Monday, June 22, 2015
Equitable Distribution Of A Residence 'Underwater'
In Grella v. Rumer, the Defendant appealed from a provision in a 2014 Family Court Order that denied his Motion to modify the parties' property settlement agreement (PSA) regarding the equitable distribution of the parties' marital home. The Plaintiff moved out of the marital residence in 2007. According to a provision in the parties' PSA which was incorporated into their divorce judgment in 2009 the husband was to have exclusive possession of the home, and the home was to be listed for sale or the husband was to buy out the Plaintiff's portion within five (5) years of their divorce. Further, it was stated that the wife was not entitled to any equity the Defendant paid into the home after the parties separated. Five (5) years after the parties were divorced the home was appraised at $190,000 and the outstanding mortgage indebtedness at that time was $231,561 therefore the parties' mortgage was $41,000 more than the home's value. The Defendant argued that the parties were mutually mistaken in believing the home had equity when they divorced. The Plaintiff claimed that the Defendant unilaterally increased the debt on the home. Further, the fact that a particular value was not agreed upon when the parties' divorced did not mean that the parties were mistaken with regard to any equity the home may have had. According to the Appellate Court, "the doctrine of mutual mistake applies when a 'mistake was mutual in that both parties were laboring under the same misapprehension as to [a] particular, essential fact.'" Bonnco Petrol, Inc. v. Epstein, 115 N.J. 599, 608, 560 A.2d 655 (1989); Beachcomber Coins, Inc. v. Boskett, 166 N.J. Super. 442, 446, 400 A.2d 78 (App. Div. 1979). In this case, the Defendant had fallen woefully short of demonstrating the clear and convincing evidence necessary to demonstrate that the parties were mistaken. Although he may have had evidence of a current lack of equity, he had not demonstrated any lack of equity in the residence in 2009 when the PSA was executed. Therefore, the Appellate Division affirmed the decision of the lower court. If you believe that a post-judgment modification to your settlement agreement regarding the equitable distribution of your property may be beneficial to you it is critical that you seek out the advice of an experienced attorney before moving forward. For more information about post-judgment modification, equitable distribution, alimony, or other family law matters in New Jersey visit the DarlingFirm.com. This blog is for informational purposes and in no way is intended to replace the advice if an attorney.