CARLOS MORALES v. TERESITA MORALES

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

CARLOS MORALES,

Plaintiff-Respondent,

v.

TERESITA MORALES,

Defendant-Appellant.

_____________________________________________________

January 26, 2015

Submitted December 2, 2014 Decided

Before Judges Messano and Hayden.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-0944-06.

Damico, Del Sardo & Montanari, LLC, attorneys for appellant (Michael E. Damico and Jayna B. Patel, on the brief).

Law Office of Federico Velez, attorneys for respondent (Robert J. Michelini, on the brief).

PER CURIAM

In this post-judgment matrimonial matter, defendant Teresita Morales appeals from the September 27, 2013 Family Part order denying her motion to modify the February 2, 2006 judgment of divorce (JOD). For the reasons that follow, we affirm.

Defendant and plaintiff, Carlos Morales, were married in 1987 and had two children, born in 1992 and 1997. On October 24, 2005, plaintiff filed for divorce, seeking child support, sole legal and residential custody, and equitable distribution of the parties' marital assets. Defendant was personally served with the complaint on November 11, 2005. Due to defendant's failure to answer the complaint, the court granted plaintiff's motion to enter a default.

In January 2006, plaintiff filed and served on defendant a Notice of Equitable Distribution, which gave the date of the scheduled default divorce hearing. The notice showed that plaintiff was no longer seeking equitable distribution or child support; rather, he sought to continue the Family Part's April 11, 2005 order1 which granted the parties joint custody of the two children with plaintiff having residential custody and terminated plaintiff's support obligation to defendant. As such, no list of the parties' marital assets or request to distribute them was submitted to the court. On February 2, 2006, the court entered a final JOD, which continued the April 11, 2005 Family Part custody order but did not distribute the parties' marital assets.

On or about June 17, 2013, defendant filed a motion to modify the divorce judgment, seeking equitable distribution of plaintiff's union pension and annuity retirement accounts. In support, defendant claimed that the parties had made an oral arrangement shortly after the entry of the JOD whereby plaintiff promised that he would give defendant half of the monies in his pension and retirement accounts. Plaintiff disputes this and claims that the parties agreed to "keep whatever assets and liabilities [they] had at the time of the divorce." Plaintiff also provided evidence that he had depleted his retirement account due to the past several years of his unemployment.

On September 27, 2013, the trial court denied defendant's motion after oral argument. It held that defendant's motion was time-barred under Rules 4:50-1 and 4:50-2. The trial court reasoned that defendant had "effectively waived her right" to plaintiff's pension and retirement accounts by not raising it either at the default hearing or soon after the JOD was entered, despite the fact that she had proper notice of the hearing and the JOD. The court observed that plaintiff was not required to file a notice of equitable distribution because plaintiff was not seeking equitable distribution but simply a "straight-out judgment of divorce." The court also found that permitting defendant to reopen the judgment of divorce, several years after it was entered, would be "totally inequitable."

I.

On appeal, defendant argues that the trial court erred in not deciding her motion under Rule 4:50-3 as plaintiff committed a fraud on the court by failing to disclose his pension and retirement accounts as marital assets.2 We disagree.

Pursuant to Rule 4:50-1, a court may relieve a party from final judgment or order for considerations such as

(a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under R. 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.

"The rule is 'designed to reconcile the strong interests in finality of judgments and judicial efficiency with the equitable notion that courts should have authority to avoid an unjust result in any given case.'" US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012) (quoting Mancini v. EDS, 132 N.J. 330, 334 (1993)). We review a trial court's decision to grant or deny a Rule 4:50 motion on an abuse of discretion standard. See DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 260-61 (2009). A trial judge abuses his or her discretion when denying relief under the Rule without rational explanation, in departure from established policy, or upon an impermissible basis. US Bank, supra, 209 N.J. at 467 (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007)).

Rule 4:50-2 requires a motion to "be made within a reasonable time, and for reasons (a), (b) and (c) of R. 4:50-1 not more than one year after the judgment, order or proceeding was entered or taken." While the Rule explicitly bars relief when a motion is filed after one year, "the one-year period represents only the outermost time limit for the filing of a motion . . . ." Orner v. Liu, 419 N.J. Super. 431, 437 (App. Div.), certif. denied, 208 N.J. 369 (2011).

Rule 4:50-3 provides that

A motion under R. 4:50 does not suspend the operation of any judgment, order or proceeding or affect the finality of a final judgment, nor does this rule limit the power of a court to set aside a judgment, order or proceeding for fraud upon the court or to entertain an independent action to relieve a party from a judgment, order or proceeding.

When fraud has been committed on the court, Rule 4:50-3 allows relief to "be obtained without limitation as to time." Tara Enters., Inc. v. Daribar Mgmt. Corp., 369 N.J. Super. 45, 52 (App. Div. 2004) (internal quotation marks and citation omitted). A party arguing that a fraud was committed on the court must "demonstrate[], clearly and convincingly, that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system's ability [to] impartially . . . adjudicate a matter by improperly influencing the trier or unfairly hampering the presentation of the opposing party's claim or defense." Triffin v. Automatic Data Processing, Inc., 411 N.J. Super. 292, 298 (App. Div. 2010) (quoting Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989)). Additionally, courts have determined that a fraud on the court may occur where a party commits perjury, whether through oral or written testimony. See Von Pein v. Von Pein, 268 N.J. Super. 7, 15-16 (App. Div. 1993); but cf. Shammas v. Shammas, 9 N.J. 321, 329-30 (1952) (finding that perjured testimony alone is generally not sufficient to set aside a judgment); see also Tara Enters., supra, 369 N.J. Super. at 53.

Here, defendant has failed to establish that plaintiff committed a fraud on the court. While defendant argued before the trial court that plaintiff may have perjured himself during the divorce proceedings, she did not submit any proof to support this allegation. Defendant's reliance on Von Pein is misplaced as that case involved demonstrated and proven fraudulent testimony. No such evidence exists in the record here to support such a claim.

The crux of defendant's argument is that plaintiff committed fraud in failing to comply with then-existing Rule 5:5-2(e)3 by not including a list of the parties' marital assets when he sought a default divorce judgment. We find this argument meritless. We perceive nothing in the Rule that required plaintiff to list the marital assets if he was not seeking equitable distribution at the time of the hearing. As the trial judge pointed out, it is a common occurrence in a default divorce for plaintiffs to forgo equitable distribution, even if originally pled. A party may implicitly or explicitly waive a claim by his or her actions during litigation. See Cole v. Jersey City Med. Ctr., 215 N.J. 265, 277 (2013) (finding waiver where "the circumstances clearly show that the party knew of the right and then abandoned it, either by design or indifference.") (quoting Knorr v. Smeal, 178 N.J. 169, 177 (2003)). Plaintiff's waiver of his original claim of equitable distribution is simply not "some unconscionable scheme calculated to interfere with the judicial system[,]" Triffin, supra, 411 N.J. Super. at 298, and does not amount to fraud on the court under Rule 4:50-3.

II.

Plaintiff also argues that the court correctly determined that it would be inequitable to grant defendant relief because the doctrines of laches and equitable estoppel apply. We agree.

The doctrine of equitable estoppel "is designed to prevent a party's disavowal of previous conduct if such repudiation would not be responsive to the demands of justice and good conscience." Hirsch v. Amper Fin. Servs., LLC, 215 N.J. 174, 189 (2013) (internal citation omitted). To establish equitable estoppel, the party seeking to invoke the doctrine must prove that an opposing party "engaged in conduct, either intentionally or under circumstances that induced reliance, and that [the moving party] acted or changed . . . position to [his or her] detriment." Knorr, supra, 178 N.J. at 178 (citing Miller v. Miller, 97 N.J. 154, 163 (1984)). Notwithstanding the equitable nature of this doctrine, courts do not apply equitable estoppel where a party has effectively slept on his or her rights. See Palatine I v. Planning Bd. of the Twp. of Montville, 133 N.J. 546, 562 (1993), overruled on other grounds, D.L. Real Estate Holdings, L.L.C. v. Point Pleasant Beach Planning Bd., 176 N.J. 126, 135 (2003); see also Dimitrov v. Carlson, 138 N.J. Super. 52, 61 (App. Div. 1975), certif. denied, 70 N.J. 275 (1976) (rejecting the plaintiff's efforts to invoke equitable estoppel because the plaintiff "slept upon [its] rights" without good cause).

The doctrine of laches is another equitable tool that may be "invoked to deny a party enforcement of a known right when the party engages in an inexcusable and unexplained delay in exercising that right to the prejudice of the other party." Knorr, supra, 178 N.J. at 180-81. "Laches may only be enforced when the delaying party had sufficient opportunity to assert the right in the proper forum and the prejudiced party acted in good faith believing that the right had been abandoned." Id. at 181. Several factors that have been used in determining whether the doctrine of laches applies are: (1) the length of the delay; (2) the reasons for the delay; and (3) the "changing conditions of either or both parties during the delay." Ibid. (quoting Lavin v. Bd. of Educ. of the City of Hackensack, 90 N.J. 145, 152 (1982)).

We conclude that defendant's claims are barred by the doctrines of equitable estoppel and laches. As the trial court found, defendant failed to assert her rights to plaintiff's pension and retirement accounts despite knowing of their existence, of the entry of the JOD, and her possible equitable distribution claim. In the seven years since the court entered the JOD, defendant did nothing to effectuate or otherwise protect her right to equitable distribution of plaintiff's accounts. Nor has defendant provided any explanation for why she waited so long to assert her rights. Additionally, plaintiff has established prejudice by defendant's failure to act as he detrimentally relied on defendant's lack of action and has nearly depleted the annuity retirement account.

In sum, the record amply supports the trial court's denial of defendant's motion. We conclude that there was no abuse of discretion and we perceive no reason to disturb the trial court's order.

Affirmed.

1 Entered under docket number FD-07-9046-93.

2 Defendant did not clearly raise the issue of Rule 4:50-3 before the trial court, but argues that she presented facts and arguments that demonstrated a fraud on the court.

3 Rule 5:5-2(e) (2007) provided that

where equitable distribution, alimony, child support and other relief are sought and a default has been entered, the plaintiff shall file and serve upon the defaulting party . . . A Notice of Application for Equitable Distribution, Alimony, Child Support, and Other Relief . . . . The notice shall include . . . a statement of the value of each asset and the amount of each debt sought to be distributed, [and] a proposal for distribution . . . .