May 21, 2013
ETHEL MAE GOETHE, Plaintiff-Respondent,
ERNEST L. GOETHE, Defendant-Appellant.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 12, 2013
On appeal from the Superior Court of New Jersey, Chancery Division, Essex County, Docket No. C-44-10.
Luretha M. Stribling argued the cause for appellant.
Elissa Greenspoon argued the cause for respondent (Greenspoon & Greenspoon, attorneys; Ms. Greenspoon, on the brief).
Before Judges Messano and Lihotz.
Defendant Ernest L. Goethe appeals from a January 23, 2012 Chancery Division order denying his request to vacate a February 8, 2011 consent order settling the matter in dispute with his step-mother, plaintiff Ethel Mae Goethe. The order reiterated defendant's obligation under the consent settlement to "fully cooperate with the sale of [a] Farley Avenue, Newark" property, included provisions regarding the division of the proceeds of sale, and awarded plaintiff counsel fees and costs. On appeal, defendant argues the Chancery judge erred in denying his motion, as the circumstances required the consent order be vacated.Following our review of these arguments in light of the record and the applicable law, we affirm.
Plaintiff filed this action to recover her alleged interest in the Farley Avenue realty. The property is a multi-family home and was purchased by and titled to defendant, using plaintiff's funds as a down payment. Following closing, plaintiff resided in the first floor unit and made a monthly payment to defendant. Defendant did not dispute the $150, 000 down payment came from plaintiff; however, he maintained the money was a gift, making the home solely his property. After they had a falling out, defendant advised he would be selling the home and plaintiff must vacate the property.
Plaintiff filed her complaint seeking: (1) restitution comprising the $150, 000 down-payment; (2) "one-half of the proceeds of sale, over and above the purchase price of $260, 000"; (3) $51, 616.48 alleged to have been taken by defendant from plaintiff's bank account; (4) an accounting of rents defendant collected from the third-floor tenant; and (5) payment of counsel fees and court costs. Plaintiff also filed an order to show cause requesting an order enjoining defendant from removing her from the home, harassing her, and dissipating any monies received in the event of sale. After the initial filings, the parties attended mediation in an effort to resolve their disputes. Ultimately, the parties resolved the matter and entered a consent order on February 8, 2011, agreeing:
1.[D]efendant . . . shall immediately list for sale the subject property . . . .
2. When the property . . . is sold, after the mortgage and all closing costs are paid (including, but not limited to, realtor's commission and attorneys['] fees for the closing), the plaintiff and the defendant shall share the net proceeds of sale as follows:
A.[D]efendant . . . shall receive the first $10, 000.00, from the net proceeds of sale, provided that the net proceeds of sale are $70, 000.00 or greater.
B.[P]laintiff . . . shall receive the balance of the net proceeds of sale. The plaintiff shall pay, in full, her outstanding legal fee balance to Greenspoon & Greenspoon from her share of the net proceeds of sale.
3. [D]efendant agrees that he shall continue to be responsible for the mortgage, taxes, homeowner's insurance, utilities, maintenance and necessary repairs for the property . . . . At the time of the closing of sale for the property, any outstanding bills for any of the above items listed in this paragraph shall be paid from the defendant's share of the net proceeds. The defendant represents that the current mortgage balance on the said property is $100, 553.07 as of January 7, 2011 and that the mortgage arrears are $3, 159.34 as of January 20, 2011.
5. If one party does not comply with the within [o]rder, and the other party is forced to seek the intervention of the [c]ourt for enforcement, the party who did not comply will be responsible for the other party's legal fees and costs.
Defendant contracted to sell the home for $150, 000, with closing scheduled for August 15, 2011. However, prior to closing, defendant's actions thwarted the sale and the contract was terminated on October 6, 2011. On November 14, 2011, defendant moved to vacate the consent order, claiming the consent order was invalid because he did not understand its terms, and his consent was not knowingly and voluntarily given. He stated:
I was given the last page and was told that I needed to sign it. I did not have an opportunity to read the entire [c]onsent [o]rder before signing it. Approximately three weeks after signing the [c]onsent [o]rder, I received a complete copy of it. When I read the complete document, I was not in agreement with it. I was under duress when I signed the [c]onsent [o]rder. I was stressed out and was experiencing health problems at th[e] time.
Attached to his pleadings was a hand-written note, purportedly by Mustafa M. Sidali, D.O., stating "Mr. Goethe has been diagnosed and treated for hypertension since 2009." Finally, defendant mentioned it was only after the home was listed for sale that he realized he "might not get any money at all for the house that [he] alone owned and . . . would also be without a place to live." Plaintiff filed a cross-motion to appoint plaintiff's counsel as attorney-in-fact, compel defendant to remove an oil tank from the property in furtherance of efforts to sell the home, and pay her attorneys' fees and other costs.
Judge Kenneth S. Levy considered oral arguments and denied defendant's motion. Finding "defendant had ample time to discuss any concerns or questions with his attorney[, ]" as the parties mediated their dispute on December 20, 2010, and entered into the consent order on February 8, 2011. The judge found:
[T]here's no question about [a] meeting of the minds here. This is clear and signed by the [c]ourt, signed by both the attorney for the plaintiff and the plaintiff and the attorney for the defendant and the defendant. . . . I don't see how it could be clearer that the [$]10, 000 only would be paid [to defendant] if the net proceeds . . . [were] greater than [$]70, 000. And then the defendant was to get [$]10, 000. There's nothing unclear about that. I think it's very, very clear.
Judge Levy rejected defendant's assertions that he signed the agreement without reading it as "self-serving" and declined to consider substantive contentions regarding the initial transfer of the $150, 000, as the only question was "whether [the] settlement should be voided." Noting the law's strong presumption favoring enforcement, Judge Levy concluded defendant failed to demonstrate by clear and convincing evidence the consent agreement was procured by fraud, mutual mistake, undue haste, pressure, unseemly conduct, duress, or other compelling circumstances that justify its vacation.
On plaintiff's cross-motion, Judge Levy noted the June 15, 2011 contract for sale and its June 29, 2011 addendum included defendant's affirmative representation there were no underground tanks on the property, which was untrue and posed an impediment to the realty's sale. He determined defendant should be given "an opportunity to comply with the consent order without doing anything to interfere with appraisers, inspectors or anyone else[, ] who needs access to the property in order for it to be sold." Finally, he awarded plaintiff counsel fees incurred in enforcing the settlement as provided in the parties' agreement. Judge Levy entered an order memorializing his decision on January 23, 2012. We denied defendant's application seeking emergent relief. This appeal ensued.
Consent judgments resolving litigation are authorized by Rule 4:42-1, Midland Funding, LLC v. Giambanco, 422 N.J.Super. 301, 310 (App. Div. 2011), and are "'not strictly a judicial decree, but rather in the nature of a contract entered into with the solemn sanction of the court.'" Cmty. Realty Mgmt. v. Harris, 155 N.J. 212, 226 (1998) (quoting Stonehurst at Freehold v. Twp. Comm. of Freehold, 139 N.J.Super. 311, 313 (Law Div. 1976)). Stated differently, a consent judgment is "an agreement of the parties under the sanction of the court as to what the decision shall be." Fid. Union Trust Co. v. Union Cemetery Ass'n, 136 N.J. Eq. 15, 25 (1944) (internal quotation marks and citations omitted), aff'd, 137 N.J. Eq. 456 (E & A 1946).
"[A] consent judgment may only be vacated in accordance with R[ule] 4:50-1." Harris, supra, 155 N.J. at 226 (internal quotation marks and citations omitted). See also DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 261 (2009) ("The rule does not distinguish between consent judgments and those issued after trial."); Pope v. Kingsley, 40 N.J. 168, 173 (1963) ("A consent judgment has equal adjudicative effect to one entered after trial or other judicial determination." (citations omitted)).
A motion to vacate a judgment may be granted upon proof of one of the enumerated bases set forth in the rule. "Rule 4:50-1 is not an opportunity for parties to a consent judgment to change their minds; nor is it a pathway to reopen litigation because a party either views his settlement as less advantageous than it had previously appeared, or rethinks the effectiveness of his original legal strategy." DEG, supra, 198 N.J. at 261.
Here, Judge Levy considered defendant's motion in light of his burden of persuasion, as mandated by Rule 4:50-1. He found the proofs wanting and denied the requested relief.
A trial judge's "decision granting or denying an application to open a judgment rests within the sound discretion of the trial court, exercised with equitable principles in mind, and will not be overturned in the absence of an abuse of that discretion." Marder v. Realty Constr. Co., 84 N.J.Super. 313, 318 (App. Div.) (citations omitted), aff'd, 43 N.J. 508 (1964). See also DEG, supra, 198 N.J. at 261 ("On appellate review, the trial judge's determination will be left undisturbed unless it represents a clear abuse of discretion." (internal quotation marks and citations omitted)). "[A]buse of discretion is demonstrated if the discretionary act was not premised upon consideration of all relevant factors, was based upon consideration of irrelevant or inappropriate factors, or amounts to a clear error in judgment." Masone v. Levine, 382 N.J.Super. 181, 193 (App. Div. 2005) (citation omitted). Accordingly, this court's task is not "to decide whether the trial court took the wisest course, or even the better course, since to do so would merely be to substitute our judgment for that of the lower court. The question is only whether the trial judge pursued a manifestly unjust course." Gittleman v. Cent. Jersey Bank & Trust Co., 103 N.J.Super. 175, 179 (App. Div. 1967), rev'd on other grounds, 52 N.J. 503 (1968).
Applying this standard, we conclude Judge Levy properly exercised his discretion. He did not err in declining defendant's urging to reexamine the underlying substance of the initial $150, 000 transfer between plaintiff and defendant, or whether plaintiff's proofs established a legal interest in the subject home. He did review whether defendant presented evidence showing his consent to the agreement was not knowingly and voluntarily given, or whether he executed it under duress. In his analysis, he found the terms of the consent judgment were clear and unambiguous; the signatures on the agreement reflect the parties were represented by legal counsel; and sufficient time passed from the parties' appearance in mediation, where settlement discussions commenced, to the date of the final settlement, which allowed reflection on the decision.
We conclude Judge Levy's findings were fully supported by the record, and no evidence sustains defendant's bald assertions of involuntary execution or duress. There is no error in the court's analysis.
Finally, as to the challenge to the award of plaintiff's attorneys' fees, we conclude the argument lacks merit. R. 2:11-3(e)(1)(E). The parties included a provision for payment of fees in the event of need for legal enforcement of the terms of settlement. See N. Bergen Rex Transp., Inc. v. Trailer Leasing Co., 158 N.J. 561, 570 (1999) ("A Party may agree by contract to pay attorneys' fees." (citations omitted)). Despite the agreement's deviation from the American Rule,  such a provision is fully enforceable. See Satellite Gateway Commc'ns, Inc. v. Musi Dining Car Co., 110 N.J. 280, 285 (1988) (prohibiting fee shifting unless authorized by statute, court rule, or contract).