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March 6, 2017


Submitted January 31, 2017 Decided

Before Judges Messano and Guadagno.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Atlantic County, Docket No. FM-01-0828-10.

Richard A. Renza, Jr., attorney for appellant.

Respondent has not filed a brief.


In June 2011, plaintiff Joseph A. Foley and defendant Linda J. Foley executed a property settlement agreement (PSA) in conjunction with their anticipated divorce.1 Plaintiff agreed to pay permanent alimony, and, as part of the equitable distribution of marital assets, he agreed to convey his interests in the home the parties owned in Mt. Laurel to defendant, and defendant agreed to convey her interests in a home the parties owned in Brigantine to plaintiff.

The Mt. Laurel home was encumbered by a first mortgage with Wells Fargo with an outstanding principal balance of $101,000, and a home equity line of credit (HELOC) with Bank of America (BOA) with an outstanding principal balance of $170,000. Plaintiff agreed to be solely responsible for payments on the HELOC until he made a lump sum payment of $75,000 to defendant. That payment was to be made within fifteen months, and, upon making the payment, defendant would refinance the Mt. Laurel home within three months and pay off the mortgage and BOA HELOC. The PSA provided that if defendant could not refinance the home, she was thereafter to list it for sale immediately.

In July 2015, plaintiff filed a motion seeking to be relieved of making the $75,000 lump sum payment, citing an unforeseen circumstance, namely, BOA's class action settlement with the United States Department of Justice (DOJ). As a result of the settlement, the HELOC was forgiven. Plaintiff argued it was inequitable and would result in a windfall to defendant if he was still obligated to pay her $75,000 as required by the PSA.

Defendant's certification painted a different picture. She noted that plaintiff failed to pay $75,000 as required by the PSA, failed to make timely payments of alimony, failed to pay other obligations under the PSA and failed to pay her counsel fees resulting from numerous motions to enforce her rights, all of which resulted in foreclosure of the Mt. Laurel home. The BOA settlement was a result of the foreclosure. Further, defendant stated she would be responsible for the tax consequences of the loan forgiveness.

The Family Part judge heard argument on plaintiff's motion. Although plaintiff never cited Rule 4:50-1 (the Rule) as a basis for his request, the judge analyzed the motion within that framework. He found plaintiff had failed to comply with the terms of the PSA and came into court with "unclean hands." The judge noted the PSA required plaintiff to pay $75,000 to defendant before she had any obligation to refinance the Mt. Laurel home, and plaintiff failed to make that payment. The judge found the payment was plaintiff's "separate obligation." The judge denied plaintiff's motion by conforming order filed on October 9, 2015. This appeal followed.

Before us, plaintiff argues the judge "fail[ed] to utilize" the Rule to "modify" the PSA. In particular, he contends subsection (e) and (f) of the Rule apply. We disagree and affirm.

Rule 4:50-1 permits a court to relieve a party of a final judgment or order because

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 [] any other reason justifying relief . . . .

[R. 4:50-1(e) and (f).]

"Although courts are empowered to confer absolution from judgments, '[r]elief [under this rule] is granted sparingly.'" DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 261 (2009) (alteration in original) (quoting F.B. v. A.L.G., 176 N.J. 201, 207 (2003)). "On appellate review, the trial judge's determination 'will be left undisturbed unless it represents a clear abuse of discretion.'" Ibid. (quoting Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994)).

Subsection (e) is essentially "rooted in changed circumstances that call the fairness of the judgment into question." Id. at 265-66. The subsection requires the moving party to demonstrate inequity resulting from continued enforcement. Id. at 269.

"No categorization can be made of the situations which would warrant redress under subsection (f). . . . [T]he very essence of (f) is its capacity for relief in exceptional situations. And in such exceptional cases its boundaries are as expansive as the need to achieve equity and justice." Id. at 269-70 (quoting Court Inv. Co. v. Perillo, 48 N.J. 334, 341 (1966) (citation and emphasis omitted)).

In this case, while BOA's settlement with DOJ was unforeseen when the parties executed the PSA, plaintiff's obligations to continue to pay the HELOC and to pay defendant $75,000 within fifteen months were not. Those were separate and distinct from defendant's agreement to refinance the home, which was conditioned upon receipt of plaintiff's $75,000. Plaintiff never made the payment.

Additionally, under subsection (e), plaintiff was required to demonstrate the inequity of the prospective obligation to pay defendant $75,000. The judge carefully considered the respective equities of the situation and correctly concluded plaintiff failed to demonstrate he was entitled to relief.

The relief accorded by subsection (f) "is limited to 'situations in which, were it not applied, a grave injustice would occur.'" US Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 484 (2012) (quoting Little, supra, 135 N.J. at 289). Requiring plaintiff to pay defendant the money he agreed to pay her does not result in any injustice.

Lastly, even though he has not raised the argument, for all the reasons expressed by the judge, we conclude plaintiff failed to establish that the BOA settlement was a changed circumstance requiring modification of the PSA. See, e.g., Lepis v. Lepis, 83 N.J. 139, 148-49 (1980) (recognizing inherent power to modify consensual agreements so they remain "fair and equitable" based on changed circumstances).


1 The record fails to reveal when the judgment of divorce was actually filed.

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