SARINA M. FERNICOLA VS. ROBERT C. FERNICOLA (FM-15-0587-17, OCEAN COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: January 11, 2021
• Docket: A-0523-19T1
• Status: Unpublished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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-0523-19T1

SARINA M. FERNICOLA,

Plaintiff-Appellant,

v.

ROBERT C. FERNICOLA,

Defendant-Respondent. ________________________

Argued October 19, 2020 – Decided January 11, 2021

Before Judges Hoffman and Suter.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Ocean County, Docket No. FM-15-0587-17.

Kevin E. Young argued the cause for appellant (Herlihy, Young & Niemiec, attorneys; Kevin E. Young, on the brief).

Abigale M. Stolfe argued the cause for respondent (Stolfe & Zeigler attorneys; Abigale M. Stolfe and Heather N. Capp, on the brief).

PER CURIAM Plaintiff Sarina M. Fernicola appeals the August 23, 2019 Family Part

order granting defendant Robert C. Fernicola's motion for reconsideration and

finding the Nationwide Financial IRA (the Nationwide account) consisted solely

of premarital funds and was not subject to equitable distribution under the

parties' Marital Settlement Agreement (MSA). We affirm the August 23, 2019

order.

After ten years of marriage, plaintiff filed for divorce on November 14,

2016, citing irreconcilable differences. Defendant filed a counterclaim citing

the same grounds. A lengthy "collaboration process" was unsuccessful but the

parties reached a settlement in mediation. The MSA was incorporated into their

May 25, 2017 Final Judgment of Divorce.

The MSA is a comprehensive document. We mention only the sections

that are necessary for our opinion.

Section 1.17 of the MSA provides that the parties have "conducted limited

discovery but wish to proceed with the information exchanged during

mediation." They "waive[d] the right to complete formal discovery

proceedings." Section 1.15 provides that the MSA is the entire agreement

between the parties.

A-0523-19T1 2 Article V of the MSA addresses the division of their property. Section 5.1

lists certain assets defendant retains "free and clear of any interest" by plaintiff.

Among other things, this includes two accounts identified by name and number,

but does not include the Nationwide account. Section 5.2 lists the assets plaintiff

retains "free and clear of any interest" of defendant. This includes plaintiff's

teacher's pension. In section 5.3, the parties agree to execute the documents that

are needed to transfer title in these assets. Section 5.4 lists an account the parties

agree to share equally "along with any passive increase or decrease in value

accumulated as of" the date the asset is distributed.

The Nationwide account is addressed in section 5.5. Under that section,

[t]he parties shall share the marital portion (the value of the asset as of the date of marriage, July 22, 2006 and agreed upon date of dissolution, June 30, 2015) of the following assets:

A. [account A] . . .

B. Nationwide IRA . . .

C. [account C] . . .

D. [account D] . . .

The parties will exchange the necessary documentation to each other within [thirty] days of this agreement so that each party's portion of these assets can be properly titled in their own name. Should a Qualified Domestic Relations Order [QDRO] be required for the transfer of

A-0523-19T1 3 any asset described above, the parties will share the cost of preparing the QDRO through Troyan and Associates. Any tax or liability associated with the transfer of these funds shall be paid by the party receiving the distribution that incurred the tax.

The parties do not agree what portion of the Nationwide account, if any, is

subject to equitable distribution.

On August 22, 2018, defendant filed a motion to enforce litigant's rights

requesting that plaintiff abide by paragraph 5.5 of the MSA. Defendant certified

that the Nationwide account was "entirely pre-marital," making it exempt from

distribution. He certified these funds were "never commingled during the

marriage." He requested counsel fees for making the motion.

Plaintiff also requested the enforcement of litigant's rights to require

defendant to complete the QDRO in accord with the MSA and requested an

award of attorney's fees.

The Family Part judge granted plaintiff's cross-motion. The December

14, 2018 order provided that the parties were to cooperate in facilitating the

completion of the QDRO's in accordance with their MSA, including the

Nationwide IRA. The court denied the parties' requests for attorney's fees.

Defendant requested reconsideration, arguing the term "marital portion"

used in the MSA was not defined and that the full value of the account is not the

A-0523-19T1 4 "marital portion." Plaintiff filed opposition and a cross-motion to enforce

litigant's rights. She argued that defendant's motion did not satisfy the standard

for reconsideration.

On February 22, 2019, the trial court ordered discovery and a plenary

hearing. The plenary hearing was to determine the source of the funds for the

Nationwide account.

At the hearing, defendant testified that he is an attorney. Prior to his

marriage, he worked as an associate in the firm of Schibell & Mennie. The firm

funded a 401K with a cash deferred contribution. When he left the firm to start

his own, the 401K account remained dormant. In his new firm, he established

an IRA with Smith Barney as a retirement account.

The parties consulted with a financial planner in 2010 because defendant

wanted to invest money in "income-generating vehicles." New accounts were

created and monies from existing accounts were rolled into the new ones.

Defendant testified that through the divorce process, "[i]t was always

understood . . . what was premarital was premarital. What was during the

marriage, was during the marriage." This meant that "[w]hat we brought into

the marriage prior to the marriage was not to be part of the marital component

A-0523-19T1 5 and what would be divided up between is with regard to the assets during the

marriage."

Defendant claimed that when the MSA was prepared, they did not have

all the documentation for the accounts "to determine what the amount of the

premarital component was." The values listed in section 5.5 were approximate

values. He thought the 401K from the Schibell & Mennie firm was rolled over

into account C, but he was mistaken. Because they did not know what portion

of the accounts in section 5.5 were premarital or marital, defendant testified that

they were to submit all of their documentation to Troyan to prepare the QDRO.

After the divorce, he assembled documents for Troyan as requested, but the

401K from Schibell & Mennie and an IRA from Smith Barney were pre-marital.

There was no premarital component to account C. Defendant advised plaintiff's

attorney, but she would not agree to any exemption of the assets.

Plaintiff testified that some of the financial statements about their

investments were being sent directly to defendant's law firm, giving him

knowledge of those accounts. This included the Nationwide account. Plaintiff

claimed she had premarital funds in account A.

Plaintiff testified that they met with the financial planner in 2010. Each

had to bring documentation of their accounts. She did not have access to

A-0523-19T1 6 defendant's accounts. Plaintiff testified that because the Nationwide account

was "opened essentially in the duration of the marriage, [she assumed] that it

was part of the marital property." She understood the Nationwide account was

to be divided evenly between them. In mediation, they were asked to discuss

the premarital portions of any retirement accounts. She thought the premarital

portion was already taken out of all the accounts in section 5.5 lettered A, B, C

and D and that those values were then to be added and divided evenly.

On August 23, 2019, the court found that the Nationwide account "was

funded with and consists of solely premarital funds" and that it was "exempt

from distribution in accordance with the plain language of [the MSA]." In the

court's oral decision, the court found that "[t]he parties were in agreement

coming out of the collaborative process, that [what] was premarital would be

kept premarital, meaning that, the property of whatever party was premarital

would not be subject to equitable . . . distribution." The court found it "was

unclear at the time that the parties negotiated [the MSA]" what portion of the

Nationwide account was marital and what was premarital.

The court found the parties were not certain where certain premarital

accounts had gone to in connection with their retirement planning. At issue was

defendant's 401K from the Schibell & Mennie firm and other amounts rolled in

A-0523-19T1 7 from two other accounts. The parties "assumed" these monies went into account

C, but they did not. The court found credible defendant's testimony that "no one

was really focused on this." The court found that if the parties had known the

monies in the Nationwide account were premarital, it would have been included

in section 5.1 of the MSA. The court was not rewriting the agreement by

awarding plaintiff a portion of the premarital funds. Rather, the "[N]ationwide

account is entirely premarital and not subject [to] equitable distribution."

On appeal, plaintiff argues that

THE MARITAL SETTLEMENT AGREEMENT WAS INTENDED TO AVOID POST-JOD HAGGLING OVER THE 'SOURCE' OF THE MARITAL ASSETS THE PARTIES AGREED TO DISTRIBUTE; JUDGE PUGLISI WAS CORRECT IN HER ORIGINAL DECISION AND THIS COURT SHOULD VACATE THE AUGUST 23, 2019 RECONSIDERATION ORDER.

Plaintiff argues the trial court had no basis to reform the parties MSA by

recategorizing an asset absent a finding of "unconscionability, fraud or

overreaching," citing Miller v. Miller, 160 N.J. 408, 419 (1999). She concludes

the MSA should be enforced as any other contract, pursuant to its intent. The

parties assumed the source of the Nationwide account was commingled assets.

She argues the judge should not be able to revisit one of the assets to place it

under section 5.1 instead of 5.5.

A-0523-19T1 8 We defer to the factual findings of the Family Part judge when there is

substantial credible evidence in the record to support them. N.J. Div. of Youth

& Fam. Servs. v. E.P., 196 N.J. 88, 104 (2008). In doing so, we are mindful of

the "special expertise of judges hearing matters in the Family Part," according

due deference to factual findings. Parish v. Parish, 412 N.J. Super. 39, 48 (App.

Div. 2010); see also Cesare v. Cesare, 154 N.J. 394, 413 (1998). However, "[a]

trial court's interpretation of the law and the legal consequences that flow from

established facts are not entitled to any special deference." Hitesman v.

Bridgeway, Inc., 218 N.J. 8, 26 (2014) (citing Manalapan Realty, L.P. v. Twp.

Comm. of Manalapan, 140 N.J. 366, 378 (1995)).

Both parties agreed that premarital assets were not to be subject to

equitable distribution under the MSA. This was consistent with the general

notion that for an asset to be subject to equitable distribution, it must be

"property . . . legally and beneficially acquired by [the parties] or either of them

during the marriage." Orgler v. Orgler, 237 N.J. Super. 342, 350 (App. Div.

1989) (alterations in original) (quoting N.J.S.A. 2A:34-23). It is generally

understood that property owned by a party "at the time of marriage will remain

the separate property of such spouse . . . ." Painter v. Painter, 65 N.J. 196, 214

(1974); see Scavone v. Scavone, 230 N.J. Super. 482, 488-89 (Ch. Div. 1988).

A-0523-19T1 9 The MSA itself was careful to distinguish between these concepts.

Section 5.1 addressed defendant's property. Section 5.2 addressed plaintiff's

property. Section 5.4 listed an account that they both agreed was subject to

equitable distribution. Section 5.5 were the accounts where a portion was

supposed to be marital and subject to division.

Plaintiff believed that section 5.5 did not include premarital assets and

that the amounts listed in 5.5 were net of these amounts. However, the court

found defendant was credible that at the time of the divorce neither party focused

on the source of the funds for the Nationwide account. That is consistent with

the language of the MSA to the extent it said the parties would share the marital

portion of the assets in section 5.5. Section 5.5 also contemplated that the parties

would determine after the MSA was signed what part of the accounts were

premarital. They were to "exchange the necessary documents to each other

within [thirty] days . . . so that each party's portion of these accounts can be

properly titled in their own name."

Plaintiff did not contest that the 401K from Schibell & Mennie and the

funds from the other two accounts that also funded the Nationwide account were

premarital. Rather, she testified that because the monies had been rolled into

the Nationwide account in 2010, they became marital at that time. That was not

A-0523-19T1 10 consistent with her testimony that certain funds of hers were premarital or that

premarital funds were not subject to equitable distribution.

The plenary hearing resolved that none of the Nationwide account

included marital funds, having been derived entirely from premarital funds.

This was amply supported by the evidence presented by defendant. There was

no abuse of discretion in determining that these funds were not subject to

equitable distribution.

"A settlement agreement is governed by basic contract principles." Quinn

v. Quinn, 225 N.J. 34, 45 (2016) (citing J.B. v. W.B., 215 N.J. 305, 326 (2013)).

In interpreting and enforcing a settlement agreement, a court is to "discern and

implement the intentions of the parties." Ibid. (citation omitted). An agreement

will not be enforced if it was the product of "unconscionability, fraud or

overreaching in the negotiations of the settlement[.]" Id. at 47 (alteration in

original) (quoting Miller, 160 N.J. at 419). We are not to make a better

agreement for the parties. See Quinn, 225 N.J. at 45.

The court's order was consistent with the parties' intent as expressed in the

MSA. The MSA left open that the accounts in section 5.5 could be a mixture of

funds. In this case, the Nationwide account was entirely premarital. The Family

A-0523-19T1 11 Part judge simply applied the MSA as it was written once it was clear these

funds were premarital.

Defendant requests an award of attorney's fees for the appeal under Rule

2:11-4 but did not file the required motion. We will not address what is not

properly before us. Bandler v. Melillo, 443 N.J. Super. 203, 212 n.5 (App. Div.

2015).

Affirmed.

A-0523-19T1 12