On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Atlantic County, Docket No. FM-01-0900-09N.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Carchman and Graves.
In this post-judgment matrimonial matter, plaintiff Richard Fellows appeals from an order dated November 4, 2009, that granted a motion by defendant Patti Genard to enforce the parties' property settlement agreement (PSA). The order provides that plaintiff is solely responsible for a debt to the Internal Revenue Service (IRS) the parties incurred prior to the divorce. The order also requires plaintiff to indemnify and reimburse defendant for the monies deducted from her wages as a result of an IRS levy and to obtain a life insurance policy with defendant as beneficiary in the amount of $250,000.
On appeal, plaintiff contends "the findings of the trial court were not sufficiently supported by the facts." Based on our review of the record and the applicable law, we are satisfied that plaintiff's arguments are without sufficient merit to warrant extended discussion. R. 2:11-3(e)(1)(E). We therefore affirm with only the following comments.
The parties were married in 1988, separated in December 1999, and a judgment of divorce (JOD) was entered on December 13, 2001. The JOD incorporated a PSA signed by both parties on September 24, 2001. In Article 19 of the PSA, the parties agreed that defendant would receive the former marital residence located at Cape May Beach together with her pension and tax deferred annuity, and she relinquished all right, title, and interest in plaintiff's business, known as Fellows Family Chiropractic Center.
In Article 19.3 of the PSA, the parties acknowledged that the IRS debt was acquired during the marriage and each agreed to "separately [file] an Offer of Compromise Form with the IRS."
If the IRS accepted defendant's offer of compromise, plaintiff agreed to pay it. As originally drafted, Article 19.4 stated that "[i]n the event the Offer of Compromise is not accepted by the IRS the parties agree to mediate this issue." However, that language was crossed out and replaced with the following handwritten substitution that was initialed by the parties: "The husband agrees to assume the tax liability for those years that returns were filed jointly. The wife agrees to cooperate in every way possible to reduce the amount of this liability." In addition, it was agreed that defendant would "file for Chapter 13 Bankruptcy," and plaintiff would "make all Chapter 13 payments directly to the Trustee through June 30, 2002."
Defendant filed a Chapter 13 bankruptcy petition in 2001, and both parties filed offers in compromise that were rejected by the IRS. In April 2007, plaintiff filed a Chapter 7 bankruptcy petition listing, among other obligations, $322,562 in debt to the IRS for income taxes due from 1994 through 2005; "Assorted Employer Taxes" from 1996 through 2005 in the amount of $41,073; and "Employer 940 and 941 Tax Liability" from 1995 through 2003 in the amount of $129,611. Plaintiff was granted a Chapter 7 discharge on August 3, 2007.
When defendant learned of the discharge, she moved to reopen plaintiff's bankruptcy proceeding. In a certification in support of her motion, defendant stated that she did not receive notice of the bankruptcy proceeding or plaintiff's discharge, and, based on the PSA, she demanded reimbursement for any monies she was required to pay the IRS. On February 11, 2009, the bankruptcy court entered a consent order stating that any obligation found to be due under the parties' JOD or PSA "was not discharged by the bankruptcy."
Following the entry of the consent order, defendant moved before the Superior Court to enforce the terms of the PSA. In her amended notice of motion, defendant sought an order requiring plaintiff to: (1) reimburse her for the monies that were being deducted from her paychecks as a result of an IRS levy; (2) pay "an amount that will retire the [IRS] debt within a reasonable period of time"; and (3) "complete an insurance application and submit to a medical examination . . . so that she [could] obtain a life insurance policy in the amount of $500,000.00."
The trial court initially heard oral argument on June 12, 2009, but the matter was adjourned to obtain additional information from both parties. When the parties returned to court on October 16, 2009, plaintiff argued that there was no equity in the former marital home in 2002, and that defendant should have eliminated the IRS debt by converting her bankruptcy proceeding "from a 13 to a 7." Plaintiff also argued that defendant "should be responsible for whatever penalties have accrued since 2002."
In an oral decision, the motion judge found there was "a clear and unambiguous assumption of the tax liability" by plaintiff in the PSA and that he was solely responsible for the entire tax debt, including interest and penalties. The court also ordered plaintiff to reimburse defendant for the monies deducted from her wages as a result of the IRS levy, and it directed plaintiff to obtain a life insurance policy ...