A.T.M. VS. R.P.M. (FM-04-0337-05, CAMDEN COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: June 6, 2018
• Docket: A-0960-16T4
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-0960-16T4

A.T.M.,

Plaintiff-Respondent,

v.

R.P.M.,

Defendant-Appellant. _______________________________

Argued May 7, 2018 – Decided June 6, 2018

Before Judges Ostrer and Firko.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Camden County, Docket No. FM-04-0337-05.

Patricia Ronayne argued the cause for appellant (Law Office of Patricia Ronayne, PC, attorneys; Patricia Ronayne, on the brief).

Michael A. Weinberg argued the cause for respondent (Archer & Greiner, PC, attorneys; Michael A. Weinberg, of counsel; Jennie A. Owens, on the brief).

PER CURIAM

Defendant R.P.M. appeals from the denial of a post-judgment

motion to modify or terminate his alimony obligation. The trial

court ruled the alimony obligation was not modifiable based on anti-Lepis1 language set forth in the parties' Property Settlement

Agreement ("PSA") incorporated into the Final Judgment of Divorce

("FJOD"). The trial judge denied defendant's request to exchange

discovery and conduct a plenary hearing. We affirm the decision

to uphold the anti-Lepis provision and reverse and remand for

further proceedings to determine defendant's ability to pay

current support, arrearages, and other obligations.

The parties were married in 1979 and divorced in 2004. They

have two children who were both emancipated at the time defendant

filed his motion. The parties separated in 2001 and negotiated

the terms of their agreement without the benefit of counsel, formal

discovery or financial disclosures. The PSA was then drafted by

plaintiff's counsel.

Pertaining to the equitable distribution of assets, plaintiff

received the former marital home free of any encumbrances.

Defendant retained any equitable interest in BRS Produce Co.,

Inc., a family business. Defendant's IRA and asset accounts were

divided equally. Plaintiff retained her leased vehicle through

termination and thereafter, defendant purchased a vehicle outright

for her. Furthermore, defendant agreed to pay for undergraduate

1 Lepis v. Lepis, 83 N.J. 139 (1980).

2 A-0960-16T4 and post-graduate educational expenses for the unemancipated

child.

Alimony was based on defendant's employment in BRS Produce.

At that time, defendant reported a gross income of $115,000 per

year.2 The parties agreed that defendant was the primary wage

earner. Plaintiff was a stay at home mother who raised the

children, who are now emancipated. At the time of divorce, she

earned $10,000 per year. Commencing upon the execution of the PSA,

defendant agreed to pay $800 per week in non-taxable, permanent

alimony, plus semi-annual lump sum payments of $10,000 on or before

June 30 and December 15. The only condition stipulated to in the

PSA in respect of terminating alimony was the death of either

party. In relevant part, the PSA states:

Further, the [defendant] represents and acknowledges that he has sufficient assets to meet his permanent alimony obligation set forth herein even if his income would not otherwise warrant said spousal support obligation and he has, therefore, chosen and voluntarily agreed to make said permanent alimony obligations to [plaintiff] non- modifiable.

2 In addition, defendant received other benefits and perquisites not specifically delineated. It is unknown whether he had an ownership interest in the business.

3 A-0960-16T4 In addition to alimony payments, defendant is obligated to

provide plaintiff with private healthcare coverage and to maintain

a $600,000 life insurance policy naming her as the beneficiary in

order to secure his obligations to her.

After complying with the terms of the PSA for approximately

eleven years, defendant ceased making alimony payments. On August

4, 2015, plaintiff moved to enforce the PSA and defendant cross-

moved to modify his support obligations. In a decision rendered

on October 2, 2015, following oral argument, the trial court

enforced the terms of the PSA, and denied defendant's motion,

finding the non-modifiable provisions of the PSA to be "iron

clad."3 Plaintiff asserts that this decision constituted an

adjudication on the merits as to the anti-Lepis provision.

Less than a year later on July 28, 2016, defendant moved

again to modify or terminate his support obligation. He submitted

no new evidence, except a forensic accounting report. For the

second time, defendant challenged the validity of the anti-Lepis

provision. The court denied defendant's motion, and this appeal

ensued.

The PSA contains the following preamble:

3 The record is devoid of any motion for reconsideration or appeal from the October 2, 2015 order. We deem said order to be final pursuant to Rule 2:4-1 and not interlocutory.

4 A-0960-16T4 This preamble is being written to explain the process that was undertaken to reach this [PSA]. It should be explained that this is not a typical divorce case. Upon their separation in or about July, 2001, [defendant] and [plaintiff] met and negotiated the terms of this Agreement, orally, without the involvement of counsel. Their compromises were made in order to avoid long divorce proceedings involving significant time, expense and emotion. The partie[s] negotiations were conducted without the benefit of formal discovery. Both parties, however, have been fully advised and understand their right to obtain formal discovery before entering into this [PSA].

After execution of the PSA, and five days before the FJOD was

granted, defendant also executed a notarized "Affidavit of

Defendant Re: Voluntary Execution of [PSA]." The affidavit

provides in relevant part that: "The [PSA] in its final form is a

compromise of my initial position and the initial position of my

spouse"; "[c]onsidering that the [PSA] is a compromise, I

nevertheless consider it to be fair and equitable"; and "I intend

to be bound by the [PSA]."

I.

As his initial point on appeal, defendant argues that the

trial court "erred in declining to find the [PSA] unconscionable

under [R.] 4:50-1(f) and, in doing so, abused her discretion in

declining to modify and/or terminate defendant's support

obligations contained in the [PSA]." We disagree.

5 A-0960-16T4 Rule 4:50-1(f) provides: "On motion, with briefs, and upon

such terms as are just, the court may relieve a party or the

party's legal representative from a final judgment or order for .

. . any other reason justifying relief from the operation of the

judgment or order."

The rule is "designed to reconcile the strong interests in

finality of judgments and judicial efficiency with the equitable

notion that courts should have authority to avoid an unjust result

in any given case." US Bank Nat'l Ass'n v. Guillaume, 209 N.J.

449, 467 (2012) (citation omitted). Nevertheless, relief under

Rule 4:50-1(f) is available only when "truly exceptional

circumstances are present." Baumann v. Marinaro, 95 N.J. 380, 395

(1984) (citation omitted). Since the rule deals with exceptional

circumstances, each case must be resolved "on its own particular

facts." Ibid.

"The trial court's determination under the rule warrants

substantial deference, and should not be reversed unless it results

in a clear abuse of discretion." Guillaume, 209 N.J. at 467. An

abuse of discretion exists when a decision has been "made without

a rational explanation, inexplicably departed from established

policies, or rested on an impermissible basis." Id. at 467-48

(citations omitted).

6 A-0960-16T4 Unconscionability can serve as a basis to invalidate an

agreement in New Jersey. Saxon Constr. & Mgmt. Corp. v.

Masterclean, Inc., 273 N.J. Super. 231, 236 (App. Div. 1994). It

exists when there is "overreaching or imposition resulting from a

bargaining disparity between the parties, or such patent

unfairness in the contract that no reasonable person not acting

under compulsion or out of necessity would accept its terms."

Howard v. Diolosa, 241 N.J. Super. 222, 230 (App. Div. 1990)

(citation omitted). The courts should look to two factors in

cases dealing with unconscionability: "(1) unfairness in the

formation of the contract, and (2) excessively disproportionate

terms. These two elements have been described as "procedural" and

"substantive" unconscionability." Sitogum Holdings, Inc. v.

Ropes, 352 N.J. Super. 555, 564 (Ch. Div. 2002) (citation omitted).

Substantive unconscionability "suggests the exchange of

obligations so one-sided as to shock the court's conscience." Id.

at 565.

Here, the trial court determined that the PSA was not

unconscionable. The judge reasoned:

[t]he payments were not unconscionable at the time, given the income level stated in the agreement, the length of the marriage of the parties, and the economic dependency of the plaintiff. The agreement was not unconscionable at that time, and it was, in

7 A-0960-16T4 fact, based on an income level that defendant exceeded for many years after the agreement.

Moreover, the record fully supports the trial court's

conclusion. As the judge found, this was a long term marriage of

twenty-five years. Defendant earned a relatively high level of

income and plaintiff was the primary caretaker of the children.

No Matrimonial Case Information Statements were ever exchanged.

The produce business was never evaluated for equitable

distribution purposes. As partial consideration for the PSA,

plaintiff waived her right to pursue a cause of action against

defendant for his transmitting the human papillomavirus infection

to her, which he acknowledged doing on the record and in a

certification.4 As aptly pointed out by plaintiff, the statute of

limitations has now expired insofar as it relates to transmission

of the virus to her and her ability to litigate this issue against

defendant.5

4 See Tevis v. Tevis, 79 N.J. 422 (1979). The entire controversy doctrine is set forth in Rule 4:30A. "Non-joinder of claims required to be joined by the entire controversy doctrine shall result in the preclusion of the omitted claims to the extent required by the entire controversy doctrine, except as otherwise provided by [Rule] 4:64-5 (foreclosure actions) and [Rule] 4:67- 4(a) (leave required for counterclaims or cross-claims in summary actions)." 5 See N.J.S.A. 2A:14-2 (establishing two-year limitations period for personal injury actions).

8 A-0960-16T4 We find no basis to conclude that there was

"unconscionability, fraud, or overreaching in negotiations of the

settlement," to provide a basis for vacating or modifying the PSA.

J.B. v. W.B., 215 N.J. 305, 326 (2013) (citation omitted). The

trial court duly found that this case was not sufficiently

"extreme" to warrant modification despite the anti-Lepis clause.

Morris v. Morris, 263 N.J. Super. 237, 244 (App. Div. 1993).

"There is no great inequity, since each party has the expected

benefit and burden of the contact." Ibid.

From the record we have, defendant has failed to prove that

he is entitled to have the PSA invalidated. Motions made pursuant

to R. 4:50-1(f) are to be granted sparingly and are within the

sound discretion of the trial court. Guillaume, 209 N.J. at 467.

Nothing presented herein suggests that the PSA was procured

unfairly by fraud, falsehood, or duress, or that it was wholly

unconscionable when entered. Wertlake v. Wertlake, 137 N.J. Super.

476 (App. Div. 1975). Defendant has failed to establish

exceptional and compelling circumstances to justify the relief he

seeks in setting aside the PSA.

II.

We turn next to defendant's argument that he was entitled to

a modification of his alimony obligation.

9 A-0960-16T4 "Each and every motion to modify an alimony obligation 'rests

upon its own particular footing and the appellate court must give

due recognition to the wide discretion which our law rightly

affords to the trial judges who deal with these matter.'" Larbig

v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006) (citation

omitted). We do not overturn such discretionary decisions "unless

the court abused its discretion, failed to consider controlling

legal principles or made findings inconsistent with or unsupported

by competent evidence." Storey v. Storey, 373 N.J. Super 464, 479

(App. Div. 2004).

Although it is well established that matrimonial agreements

represent enforceable contracts, "[a]t the same time, 'the law

grants particular leniency to agreements made in the domestic

arena,' thus allowing 'judges greater discretion when interpreting

such agreements.'" Pacifico v. Pacifico, 190 N.J. 258, 265-66

(2007) (citation omitted). "The court's role is to consider what

is written in the context of the circumstances at the time of

drafting and to apply a rational meaning in keeping with the

'expressed general purpose.'" Id. at 266. (citation omitted).

Applying the above standards, we hold the trial court was

correct in finding the anti-Lepis provision valid. The trial

court held:

10 A-0960-16T4 In this agreement, there are no ambiguities, no missing terms, and the court does not find there was overreaching or that the plaintiff was in a superior negotiating position. Thus, when the intent of the parties is plain, the language is clear, the court must enforce the agreement as written unless doing so would lead to an absurd result. Quinn v. Quinn, [225 N.J. 34 (2016)] again citing [Sachau v. Sachau, 206 N.J. 1 (2011)].

The language and the intent of this agreement are clear. Currently, the agreement provides results that are very difficult for the defendant. He is now earning less than he was at the time of the agreement, and it is more difficult for him to meet his obligations. However, the court cannot find that the current decrease represents an unanticipated event or an absurd result; therefore, the defendant's application to set aside or modify the agreement must be denied.

Based upon the trial court's decision, we concur that there

was no "overreaching or imposition resulting from a bargaining

disparity between the parties, or such potent unfairness in the

contract that no unreasonable person not acting under compulsion

or out of necessity would accept its terms." Howard v. Diolosa,

241 N.J. Super. 222, 230 (App. Div. 1990).

The "exceptional circumstances" advanced by defendant were

clearly foreseeable when the PSA was executed. Reviewing the

plain language of the PSA, it specifically states "both parties

waive their right to seek a modification and/or termination of

[defendant's] alimony obligation to [plaintiff], and both parties

11 A-0960-16T4 warrant and represent that this waiver is irrevocable." Moreover,

defendant "represent[ed] and acknowledge[d] that he has sufficient

assets to meet his permanent alimony obligation set forth herein

even if his income would not otherwise warrant said spousal support

obligation, and he has, therefore, chosen and voluntarily agreed

to make said permanent alimony obligation to [plaintiff] non-

modifiable." There is no unfair surprise as the PSA specifically

provides that the parties contemplated any "prospective changes

in their incomes."

Defendant's reported Medicare wages for calendar years 2004

through 2014 were provided to the trial court. Post-divorce,

defendant's earnings exceeded $115,000 - sometimes by multiples

of two or three - each year except 2012 and 2014.

III.

Notwithstanding the validity of the anti-Lepis clause of the

PSA, as we noted in Morris, a finding that the parties intended

their matrimonial settlement agreement not be subject to

modification for changed circumstances does not end the inquiry.

Morris, 263 N.J. Super. at 244. The trial judge "has both the

power and duty to establish a reasonable level of current payment

based upon defendant's income, assets, and reasonable resort to

credit." Ibid.

12 A-0960-16T4 Defendant retained a forensic accountant, Frederick Bucci,

CPA, to evaluate his current income vis-à-vis his support

obligations. Based upon Mr. Bucci's analysis, in 2015, defendant's

disposable income was essentially the same as his support

obligations. In 2014, his support obligations constituted

approximately 120% of his disposable income; and in 2013, 61.72%

of his disposable income. He contends that he was able to comply

with his obligations in the past because he received bonuses. He

is now liquidating savings and retirement accounts in order to

comply with not only the terms of the PSA, but the October 2, 2015

order as well. Defendant contends that his depressed circumstances

leave him with almost no disposable income and diminishing capital

assets available to liquidate.

The Morris court noted the blatant inequity of not enforcing

an agreement in which the parties expressly "provided for

defendant's future decreased ability to pay - '[i]f defendant's

income increased, he could hold plaintiff to her agreement; if it

decreased, he inequitably could claim an inability to pay and

avoid his debt to her.'" Id. at 242, 244. Defendant was required

to pay the agreed upon alimony if he had the means to do so, and,

if not, the unpaid balance would accrue until his fortunes

improved. Id. at 244. If defendant's financial situation did not

improve and his arrearages accumulated, then that would be the

13 A-0960-16T4 result he bargained for when plaintiff gave up her Tevis claim and

her potential equitable distribution claim in respect of his

produce business. As explained in Morris, there is "no great

inequity" because "each party has the expected benefit and burden

of the contract." Ibid.

The motion judge "has both the power and duty to establish a

reasonable level of current payment based upon defendant's income,

assets, and reasonable resort to credit." Ibid.; N.J.S.A. 2A:34-

23.

Based upon the record before us, we find that defendant has

established a prima facie showing of changed circumstances. Hand

v. Hand, 391 N.J. Super. 102, 106 (App. Div. 2007). Therefore,

we remand to the trial court for an ability-to-pay hearing. See

Schochet v. Schochet, 435 N.J. Super. 542, 548 (App. Div. 2014).

This distinction is made from a plenary hearing because:

[t]he Rule 1:10-3 hearing is not a plenary to decide the appropriate amount of support an obligor should pay. That amount has been determined, either by the court following a trial or post-judgment motion, or by the parties themselves. The hearing is also not a substitute for an appeal or a motion to modify the obligation based on changed circumstances. The hearing comes about because an obligor has failed to comply with an order. The objective of the hearing is simply to determine whether that failure was excusable or willful, i.e., the obligor was able to pay and did not. It does not establish

14 A-0960-16T4 the future obligation of the party paying support.

Ibid.

We affirm the order entered by the trial court insofar as it

upholds the validity of the PSA and anti-Lepis provision. We

remand to the trial court to conduct an ability-to-pay hearing as

to defendant's current financial circumstances consonant with his

arrearages, alimony, and other obligations.

We do not retain jurisdiction.

15 A-0960-16T4