ALEXANDRA DALEY v. ERIC DALEY

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

ALEXANDRA DALEY,

Plaintiff-Respondent,

v.

ERIC DALEY,

Defendant-Appellant.

_________________________________

September 25, 2015

Before Judges Alvarez and Haas.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-1271-07.

Bonnie C. Frost argued the cause for appellant (Einhorn, Harris, Ascher, Barbarito & Frost, P.C., attorneys; Ms. Frost and Linda Mainenti-Walsh, on the brief).

Sharon Bittner Kean argued the cause for respondent.

PER CURIAM

In this post-judgment matrimonial matter, defendant appeals from the July 11, 2013 order of the Family Part granting plaintiff's motion to enforce and amend a provision of the parties' Property Settlement Agreement (PSA) dealing with the funding of their children's college education. Plaintiff also appeals from the court's October 7, 2013 order denying his motion for reconsideration, and granting plaintiff's request that the parties equally share the cost of their children's private school tuition for the seventh and eighth grades. We affirm in part, reverse in part, and remand for further proceedings.

I.

The parties were married in August 1995 and divorced in May 2007. They have two children. The Dual Judgment of Divorce incorporated the parties' PSA. The present appeal concerns two provisions of the PSA, which we will address in turn.

A.

Paragraph four of the parties' PSA stated

4. College Education of Children. It is specifically understood and agreed by the [p]arties that they both have an obligation to provide for the college education of their children. [Defendant] agrees to contribute (deposit) $300 per child per month to each child's 529 College Savings Plan. [Plaintiff] shall have access to these accounts so that if she is able, she may also contribute to these funds. [Plaintiff's] contributions do not, in any way, diminish [defendant's] responsibilities for monthly deposits. An annual copy of the 529 Fund Balance shall be provided to [plaintiff] each February. The [p]arties agree to consult with a view toward adopting a harmonious policy concerning the college education of the children. Any dispute in this regard shall be resolved by a court of competent jurisdiction upon application properly made.

In her May 2013 motion to enforce and amend this provision of the PSA, plaintiff alleged that defendant failed to provide her with complete copies of the annual fund balances and failed to make all of the required monthly payments to the children's accounts. She also asserted that defendant made numerous unauthorized withdrawals from the accounts and had used these monies for his own personal expenses.

In response to plaintiff's motion, defendant admitted that, between 2009 and 2013, he had withdrawn approximately $33,000 from the accounts, but had repaid this sum before plaintiff filed her May 2013 motion. However, defendant also stated that, in February 2008, he withdrew $29,100 to pay his federal and State taxes, and he had not yet repaid that money to the accounts. While defendant stated that "the 529 accounts have been, and shall remain an asset that is for the benefit of our children," he alleged that, as the "owner" of the funds, he was "not prevented from making necessary withdrawals from the accounts" to pay for his personal expenses and his support obligations under the PSA. Thus, although defendant acknowledged he was obligated to contribute to the accounts and ensure that the money was available to pay for the children's college expenses, he still insisted that "nothing, either in the [PSA] or in the tax code, prevents [him] from making withdrawals if there is the necessity to do so, and nothing dictates the timing that [he] must replenish the accounts."

In her motion, plaintiff asked that she be named the custodian of the accounts so that defendant could not make future withdrawals in order to safeguard the funds for the children. Following oral argument, the trial judge agreed that defendant should no longer be in charge of the children's 529 accounts. In explaining her ruling, the judge stated

In the present matter, it is clear that the intention of both parties was to secure the children's financial ability to attend the colleges of their choice, despite whatever change in finances the parties may experience from the time of the divorce up to the time the children are finished with college. Defendant's actions are contrary to the stated intent of the PSA. His surreptitious nature in hiding the withdrawals from . . . [p]laintiff, despite an obligation in the PSA to disclose account activity, is testament that he knew he should not be withdrawing monies from the children's accounts. Defendant admits that he has failed to replenish a $29,100 withdrawal from five years ago. If not for [p]laintiff's motion, he had no date by which to redeposit this amount and, given his claims that the withdrawals were due to financial hardships, [d]efendant may not have been able to replenish these accounts when the children went to college.

Thus, the judge ordered that plaintiff be named the custodian of the children's 529 accounts and that defendant repay the $29,100 he had withdrawn within thirty days.

Plaintiff also asked that paragraph four of the PSA be amended to add additional terms she believed would "clarify intent, [and] establish policy and objectives concerning future disbursement of funds . . . ." Without explaining in her statement of reasons attached to the July 11, 2013 order why these amendments were necessary to enforce defendant's obligations under the PSA, the judge granted plaintiff's request and ordered that paragraph four

be amended to include the following language: (1) The Daley parents agree that they have an obligation to provide financially for the college education of their children; (2) A tax advantaged 529 College Savings [Plan] has been established for each of the children for the express purpose of funding all (or as much as possible) of their qualified secondary (college and post[ ]graduate)[1] education expenses; (3) These savings plans have been established with the financial objective of eliminating or minimizing additional expenses for parents or children at the time of their actual entry into college; (4) In an ideal environment, the funds accumulated in the individual 529 College Savings Plan will be totally exhausted by legitimate/qualified secondary educational expenses; (5) The Daley children, with guidance and assistance from their parents, family, school counselors, teachers and others, should be entirely free to attend (provided they meet the admission standards) the secondary educational institution of their choice; (6) The Daley parents agree the existence of these 529 Plans or the accumulated value of them is NOT to be used for the purpose of directing or controlling the location of or the specific secondary institution (college) the children attend or for any non-educational purpose; (7) The Husband agrees to contribute (deposit) $300 per child per month to each child's 529 College Savings Plan. This obligation ceases for each child upon high school graduation or attainment of the age of 18, whichever comes sooner. The Wife may contribute from time to time depending on her ability and at her discretion. Wife's contributions do not, in any way, diminish the Husband's responsibilities for monthly deposits; (8) Custody of these accounts shall reside with the Wife until each child reaches age 25 upon which ownership and any remaining balance shall be transferred to the Husband; and (9) Any dispute with regard to the policy and objectives outlined in this section or their administration shall be resolved by a court of competent jurisdiction upon application properly made.

B.

At the time of the parties' divorce in May 2007, their children attended a parochial school which only went up to the sixth grade. In addition to the regular monthly child support payments, defendant agreed in paragraph three of the PSA to "pay 100% of the tuition for [this school] (or an equivalent amount to a similar Catholic grammar school if the children should transfer." (emphasis omitted). In 2009, the school added a seventh and eighth grade.

In her May 2013 motion, plaintiff asked that defendant be ordered to pay tuition for both children through the eighth grade. Defendant objected to doing so, stating that he only agreed to pay tuition up to the completion of the sixth grade. The judge did not conduct an evidentiary hearing to assist in determining the parties' intent, but found, in her July 11, 2013 order, that because the PSA stated "that payment will be made for 'grammer [sic] school' and not middle school[,]" defendant was not obligated to pay tuition for the seventh and eighth grades.

C.

Defendant and plaintiff each filed motions for reconsideration. Defendant again objected to turning custody of the 529 accounts over to plaintiff and asked that he be permitted to remain in control of these funds. Plaintiff asked that paragraph four of the PSA be amended further to include other provisions not set forth in the PSA. The judge denied both motions, finding that the parties failed to raise any new arguments not previously considered by her.

Although not set forth in her notice of motion, plaintiff's certification in support of her motion for reconsideration also contained a request that defendant pay for half of the children's parochial school tuition for the seventh and eighth grades. Again without conducting an evidentiary hearing on this issue, the judge granted plaintiff's request, stating that it was "an equitable solution[.]" This appeal followed.

II.

On appeal, defendant asserts that the judge erred by: placing plaintiff in charge of the children's 529 accounts in order to enforce paragraph four of the PSA; amending paragraph four to include terms concerning the use of the funds by the children and the college selection process that were not in the original PSA; and requiring the parties to equally share the cost of the children's tuition for the seventh and eighth grades.

The scope of our review of the Family Part's orders is limited. Cesare v. Cesare, 154 N.J. 394, 411 (1998). We owe substantial deference to the Family Part's findings of fact because of that court's special expertise in family matters. Id. at 413. Thus, "'[a] reviewing court should uphold the factual findings undergirding the trial court's decision if they are supported by adequate, substantial and credible evidence on the record.'" MacKinnon v. MacKinnon, 191 N.J. 240, 253-54 (2007) (alteration in original) (quoting N.J. Div. of Youth & Family Servs. v. M.M., 189 N.J. 261, 279 (2007)).

While we owe no special deference to the judge's legal conclusions, Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995), "we 'should not disturb the factual findings and legal conclusions of the trial judge unless . . . convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice' or when we determine the court has palpably abused its discretion." Parish v. Parish, 412 N.J. Super. 39, 47 (App. Div. 2010) (quoting Cesare, supra, 154 N.J. at 412). We will only reverse the judge's decision when it is necessary to "'ensure that there is not a denial of justice' because the family court's 'conclusions are [] "clearly mistaken" or "wide of the mark."'" Id. at 48 (alteration in original) (quoting N.J. Div. of Youth & Family Servs. v. E.P., 196 N.J. 88, 104 (2008)).

With regard to the enforcement of a PSA, Rule 1:10-3 "provide[s] a mechanism, coercive in nature, to afford relief to a litigant who has not received what a Court Order or Judgment entitles that litigant to receive." D'Atria v. D'Atria, 242 N.J. Super. 392, 407 (Ch. Div. 1990).2 "The particular manner in which compliance may be sought is left to the court's sound discretion." Bd. of Educ. of Middletown v. Middletown Twp. Educ. Ass'n, 352 N.J. Super. 501, 509 (Ch. Div. 2001).

Applying these standards, we discern no basis for disturbing the judge's decision to place plaintiff in charge of the children's 529 accounts in order to enforce the provisions of paragraph four of the PSA and ensure that the funds would be available for their college education. Although defendant was the "owner" of the accounts, the PSA required him to make regular monthly payments into each child's account.

Nothing in the PSA indicates that the parties ever intended that defendant could periodically withdraw funds from the accounts to pay his personal expenses, thus endangering the security of the funds for the children. As defendant expressly stated in response to plaintiff's enforcement motion, "the 529 accounts have been, and shall remain an asset that is for the benefit of [the] children[.]" Yet, he continued to assert that he could withdraw monies from the accounts whenever he wished and could decide when to replenish these funds. He also failed, for over five years, to repay $29,100 in withdrawn funds to the accounts. Under these circumstances, we conclude that the judge did not abuse her discretion in ordering that plaintiff replace defendant as the custodian of the children's 529 accounts.

We reach a different conclusion, however, with regard to the judge's decision to amend paragraph four of the PSA to include additional provisions regarding the children's future college education. Among other things, the amendments required that the 529 accounts be used to fund "all (or as much as possible)" of the children's college expenses and be "totally exhausted" for this purpose; stated that the children would be "entirely free to attend (provided they meet the admission standards) the secondary education institution of their choice"; and provided that the "existence of these 529 Plans" or their "accumulated value" would not be used by the parties to direct or control the children's college choices. None of these provisions were included in the PSA and none were necessary to ensure the continued financial viability of the funds. Instead, they addressed new issues which were either not contemplated by the parties at the time of their divorce or considered and not adopted by them.

It is well established that "once the parties have reached an agreement, no court may create a 'new or better' contract for them." Aarvig v. Aarvig, 248 N.J. Super. 181, 185 (Ch. Div. 1991) (quoting Commc'n Workers of Am., Local 1087 v. Monmouth Cnty. Bd. of Soc. Servs., 96 N.J. 442, 452 (1984)). Moreover, "when the parties and their attorneys have bargained at arm's length and there is no showing of unfairness, the trial court should not supply terms" to a PSA. Berkowitz v. Berkowitz, 55 N.J. 564, 569 (1970). The parties could have included provisions in the PSA, like those the judge added at plaintiff's request but they did not. Thus, the judge mistakenly amended the PSA to include the new terms plaintiff requested. Therefore, we reverse this portion of the judge's decision.

Finally, we conclude that the judge incorrectly ordered the parties to equally share the cost of the children's private school tuition for the seventh and eighth grades. While plaintiff insisted that the parties were always aware that the children's school would expand to include the seventh and eighth grades, defendant alleged the parties specifically agreed to limit his obligation to paying only up to the sixth grade for each child. Because of this factual dispute, an evidentiary hearing was required in order to address the parties' competing contentions on this point. See Hand v. Hand, 391 N.J. Super. 102, 105 (App. Div. 2007). We therefore remand this issue to the trial court for this purpose.3

Affirmed in part; reversed in part; and remanded for further proceedings. We do not retain jurisdiction.

1 The parties subsequently agreed that "the modified terms of the PSA shall apply to college only and not any post-graduate education."

2 The D'Atria opinion refers to R. 1:10-5, but that rule has been amended and re-designated as R. 1:10-3. Pressler & Verniero, Current N.J. Court Rules, note on R. 1:10-3 (2015).

3 Defendant also asserts that the judge "erred in setting forth relief in its statement of reasons inconsistent with or not reflected in its July or October orders." We disagree. The judge's orders specifically incorporated the statement of reasons appended to each order, and the judge's rulings were therefore clear.