KIMBERLY CARTER v. JOHN CARTERAnnotate this Case
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
DOCKET NO. A-0
October 28, 2014
Argued May 7, 2014 Decided
Before Judges Nugent and Accurso.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, Docket No. FM-03-1441-09-X.
John Carter, appellant, argued the cause
Lawrence W. Saltzman argued the cause for respondent.
The opinion of the court was delivered by
Defendant John Carter appeals from a post-judgment order on a joint application with plaintiff Kimberly Carter for summary disposition of the parties' dispute as to the amount due defendant for his share of the net equity in their marital home. After considering the amended final judgment of divorce, the deposition testimony presented, the parties' certifications and exhibits, and the briefs and oral argument of counsel, Judge Domzalski determined that there was virtually no equity in the marital home and thus nothing due defendant. We affirm, substantially for the reasons expressed in the judge's thorough and thoughtful opinion from the bench on December 10, 2012.
While the essential facts are largely undisputed, the matter has a somewhat lengthy procedural history, which is unnecessary to recount in detail. Certain background information, however, is essential to put the discussion of the facts in context. Judge Haas presided over the parties' divorce trial in which both custody and equitable distribution were disputed. Much of the background is drawn from his findings of fact set forth in a letter opinion of April 13, 2010. Neither party appealed the judgment in which those findings were incorporated.
The parties were married for almost twenty years and had four children, three of whom were minors and living with plaintiff at the time of the divorce. With the exception of some part-time substitute teaching, plaintiff had not worked outside the home after the children were born. That changed in 2004 when defendant was fired from his job as a police officer in Bordentown for sleeping on duty. Plaintiff got a full-time job as a teacher's assistant, and it was her income, along with the financial assistance provided by her parents, the Colbys, that supported the family after defendant lost his job.1 It is the amount owed the Colbys on which Judge Domzalski's decision turned.
The Colbys have provided financial assistance to the parties since at least 2002, when the Colbys loaned them $10,196.67 to avoid foreclosure on their marital home. After defendant lost his job in 2004, the Colbys made the monthly payments on both a first and a second mortgage encumbering the property and paid the real estate taxes. The Colbys also helped fund the cost of defendant's lawsuit challenging his termination. Although the Merit System Board had upheld the termination, this court reversed, finding that a lesser sanction should have been imposed. Carter v. Twp. of Bordentown, No.
A-1566-04 (App. Div. May 8, 2006) (slip op. at 2, 32). Bordentown, however, successfully petitioned the Supreme Court for certification.
Needing money to fund the litigation in the Supreme Court, the parties again turned to the Colbys. They, however, refused to advance more monies without a promissory note acknowledging past loans and pledging repayment of all sums they had advanced and would advance in the future. Accordingly, around the time the Supreme Court took certification, the parties signed a promissory note to the Colbys, which defendant claims to have drafted. The note provides as follows.
KNOW ALL MEN BY THESE PRESENTS THAT John R. Carter and Kimberly C. Carter hereby promise to pay James Gary Colby and Margaret Colby, an amount equal to payments advanced by James Gary Colby and Margaret Colby for payment of legal fees on behalf of John R. Carter relating to a disciplinary action/termination of employment filed by Bordentown Township and pending in the Merit System Board/Superior Court, Appellate Division/Supreme Court of the State of New Jersey; and also such sums as where [sic] advanced for payment of the Note and Mortgage held by Peoples Savings Bank as to property located at 4 Wellington Court, Bordentown Township. Said reimbursement is to be paid from the proceeds of any successful conclusion of said disciplinary action/termination of employment matter or from any equity/proceeds upon the sale of the property located at 4 Wellington Court, Bordentown Township, New Jersey only.
The said reimbursement of funds, the amount to be calculated at the time of final distribution, as agreed to by the parties. Reimbursement of funds hereunder is contingent upon such additional payment of Attorney fees relating to said disciplinary action/termination of employment matter and/or towards said mortgage as may from time to time become due pending the outcome of said action.
The said John R. Carter and Kimberly C. Carter hereby acknowledge that they are responsible for the reimbursement of funds advanced, and to be advanced, and that said funds were advanced/paid on their behalf.
The note, which is undated, is signed by the parties.
The Supreme Court reversed our ruling in defendant's case and reinstated his termination. In re Carter, 191 N.J. 474 (2007). As the note provides that reimbursement is only to be as of the successful outcome of that case, or proceeds of sale, the Colbys attempted to intervene in the parties' divorce to secure payment of the monies owed them. Judge Haas denied intervention but made certain findings regarding the note on the basis of testimony provided by the parties and Mrs. Colby. Specifically, in addition to the $10,196.67 lent in 2002, Judge Haas found on the basis of Mrs. Colby's "credible testimony" based on the "careful records of the payments she and her husband had made on the parties' behalf," that since August 2004,
the Colbys have been paying both of the mortgages and the taxes on the home. They have also paid other bills for the parties to ensure that utilities were not cut off to the home. They have paid portions of the parties' legal bills.
As discussed . . . the Colbys will be filing a lawsuit against the parties to recover all of the funds that they have paid on the parties' behalf. These payments exceed $200,000. Thus the equitable distribution discussed below will be subject to the Colbys' claim and to the defenses, if any, that might be raised by the parties to this claim.
Because an understanding of Judge Haas' decision regarding the equitable distribution of the marital home is essential to Judge Domzalski's resolution of the post-judgment motion, we quote Judge Haas' decision at length
Plaintiff shall continue to live in the former marital home until the parties' youngest child, . . . , graduates from high school. [The child] is currently eleven years old and he is in the fifth grade. Therefore, he should be graduating from high school in June 2017. It is important that the children be able to stay in the home they have known for the majority, if not all, of their lives. The children obviously need a place to live. Defendant currently lives, according to his testimony, either in his car or at one or more of his friend's homes. He has not, and cannot, provide shelter for the children. Defendant did not pay child support until the [pendent lite] Order was entered. With the help of the Colbys, who have offered to continue to pay the bulk of plaintiff and the children's Schedule A expenses, the children can continue to be safe and secure in their own home. That is the fair result.
The parties shall list the home for sale on June 1, 2017 at a price to be determined in consultation with the licensed realtor that is selected. Plaintiff shall select the realtor. At the time the home is sold, the parties shall equally share the net proceeds from the sale. Those net proceeds will be subject to the claims to be raised by the Colbys against the parties in their separate proceeding, and subject to the defenses, if any, that are raised by the parties at that time.
Defendant had requested an immediate sale of the home, arguing that he needed his share of the net proceeds now so that he could obtain a residence so that he could have custody of the children. However, that would not be equitable. Defendant is not currently employed and he presents no reasonable plan for obtaining employment. He could not provide even the most minor details of his alleged job search. There is no reasonable way that he can maintain a home without the prospect of employment. The claims made by the Colbys, including any claims that they may make for the funds they are providing currently to maintain the mortgages and taxes and other items, need to be heard in an appropriate forum before any disposition of the proceeds of any sale of the home is made. With child support, and as reflected in the attached Guidelines Worksheet, plaintiff will net only $2,318 per month in combined income and child support. She can not [sic] provide a suitable residence for three children on that level of income. With the assistance of the Colbys, however, she will be able to do so. Thus, permitting her to maintain the home for the benefit of the children until [the youngest child] graduates from high school is in their best interests.
In making this distribution, the Court also considered the fact that plaintiff is not seeking alimony from defendant and that she is not seeking to have additional income imputed to defendant. That is eminently fair to him. This is a long-term marriage. Plaintiff stepped up and obtained employment and health insurance for the family in 2004 when defendant was terminated from his job for cause. With the financial assistance provided by the Colbys, plaintiff has kept a roof over the children's heads since the time defendant was fired for misconduct. Defendant has the ability to work, but he has not sought or obtained suitable employment. Plaintiff has realistically accepted that defendant is currently only receiving unemployment compensation, which reduces his current obligation to pay child support. Because of this, however, the "delayed" distribution of the marital home is certainly appropriate.
In addition, defendant took at least $15,000 from his pension for his own use; took the proceeds of [the sale of his fishing boat, financed by the second mortgage] while leaving behind the debt, and likely used thousands of dollars of the monies he had allegedly placed into joint accounts from his inheritance (thereby clearly making them joint, rather than exempt, marital assets), again for his own purposes. Plaintiff will never receive a share of those funds and defendant has refused to even provide an accounting of them. Defendant will ultimately receive his fair share of this asset. He cannot reasonably complain that the timetable for the distribution will ensure the health, safety and welfare of the children.
Following the parties' divorce in April 2010, defendant learned that the house was again in danger of foreclosure. He made a motion in February 2012 to require plaintiff to bring all payments current and to pay him his half of the equity. The judge denied defendant's motion to require plaintiff to pay the mortgage as the judgment of divorce did not require her to do so. Because, however, plaintiff did not object to purchasing defendant's interest, so long as his equity was calculated properly, Judge Domzalski provided for discovery and the parties agreed to thereafter submit the matter for summary disposition, thereby avoiding the expense of a plenary hearing.
The parties agreed that the home's appraised value was $305,000. Judge Domzalski determined the balance due on the mortgages was $74,000, consisting of $55,000 on the first mortgage and $19,000 on the second. Notwithstanding Judge Haas's finding that the second mortgage was as a result of a fishing boat defendant purchased during the marriage and later sold without accounting for the proceeds, Judge Domzalski determined that absent an express finding that plaintiff was to be held harmless, he was bound to hold both parties jointly responsible for its payment. Accordingly, the judge calculated the net equity in the property to be $231,000. Considering only monies advanced by the Colbys for payment of the mortgages, the judge found they were owed $202,500, further reducing the equity to $28,500. Finally, the judge found that the Colbys had paid $28,200 in legal fees on defendant's behalf, which the judge likewise determined to be a joint liability, leaving only $300 to be split between them. Judge Domzalski determined that defendant's share of that nominal equity, $150, was to be used to offset any subsequent payments to be made by the Colbys as provided in the judgment of divorce.
On appeal, defendant, now self-represented, claims that he is owed $77,061 as his share of the net equity in the property. As in the parties' divorce where Judge Haas found that despite being ordered to file a case information statement and tax returns, defendant "never provided that, or any other, financial information," he does not have any financial records to counter the detailed accounting presented to the trial court by the Colbys. Instead, he claims Judge Domzalski erred in interpreting the promissory note the parties signed.
Specifically, he claims that the note does not require repayment of any sums advanced by the Colbys before the note was signed or after the judgment of divorce.2 He also claims that the note is void because it is not signed by the Colbys and the conditions for payment of the note have not occurred. None of these claims has any merit.
A promissory note being a contract for the repayment of a debt, we review the trial court's interpretation de novo. See Manahawkin Convalescent v. O'Neill, 217 N.J. 99, 115 (2014).
Defendant's contention that he is owed $77,061 for his share of the equity is based on his claim that the note does not require repayment of sums advanced by the Colbys before it was signed or after the date of the divorce. He has not offered any evidence contesting plaintiff's proofs regarding the sums her parents paid on the parties' behalf; he merely offers a different interpretation of the note the parties signed.
Judge Domzalski, however, rejected defendant's tortured reading based on the clear and unambiguous terms of the document, which expressly refer to sums previously advanced as well as sums to be advanced in the future. In addition, Judge Haas made clear that plaintiff could not provide a home for the children based on her income and defendant's child support, which was calculated on the basis of his unemployment benefits. The only way plaintiff could continue to maintain the children in the home they grew up in was with the continued assistance of her parents in paying the mortgage, real estate taxes and homeowners insurance. Judge Haas anticipated that such assistance would continue until the youngest child graduated from high school in 2017. It was not until that time that defendant could claim his share of whatever equity remained. Judge Domzalski therefore did not err in charging defendant with his share of the mortgage payments made by the Colbys after the date of the divorce and in concluding that whatever nominal equity of defendant remained at the time of the order should be used to offset future payments for taxes and insurance through 2017.
Defendant's remaining arguments as to the enforceability of the note were not raised to the trial court and are thus not properly before us. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). We note only that we are aware of no requirement that the Colbys execute the promissory note in their favor. Cf. Fidelity Union Bank v. United Plastics Corp., 218 N.J. Super. 381, 383 (App. Div. 1987). Defendant's argument that the conditions for repayment of the note have yet to occur is plainly without merit. R. 2:11-3(e)(1)(E). While it is true that there was no successful conclusion of the litigation over his job, defendant was the one to instigate this proceeding to require plaintiff to buy out his interest in the marital home.
1 Judge Haas found that defendant worked for a time as a limousine driver with some sporadic earnings. He was also employed briefly by the State until he lost that job after entry of a domestic violence restraining order.
2 By parsing the note in this fashion, he disclaims any obligation for the approximately $60,000 in mortgage payments the Colbys made before the note was signed and the roughly $67,000 in payments they made after entry of the divorce. He also disclaims any obligation for an additional $21,000 in legal fees for which the Colbys' presented proof of payment in 2004 and 2005.