On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-599-01.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 19, 2012
Before Judges Axelrad and Ostrer.
Defendant appeals from a post-judgment order compelling him to pay the mortgage balance due upon the sale of the former marital home that plaintiff occupied after divorce. He argues that the parties' Property Settlement and Separation Agreement (PSSA) did not oblige him to pay off the mortgage, or alternatively, the PSSA is ambiguous in that regard, requiring the court to consider extrinsic evidence to determine the parties' intention. We agree that the PSSA is ambiguous and reverse and remand for further proceedings.
A final judgment of divorce (FJD) was entered on March 26, 2001, ending the parties' marriage of almost nineteen years. The FJD incorporated the PSSA, which was executed March 9, 2001. The PSSA equitably distributed the marital home to plaintiff and obliged defendant to pay $1900 a month in alimony, $2100 in child support, and expressly required defendant to make the monthly mortgage payments on the home. As long as the mortgage existed, defendant was also required to pay the insurance and real property taxes, but was permitted to offset those outlays against his alimony obligation. The PSSA provision did not expressly require defendant to pay off the mortgage in a lump sum. Article VI of the PSSA addresses disposition of the marital home and defendant's obligation to pay the mortgage:
A. Re: 18 Whitehall Road, East Brunswick:
1. The parties hereto agree that premises known as 18 Whitehall Road, East Brunswick, New Jersey are owned by the parties by the entirety. The following disposition shall be made of this real property:
(a) The Wife shall have the sole and exclusive right to occupy the marital property as of the signing of this Agreement. The Wife shall own the mortgage on the property and transfer same into her name at the signing of this agreement, however the Husband shall continue to pay the monthly mortgage payments for the property to the Wife until the existing mortgage on the house and any equity loan on the house is paid in full.
(b) Upon the execution of this Agreement, the Husband agrees and shall execute a Bargain and Sale Covenants [sic] against Grantor's Acts, Deed, conveying all of his right, title, and interest in the marital home as set forth above to the Wife and to deliver a standard All-State Affidavit of Title in connection therewith.
(c) The Wife shall pay all carrying charges in connection with said real estate including but not limited to real estate taxes, insurance, utilities and repairs. It is understood that as of January 1, 2001, the Wife shall be responsible for payments of real estate taxes and homeowner's insurance. The Husband shall continue to pay these expenses through his payments to the Wife as long as the mortgage is still in effect. The Husband shall deduct the tax and insurance money from his alimony payment to the Wife. These expenses currently total $450.00 per month. Should that amount change, the Husband shall adjust his deduction accordingly. Once the mortgage is paid off and the Wife begins paying these expenses herself, the Husband shall resume the total alimony payment as set forth in Article V, Paragraph 1.
(d) The Husband shall be entitled to the tax deduction for the marital home as long as he continues to pay the Wife the mortgage and until it is paid in full. It shall be the responsibility of the Wife to claim the deduction on her income tax return and then forward the amount of tax relief from that deduction to the Husband on or before June 30th of every year, as long as the Wife is in receipt of the refund by that date.
The PSSA also awarded plaintiff half the value of the defendant's retirement accounts accrued during the marriage, made defendant solely responsible for $300,000 in IRS debt, and granted plaintiff an interest in defendant's employment-related stock options that was tied to payment of the home mortgage. Plaintiff was entitled to up to half the proceeds of the sale of the stock options, which would be first allocated toward paying off the then-remaining balance on the mortgage (estimated to be $180,000), and then directly to plaintiff, in an amount not exceeding $500,000. The PSSA states in Article VII:
2. The Husband shall continue to sell stock options that he will receive from his employer, as they become vested and the share price makes financial sense, i.e., the sale is done at a substantial gain. The Husband shall pay Wife up to 50%, but not less than 33% of the net proceeds of said options at the time of sale after all provisions for tax have been reserved. The parties agree that the Wife's share of the proceeds of the stock options shall be applied as follows:
a. Husband shall first pay the Wife the amount equal to pay off the mortgage on the marital home of approximately $180,000.00.
b. Husband shall pay Wife additional payments of $500,000.00.
The parties agree that there will be no limit of time on the above pay-out. Once the mortgage is paid off and the Wife has received $500,000.00 in cash from the husband, the pay out shall be considered fulfilled. It is the sole intention of the Husband to fulfill the above pay out at the earliest date as possible, but is agreed by the parties, that the Husband shall only sell stock options if it makes financial sense, i.e. substantial gain.
The parties understand that there is a chance the stock options may never be sold should they not become sufficiently "in the money", or if the Husband does not receive enough options to meet the numbers listed above. However, any time the Husband sells more options, the Husband shall pay the Wife the share as listed above.
It is undisputed that after the divorce, defendant paid the monthly mortgage payments until plaintiff sold the marital home on August 26, 2010. The proceeds of the sale satisfied the mortgage (as well as $102,000 owed on a second mortgage that plaintiff took out after the divorce), leaving plaintiff with roughly $45,000 in net proceeds after the sale. It is ...