K.D.E. VS. J.E. (FM-13-0185-08, MONMOUTH COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE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-5390-16T1
K.D.E.,
Plaintiff-Respondent,
v.
J.E.,
Defendant-Appellant.
_____________________________
Argued October 1, 2018 – Decided October 12, 2018
Before Judges Sabatino and Haas.
On appeal from Superior Court of New Jersey,
Chancery Division, Family Part, Monmouth County,
Docket No. FM-13-0185-08.
Noel S. Tonneman argued the cause for appellant
(Tonneman & Connors, LLC, attorneys; Noel S.
Tonneman, of counsel and on the brief).
August J. Landi argued the cause for respondent.
PER CURIAM
In this post-judgment matrimonial matter, defendant J.E. 1 appeals from
the Family Part's June 16, 2017 order which, among things: (1) granted plaintiff
K.D.E.'s motion to be "reimbursed the sum of $36,254.61 from [d]efendant's
share of [the] proceeds of the sale of the former marital home for the principal
reduction of the mortgage" (paragraph ten of the order); (2) required defendant
to pay 15% of the parties' "out-of-pocket costs incurred" for the college expenses
of their youngest child (paragraphs eleven and twelve of the order); and (3)
directed defendant to reimburse plaintiff for half of the money the parties paid
to a mediator and a guardian ad litem (GAL) retained by them during their
divorce proceedings (paragraphs four and five of the order). We are constrained
to reverse and remand these portions of the June 16, 2017 order because the trial
judge did not conduct a plenary hearing to resolve the parties' sharply conflicting
factual contentions on these matters, and failed to make adequate findings of
fact and conclusions of law in connection with these rulings.
The parties were married in May 1988 and divorced in June 2009. They
have two children. During the divorce proceedings, the court appointed a GAL
for defendant, and she was also represented by an attorney. The parties
1
We use initials to refer to the parties in order to protect the family's privacy.
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incorporated their Matrimonial Settlement Agreement (MSA) into their Dual
Judgment of Divorce.
At the time of their divorce, the parties still owned and lived in their home.
Plaintiff earned $137,500 per year, while defendant's only income came from
Social Security Disability (SSD) benefits of $793 per month. Plaintiff agreed to
pay $700 per week in alimony to defendant after she vacated the marital home.
Although the parties shared joint legal custody of their children, they were to
live with plaintiff after defendant moved out or the home was sold. Because
defendant was receiving SSD, the MSA did not require her to pay child support
to plaintiff. However, plaintiff received and controlled the children's own Social
Security benefits.
Paragraph 4.3 of the MSA stated that plaintiff and the children had "the
right to occupy the marital residence until it is sold[,]" although defendant could
also "remain in the home until alternate housing approved by her [GAL] is
obtained for her[,] . . . provided that a court-appointed [GAL] is still in place[.]"
With particular relevance to the current appeal, Paragraph 4.3 went on to state:
For so long as [plaintiff] and [defendant] continue to
occupy the residence, they shall continue to pay the
household expenses as they have since [defendant]
commenced receiving [SSD] benefits. Thereafter,
[plaintiff] shall be solely responsible for all costs
incident to maintaining the home until sold.
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Regarding the sale of the home, Paragraph 4.1 of the MSA provided:
The home shall be listed for sale with [a specific real
estate agent] at a listing price of $530,000[]. Both
parties shall fully cooperate with the listing of the home
and take all necessary steps to effectuate a timely sale
of the residence. Upon the sale of the home, the net
proceeds realized shall be equally divided between the
parties after the payment of the following:
a. Outstanding mortgage and home equity loan.
b. All usual and customary selling expenses.
c. The cost of all repairs required to obtain a
continuing Certificate of Occupancy or to
effectuate the closing of title.
d. The balance outstanding on the United Teletech
credit card of approximately $18,000[].
e. All outstanding fees owed to the attorneys for the
parties in connection with the pending
matrimonial litigation, the mediator's fees and the
fees for [defendant's GAL].
f. The cost of the preparation of any Domestic
Relations Orders required by the provisions of
this agreement.
Paragraph 2.4 of the MSA stated that the parties "shall each contribute
toward their children's post-secondary school education costs and expenses[.]"
However, this paragraph also provided that
[i]n the event [defendant] is still disabled at the time the
children enter college or other post-secondary
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education program and [plaintiff] continues to earn an
income comparable or greater than his current annual
salary of $137,500, [defendant's] contribution toward
the children's educational expenses shall not exceed
15% of the out-of-pocket costs incurred.
Finally, Paragraph 8.12 of the MSA provided that
[a] modification or waiver of any of the provisions of
[the MSA] shall be effective when and only if made in
writing and executed with the same formality as [the
MSA]. The failure of either party to insist upon strict
performance of any of the provisions of [the MSA]
shall not be construed as a waiver of any subsequent
default of the same or similar nature.
About a month after the parties executed their MSA, defendant moved to
Arizona. Upon her arrival, defendant threatened to commit suicide and she was
hospitalized for a period of time. Following her release, she moved into an
assisted living facility, and paid $2300 per month to live there.
Plaintiff and the children remained in the former marital home. Plaintiff
arranged for the listing of the home with the real estate agent, but he asserted
that "[d]efendant refused to sell the house" and "maintain[ed] that she wanted to
wait until the real estate market improved so that [the parties] could get a higher
price for the home." Plaintiff knew that he could file an enforcement motion to
compel the sale of the home, but he failed to do so because he "was not eager to
spend more time and money in court."
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Thereafter, plaintiff and the children lived in the home until 2015. During
this period, plaintiff continued to pay the mortgage and the other carrying costs
as required by Paragraph 4.3 of the MSA. Plaintiff claimed that he "talk[ed] to
defendant often about selling the house over the years but she steadfastly
refused. [He] did not have the realtor send a listing agreement knowing she
would not sign." Defendant disputed that these contacts occurred, and asserted
that she may not have been competent when plaintiff attempted to list the home
in 2009 and, therefore, plaintiff should have gone to court to have a GAL
appointed for her who could review and sign the listing agreement.
Sometime in 2015, the parties agreed to list the home for sale, and it was
sold for $470,000 on November 30, 2015. However, the parties were unable to
agree on the distribution of the sale proceeds as required by Paragraph 4.1 of the
MSA, and plaintiff filed a motion seeking to compel certain payments to him
from these funds. We now turn to the parties' specific contentions that are at
issue in this appeal.
First, plaintiff asserted that the parties' outstanding mortgage balance was
$115,305.79 at the time they signed the MSA. After living in the house until
2015 and paying the mortgage for over six years, the mortgage had been reduced
by $72,509.23 to $42,796.56. In his certification in support of his motion,
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plaintiff argued that he "should receive a credit for the reduction of the mortgage
balance post-divorce" in the amount of $36,254.61, which was half of the
amount by which the mortgage was reduced following the payments he made
while he lived there.
As noted above, Paragraph 4.3 of the MSA required plaintiff to continue
to pay the mortgage until the home was sold. There is no provision in this or
any other provision of the MSA that states that plaintiff is to receive a credit for
having reduced the mortgage balance while staying in the home. Nevertheless,
plaintiff asserted that the parties both believed the house would be sold in "a
matter of months" once defendant moved out, and neither "expected that the
former marital home would not be sold for six years" because of defendant's
failure to cooperate with the sale. Based on these allegations, plaintiff asked the
court to give him a credit for paying down the mortgage.
Defendant disagreed, and argued that plaintiff paid less by staying in the
home than he would have paid had he left the home and bought or rented a new
one. He also received tax benefits from paying the mortgage, which he did not
share with her. Defendant also continued to argue that plaintiff could have, but
did not, file an enforcement motion at any time between 2009 and 2015 to sell
the home.
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Plaintiff also sought an order compelling defendant to contribute to the
college costs of the parties' youngest child, who had entered a five-year college
program in 2013. Plaintiff alleged that he had paid over $56,000 of the child's
expenses, and argued that based on the alimony and SSD benefits defendant was
receiving, she should be obligated to pay 15% of these and future college costs.
In response, defendant questioned whether plaintiff had actually paid these
expenses. More pertinently, she alleged that her "bare-bones budget exceed[ed]
[her] income" and, therefore, she could not pay any portion of the child's college
expenses.
Finally, plaintiff asked that the court order defendant to pay half of all of
the monies owed to both the GAL and the mediator who assisted the parties
during the divorce proceedings. He stated that the GAL had charged $7306.80,
while the mediator's billings totaled $2767.50, and he sought a credit for
allegedly paying these bills.
Defendant disputed plaintiff's asserted right to this payment. Pointing to
the exhibits attached to plaintiff's motion, defendant alleged that as of the date
of the parties' divorce, all of the mediator's bills had been paid. In addition,
while the GAL's total bill had been over $7000, she maintained that the unpaid
balance when the parties divorced was just $3108.38.
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Contradicting plaintiff's claim that he had paid these amounts prior to the
divorce, defendant asserted that both parties were contributing to all of their
expenses while their divorce was pending. Pointing to Paragraph 4.1(e) o f the
MSA, defendant argued that the parties had agreed to pay only the mediator and
GAL bills that were "outstanding" at the time the MSA was executed. Therefore,
defendant stated that plaintiff was not entitled to any credit for the mediator's
bill because it had already been paid in full by the time the MSA was executed.
Defendant also argued that the parties should simply split the responsibility for
the $3108.38 for the amount still due the GAL, with each of them contributing
$1554.19 from their share of the sale proceeds.
The judge did not conduct a plenary hearing to address the disputes of fact
raised by the parties in their competing certifications. Instead, she decided the
motion in plaintiff's favor based only on their divergent pleadings.
In a short statement of reasons attached to the order, the judge found that
plaintiff did not "push the issue of the sale of the home until 2015" because
defendant had "made multiple suicide attempts since the time of the divorce[.]"
However, plaintiff claimed in his certification that he did not seek to enforce the
order to sell the home because he "was not eager to spend more time and money
in court[,]" not because of defendant's hospitalization.
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The judge noted that the MSA did not provide for plaintiff to receive a
credit against defendant's share of the sale proceeds for any reduction in the
mortgage balance caused by him paying the mortgage while living in the home.
Nevertheless, the judge opined that the parties "did not anticipate the lengthy
delay from the time of the divorce to the time of sale that allowed [plaintiff] this
opportunity to pay down the mortgage principal." The judge found that
defendant's failure to sign the listing agreement in 2009 was the sole cause for
the delay, without mentioning that plaintiff failed to do anything to enforce the
agreement for over six years. The judge also did not address defendant's
argument that plaintiff received the financial benefit of tax deductions by paying
the mortgage, and was able to live less expensively by staying in the marital
home instead of buying or renting a new house.
The judge concluded that if defendant had signed the listing agreement in
2009, plaintiff "would have had the ability to purchase a new home and gain
equity. [Defendant's] noncompliance prevented [plaintiff] from receiving the
equity and benefits that would come from owning his own home." Therefore,
the judge found that plaintiff's request "for a credit must be granted in order to
prevent the unjust enrichment of" defendant.
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The judge also ordered defendant to pay 15% of the parties' child's college
expenses. However, she made no findings in her decision explaining this
determination.
Finally, the judge awarded plaintiff a credit against defendant's share of
the house sale proceeds of $1387.75, which was half of the $2767.50 the parties
paid to the mediator prior to their divorce. The judge also ordered defendant to
pay plaintiff $3653.40, which was half of the total $7306.80 billed by
defendant's GAL. The judge did not make any findings of fact or conclusions
of law in her statement of reasons concerning this ruling. In addition, she did
not address defendant's argument that the parties agreed in the MSA that only
the amounts still "outstanding" at the time of the divorce for these bills would
be paid out of the sale proceeds. This appeal followed.
On appeal, defendant argues that the judge erred by giving plaintiff a
credit for reducing the mortgage balance because nothing in the MSA provided
for such a credit, and there were disputes of fact between the parties as to this
issue. She also contends the judge made no findings of fact or conclusions
concerning her determinations on college expenses, and the payment of the
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mediator and GAL bills. 2 For the reasons that follow, we reverse and remand
for a plenary hearing.
We normally owe substantial deference to the Family Part's findings of
fact because of that court's special expertise in family matters. Cesare v. Cesare,
154 N.J. 394, 411-12 (1998). Thus, "[a] reviewing court should uphold the
factual findings undergirding the trial court's decision if they are supported by
adequate, substantial and credible evidence on the record." MacKinnon v.
MacKinnon, 191 N.J. 240, 253-54 (2007) (alteration in original) (quoting N.J.
Div. of Youth & Family Servs. v. M.M., 189 N.J. 261, 279 (2007)).
2
On appeal, defendant asserts that there was also a dispute between the parties
over a home equity line of credit (HELOC) that plaintiff tapped to pay off a
credit card. However, she did not raise this issue concerning the HELOC before
the trial court. Instead, she stated in her response to plaintiff's motion that: (1)
the HELOC had a balance of $122,918.24 at the time of the divorce; (2) this
balance had risen to $126,730.28 by the time the house was sold; and (3) this
amount was paid to close out the HELOC at the closing. She asked that the
court order plaintiff to account for the $3812.04 difference between the
beginning and ending HELOC balances by giving her a credit of $1906.03
against plaintiff's share of the sale proceeds. Plaintiff agreed to do so. Noting
the parties' agreement, the judge included this requirement in paragraph two of
the June 16, 2017 order. Because defendant failed to raise any issue concerning
the HELOC before the trial court, we decline to consider her argument raised in
Point One of her brief that plaintiff should have been responsible for paying
additional amounts to settle the HELOC account. Nieder v. Royal Indem. Ins.
Co., 62 N.J. 229, 234 (1973) (noting that we ordinarily decline to consider an
issue not properly raised before the trial court, unless the jurisdiction of the court
is implicated or the issue concerns a matter of great public importance).
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However, we owe no special deference to the judge's legal conclusions.
Manalapan Realty, LP v. Twp. Comm. of Manalapan, 40 N.J. 366, 378 (1995).
Interpretation and construction of a contract, such as the MSA in this case, is a
question of law for the trial court, subject to de novo review on appeal. Kaur v.
Assured Lending Corp., 405 N.J. Super. 468, 474 (App. Div. 2009) (reviewing
the enforcement of a settlement agreement de novo).
We also note that Rule 1:7-4(a) clearly states that a trial "court shall, by
an opinion or memorandum decision, either written or oral, find the facts and
state its conclusions of law thereon . . . on every motion decided by a written
order that is appealable as of right[.]" See Shulas v. Estabrook, 385 N.J. Super.
91, 96 (App. Div. 2006) (requiring an adequate explanation of basis for court's
action). "Meaningful appellate review is inhibited unless the judge sets forth
the reasons for his or her opinion." Strahan v. Strahan, 402 N.J. Super. 298, 310
(App. Div. 2008) (quoting Salch v. Salch, 240 N.J. Super. 441, 443 (App. Div.
1990)). The failure to provide findings of fact and conclusions of law
"constitutes a disservice to the litigants, the attorney[s], and the appellate court."
Curtis v. Finneran, 83 N.J. 563, 569-70 (1980) (quoting Kenwood Assocs. v.
Bd. of Adj. Englewood, 141 N.J. Super. 1, 4 (App. Div. 1976)).
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After reviewing the record in light of these principles, we reverse and
remand the trial judge's decision because the judge did not conduct a plenary
hearing concerning the proper interpretation of the MSA, and failed to make any
meaningful findings of fact and conclusions of law on the three issues presented
in this appeal.
We begin with the judge's decision granting a credit to plaintiff against
defendant's share of the sale proceeds for half of the amount by which the
mortgage balance was reduced during the six years plaintiff lived there after the
divorce. When determining the meaning of a matrimonial agreement, such as
parties' MSA, courts apply the "basic rule of contractual interpretation that a
court must discern and implement the common intention of the parties."
Pacifico v. Pacifico, 190 N.J. 258, 266 (2007). Courts usually enforce contracts
as written. Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960).
However, when a contract is ambiguous in a material respect, the parties
must be given the opportunity to illuminate the contract's meaning through the
submission of extrinsic evidence. Conway v. 287 Corporate Ctr. Assocs., 187
N.J. 259, 268-70 (2006). A contract is ambiguous if its terms are "susceptible
to at least two reasonable alternative interpretations." Nester v. O'Donnell, 301
N.J. Super. 198, 210 (App. Div. 1997) (quoting Kaufman v. Provident Life &
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Cas. Ins. Co., 828 F. Supp. 275, 283 (D.N.J. 1992), aff'd, 993 F.2d 877 (3d. Cir.
1993)).
In attempting to resolve ambiguities in a document, courts may consider
extrinsic evidence. While such evidence should never be permitted to modify
or curtail the terms of an agreement, a court may "consider all of the relevant
evidence that will assist in determining the intent and meaning of the contract."
Conway, 187 N.J. at 269. As the Court explained in Conway,
[e]vidence of the circumstances is always admissible in
aid of the interpretation of an integrated agreement.
This is so even when the contract on its face is free from
ambiguity. The polestar of construction is the intention
of the parties to the contract as revealed by the language
used, taken as an entirety; and, in the quest for the
intention, the situation of the parties, the attendant
circumstances, and the objects they were thereby
striving to attain are necessarily to be regarded. The
admission of evidence of extrinsic facts is not for the
purpose of changing the writing, but to secure light by
which to measure its actual significance.
[Ibid. (quoting Atl. N. Airlines, Inc. v. Schwimmer, 12
N.J. 293, 301-02 (1953)).]
Here, the MSA did not specifically address whether plaintiff would be
entitled to a credit if he stayed in the home and paid down the mortgage. On the
one hand, defendant argued that this was an intentional decision by the parties,
and the absence of a specific provision in the MSA meant that plaintiff was not
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entitled to the requested credit. In response, plaintiff alleged that the parties
never intended that the house would remain unsold for over six years and, in
light of this understanding, felt there was no need to include a specific provision
authorizing the mortgage credit.
Defendant also argued that plaintiff reaped the financial benefits of living
in the home and getting tax deductions for paying the mortgage, which the judge
did not consider in her decision. Plaintiff asserted that the judge should not hold
him responsible for failing to file a motion to enforce the MSA in 2009, even
though Paragraph 4.1 required both parties to "take all necessary steps to
effectuate a timely sale of the residence."
On the basis of these conflicting factual and legal allegations, the judge
observed that the provision in the MSA "related to the mortgage payments is
ambiguous, if not completely absent." Under these circumstances, the judge
should have conducted a plenary hearing. "[I]n a variety of contexts, courts
have opined on the impermissibility of deciding contested issues of fact on the
basis of conflicting affidavits or certifications alone." State v. Pyatt, 316 N.J.
Super. 46, 50 (App. Div. 1998). In particular, where the parties' pleadings raise
issues of fact or require credibility determinations, relief cannot be denied
absent a plenary hearing. Whitfield v. Whitfield, 315 N.J. Super. 1, 12 (App.
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Div. 1998). Here, the parties filed conflicting certifications concerning their
intent, and the appropriate interpretation of the MSA as it related to plaintiff's
payment of the mortgage, which required a plenary hearing to resolve.
Therefore, we reverse paragraph ten of the June 16, 2017 order, and re mand for
a plenary hearing.
Turning to defendant's remaining contentions, the judge did not make any
findings of fact or conclusions of law to support her decision to require
defendant to pay 15% of the costs of the parties' child's college expenses. As
set forth in Paragraph 2.4 of the MSA, that was the maximum amount of any
contribution from defendant. However, defendant argued she was unable to pay
anything toward the college costs. The parties each submitted Case Information
Statements with their motion papers, but the judge did not address them in her
decision. The judge's failure to make the required findings in connection with
paragraphs eleven and twelve of the June 16, 2017 order requires a remand for
fulfillment of the court's obligation in this regard. In view of the factual disputes
involved in the parties' respective positions on defendant's ability to pay, this
issue should also be addressed at the plenary hearing.
Finally, we must also reverse the judge's ruling in paragraphs four and
five of the June 16, 2017 order, and remand the issues concerning the payments
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made to the mediator and defendant's GAL for a plenary hearing. As was the
case with the college expenses, the judge did not make findings of fact or
conclusions of law concerning her decision to grant plaintiff credits for these
expenses.
In addition, the judge did not address the contract interpretation issue
posed by the ambiguous language the parties used in Paragraph 4.1(e)
concerning the payment of these fees. As stated above, this provision required
the parties to pay "[a]ll outstanding fees owed to the attorneys for the parties in
connection with the pending matrimonial litigation, the mediator's fees and the
fees for" defendant's GAL. (emphasis added).
Although defendant reads this provision to mean that the required
payment was limited to the "outstanding" mediator's fees and GAL fees at the
time of the parties' divorce, only the attorney's fees mentioned in the paragraph
are modified by that adjective. Thus, it is entirely possible that the parties
intended that all of the mediator's and GAL's fees were to be paid from the sale
proceeds. However, this interpretation does not take into account defendant's
claim that the mediator had already been fully paid at the time of the divorce
and partial payments had been given to the GAL, and these payments were not
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made solely by plaintiff. These factual issues can only be addressed at a plenary
hearing.
In sum, we reverse and remand the court's determinations that are the
subject of this appeal, and remand for a plenary hearing on these issues. The
court shall conduct a case management conference within thirty days to plan the
logistics of the plenary hearing and the possible exchange of any appropriate
discovery.
Reversed and remanded. We do not retain jurisdiction.
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