Oral Equitable Distribution Agreement Enforced By Court

In Ahlstrom v. Monteferrario, a case coming out of Bergen County, the Plaintiff appealed from a dual judgment of divorce with regard to the parties' oral agreement concerning the equitable distribution of their marital home. The Appellate Division affirmed the Family Court's judgment. In 2007, prior to the parties' 2008 marriage, they purchased a house for $759,000. The deed of the home stated that the parties were owners as tenants in common, "each owner with a 50% ownership share." The Plaintiff advanced $314,559.20 as a down payment. The balance of the purchase price was covered by a mortgage on which both parties were the borrowers, but only the Plaintiff was on the note due to the Defendant's credit issues. After the house was purchased the parties entered into a Co-Ownership Agreement (COA) in 2007, which was prepared by the Defendant's attorney. This agreement detailed the parties' ownership and provided that if the house was sold each party would receive 50% of the net profits. The marriage fell apart and by 2011, the parties reached an oral agreement resolving all issues related to the divorce, alimony, and equitable distribution. The Plaintiff's lawyer sent a draft PSA to the Defendant's lawyer that provided that "[e]ffective with the date [defendant] vacated the martial residence, he has had and shall not have any obligation for the mortgage," and that the Plaintiff would hold the Defendant harmless in connection with the mortgage. In the end, the parties failed to mutually execute the PSA. Soon thereafter, the Plaintiff filed a Complaint for Divorce and subsequently filed a Motion to enforce the COA, demanding that the Defendant repay her the $37,652.40 mortgage payments she made and to repay the mortgage in the future. The Family Court Judge held a ten day trial and a plenary hearing under Harrington v. Harrington, 281 N.J. Super. 39, 656 A.2d 456 (App. Div.), certif. denied, 142 N.J. 455 663 A.2d 1361 (1995). In the 2013, dual judgment of divorce, the trial court discredited the Plaintiff, credited the Defendant, and found that the parties had reached a binding oral agreement. The Plaintiff appealed arguing that the parties' discussions never resulted in a binding verbal agreement. According to the Appellate Division, New Jersey courts strain "to give effect to the terms of a settlement agreement wherever possible." Brundage v. Estate of Carambio, 195 N.J. 575, 601, 951 A.2d 947 (2008). An agreement to settle "is a contract, which like all contracts, may be freely entered into and which a court, absent a demonstration of 'fraud or other compelling circumstances,' should honor and enforce." Pascarella v. Bruck, 190 N.J. Super. 118, 124-25, 462 A.2d 186 (App. Div.), certif. denied, 94 N.J. 600, 468 A.2d (1983). The Appellate Court in Harrington, held that "to be enforceable, matrimonial agreements, as any other agreements, need not necessarily be reduced to writing or placed on the record." Harringon, 281 N.J. Super. 39 at 46. "Where the parties agree upon the essential terms of settlement, so that the mechanics can be 'fleshed out' in a writing to be thereafter executed, the settlement will be enforced notwithstanding the fact that the writing does not materialize because a party later reneges." Id. In this case, the Appellate Court found that the parties entered into a binding oral agreement based upon the evidence submitted into the record and therefore the Family Court's judgment was correct. If you believe that a post-judgment modification to your settlement agreement or divorce judgment 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.

Equitable Distribution Dictates Payment Of Mortgage

In Murphy v. Murphy, a New Jersey Appellate Division case out of Morris County, the Defendant appealed from a 2014 Family Court Order that denied his post-judgment Motion to compel the Plaintiff, his ex-wife, to make mortgage payments on the parties' martial residence under the terms they agreed to regarding equitable distribution. The Court also granted her request to compel him to reimburse her for unreimbursed medical expenses and insurance. The parties in this case were married in 1987 and had three (3) children together. They were divorced in 2013, at which time two (2) of their children were emancipated and they shared joint custody of their daughter. Their divorce judgment incorporated a marital settlement agreement (MSA). In the agreement, the Defendant agreed to paying the carrying charges on the marital home until "the house [was] sold, or through January 1, 2014, whichever [was] sooner." Also, the agreement specified that the Defendant was obligated to maintain medical insurance for the Plaintiff and pay for her uncovered or unreimbursed health care expenses until a certain date. The parties assumed that the marital residence would sell before January 1, 2014, but unfortunately it did not and there was no provision in the agreement that provided for mortgage payments beyond that date. The Defendant stopped paying the mortgage after December of 2013. At the end of January 2014, the Defendant filed a Motion to compel the Plaintiff to start paying the mortgage payments. The Plaintiff filed a Cross-Motion for an Order compelling the Defendant to pay the mortgage and for unreimbursed medical bills. A Family Court judge denied the Defendant's Motion finding that the parties had previously agreed that there was no equity in the marital residence and therefore continuing to pay the mortgage would not produce a positive result. Therefore, the judge held that neither party would have to pay the mortgage. In addition, the judge granted the Plaintiff's request to compel the Defendant to pay for unreimbursed medical expenses. The Defendant appealed and on appeal the Defendant argued that the parties' MSA did not obligate him to pay the mortgage after January 1, 2014 and he was also not obligated to reimburse the Plaintiff for unreimbursed medical insurance expenses. The Appellate Division agreed with the Defendant's first argument but disagreed with his second. According to the Appellate Division, "An agreement to settle a lawsuit is a contract which, like all contracts, may be freely entered into and which a court, absent a demonstration of 'fraud or other compelling circumstances,' should honor and enforce as it does other contracts." Pascarella v. Bruck, 190 N.J Super. 118, 124-5 (App Div) certif. denied, 94 N.J. 600 (1983). "Settlement agreements in matrimonial matters, being 'essentially consensual and voluntary in character, ... [are] entitled to considerable weight with respect to their validity and enforceability' in equity, provided they are fair and just." Dolce v. Dolce, 383 N.J. Super. 11, 20 (App. Div. 2006). In this case, the Defendant sought to compel the Plaintiff to pay the mortgage after January 1, 2014 when either the MSA or the divorce judgment specified that she was to do so. The court held that if the Defendant had wanted the Plaintiff to pay the mortgage for as long as she lived in the home he should have negotiated that when the parties were creating their MSA. Therefore, the Appellate Court affirmed the lower court's denial of this request. However, the court found that the Plaintiff was not entitled to unreimbursed medical expenses from the Defendant because she incurred those costs after the date contemplated in their divorce judgment and therefore reversed the lower court's ruling with regard to this issue. The equitable distribution of assets is of the most emotional and complex aspects of a divorce. If you are involved in a battle over the pre- or post-judgment division of marital property, assets, or debts it is extremely important that you seek out the advice of an experienced attorney before moving forward. For more information about equitable distribution, post-judgment modification, contested divorce, alimony, or other family law matters in New Jersey visit DarlingFirm.com. This blog is for informational purposes and in no way intended to replace the advice of an attorney.