NJSBA Family Law Section

Gina-Marie,
<x-tab>        </x-tab>The meaty sections from two recent letter briefs are below. First one resulted in a plenary hearing order (still scratching my head over what justifies the cost and delay of a hearing in light of the undisputed facts, but so be it). The second one resulted in a settlement without a judge calling it (and new, fairer agreement being reached).
<x-tab>        </x-tab>Good luck with it.


<x-sigsep>

David Perry Davis, Esq.
----------------------------------------------------
   www.FamilyLawNJ.pro
----------------------------------------------------
112 West Franklin Avenue
Pennington, NJ 08534
Voice: 609-737-2222
Fax:    609-737-3222

Days before the parties were to appear before an ESP panel in March, 2015, counsel for plaintiff (the supporting spouse) announced to the court that an agreement had been reached. Defendant's counsel responded he was unaware of an agreement even being discussed, at which point plaintiff's counsel provided it to the court and defendant's attorney.

Upon receipt of the agreement, defendant's counsel immediately objected, noting that the "agreement" was accomplished via an end-run around counsel, was absurdly unfair, and that defendant did not accept the proposition that an agreement had been reached.

Plaintiff has now acknowledged that she and her stroke-victim husband, with whom she still resides, "reached this agreement between ourselves" without having consulted with counsel.

While the parties disagree as to the attendant circumstances as to its signing, there are no relevant fact questions requiring a plenary hearing or which prevent this court from addressing whether the purported agreement is unconscionable as a matter of law and should thus be declared void by the Court.


I.THE PURPORTED AGREEMENT IS UNCONSCIONABLE AS A MATTER OF LAW AND SHOULD BE DECLARED VOID.

Not a single case cited in plaintiff's brief contains a factual scenario that is even in the same universe as the issue before this Court. Two very unequal parties who reside together, one a sophisticated businesswoman who built a career in the working world and has always had control of all the family finances, the other an unsophisticated stay-at-home parent who suffered a stroke, signed an agreement. It is undisputed that counsel was not involved in any way with its negotiation or drafting. Within hours of counsel being notified, the agreement was promptly repudiated in writing.

Every single case - every one - cited in plaintiff's brief involves situations where the parties, with counsel, reached an agreement (the majority having done so with the assistance of a professional Family Law mediator). In none of them had there been an end-run around counsel by a supporting spouse that produced an agreement that is unconscionable as a matter of law.

The agreement is unconscionable as a matter of law and should be declared void.

It is uncontested that this is a twenty-seven (27) year marriage. Plaintiff has always been the breadwinner and Mr. Whippersnapper a stay-at-home parent. Plaintiff now earns approximately $105,000 per year. Mr. Whippersnapper attached his Social Security earnings statement, which shows an average earned income of less than $4,000 per year, with most years showing $0. The purported agreement awards two years of alimony at $800 per month. This is unconscionable as a matter of law.

It is uncontested that defendant has raised the parties' children, including Junior, their now-13-year-old son, and that plaintiff leaves for work every day at 6:30, returning around 7:00 pm. The Agreement transfers residential custody and would require that, for the first time in his life, Junior would become either an unsupervised young teen or in aftercare programs. The Agreement does not even pretend to recite that this would be in his best interests, and it plainly would not only be contrary to his best interests, it would be devastating to them. This is unconscionable as a matter of law.

Under the terms of the Agreement, and using plaintiff's numbers,¹ defendant would receive roughly 22% of all the assets accumulated during this nearly three-decade long marriage and plaintiff would receive 78%. He receives nothing from the sizable retirement accounts accumulated during the marriage. This is unconscionable as a matter of law.

If the purported agreement at issue were merely "unfair", it might be proper to enforce it. However, the agreement is beyond "unfair." It is unconscionable as a matter of law and would leave defendant utterly indigent. It is blatantly contrary to the best interests of the child, thus implicating public policy.

Plaintiff has taken the position that because defendant had retained an attorney, it is irrelevant that an end-run was made around counsel, and an agreement "negotiated" between a sophisticated businesswoman and a stay-at-home parent who last worked as a janitor and in a warehouse. "Matrimonial suits ... ought not be permitted to take on the aspects of a game wherein wits ... and finesse prevail over elemental right and justice." Shepherd v. Ward, 5 N.J. 92, 111 (1950). Obviously, when reference is made in the law to a party "being represented by counsel", it means that there was communication with counsel and an understanding of the implications of an agreement and whether it was a "fair" resolution in line with what a settlement panel would recommend or a court would order. It does not mean that a supporting spouse can make an end-run around counsel and then rely on the fact that the supported spouse had an attorney who was not included in the negotiations or even advised of them.

The agreement is unconscionable as a matter of law and was the product of an end-run around counsel and everything that "counsel" stands for in the law. Nothing more need be considered in order to determine that it should be declared null and void.


II.THE FAILURE OF THE AGREEMENT TO INCLUDE MANDATORY, STANDARD (YET VITAL) PROVISIONS RENDERS IT UNENFORCEABLE.

If the Court agrees that the Agreement is the unconscionable result of negotiations between two very unevenly matched litigants, and thus must be declared void on that basis, then it is not necessary to delve further into its deficiencies. However, should the Court require further basis to declare it void, it is difficult to count all of its fatal defects.

Every Property Settlement Agreement includes provisions sometimes referred to as "boilerplate." While they may be standard, they are not extraneous. They are vital to an agreement being enforceable. Their complete absence here demonstrate why they necessary and why an agreement lacking them is unenforceable.

By way of example only, the agreement lacks recitations, acknowledgments, and waivers as to:

Review of Agreement. It does not state that the parties "independent counsel has fully reviewed and explained the legal and practical effect of this Agreement" and that it is signed "having the knowledge of such advice and with an understanding of the force and effect of this Agreement." To the contrary, plaintiff has admitted in her certification that the agreement at issue was made between herself, a professional executive, and defendant, a janitor / warehouse worker / stay at home parent who sufferred a stroke four years ago, without any consultation between defendant and his counsel.

As indicated, defendant's counsel become aware of the purported agreement on March 24 and immediately wrote to plaintiff's former counsel asking him to confirm that he agreed the proposal was absurd and further requesting that outstanding discovery deficiencies as to vital issues be addressed so the matter could move forward (Exhibit A). After hearing that counsel did indeed intend to seek to have the agreement enforced, defendant's attorney immediately wrote the Court.

Voluntary Execution of Agreement. The agreement does not state that "each party signs it voluntarily, of their own free will, and without any undue influence, fraud, coercion or duress of any kind exercised upon either of them by any person."

Right to Trial. The agreement does not state that the parties acknowledge that each has been informed by their respective counsel of the right to have a court of competent jurisdiction determine all issues arising from the marriage, or that each party voluntarily and knowingly waives this right, and accepts the terms of this Agreement as being final, complete and binding as to all said issues arising from the marriage. The agreement does not state that the parties were aware of their right to a trial wherein a judge would determine the issues, and are knowingly waiving this right.

Entire Agreement. The agreement does not state that it resolves all the issues between the parties. It describes one period of term alimony. It does not even address the claim in defendant's counterclaim for open durational alimony. That claim remains viable even if this agreement were accepted as to a resolution of support for the initial two years following its entry.

Crews / Lifestyle statement. The agreement does not comply with the mandate of the New Jersey Supreme Court that alimony be of a sufficient amount so as to maintain the marital standard of living. Gnall v. Gnall, 222 N.J. 414, 429 (2015). It neither sets out a martial lifestyle as required by Crews v. Crews, 164 N.J. 11 (2000) nor waives the requirement that this be established as per Weishaus v. Weishaus, 180 N.J. 131 (2004).

No Merger / independent agreement. The agreement does not state that it will not merge, but will survive and stands independently. Therefore, since it was signed before plaintiff filed the current complaint, it merged with the prior order dismissing the first complaint and became invalid.

Best Interests of Child. The agreement does not recite that its custody and parenting time provisions are in the best interests of the children. A brief review of the relevant uncontested facts -- that plaintiff has raised the children and run the home for 27 years and that the parties' son would suddenly be deprived of having a full-time parent -- demonstrate that the agreement would not be in Junior's best interests.

Discovery. The agreement does not state that each party has received adequate discovery to confidently resolve this matter and waives the right to receive additional information. In fact, here, there were significant outstanding discovery issues (Exhibit A). The majority of the relevant financial documents were obtained only via subpoena, and demonstrate that there have been complex financial transactions and a tremendous amount of unaccounted-for funds, including the disappearance of the proceeds of at least two refinances of the marital home.

Negotiated Settlement. The agreement does not contain an acknowledgment that the parties understand the terms of the agreement nor that it represents a compromise and negotiated settlement and that each has actively participated, with the assistance of counsel, in the preparation of this Agreement.

Review of Agreement. It does not reflect that each party has read and reviewed this Agreement in its entirety, with their respective counsel, prior to signing.

Severability. The agreement contains no provision as to severability, stating that if any provision of it be held invalid or unenforceable by any court of competent jurisdiction, all other provisions shall nonetheless continue in full force and effect. Among its many other fatal defects, the agreement contains no reference whatsoever to child support. While the guidelines support amount may be departed from, an agreement that purports to waive support without referencing the guidelines is invalid. Ordukaya v. Brown, 357 N.J.Super. 231 (2003). As there is no clause that would render the agreement's other provisions to be severable from this fatal defect, the agreement as a whole must fall as there was no "meeting of the minds" as to mandatory, essential terms.

For the above reasons, the Court should grant the application to have the purported agreement declared null and void. While the parties will eventually reach an agreement, it must be fair and based on full disclosure.

In the interim, defendant must be permitted to access sufficient funds so as to litigate on an even playing field with plaintiff, and awarded sufficient support to maintain the status quo of the marriage until its dissolution.


Respectfully,




David Perry Davis, Esq.


Cc: XX




Please accept this letter brief in lieu of a more formal submission in opposition to plaintiff's motion and in support of defendant's cross motion

Defendant relies on the facts as set forth in her annexed certification and attachment.

THE PURPORTED SETTLEMENT DOCUMENT SHOULD NOT BE ACCEPTED BY THE COURT AS A RESOLUTION OF THE ISSUES AS IT WAS NOT BASED ON FULL AND FAIR DISCLOSURE BETWEEN THE PARTIES.

Divorce settlements are not merely contracts between two parties; rather, they are agreements "infused with equitable considerations" and are "construed in light of salient legal and policy concerns." Konzelman v. Konzelman, 158 N.J. 185, 194 (1999). It therefore follows that the interpretation, application, and enforceability are not governed solely by principles of contract law, but also by principles of equity. Ibid. (citations omitted); Gulgliemo v. Gulgliemo, 253 N.J. Super. 531, 542 (App. Div. 1992) (noting leniency provided for agreements in domestic arena and allowing for greater judicial discretion in interpreting those agreements). This policy is based on the premise that despite the contractual nature of marital agreements, "contract principles have little place in the law of domestic relations." Lepis v. Lepis, 83 N.J. 139, 148 (1980).

In order to find an enforcement settlement agreement, the

court is required to find that there was a meeting of the minds based on full and fair disclosure of all the relevant facts, Morton v. 4 Orchard Land Trust, 180 N.J. 118, 129 (2004), agreement on all essential terms, Pascarella v. Bruck, 190 N.J. Super. 118, 126 (App. Div.) certif. denied, 94 N.J. 600 (1983), and the intent of the parties, Pacifico v. Pacifico, 190 N.J. 258, 266 (2007).

Courts must, above all, ultimately ensure that a marital agreement is fair, reasonable, and equitable, see Konzelman, supra, 158 N.J. at 194, and that it "reflects the strong public and statutory purpose of ensuring fairness and equity in the dissolution of marriage." Addesa v. Addesa, 392 N.J. Super. 58, 66 (App. Div. 2007). As such, only agreements that are "fair and just" and based on proper disclosure should be enforced, despite the presumption of validity that generally applies to spousal agreements. Ibid. (citing Peterson v. Peterson, 85 N.J. 638, 642 (1981)).

In this matter, prior counsel did nothing to enforce the court's case management order requiring the plaintiff advance the costs for an accurate, reliable business valuation. Comps provided to this court show that the valuation used was somewhere between 10% and 30% of the business' actual value. As a result of the failure to act, this case is now aged. However, this cannot be the controlling factor. While calendar objectives are not to be lightly disregarded, they must always "be pursued consistently with and not counter productively to the real business of the courts, which is to dispense substantial justice on the merits." Luedtke v. Shobert, 342 N.J.Super. 202 (App.Div. 2001), citing Fusco v. Fusco, 186 N.J.Super. 321 (App.Div.1982).

This rule has been found to be of special weight in the Family Part. Ponden v. Ponden, 374 NJ Super 1, 11 (App. Div. 2004).

In the matter before this court, the discovery record shows that there was active concealment of assets (including a complete denial of the existence of retirement accounts that were being liquidated) and a completely inadequate valuation of the primary martial asset, Parkside Auto Body. Putting aside any other considerations as to the circumstances surrounding the agreement, these factors alone should persuade the court that the purported agreement should not be enforced.

Defendant relies on the facts as set forth in her annexed certification and attachments, and the certification and attachments filed in support of her cross motion in January, 2015.

THE PURPORTED SETTLEMENT SHOULD NOT BE ACCEPTED BY THE COURT AS A RESOLUTION OF THE ISSUES AS IT IS NOT EQUITABLE AND WAS NOT ENTERED INTO "KNOWINGLY" AS THAT TERM IS DEFINED BY LAW.

The parties appear to agree on the applicable law, which defendant will not again recite here. In fact, many of the same cases are cited by both counsel.

The question that the court is therefore asked to address is whether the agreement is fundamentally fair and whether defendant entered into it "knowingly." Defendant respectfully asserts that the certifications and attachments demonstrate that she did not and that, therefore, the purported agreement cannot be enforced. Defendant's request for a brief period of discovery (primarily the enforcement of already requested documents) by granted, followed by a return to mediation.

For the above reasons, the court should deny the application to enter the purported settlement agreement as a full and final resolution of the issues. Defendant's cross application to complete the discovery process and for counsel fees should be granted.


Respectfully,


David Perry Davis, Esq.


Cc: YY

ZZ

1 With the exception of including the parties' older son's student loan debt, which are GSL loans, not PLUS loans, and thus not includable in the marital estate.
</x-sigsep>