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John C. Crimi v. Susan F. Crimi

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 29, 2011

JOHN C. CRIMI, PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
v.
SUSAN F. CRIMI, DEFENDANT-RESPONDENT/CROSS-APPELLANT.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Hunterdon County, Docket No. FM-10-307-01.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 7, 2010

Before Judges Graves, Messano and Waugh.

In this post-judgment matrimonial matter, plaintiff John Crimi appeals from the portion of an order that denied his request to modify a property settlement agreement (PSA). Defendant Susan Crimi cross-appeals from a portion of the same order denying her request for counsel fees. For the reasons that follow, we affirm with one minor modification.

The parties were married on June 3, 1973, and have three emancipated children. They separated in 1997 and obtained a final judgment of divorce (JOD) on March 30, 2005. During a hearing on that date, the parties entered into an oral settlement agreement. The final JOD stated that the parties entered into an oral PSA that would be reduced to a written agreement to be signed by the parties.

A written PSA was signed by plaintiff on May 27, 2005, and by defendant on June 13, 2005. Both parties waived their rights to spousal support from one another. In Paragraph 10A of the PSA, plaintiff agreed to pay defendant $8,800,000, as tax-free equitable distribution over a period of five years. The agreement provided that plaintiff could receive a prepayment discount if he prepaid within the first three years of the payment schedule. Plaintiff subsequently paid $7,830,000 to defendant, and the parties agreed that he had satisfied his financial obligation under Paragraph 10A of the PSA.

Pursuant to the parties' agreement, defendant received title to her residence in Madison and the contents of the former marital home in New Vernon except for certain specified personal property; all personal property and assets in her name; and a $274,195.00 rollover from plaintiff's 401K Plan. Plaintiff also agreed to pay "the bridge loan taken to effect the purchase of [defendant's] current residence in Madison" until "the sale and closing of the New Vernon property," and to pay the following for and on behalf of [defendant], as additional equitable distribution": (1) all expenses for the New Vernon home "until the actual closing on the ultimate sale"; (2) "one-half of his salary"; (3) "defendant's credit card bills up to a maximum of $40,000 per year"; (4) "defendant's automobile insurance and gasoline expenses for her Lexus vehicle"; and (5) until December 31, 2005, "defendant's health insurance coverage costs" and the premiums on the "life insurance policy that defendant owns."

According to plaintiff's case information statement dated November 4, 2004, the parties' gross assets subject to equitable distribution were valued at $31,717,580. These assets included a business known as County Concrete Corporation (County Concrete) as well as various other businesses and real estate. In Paragraph 11 of the PSA, the parties agreed that plaintiff would receive the following:

A. All of his business interests howsoever named and in whatever form they may be incorporated or held, as set forth on his Case Information Statement, or otherwise in discovery.

B. All business and other real estate set forth in his Case Information Statement dated November 4, 2004, or otherwise in discovery, whether held in the name of a business, partnership, or plaintiff individually.

C. His residence [in] Tewksbury, New Jersey.

D. All of his personal property, bank accounts, and other assets titled solely in his name, including but not limited to, retirement plans, cash surrender value of life insurance policies, motor vehicles, and the contents of his home.

In paragraph 19 of the PSA the parties agreed "that each shall be responsible for his or her own counsel fees and expert fees." In the same paragraph, the parties stated they were satisfied with the services provided by their attorneys, real estate appraisers, and business appraisers.

With regard to the former marital home in New Vernon, Paragraph 10B of the PSA provided as follows:

The wife shall receive the net proceeds of sale of the jointly held property located at Welsh Lane, New Vernon, New Jersey, however, irrespective of the actual ultimate sale price, the husband guarantees to the wife that her minimum proceeds shall be calculated as if the house had sold for not less than $7,000,000.00, from which a broker's commission agreed upon by the wife shall be deducted, as shall the principle of the existing bridge loan, and as shall any tax on gain of the sale of the residence.

If the sale price exceeds $7,000,000.00, wife shall receive the greater amount. It is the husband's desire forthwith to terminate the present listing agreement covering the former marital home. The wife consents to this, however, in the event that any costs, charges, or other penalties accrue as a result of the premature termination of the listing contract with the broker, but agrees to pay and fully be responsible for any monies found due and owing and hold the wife harmless thereon.

The payment by the husband to the broker in the amount of $4,250.00 for advertising costs incurred prior to cancellation is not deemed a cost, charge or penalty for premature termination. Thereafter, the husband shall be free to list the house with a broker and at a price of his choosing, however, the broker's commission shall not be set without the wife's agreement thereto, and her consent shall not be unreasonably withheld.

After the parties separated in 1997, defendant lived in the New Vernon home "through 2004." On March 4, 2004, the New Vernon residence was appraised by Thomas J. Toohey. He estimated that the market value of the property was $7,250,000. The home was subsequently listed for sale through Ned Ward Realtors on November 15, 2004, for $8,000,000.

In April 2005, the New Vernon home was listed with Coldwell Banker, and the sale price was periodically reduced: to $7,495,000 in June 2005; to $6,900,000 in October 2005; and to $6,500,000 in April 2006. At plaintiff's request, defendant also agreed to modify the PSA by reducing the guaranteed sum she was to receive from $7,000,000 to $6,500,000.

In a letter to defendant's attorney dated December 3, 2007, plaintiff's attorney confirmed that plaintiff had rejected a $4 million offer for the New Vernon Home. The letter further stated: "Mr. Crimi has decided to wait out the bad market. Real estate prices in New Vernon have decreased by as much as 45% in the last year and a continued decline is predicted in 2008. Unfortunately, a sale may not occur for several years."

On October 13, 2009, plaintiff filed a motion seeking to have defendant assume responsibility for listing and selling the martial home at a price she desired. Plaintiff also requested to be released from his obligation under the PSA to guarantee $6,500,000 to defendant from the sale proceeds. Additionally, plaintiff sought to have his financial obligations to defendant under Paragraph 12 terminated, which includes payment of the bridge loan to purchase defendant's Madison home; expenses associated with the New Vernon home; one-half of his salary; and up to $40,000 annually for defendant's credit card bills.

Alternatively, plaintiff asked for an order: (1) compelling defendant to execute a listing agreement with the listing broker chosen by plaintiff; (2) permitting the listing broker "to lower the listing price to a price she believes will generate a reasonable offer for purchase"; (3) modifying the PSA "by offsetting, against defendant's entitlement [to] the proceeds of sale of the marital home, the payments [made by plaintiff] to maintain and improve the marital home, the payments on account of the bridge loan, and the payments made to satisfy the defendant's credit card expenses, retroactively to January 1, 2005, and prospectively until the sale of the home"; and (4) compelling defendant to either satisfy the "bridge loan that was taken to construct her current residence, or assume payments on said loan until the home is sold."

In a certification in support of his motion, plaintiff stated: "[T]he total expenses I have incurred to market the home and satisfy the defendant's credit card expenses are $1,088.101.70. At the time we entered into the agreement, I could never have predicted assuming such an astounding responsibility." In addition, plaintiff certified as follows:

At the time we entered into our PSA in 2005, nobody could have predicted the national economic crisis that was impending. Asset values were increasing and bank lending was generous. Housing prices never fell. Businesses were flourishing and money was being made. Suddenly, in early 2007, leading sub[-]prime mortgage lenders filed for bankruptcy, investors began downgrading bonds backed by sub-prime mortgages, and financial corporations warned of difficult conditions. As time passed, the financial market pressure intensified, unemployment increased to an all-time high, and lending virtually ceased. . . .

Simultaneously, the Highlands Act was enacted, which severely limited construction in Western New Jersey. Wetland laws increased the buffer distance from 150 feet to 300 feet, further limiting construction along New Jersey's wetlands.

These unforeseen conditions have resulted in the "perfect storm" for me. The crippling of the housing market made it impossible to sell the marital home, from which I guaranteed an amount certain to the defendant under our Agreement. Due to the laws and economic conditions described above, my business is doing poorly.

The consequences are drastically different than what we intended when reaching the [A]greement. We assumed the house would sell within 6 months, based on a flourishing real estate market that was still on the rise. However, four years later, the house remains unsold and the Agreement is impossible to abide by. I am thus forced to seek the court's intervention.

Defendant filed a cross-motion together with a certification on November 18, 2009. In her cross-motion, defendant requested an order: (1) denying all relief sought by plaintiff; (2) enforcing the terms of the PSA; (3) requiring plaintiff to list "the former marital home for sale at a reasonable, realistic sales price"; (4) requiring plaintiff to provide proof of his salary "to substantiate the reduction in his payment to Defendant of fifty percent of his salary" pursuant to Paragraph 12(B)(2) of the PSA; (5) requiring the listing broker to keep her "informed of the status of the listing, open houses, advertisements, and prospective buyers"; and (6) awarding her counsel fees and costs.

Defendant certified that plaintiff's "lifestyle [had] not changed one iota," and she further certified as follows:

I am entitled to the full amount of equitable distribution that I bargained for at the time of our divorce. Plaintiff blames the national economic crisis for our former home not selling. I blame him. He did not want to sell the house in 2007, as he admitted through counsel. Plaintiff wanted to hold out no matter how long it took so that he did not have to financially contribute towards the net proceeds I am to receive, which in retrospect probably would have cost him less than he has paid to date in expenses.

I offered on several occasions for Plaintiff to buy out my interests in our former home, and then he could have done with it whatever he desired. He refused.

It would be grossly unfair and inequitable for me to suffer further financial loss if this Court grants any monetary relief to the Plaintiff.

In addition, defendant explained that she was requesting "documentary proof" of defendant's salary because the monthly payments she received had been reduced from $5600 per month to $424 per month "without notice or explanation":

Plaintiff was required to pay to me fifty percent of his salary pursuant to Paragraph 12B(2) of our agreement. At the time of our divorce, he paid to me $5,600 per month, in cash, that he sent to me via Federal Express in two monthly payments of $2,800 each. He unilaterally, without notice or explanation, reduced this payment to $3,600 per month ($1,800 twice per month), which I believe was in or about October 2007. He further unilaterally, without notice or explanation, reduced this payment to me to $1,600 per month ($800 twice per month) in or about March 2008. In the fall of 2008, he reduced this payment further to $800 per month, which has now fallen to $424 per month ($212 twice per month). Plaintiff, as majority owner of County Concrete, has complete control over his income. . . . If Plaintiff cannot demonstrate a legitimate reduction in his salary, I ask that this Court require Plaintiff to pay me the shortage in payments due me from October 2007 to date within a period of time set by this Court.

Plaintiff filed a reply certification to defendant's cross-motion on January 4, 2010, along with a letter brief. In his certification, plaintiff said that his assets, including his business and other commercial properties, had "substantially declined in value," and it was necessary to drastically reduce salaries and take "other radical measures to reduce expenses in order to keep [County Concrete] afloat." Plaintiff also stated: "Our intention was to share our assets equitably. That intention will not be realized unless there is an adjustment to the Agreement to account for the unexpected market crash."

On February 5, 2010, the court heard oral argument on plaintiff's motion and defendant's cross-motion. Plaintiff argued there were exceptional circumstances sufficient to modify the PSA under Rule 4:50-1(f). However, plaintiff did not submit a case information statement supporting his claim that his assets diminished in value and his business was losing profits. Defendant opposed the motion and sought fees.

For the reasons set forth in an order dated February 5, 2010, the trial court denied plaintiff's motion to modify the PSA, but granted plaintiff's request in the alternative to compel defendant "to cooperate with the listing chosen by the plaintiff by executing a listing agreement." The court also granted plaintiff's request to permit the listing broker to lower the listing price "to a price she believes will generate a reasonable offer for purchase." Additionally, defendant's request requiring plaintiff to provide proof of his salary "to substantiate the reduction in his payments to defendant" of his salary was granted. Defendant's request for counsel fees and costs was denied.

After appealing the order on March 22, 2010, plaintiff filed a motion to stay the order pending a determination of his appeal. On April 30, 2010, the trial court denied plaintiff's request to stay the order of February 5, 2010.

Plaintiff presents the following arguments for our consideration:

POINT I

THE TRIAL COURT'S DENIAL OF PLAINTIFF'S MOTION TO RELIEVE HIM FROM PAYING DEFENDANT A GUARANTEED MINIMUM SALES PRICE FROM THE SALE OF THE MARITAL HOME WHERE THE REAL ESTATE MARKET HAS CRASHED, IS A MISTAKEN EXERCISE OF JUDICIAL DISCRETION, RESULTING IN INEQUITY THAT IS EXACERBATED BY THE TRIAL COURT TRANSFERRING CONTROL OF THE LISTING PRICE FROM PLAINTIFF TO A REAL ESTATE BROKER.

POINT II

THE TRIAL COURT'S ORDER THAT THE PLAINTIFF PRODUCE PROOF OF HIS 2009 EARNINGS AND NET PROFITS FROM HIS COMMERCIAL REAL ESTATE PROPERTIES IS A MISTAKE OF FACT AND LAW BECAUSE PLAINTIFF RECEIVES NO SALARY FROM THE COMMERCIAL PROPERTIES, HAD PAID DEFENDANT $8 MILLION IN EQUITABLE DISTRIBUTION FOR HER INTEREST IN THE PROPERTIES AND [Larbig v. Larbig, 384 N.J. Super. 17, (App. Div. 2006)] HAS NO STANDARD APPLICABLE TO THE INSTANT CASE.

We have considered these arguments in light of the record and the applicable legal principles, and we conclude they are without merit. We therefore affirm the order entered on February 5, 2010, substantially for the reasons stated by the motion judge with one modification.

The parties agreed in Paragraph 10B of the PSA that defendant would receive a guaranteed sum from the sale of the former marital home and that plaintiff would "be free to list the house with a broker and at a price of his choosing." We therefore vacate the portion of the order that permits "the listing broker of the marital home to lower the listing price to a price she believes will generate a reasonable offer for purchase." Although this was one of plaintiff's alternative requests for relief, he now claims that his "alternative request was conditioned on a modification of the PSA," which did not occur. In any event, as the trial court correctly concluded, the parties must "continue to abide by the express provisions of the PSA."

"[I]t is settled law in New Jersey that, unlike an award of alimony or support, property division or equitable distribution provisions may not be adjusted after divorce to reflect unanticipated changes in the parties' circumstances, because the finality of a property division precludes any modification based on such changed circumstances." Schwartzman v. Schwartzman, 248 N.J. Super. 73, 77 (App. Div.), certif. denied, 126 N.J. 341 (1991). Further, "[s]ubsequent events which should have been in contemplation of the parties as possible contingencies when they entered into the contract will not excuse performance" of a obligations under a PSA. Schiff v. Schiff, 116 N.J. Super. 546, 561 (App. Div. 1971), certif. denied, 60 N.J. 139 (1972).

An application for modification of a PSA is appropriately considered under Rule 4:50-1(f). Schwartzman, supra, 248 N.J. Super. at 77. Rule 4:50-1 provides:

On motion, with briefs, and upon such terms as are just, the court may relieve a party or the party's legal representative from a final judgment or order 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 [Rule] 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.

It is within the trial court's broad discretion to award relief under Rule 4:50-1(f), provided the requesting party has shown that "'exceptional and compelling circumstances'" exist such that enforcement of the PSA would be unjust, oppressive or inequitable. Schwartzman, supra, 248 N.J. Super. at 77 (quoting Baumann v. Marinaro, 95 N.J. 380, 393 (1984)). The burden on the moving party to show exceptional circumstances is not equal to the lesser standard of changed circumstances, which applies to requests to modify alimony and support agreements. Id. at 78; Larbig, supra, 384 N.J. Super. at 24.

"[R]elief is granted sparingly" under this rule, Eaton v. Grau, 368 N.J. Super. 215, 222 (App. Div. 2004), and a trial judge's decision as to whether a PSA should be modified under Rule 4:50-1(f) should not be overturned absent a clear abuse of discretion. Schwartzman, supra, 248 N.J. Super. at 77 (citing In re Adoption of Child of Indian Heritage, 111 N.J. 155, 184 (1988)).

In this case, plaintiff claimed that the recession and decline of the housing market was an exceptional unanticipated circumstance sufficient to warrant modification of the PSA under Rule 4:50-1(f). The trial court found, however, that both parties were "aware of the potential for either a shift upwards or downwards" in the housing market, and they addressed any potential decline in real estate values by agreeing that defendant was entitled to a guaranteed sum "irrespective" of the actual sale price. The court also noted that plaintiff "could have agreed to pay defendant an additional sum of money in line with the expected net proceeds from the sale of the home," and it concluded that defendant failed to establish exceptional circumstances warranting modification of the PSA.

Based on our examination of the record, we are satisfied the motion judge's findings are amply supported by sufficient credible evidence; the judge correctly applied well-settled principles; and the remaining issues raised by plaintiff and defendant are without sufficient merit to warrant further discussion. R. 2:11-3(e)(1)(E).*fn1 Accordingly, we affirm the order entered on February 5, 2010, except for the one modification previously noted.

Affirmed as modified by this opinion.


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