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Woytas v. Greenwood Tree Experts, Inc.

Supreme Court of New Jersey

May 6, 2019

Sandra Woytas, Administratrix of the Estate of Timothy G. Woytas, deceased; and Sandra Woytas, individually, Plaintiff-Appellant,
v.
Greenwood Tree Experts, Inc., Greenwood Lawn Services, Inc., Greenwood Continuity Trust, John R. Woytas, III, Raymond J. oytas, David W. Dubee, Robert W. Dubee, Whippany Fire Department (a/k/a Township of Hanover Fire District #2) and Lincoln National Life Insurance Company, Defendants, and Christina Woytas, individually and as guardian for T.M. Woytas, C.T. Woytas and J.T. Woytas, Defendant-Respondent.

          Argued March 25, 2019

          On certification to the Superior Court, Appellate Division.

          Matheu D. Nunn argued the cause for appellant (Einhorn, Harris, Ascher, Barbarito & Frost, attorneys; Matheu D. Nunn, of counsel and on the briefs, and Bonnie C. Frost and Gary R. Botwinick, on the briefs).

          Lauren F. Iannaccone argued the cause for respondent (Connell Foley, attorneys; Lauren F. Iannaccone, on the brief, and Andrew C. Sayles, of counsel and on the brief).

          SOLOMON, J., writing for the Court.

         In this appeal, the Court first considers whether Timothy G. Woytas breached the Marital Settlement Agreement (MSA) he entered into with Christina Woytas prior to their divorce by committing suicide within two years of purchasing life insurance policies he was required to "maintain" under the MSA, when those policies included a "suicide exclusion" barring recovery of benefits if the insured were to commit suicide within two years of purchase. Second, the Court is asked to determine to whom the limited funds in Timothy's estate should be distributed and in what amounts.

         The MSA required Timothy to provide a monthly sum to Christina for support of their three children and to pay her monthly alimony for twelve years. The MSA also required that Timothy maintain medical insurance for the children; pay sixty-five percent of the children's unreimbursed and non-reimbursable medical, dental, and other health care expenses; pay sixty-five percent of any mutually agreed upon extracurricular activities; pay fifty percent of the children's cell-phone expenses; and, if practicable, contribute to the children's undergraduate college, junior college, or vocational or trade school education, including application fees, preadmission standardized test costs, tuition, room and board, activity fees, lab fees, books, supplies, and transportation.

         In order to secure those obligations, the MSA obligated Timothy to maintain a $400, 000 life insurance policy for the duration of his alimony obligation, naming Christina as the beneficiary. Timothy was likewise required to maintain a $750, 000 life insurance policy for the benefit of the children, as co-equal beneficiaries. Pertinent to this appeal, Timothy and Christina handwrote a clause into the MSA, providing that "[i]n the event either party fails to maintain the life insurance [policy requirements], such party's estate shall be liable for any outstanding obligations owed under this Agreement."

         Timothy obtained the necessary policies, which contained a "suicide exclusion" providing that if the primary insured -- Timothy -- should commit suicide within two years of the effective date of the policy, the death benefit would equal only the premiums paid plus interest. A little over four months after his divorce, Timothy married Sandra Woytas and obtained a $500, 000 life insurance policy naming her as the beneficiary.

         Less than two years after his divorce from Christina, Timothy committed suicide. Sandra was appointed administratrix of his estate. The suicide clauses in the policies purchased pursuant to the MSA and the policy purchased for Sandra's benefit, which contained a similar exclusion, led to a denial of the death benefits on each policy.

         Christina filed claims against Timothy's estate on her own behalf and on behalf of the three children. Sandra likewise filed a claim against Timothy's estate for the value of the life insurance policy naming her as beneficiary. The claims against the estate totaled over $1, 400, 000. However, at the time of his death, Timothy's assets, less estate expenses, totaled only $446, 966.47.

         Finding no controlling New Jersey case law, the Chancery judge, citing Tintocalis v. Tintocalis, 25 Cal.Rptr.2d 655 (Ct. App. 1993), concluded that Timothy breached the MSA by failing to maintain life insurance for the benefit of Christina and the children. The court explained that "the calculation of future child [support] . . . payments relie[d] on too many uncertainties." Finding that the claim for outstanding child support "must be paid before any other claims," and that this obligation exceeds the value of the estate's net assets, the Chancery Division awarded the amount claimed as outstanding child support -- $750, 000. The court thus ordered Sandra, as adminstratrix of Timothy's estate, to pay the balance of the estate to Christina for the benefit of the children.

         In an unpublished opinion, the Appellate Division affirmed. The Appellate Division agreed with the trial court's determination that Timothy breached the MSA by committing suicide. The panel held that the children were entitled to the $750, 000 face value of the life insurance policy from Timothy's estate. Thus, the panel dismissed Sandra's contention that the children should be entitled only to outstanding child support payments over time. Finally, the panel held that the MSA's requirement that Timothy maintain life insurance benefiting the children constituted a child support order, and it rejected Sandra's argument that her claims had priority.

         The Court granted Sandra's petition for certification. 236 N.J. 239 (2018).

         HELD: The MSA required Timothy to "maintain" life insurance to support the children in the event of Timothy's death. Because Timothy's suicide barred recovery of the life insurance proceeds, he failed to "maintain" life insurance and therefore breached the Agreement. A precise calculation of Timothy's outstanding child support obligations would be speculative, and the Chancery Division did not abuse its discretion by finding that Timothy's outstanding obligations exceed the remaining assets of Timothy's estate. Thus, there would be no remaining estate assets to pay Sandra's claims, and a remand for a precise damages calculation is unnecessary.

         1. The question of whether Timothy's suicide resulted in a breach of the MSA is a matter of first impression in New Jersey. In Tintocalis, the husband was required to "immediately secure" and "maintain" a life insurance policy benefiting his wife until his alimony obligation ended. 25 Cal.Rptr.2d at 657. The husband purchased a life insurance policy with a two-year suicide exclusion and committed suicide within the exclusion period. Ibid. The court concluded that the husband's actions could not "reasonably be equated with 'maintaining' the policy," because the wife could not recover on the policy after the husband's death. Id. at 658. (pp. 13-15)

         2. Tintocalis is analogous to the present case and persuasive. As in Tintocalis, the plain language of the MSA here required Timothy to "maintain" a life insurance policy for the benefit of the children. Black's Law Dictionary defines "maintain" to mean "[t]o continue (something)." The life insurance policy purchased by Timothy for the benefit of the children did not "continue" after his suicide. More importantly, his act of suicide deprived the children of the intended benefits of the policy. Therefore, Timothy's suicide constituted a breach of the MSA -- it thwarted the MSA's intent to provide for the children's support in the event of his death. (p. 15)

         3. Timothy's child support obligations were substantial, and consisted of monthly payments as well as payment of a significant percentage of the children's expenses. The MSA's clear and unambiguous handwritten clause provides for the measure of loss occasioned by Timothy's breach -- "any outstanding obligations owed under this Agreement." At the time of Timothy's death, the three children were ages sixteen, fourteen, and eleven. The Chancery Division concluded that the circumstances warranted payment of the remaining assets of the estate to the children because the amount owed to them exceeded the estate's net assets. (pp. 15-17)

         4. In light of Timothy's substantial child support obligations and the number of years for which it has been and will be owed, common sense supports the remedy reached by the Chancery judge, which more accurately reflects the scope of Timothy's obligations than the appellate panel's reliance on the policy limit. With that modification, the Court affirms the judgment of the panel because Timothy's outstanding child support obligations exceed the value of the remaining assets of Timothy's estate. Here, because there would be no remaining estate assets to pay Sandra's claims, remand for a precise damages calculation is unnecessary. (pp. 17-18)

         The judgment of the Appellate Division is AFFIRMED AS MODIFIED.

          CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA, and TIMPONE join in JUSTICE SOLOMON'S opinion.

          OPINION

          SOLOMON, JUSTICE

         Christina Woytas and Timothy G. Woytas were married for seventeen years and had three children. The couple divorced after entering into a Marital Settlement Agreement that required Timothy to pay both alimony and child support. To secure Timothy's child support and alimony obligations, the Agreement required that he "maintain" life insurance policies naming Christina and their three children as beneficiaries.

         The life insurance policies Timothy purchased included a "suicide exclusion" barring recovery of benefits if the insured were to commit suicide within two years of purchase. Timothy committed suicide within two years of acquiring the policies. As a result, the insurance companies did not pay the face value of the life insurance policies, instead offering a return of premiums plus interest.

         In this appeal, we first consider whether Timothy breached the Marital Settlement Agreement by committing suicide within two years of purchasing the life insurance policies. Second, we are asked to determine to whom the limited funds ...


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