R.R. v. R.N.

RECORD IMPOUNDED

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

R.R.,

Plaintiff-Appellant,

v.

R.N.,

Defendant-Respondent.

_________________________________

December 29, 2014

Argued October 28, 2014 - Decided

Before Judges Hoffman and Whipple.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-11-13.

Alison C. Leslie argued the cause for appellant (Leslie Law Firm, L.L.C., attorneys; Ms. Leslie, of counsel and on the brief).

Jennifer Weisberg Millner argued the cause for respondent (Fox Rothschild, L.L.P., attorneys; Ms. Millner, of counsel and on the brief; Robert A. Epstein and Lauren Koster Beaver, on the brief).

PER CURIAM

Plaintiff appeals from a July 23, 2013 order entered by the Family Part enforcing a provision of the parties' Property Settlement Agreement ("Agreement") and denying plaintiff's motion for leave to list and sell real property owned by the parties. The order was certified as final on October 11, 2013, upon entry of the dual judgment of dissolution of the parties' domestic partnership. We affirm.

The parties began a dating relationship in 1999 and entered a Domestic Partnership on April 26, 2005. The parties ended their relationship in early 2011 and entered into an Agreement dated March 16, 2011.

The Agreement provides that the parties' real property in Ocean Grove, New Jersey ("98 MCW") is converted from a joint tenancy to a tenancy in common, with two-thirds owned by plaintiff and one-third owned by defendant. Defendant possesses the sole right to occupy the property for ten years from the date of the Agreement, and is "responsible for all carrying costs, including but not limited to utilities, repairs, taxes, assessments, or the like."

Defendant has an option to purchase plaintiff's share in the property at the end of the ten-year period, and plaintiff has a similar option to purchase defendant's share if defendant does not timely exercise his option. In the event neither party exercises the option, the parties "will engage the services of an agreed upon realtor," and split the proceeds of the sale in accordance with their respective ownership interests.

The Agreement provides that if defendant wishes to sell his share before the end of the ten-year period, he must offer the share to plaintiff for one hundred thousand dollars, and, if plaintiff does not purchase the share, the property will be sold by a realtor and the proceeds split as previously outlined. The Agreement also contains provisions regarding the possibility of the death of either party within the ten-year period and requires that defendant share fifty percent of net proceeds if the property is rented for a period over two weeks per year.

The Agreement specifies, among other things, that

The parties acknowledge that they have been represented by the same counsel with respect to the drafting and execution of this Agreement. The parties represent and acknowledge that each has fully reviewed the legal and practical effect of this Agreement, and each party signs same voluntarily, of his own free will, and without any undue influence, fraud, coercion or duress of any kind whatsoever exercised upon either of them by any person. The parties acknowledge that they have been advised of the right and advisability of obtaining separate counsel, and of the potential conflict of interest, but have chosen to waive the potential conflict and be represented by the same attorney.

After the parties signed the Agreement, the relationship deteriorated, and, within a few months, defendant embarked on what plaintiff claimed was a campaign of harassment and stalking plaintiff. Plaintiff sought the protection of a restraining order on September 21, 2011.

Following a trial, the court granted plaintiff a Final Restraining Order ("FRO") against defendant on June 18, 2012. The trial court determined that defendant harassed plaintiff by sending an email with an attachment containing inaccurate and embarrassing information about plaintiff's personal life to plaintiff's work email address, which could be viewed by others, and by threatening to send the email to plaintiff's ex-wife. The court also found that defendant stalked plaintiff by texting plaintiff summaries of what plaintiff was doing and who he was with, in addition to photographing plaintiff at a party and threatening to use the photographs against plaintiff. The FRO prohibits defendant from having direct contact or communication with plaintiff, and prohibits "making or causing anyone else to make harassing communications" to plaintiff.

On June 29, 2012, plaintiff filed a verified complaint and order to show cause to force the partition of 98 MCW in the Chancery Division in Monmouth County. The matter was transferred to the Family Part in Essex County. The Family Part judge entered an order permitting plaintiff to amend the complaint to address dissolution of the parties' domestic partnership, asserting the enforcement of the Agreement, in all aspects, except with regard to 98 MCW.

On July 23, 2013, the Family Part judge denied plaintiff's request to have a broker appointed for the sale of 98 MCW. The court found

[T]he parties have already resolved and agreed to the partition of the [98 MCW] Property . . . . As evidenced by the above lengthy provision, the parties carefully negotiated and crafted an agreement as to their ownership and future partition of the [98 MCW] Property . . . .

Generally, contracts entered into by parties are enforced by courts . . . . In the instant case, the provisions in the parties' Agreement governing the [98 MCW] Property are clear and unambiguous . . . .

Plaintiff cannot use the Final Restraining Order as a chisel to chip away at the terms of the parties' Agreement. Nor can he use the FRO to deprive defendant of his agreed upon property rights. A Final Restraining Order is not an automatic trigger to undo contracts entered into by parties or to change the negotiated terms of an agreement. To do so, would throw open the floodgates encouraging the improper use of domestic violence remedies.

Plaintiff's argument that the parties' joint ownership of the [98 MCW] Property provides a basis for continued interaction is not a reason to compel a sale of the Property . . . .

. . . [I]n the instant case, mechanisms can be established to ensure that the parties do not have direct interactions and the safety of the plaintiff is not jeopardized.

The court memorialized its findings in an order. Plaintiff appealed.

On appeal, plaintiff argues that the trial court abused its discretion in denying partition and sale because the Agreement is no longer enforceable due to subsequent acts of domestic violence by defendant and imposition of a final restraining order, making joint ownership of the property under the Agreement impossible and inequitable. Plaintiff contends that the Agreement should not be enforced because both parties were represented by the same attorney in creating the Agreement, and it was reversible error for the trial court to not grant a plenary hearing regarding the ability of the parties to continue their business relationship.

Decisions regarding the granting of equitable remedies are typically left to the sound discretion of the trial courts, and are not disturbed "unless there is a clear showing of abuse of discretion." Feigenbaum v. Guaracini, 402 N.J. Super. 7, 17 (App. Div. 2008) (quoting Kurzke v. Nissan Motor Corp. in U.S.A., 164 N.J. 159, 165 (2000)). Abuse of discretion occurs when a decision 1) has no rational explanation, 2) departs from established policies without explanation, or 3) rests on an impermissible basis. Ibid.

Plaintiff contends that the trial court based its decision in part on the mistaken belief that defendant had a pending appeal of the FRO. The trial court's mention of the appeal of the FRO is irrelevant and forms no basis for the court's ruling. The trial court's ruling assumes the existence and enforcement of the FRO.

Plaintiff next asserts that the provisions of the Agreement pertaining to the property should be set aside because they were negotiated by the parties before they had counsel. Plaintiff asserts that the Agreement was reached while the parties were represented by the same counsel and that "[t]he agreement is one sided in favor of the Defendant" because it provides defendant the option to sell his interest prior to the end of the ten-year period, but provides no reciprocal option for plaintiff to sell. Plaintiff argues this ten-year limitation on the ability of plaintiff to sell is unreasonable. Plaintiff contends that 98 MCW was intended by the parties to remain a rental property, and defendant is now ignoring that intent.

The trial court found that plaintiff and defendant had carefully negotiated the Agreement. Moreover, the Agreement specifically acknowledges that both parties were advised of the right and the advisability of obtaining separate counsel. We agree with the trial court's conclusion that the Agreement is clear and unambiguous and that plaintiff has not shown a basis for abrogating the Agreement and requiring sale of property earlier than required by the Agreement.

Settlement of litigation is an important public policy goal in New Jersey. Harrington v. Harrington, 281 N.J. Super. 39, 46 (App. Div.), certif. denied, 142 N.J. 455 (1995). Domestic settlement agreements are enforceable in equity and contract law as long as they are not unconscionable, fraudulent or overreaching. Ibid. We approach such agreements "with a predisposition in favor of [their] validity and enforceability." Petersen v. Petersen, 85 N.J. 638, 642 (1981).

Plaintiff does not point to facts showing that the Agreement is fraudulent, overreaching or that he entered into it under duress. The right to separate counsel was clearly waived. His current dissatisfaction with the Agreement is not a basis for the court to set aside the Agreement and order the sale of the property.

Partition is an equitable remedy. Newman v. Chase, 70 N.J. 254, 263 (1976); see also Greco v. Greco, 160 N.J. Super 101, 102 (App. Div. 1978). But the right to partition is not absolute. Newman, supra, 70 N.J. at 264. It is subject to prior agreements not to partition. Michalski v. Michalski, 50 N.J. Super. 454, 462 (App. Div. 1958). A court may enforce an agreement not to partition if the intention to make such an agreement is sufficiently manifest from the language used, even without express use of the word "partition," and if the restraint is not fixed for an unreasonable time. Ibid. In applying equitable principles, the court may decline to enforce a restraint against partition when the circumstances have so changed that it would be inequitable to deny the partition. Id. at 467.

Plaintiff says that when he consented to the Agreement he did not foresee that he would be the victim of domestic violence at the hands of defendant. Recounting the incidents of domestic violence leading up to the issuance of the FRO, plaintiff argues that the Agreement is now unworkable, particularly because the FRO prohibits all communications between parties, including through third parties. He contends that communications through third parties would only perpetuate the harassment. However, defendant suggests that a third party realty management company could be utilized by the parties to facilitate communications regarding rental accounting because the FRO only prohibits third party communications "likely to cause annoyance or alarm."

Plaintiff further argues that the limitation on his ability to sell is unreasonable in light of the FRO and contends that the full protection of the FRO can only be achieved by a complete severance of relations between the parties, including a partition and sale of 98 MCW. He also argues that 98 MCW's proximity to plaintiff's residence provides defendant an opportunity to violate the FRO.

We do not minimize plaintiff's safety concerns; however, the adequacy of the protections afforded under the FRO are always subject to review and modification. Safety concerns do not necessarily require a modification of defendant's property rights to protect plaintiff.

Plaintiff additionally alleges that defendant has failed to provide accurate and timely accountings of rental income and that there has been a change of circumstances which frustrates the purpose of the Agreement, and defendant should not be able to enforce the Agreement because of his unclean hands. Plaintiff argues that his rights as a domestic violence victim trump defendant's contract and property rights as an owner of 98 MCW.

Here, the parties entered into an agreement delineating when and under what circumstances partition would occur and setting a fixed and reasonable period of time. We recognized in Michalski that deterioration of the parties' relationship could trigger such a change in circumstances, but the Michalski circumstances were very different. Ibid.

In Michalski, the creation of the agreement conferring ownership as tenants in common of real property contemplated that the parties would reside together in one of the properties, and partition could not be triggered until the death of one of the parties. Id. at 464. It was not until after the agreement had been executed that the Michalskis' relationship deteriorated to the point that they were engaged in civil and criminal litigation for over six years. Id. at 467. At that point, there was a change of circumstances such that it was inequitable to deny relief and the intent had been destroyed. Ibid.

Here, plaintiff and defendant executed an agreement which recognized the end of their relationship and contemplated a partition in ten years. While it may create certain difficulties, the entry of the FRO does not "destroy the intent of the parties" to fulfill the Agreement. Ibid. As the trial court correctly found, mechanisms can be established to ensure that the parties do not have direct interactions and plaintiff's safety is not jeopardized.

Last, plaintiff argues that partition should be granted because defendant has failed to provide proof of licenses and payment of expenses in regards to 98 MCW. He contends that defendant can expose plaintiff to liability by failing to keep proper insurance for the property, pay taxes, keep premises in good repair, and comply with local ordinances.

We note that the issues and problems identified by plaintiff are matters which the parties already negotiated in their Agreement. Paragraph 3.1 of the Agreement provides that obligations incurred prior to or during the course of their continued business relationship which could bind either party will be the sole responsibility of the party who incurred or incurs them. In such a situation, the Agreement clearly states that the responsible party must defend, indemnify, and hold harmless the innocent party. Therefore, we conclude that plaintiff's proper remedy in such an event is enforcement of the Agreement, not partition of 98 MCW.

Plaintiff also contends that the trial court erred in not granting a plenary hearing to determine whether the parties are able to continue in a business relationship. In support of this argument, plaintiff reiterates his complaints regarding lack of proper rent accountings, failure to obtain business licenses, and the emotional stress that plaintiff is subject to by continuing to engage in business with defendant.

However, a review of the record demonstrates that plaintiff's claim that 98 MCW was intended by the parties to remain a rental property is not reflected in the Agreement. The Agreement states that "[i]f [R.N.] rents the property for a period of more than two (2) weeks per year, [R.R.] shall be entitled to 50% of the rent, net of any commissions paid to any realtor for the rental." The Agreement indicates that the decision to use the property for rental income is entirely under defendant's control.

A plenary hearing is only required when affidavits show that there are genuine issues of material fact, and the trial judge determines that a factual hearing would be helpful in deciding those such factual issues. Shaw v. Shaw, 138 N.J. Super. 436, 440 (App. Div. 1976). The relevant facts regarding the parties' business arrangement are contained in the Agreement, which is clear and unambiguous. Therefore, a plenary hearing was not required.

Affirmed.