November 18, 2013
MARY DAVIDSON, Plaintiff-Appellant,
MARTIN DAVIDSON, Defendant-Respondent.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted November 13, 2013.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-2581-06H.
DeMarco and Lore, attorneys for appellant (Raymond P. DeMarco, on the brief).
Goldstein and Bachman, P.A., attorneys for respondent (Howard A. Bachman, of counsel; David R. Cardamone, on the brief).
Before Judges Fisher and Koblitz.
In this appeal of a post-judgment matrimonial order, plaintiff Mary Davidson (Mary) argues the motion judge erred in failing to conduct an evidentiary hearing to determine whether defendant Martin Davidson (Martin) failed to properly or expeditiously market a home, which had been equitably distributed, and the consequences of the alleged failure. We agree these issues could not be decided on the papers and remand for an evidentiary hearing.
The parties were married in 1995 and had two children. Upon the disintegration of their marriage, the parties agreed to arbitrate the issues disputed in their divorce action. Former Superior Court Judge Fred Kieser was selected as their arbitrator, and, after a two-day hearing, he rendered a thorough written decision disposing of all issues.
As presently relevant, the arbitrator found the parties owned two residences in the Borough of Middlesex that were subject to equitable distribution: one, the marital home, is on Benart Place (hereafter Benart), and the other, on Whitney Drive (Whitney), was originally owned by Martin and leased to relatives. When the marital relationship collapsed, Martin took up residence at Whitney. The parties stipulated the values of Benart and Whitney at $385, 000 and $295, 000, respectively.
In equitably distributing the properties, the arbitrator found Mary was entitled to retain Benart and Martin was to receive a $78, 000 credit for his interest. As for Whitney, the arbitrator found Mary entitled to be "credited with one-half of the stipulated value minus one-half of the outstanding principal of the mortgage as of 8/1/08, " i.e., $127, 500; additional adjustments reduced Mary's interest in Whitney to $103, 879.92.
The arbitrator also directed that, within forty-five days, Martin was to either refinance Whitney for an amount at least equal to the $103, 879.92 owed Mary or list the property for sale. If Martin took neither step, the arbitration award expressed Mary's right to apply to court for authorization to execute any necessary instruments to list, sell and convey Whitney.
A judgment of divorce, incorporating these terms, was entered on December 5, 2008.
Whitney soon became the subject of numerous trips to court because of Mary's assertions that Martin was not adequately maintaining the property or making good faith efforts to sell it in compliance with the arbitration award. On May 28, 2010, the motion judge denied without prejudice Mary's request for authorization to sell Whitney; the judge stated she was not convinced Martin had unreasonably refused to accept a bona fide offer, but the judge also ordered Martin to comply with the realtor's recommendations for readying the property for sale and directed that Whitney be "continuously listed" for sale based upon the realtor's recommendations.
On April 15, 2011, after considering further applications, the judge ordered a reduction in Whitney's sale price to $195, 000, and again directed Martin to maintain the property and prepare it for proper "staging" to facilitate its sale. The judge's order repeated the directions given Martin in the prior order because the realtor continued to express concerns that marketing the property was hampered by its cluttered and unkempt condition. The judge again directed Martin to comply with the realtor's recommendations upon penalty of the imposition of sanctions.
The matter again came before the trial court on cross-motions. In a February 17, 2012 order, which Mary now appeals in part, the motion judge described the dispute and relevant allegations in the following way:
[Martin] requests . . . clarification of the provision regarding equitable distribution . . . .[, ] assert[ing] the current agreed upon listing price is $180, 000[.] [He] wishes to transfer title to [Mary] or sell the house at whatever the market will provide to settle all back child support and award amounts from the . . . arbitration decision. [Martin] argues that if the parties abide by the arbitration [award], and sell the home at the current price, [he] would be in arrears in order to satisfy the sum of $103, 879.92 to [Mary] as per the parties' arbitration [award].
In opposition [Mary] argues that the parties stipulated that the fair market value for equitable distribution purposes of this property was $295, 000. [She] argues that she desperately tried to get [Martin] to sell the property earlier. [Mary] argues that selling the house at the current price would be inequitable given [Martin's] lack of diligence in selling the property at a time when it was appraised at $295, 000. [Mary] argues that if she puts the house on the market and sells it for what [it is] presently worth, instead of her realizing $127, 500 [sic: $103, 879.92] she will only get between $67, 000 and $70, 000. [Mary] states that she is willing to accept title to [Whitney].
The motion judge ordered that title be transferred to Mary, as the parties agreed, and denied both parties' applications to adjust the payment or credit due to each after the sale. As relevant to the issues on appeal, the motion judge concluded that the arbitration award "clearly provided instructions for how to divide the proceeds from the marital home, concluding that the decision was based on the stipulated value "at that time" of $295, 000, but that, if the property was sold, this stipulated figure "was to be adjusted" and the division would be based on "the net of the sale price."
In appealing this aspect of the February 17, 2012 order, Mary argues, in a single point, that the motion judge:
COMMITTED REVERS[I]BLE ERROR FOR FAILING TO CONSIDER THE FINANCIAL IMPACT CAUSED BY [MARTIN] IN HIS FAILURE TO COOPERATE IN THE SALE OF THE PROPERTY HE OCCUPIED AFTER THE DIVORCE, HE HAVING RECEIVED A $78, 000 CREDIT AS HIS CURTESY INTEREST IN THE MARITAL RESIDENCE BUT BY HIS ACTION DEPRIVED [MARY] OF A SUBSTANTIAL PART OF THE EQUITY AWARDED TO HER BY OBSTRUCTING THE SALE OF THE PROPERTY HE ALONE OCCUPIED.
We agree it may be inequitable that Martin obtained his interest in Benart based on the 2008 stipulated values while Mary not only still awaits compensation for her interest in Whitney but also may have that interest diluted by a depressed market. Certainly, the mere passage of time was in the arbitrator's contemplation. But it is not as apparent that the arbitrator and parties anticipated such a delay as alleged – particularly a delay allegedly caused by a less than vigorous attempt to sell Whitney – or that Mary would suffer the risk of loss in value as a result of such a delay. Mary was entitled to an evidentiary hearing on these issues and the judge was mistaken in ruling without the illumination an evidentiary hearing may have provided.
If Mary's allegations are sustained, an equity judge might find substance in her argument that she ought not suffer the risk of loss in value caused by Martin's alleged foot-dragging or inadequate efforts at marketing and selling Whitney. Mary, of course, would have to demonstrate that – had Martin acted in good faith and with the speed contemplated at the time of the arbitration – the property would have sold for an amount closer to the 2008 stipulated value. That is, Mary would have to demonstrate a nexus between Martin's acts or omissions and Whitney's loss in value. We vacate those parts of the February 17, 2012 order that are inconsistent with our disposition of this appeal and remand for an evidentiary hearing.
Vacated in part and remanded. We do not retain jurisdiction.