments made. Moreover, the judge noted that the equities were in parity and that "the passage of time ha[d] not caused a change in position to the detriment of [Barbara]." Donald appealed, and the Appellate Division affirmed, concluding that the distribution of the proceeds from the marital home conformed to the Appellate Division's previous remand order.
The Supreme Court granted Donald's petition for certification.
HELD: Because the judgment of divorce was silent regarding the value to be ascribed to the marital home if it was not sold upon the triggering event -- the emancipation of the youngest child -- it fell to the court to supply that omitted term. Pacifico v. Pacifico, 190 N.J. 258 (2007), presumes value as of the trigger if the sale takes place at that time. Here, because there was no agreement to the contrary, the marital home should have been valued as of the date of the sale.
1. The basic contractual nature of matrimonial agreements has "long been recognized." At the same time, "[t]he law grants particular leniency to agreements made in the domestic arena," thus allowing "judges greater discretion when interpreting such agreements." As a general rule, courts should enforce contracts as the parties intended. Similarly, it is a basic rule of contractual interpretation that a court must discern and implement the common intention of the parties. (Pp. 6-7)
2. Pacifico v. Pacifico, 190 N.J. 258 (2007), provides the framework for the Court's analysis. In Pacifico, the Court declared that "where the sale of a marital asset is to abide a future event, for example the coming of age of a child, and no alternative is provided, current market value as of the time of the triggering event is presumed." Id. at 269. Obviously, that statement can only be understood on the facts of Pacifico and in the context of a sale which actually takes place at the point of the happening of the trigger. There is plainly no rationale for a presumption of value as of the trigger date if no sale occurs. Indeed, in the absence of an agreement between the parties to the contrary, marital property that is to be sold should be valued as of the date of the sale. (Pp. 7-11)
3. Here, the judgment of divorce was silent regarding the value to be ascribed to the marital home if it was not sold upon the triggering date -- the emancipation of the youngest child. Thus, it fell to the court to supply that omitted term. Although properly remanding the matter, the Appellate Division erred in determining that, if the trial court found there was no agreement regarding value in these circumstances, Pacifico required the property to be valued as of the 1984 trigger. That is an incorrect view of Pacifico which only presumes value as of the trigger if the sale takes place at that time. Here, because there was no agreement to the contrary, the house should have been valued as of the date of the sale. (Pp. 11-12)
The judgment of the Appellate Division is REVERSED. The matter is REMANDED to the trial judge, not to conduct a full plenary hearing, but to re-evaluate his conclusions in light of the 2008 valuation date and to distribute the proceeds accordingly.
CHIEF JUSTICE RABNER and JUSTICES LONG, LaVECCHIA, ALBIN, RIVERA-SOTO, and HOENS join in this opinion.