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.

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.