MARIANNE PERLSTEIN v. ROSS PERLSTEIN

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4785-08T2

MARIANNE PERLSTEIN,

Plaintiff-Appellant/

Cross-Respondent,

vs.

ROSS PERLSTEIN,

Defendant-Respondent/

Cross-Appellant.

__________________________________

April 26, 2011

Argued: December 1, 2010 - Decided:

Before Judges Cuff, Sapp-Peterson, and Fasciale.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Union County, Docket No. FM-20-272-07B.

Joel C. Seltzer argued the cause for appellant/cross-respondent.

Lucy Agostini argued the cause for respondent/cross-appellant (Agostini & Slattery, attorneys; Ms. Agostini, on the brief).

PER CURIAM

After entering a comprehensive property settlement agreement (PSA) and having it incorporated in an amended judgment of divorce (JOD), plaintiff Marianne Perlstein filed a motion pursuant to Rule 4:50-1 to vacate the financial portions of the amended JOD. She argued that defendant Ross Perlstein misled her and hid relevant information from her. By order dated April 22, 2009, the judge, who had presided over the matrimonial proceedings, denied the motion and also ordered plaintiff to pay $7,500 to defendant to defray the costs incurred to defend the motion. It is from this order that plaintiff appeals. We affirm.

The amended JOD reflects that the parties entered an agreement for the disposition of their marital property, spousal support, child support, and custody and parenting time over the course of time. The agreement was incorporated in correspondence dated January 15, 2008, and a handwritten document dated January 23, 2008. These documents were marked as J-1, the parties testified that the exhibit represented their complete agreement, and the court entered a JOD on January 23, 2008. On March 18, 2008, the court entered an amended JOD that set forth the specific terms of J-1.

According to the amended JOD, defendant agreed to pay plaintiff $40,000 annually or $3,333.33 monthly in alimony effective July 1, 2008, or when the marital home sold, whichever event occurred first. Defendant also agreed to pay $70,000 to plaintiff from his portion of the proceeds from the sale of the marital home as a partial lump sum buy-out of his alimony obligation. Following this payment, defendant's annual alimony obligation would be reduced to $30,000.

Pending sale of the marital residence, defendant agreed to pay $1500 alimony monthly to plaintiff. Defendant also agreed to continue to pay the carrying costs of the marital home until it was sold. Those costs included the first mortgage, homeowners' insurance, real estate taxes, and utilities. The parties later agreed that defendant would continue to pay the carrying charges on the former marital home retroactive to July 1, 2008, and through September 30, 2008. Thereafter, plaintiff was responsible for the carrying charges on the house until its contemplated sale on November 30, 2008.1

The parties also agreed that defendant would pay $100 weekly directly to plaintiff, once the marital home was sold, as child support. Defendant also agreed to be responsible for all of their daughter's reasonable everyday expenses, health insurance, and unreimbursed medical and dental expenses. The parties also agreed to use $50,000 from a joint account to fund their daughter's college education expenses. Thereafter, defendant agreed to be solely responsible for the cost of their daughter's college education.

Defendant agreed to contribute a maximum of $400 monthly to plaintiff's medical insurance premiums effective April 1, 2008, through March 21, 2010, unless specified events intervened to terminate this obligation. Defendant agreed to maintain $250,000 in life insurance for the benefit of plaintiff to guarantee his alimony obligation until January 22, 2013. Thereafter, defendant may reduce the coverage by $20,000 every year.

The parties also agreed to sell the marital home. The parties agreed to divide equally the net proceeds of the sale. All furnishings in the marital home, except for one item, were to become plaintiff's separate property. Plaintiff waived any interest in Allison Equipment, a business incorporated prior to the parties' marriage, and a second corporation, Ramp Equipment, Inc., in consideration of a payment of $85,000. Ramp Equipment was the service arm of Specialty Automotive Equipment, Inc. (SAE). Plaintiff waived all interest in a Florida timeshare in consideration of a payment of $9,000. Plaintiff also agreed to receive 50% of the cash value of a whole life insurance policy. The parties also agreed to share equally the amount in the joint account maintained to fund their daughter's education in excess of $50,000. They also agreed to equalize their respective individual retirement accounts.

The PSA also contains the following provision:

Knowledge of Facts. The parties acknowledge that each has produced during the course of the negotiations leading to the execution of the within agreement, financial statements, records, and other documentation pertaining to his or her financial status, income, expenses, assets and liabilities. Each party represents to the other the completeness, truthfulness, and accuracy of their respective financial representations, with the understanding that the other party is relying thereon in accepting the terms of the settlement contained herein and execution of the within agreement.

On November 4, 2008, plaintiff filed a motion pursuant to Rule 4:50-1 seeking to modify the alimony and child support provisions of the amended JOD. She also sought a deposition of defendant and his mother, production of all releases, settlements, arbitration awards, checks, dividends, agreement and stock holdings with Mohawk Resources, Ltd.
(Mohawk) from 2003 to the present time, and a plenary hearing. Plaintiff asserted that defendant lied, misrepresented and misled her about his income, the value of Allison Equipment and Ramp Equipment, and his interest in Mohawk. Plaintiff asserted that defendant did not disclose his interest in Mohawk in his case information statement. She conceded, however, that he mentioned his Mohawk interest in his November 5, 2007 Early Settlement Panel submission. She also alleged that he withheld information about ongoing litigation and an offer to settle his claim regarding his interest in Mohawk at the time the parties negotiated their PSA.

Plaintiff also asserted that defendant misstated his income from Allison Equipment and Ramp Equipment. She supported this allegation with a certification from a newly retained certified public accountant.

Defendant filed a cross-motion to enforce the settlement.
In support of the motion and in opposition to plaintiff's motion, defendant submitted the certification of the certified public accountant retained by him in 2006 to value his interests in Allison Equipment and Ramp Equipment. In her certification, defendant's accountant stated that she provided her valuation of the Perlstein business, SAE, to defendant's attorney on October 30, 2007. She then summarized a December 17, 2007 meeting between defendant's attorney, plaintiff's attorney, and two certified public accountants retained by plaintiff. She stated:

On December 17, 2007, [defendant's attorney] and I met with [plaintiff's attorney] at his office to go over my report. Two CPAs, Sam Vassallo and Brad Palmer, were also present. They were aware of [defendant's] settlement with Mohawk. One aspect of our discussions focused on the renewal of SAE's existing distributorship agreement for a 10-year calendar term and what impact, if any, the renewal has on the value of the business. We also discussed my capitalization rate, reasonable officer's compensation, [defendant's] perquisites and how I dealt with the legal fees paid by SAE to pursue the value of his inherited stock shares.

Defendant's accountant related that plaintiff's accountant stated he needed additional time to review defendant's report, and then forwarded a review and critique of defendant's accountant's report. She further related that the accountants for both parties met again, and ultimately "the parties compromised and agreed to value SAE at $340,000."

Notably, plaintiff submitted nothing to rebut this statement of events that occurred prior to the January 23, 2008 matrimonial settlement. She admitted that she knew that defendant was involved in litigation about Mohawk. She alleged she did not know about the settlement, but does not refute that the settlement was known to her attorney and accountants. Plaintiff also did not dispute that her accountants asked plaintiff's attorney to obtain for them more information about total compensation paid by Allison Equipment and Ramp Equipment to defendant from August 15, 2003 through August 15, 2006. Plaintiff also did not dispute that the accountant, who submitted a certification on behalf of plaintiff's motion, held an inactive accountancy license.

In his oral decision, Judge Issenman reviewed the law governing efforts to set aside a settlement and then identified the bases for plaintiff's motion to vacate the financial terms of the amended JOD. Noting that plaintiff sought to partially vacate the amended JOD on fraud, misrepresentations, and other misconduct of defendant, Rule 4:50-1(c), Judge Issenman underscored that plaintiff was obliged to submit clear and convincing evidence to succeed on such a motion. The judge then found that defendant "was [not] involved in active perjury or failure to disclose, I [do not] see any fraud at all." In addition, the judge held that plaintiff "has [not] even proved a sufficient quantum of evidence to allow her to have a plenary hearing under Tancredi v. Tancredi[, 101 N.J. Super. 259 (App. Div. 1968)]."

Judge Issenman proceeded to identify the various facts known by both parties as they negotiated the PSA and consulted with their individually retained counsel and accountants. The judge noted that plaintiff knew of Mohawk, knew of the litigation, and knew that matter had been settled prior to agreement on the financial terms of the divorce and entry of the JOD. In addition, the document relied on by plaintiff to establish valuation of Mohawk is "an analysis of how you value a corporation" rather than a "valuation of the corporation." He also found that each attorney and each set of accountants knew about the settlement in December 2007 and discussed it in person and later exchanged documentation about the settlement as the negotiations moved to a conclusion.

Judge Issenman also dismissed the report prepared by the inactive accountant and submitted by plaintiff in support of her motion as a report prepared by someone who is retained after-the-fact to "chip away" at an agreement. The judge also observed that this settled matter had several post-judgment motions but plaintiff "[was not] dissatisfied with this settlement on the first post-judgment motion . . . ."

Judge Issenman also reviewed all the financial terms of the PSA. The judge found that plaintiff had not established that the financial terms should be reformed because it is not "an unfair agreement overall in terms of overreaching or unconscionability for the length of the marriage, for where the parties are." He also concluded that he could not find fraud in the inducement "or in any, any way."

The judge concluded his oral opinion with the following remarks:

[I am] satisfied that the fair and appropriate response to plaintiff's motion for a vacation under rule 4:50 is to deny it in its entirety. What we have here, generally after reviewing all the papers, is that as a matter of law, based on the facts, giving her the benefit of all reasonable inferences, she has not persuaded this Court that the agreement is unconscionable, that it is reached by fraud or misrepresentation.

And instead, what we have here is a classic case of buyer's remorse. She is sorry that she made this agreement. But under the public policy of enforcing agreements, the agreement is the agreement she made, represented by competent counsel, represented by competent accountants and having the ability to have the negotiation process go back and forth. She opted to settle the case for the numbers that she settled them for.

The judge proceeded to deny plaintiff's motion, enforced the amended JOD, thereby granting defendant's cross-motion, and ordered plaintiff to pay $7500 to defendant to defray his accountant's fee. The judge found that plaintiff's motion to partially vacate the terms of the amended JOD was without merit. He found there were no "material disputes of fact."

On appeal, plaintiff argues that the judge should have granted her motion because the settlement of the matrimonial litigation was procured by fraud, misrepresentation and other misconduct by defendant. She contends the judge applied a narrow and erroneous construction of fraud and concealment that requires remand for a plenary hearing. In response, defendant argues that plaintiff submitted no evidence of fraud, misrepresentation or other misconduct to compel vacation of the JOD or even a plenary hearing about the circumstances surrounding the negotiation of the financial terms of their agreement. In his cross-appeal, defendant argues that the judge should have awarded him counsel fees. He also contends the judge erred by not fully compensating him for the costs incurred to oppose plaintiff's motion.

A motion for relief from judgment should be granted "sparingly" and in "exceptional situations" in which, "were it not applied, a grave injustice would occur." Hous. Auth. of Morristown v. Little, 135 N.J. 274, 289 (1994). Nevertheless, any decision to grant or deny a motion pursuant to Rule 4:50-1 must be guided by principles of equity. Id. at 283.

It is well-established that courts have the equitable authority to "modify property settlement agreements executed in connection with divorce proceedings . . . ." Miller v. Miller, 160 N.J. 408, 418 (1999). "'[A]pplications for relief from equitable distribution provisions contained in a [JOD] are subject to [R. 4:50-1 standard] and not, as in the case of alimony, support, custody, and other matters of continuing jurisdiction of the court, subject to a "changed circumstances" standard.'" Eaton v. Grau, 368 N.J. Super. 215, 222 (App. Div. 2004) (quoting Pressler, Current N.J. Court Rules, comment 1.7 on R. 4:50-1 (2004)).

Here, we discern no basis by which Judge Issenman could have vacated the financial terms of the amended JOD. The motion record clearly demonstrated plaintiff knew of Mohawk, her husband's interest in that business, and the litigation regarding the nature and extent of his interest in Mohawk during the marriage and throughout the matrimonial proceedings. At oral argument before this court, plaintiff conceded her knowledge, but argued she and her attorney and accountants had insufficient time to digest the information lately disclosed to them about the settlement of the litigation. Yet, while the correspondence between the accountants reflected some disagreement with the position advocated by defendant, it did not demonstrate lack of information to properly assess the information or to formulate a position for their client.

We also find no basis to allow a plenary hearing. Despite several certifications and exhibits appended to those documents, we have been unable to identify any disputes of material facts that a plenary hearing would resolve.

Finally, defendant argues that Judge Issenman should have awarded counsel fees to him and awarded a greater sum to reimburse him for the costs incurred to defend the motion. The judge denied counsel fees to plaintiff due to the unequal economic positions of the parties. Plaintiff had been unemployed for a period of time and had only recently resumed employment; defendant had been steadily employed. Plaintiff's earning capacity was considerably less than defendant's. In addition, the sale of the marital home took more time than the parties contemplated, thereby postponing implementation of the bulk of the equitable distribution scheme devised by the parties. In short, plaintiff had little ability to pay any award. See Mani v. Mani, 183 N.J. 70, 94-95 (2005); Williams v. Williams, 59 N.J. 229, 233 (1971). The judge applied the appropriate standard. The facts identified by him regarding the financial position of each party are well-supported by the record. We discern no basis to disturb the order denying defendant's fee application.

Nor do we discern any basis to disturb the amount of the award of expert fees to defendant. Defendant argues that the judge should have awarded him the entire amount of the costs incurred. Although the judge grounded this award on the bad faith of plaintiff, he was not free to disregard her financial position. R. 5:3-5(c). See also Williams, supra, 59 N.J. at 233 (explaining an award of fees is discretionary).

We, therefore, affirm the April 22, 2009 order denying plaintiff's motion to vacate the financial terms of the PSA incorporated in the amended JOD and defendant's motion for counsel fees. We also affirm paragraph 6 of the April 22, 2009 order requiring plaintiff to pay to defendant $7500 to defray the accountant's fees incurred to oppose her motion.

Affirmed.

1 The house did not sell at that time and still had not sold at the time plaintiff's motion to vacate the financial terms of the amended JOD and defendant's motion to enforce the terms of the settlement were decided by the court. We were informed at oral argument that the house has sold.