A.T.M. VS. R.P.M. (FM-04-0337-05, CAMDEN 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NOT FOR PUBLICATION WITHOUT THE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-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).
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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
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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.
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"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