TIMOTHY R. KELLERS VS. KATHLEEN M. KELLERS (FM-13-0196-14, MONMOUTH COUNTY AND STATEWIDE) ( 2017 )


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  •                         NOT FOR PUBLICATION WITHOUT THE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-4292-15T1
    TIMOTHY R. KELLERS,
    Plaintiff-Appellant,
    v.
    KATHLEEN M. KELLERS,
    Defendant-Respondent.
    ______________________________________________
    Argued telephonically May 24, 2017 –
    Decided September 18, 2017
    Before Judges O'Connor and Whipple.
    On appeal from Superior Court of New Jersey,
    Chancery Division, Family Part, Monmouth
    County, Docket No. FM-13-0196-14.
    Robert A. Abrams argued the cause for
    appellant.
    Brian D. Winters argued the cause for
    respondent (Keith, Winters & Wenning, LLC,
    attorneys; Mr. Winters, on the brief).
    PER CURIAM
    In this post-judgment matrimonial matter, plaintiff Timothy
    R. Kellers appeals from a May 5, 2016 Family Part court order
    denying his motion to compel defendant Kathleen M. Kellers to
    contribute toward certain debts incurred during the marriage.
    We affirm in part and remand for further proceedings.
    I
    In June 2014, the parties divorced after thirty-two years
    of marriage.    A matrimonial settlement agreement (MSA),
    incorporated into the parties' dual final judgment of divorce,
    includes provisions allocating marital debt.    Various provisions
    address how the parties are to handle an Internal Revenue
    Service (IRS) tax lien that attached to the marital home during
    the marriage.
    Specifically, from 1999 to 2004, the parties failed to file
    federal income tax returns and to pay any federal income taxes,
    and eventually the IRS placed a lien against the marital home.
    In the MSA, the parties agreed to pay such debt from the net
    sale proceeds of their home, which ultimately sold in December
    2015.   At the time of the sale, the parties owed the IRS
    $102,590.88 in back taxes, including interest and penalties.
    However, from December 2011 to the time the marital home was
    sold, the IRS also garnished $41,580 from plaintiff's wages.
    Paragraph 2.1(d) of the MSA addresses the IRS debt, stating
    in relevant part:
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    A-4292-15T1
    The parties shall evenly split the net
    proceeds from the sale of the Marital home
    after paying the 1999-2004 tax liens set
    forth in this Paragraph . . . . The parties
    acknowledge that there were tax liens on the
    Marital home as a result of the parties' not
    filing their 1999-2004 income taxes. The
    liens are being paid prior to the sale of
    the home, via wage garnishment against
    Husband's wages at the rate of $1,153.00 a
    month. The parties shall continue to work
    with accountant Joe Gunteshi in an attempt
    to reduce the tax liens. The parties shall
    use the proceeds from the sale of the
    Marital home, after paying realty
    commissions and other costs, if any, to pay
    all of the 1999-2004 tax liens on the
    Marital home.
    As for other debt, paragraph 2.1(d) provides:
    Any liens or judgments, if any, other than
    the tax liens for failure to file and pay
    the 1999-2004 taxes, shall be the
    responsibility of the party whose name the
    lien or judgment is in.
    Paragraphs 2.7(a), (b), and (c) of the MSA similarly
    address the IRS tax lien and how other debt is to be handled:
    a. The 1999-2004 Tax liens that are on the
    marital home shall be paid out of the net
    proceeds from the sale of the Marital Home.
    b. Other than as set forth in Paragraph
    2.7(a) above, any and all debt in the name
    of the Husband shall be the sole
    responsibility of the Husband, and the
    Husband shall hold the Wife harmless and
    indemnify her for any and all liability for
    any such debt. . . .
    c. Other than as set forth in Paragraph
    2.7(a) above, any and all debt in the name
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    A-4292-15T1
    of the Wife shall be the sole responsibility
    of the Wife, and the Wife shall hold the
    husband harmless and indemnify her for any
    and all liability for any such debt. . . .
    In addition, paragraph 3.2 states:
    The parties acknowledge there are tax liens
    on the marital property for the years of
    1999-2004 for which they had not filed their
    tax returns. They agree to pay off the tax
    liens out of the net proceeds from the sale
    of the marital home.
    Finally, paragraph 3.3 provides:
    The parties agree that all tax liabilities
    pursuant to this Agreement, and other than
    for the tax years 1999-2004, shall be the
    sole responsibility of the respective
    parties and each agrees to hold the other
    harmless for any past, present, or future,
    tax liabilities assessed against either one
    of the [parties] for state or federal income
    taxes.
    During the marriage, plaintiff and his mother co-owned a
    business known as Kellers Auto Electric.   They failed to pay
    taxes to the State of New Jersey due in 1996 and 1997.    By the
    time the house sold in 2015, these taxes were, in the aggregate,
    $130,175.62, including interest and penalties.     These particular
    taxes were not specifically addressed in the MSA.
    At the time of the closing, the parties did not appear, but
    their real estate attorney did and signed documents on the
    parties' behalf pursuant to a power of attorney.    Out of the net
    sale proceeds, various sums were allocated between the parties
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    A-4292-15T1
    to pay certain debts in accordance with the MSA.   The parties'
    attorney also signed an addendum on behalf of plaintiff that
    made him entirely responsible for the tax debt owed to the
    State.
    After the closing, defendant filed a motion to enforce
    certain provisions of the MSA, and plaintiff filed a cross-
    motion seeking, among other things, the following relief.
    First, plaintiff sought to have defendant contribute toward the
    tax payments he made through the garnishment of his wages.      He
    contended the MSA makes clear the parties were to contribute
    equally toward all of the taxes owed to the IRS, not just the
    balance owed to the IRS at the time of the closing.
    Plaintiff also sought to vacate the MSA, maintaining he had
    not been aware of the tax debt owed to the State before entering
    into the MSA.   He claimed had he known of such debt, he would
    have not have agreed to the terms of the MSA unless it provided
    defendant was also responsible for these taxes.
    The court rejected plaintiff's arguments and denied both
    requests for relief.   The court reasoned because the MSA did not
    expressly state defendant was responsible for the IRS debt
    garnished from plaintiff's wages, it could not compel her to
    contribute toward these taxes.   As for the taxes paid to the
    State, the court's principal finding was plaintiff was aware of
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    this debt before he entered into the MSA; thus, he had no
    grounds to complain the MSA did not compel defendant to pay
    toward this debt.
    II
    On appeal, plaintiff contends the court erred when it
    denied his requests for relief.    Plaintiff essentially reprises
    the arguments made before the Family Part court, though added
    some additional arguments.
    Addressing plaintiff's request to vacate the MSA, we
    disagree the court erred.    The record is clear plaintiff knew of
    the taxes owed to the State before he entered into the MSA, as
    demonstrated by the letters exchanged between counsel well
    before plaintiff signed the agreement.    We affirm the court's
    decision denying this relief for essentially the same reasons it
    expressed in its written decision accompanying the May 5, 2016
    order.
    We further observe paragraph 3.3 of the MSA clearly states
    all tax debt, other than that incurred from 1999 to 2004, shall
    be "the sole responsibility of the respective parties and each
    agrees to hold the other harmless for any past, present, or
    future, tax liabilities assessed against either one of the
    [parties] for state or federal income taxes."    We are satisfied
    the parties agreed defendant is not responsible for any of the
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    A-4292-15T1
    tax debt owed to the State.    However, we disagree with the
    Family Part court's decision to reject, without an evidential
    hearing, plaintiff's request to compel defendant to contribute
    toward those tax payments he made through the garnishment of his
    wages.
    Review of a trial court's interpretation of an agreement is
    de novo.   Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Cantone
    Research, Inc., 
    427 N.J. Super. 45
    , 57 (App. Div.), certif.
    denied, 
    212 N.J. 460
     (2012).   The reviewing court must evaluate
    the common intention of the parties and the purpose they tried
    to achieve.   Tessmar v. Grosner, 
    23 N.J. 193
    , 201 (1957).     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.'"    Sachau v. Sachau, 
    206 N.J. 1
    , 5-6 (2011).   "To the
    extent that there is any ambiguity in the expression of the
    terms of a settlement agreement, a hearing may be necessary to
    discern the intent of the parties at the time the agreement was
    entered and to implement that intent."    Quinn v. Quinn, 
    225 N.J. 34
    , 45 (2016) (citing Pacifico v. Pacifico, 
    190 N.J. 258
    , 267
    (2007)).
    Here, the MSA contains language that can be understood to
    mean only the existing debt at the time of the house sale should
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    A-4292-15T1
    be paid out of the proceeds.     On the other hand, there is also
    language that can be construed to mean the parties were to share
    equally all of this debt.1   In our view, the ambiguity in the
    agreement requires a plenary hearing so the court may properly
    discern parties' intentions and whether they agreed defendant is
    to contribute toward the debt garnished by the IRS.
    Accordingly, we remand this matter so the court may conduct a
    plenary hearing on this issue.
    To the extent we have not addressed a particular argument,
    it is because either our disposition makes it unnecessary or the
    argument was without sufficient merit to warrant discussion in a
    written opinion. R. 2:11-3(e)(1)(E).
    Affirmed in part and remanded for further proceedings
    consistent with this opinion.    We do not retain jurisdiction.
    1
    We question, without deciding, whether plaintiff would be
    entitled to any reimbursement of those wages paid to the IRS
    before the complaint was filed, but leave such consideration to
    the Family Part court.
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    A-4292-15T1
    

Document Info

Docket Number: A-4292-15T1

Filed Date: 9/18/2017

Precedential Status: Non-Precedential

Modified Date: 9/18/2017