MICHAEL KRISS v. RITA KRISS
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APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3255-15T3
MICHAEL KRISS,
Plaintiff-Appellant,
v.
RITA KRISS,
Defendant-Respondent.
_________________________________
Argued February 15, 2018 – Decided March 5, 2018
Before Judges Haas, Rothstadt and Gooden
Brown.
On appeal from Superior Court of New Jersey,
Chancery Division, Family Part, Bergen County,
Docket No. FM-02-0129-12.
Steven M. Resnick argued the cause for
appellant (Ziegler & Zemsky, LLC, attorneys;
Steven M. Resnick, on the briefs).
Celine Y. November argued the cause for
respondent (November & Nunnink, LLC,
attorneys; Kate L. Hubschman, on the brief).
PER CURIAM
Plaintiff appeals from the June 28, 2013 Family Part order,
entered after a thirteen-day plenary hearing, which declared the
parties' 2004 reconciliation agreement void due to its
unconscionable terms, and ordered plaintiff to pay defendant's
counsel fees. Plaintiff also appeals from the provisions of the
March 7, 2016 Dual Final Judgment of Divorce (FJOD), rendered
following a seventeen-day trial, which, among other things,
granted defendant open durational alimony, equitable distribution
of plaintiff's business and a money market account, and additional
counsel fees. We affirm substantially for the reasons set forth
in the comprehensive decisions rendered by the trial judges who
presided over each proceeding.1
I.
The parties are fully familiar with the procedural history
and facts of this case and, therefore, they will not be repeated
in detail in this opinion. The parties were married in the Ukraine
in June 1982, and moved to the United States in 1988. They have
one child, who is emancipated.
During the marriage, plaintiff worked in various marble and
stone businesses until 2001, when he formed Krisstone, LLC
(Krisstone), a construction contracting company that specialized
in tile and stone masonry work. When he began the business,
1
Judge Lisa Firko conducted the plenary hearing concerning the
enforceability of the Agreement, while Judge Ronny Jo Siegal
handled the trial that resulted in the FJOD.
2 A-3255-15T3
plaintiff owned 50% of Krisstone through a separate corporation.
In 2006, he became the company's sole owner. Defendant worked as
a bookkeeper.
In 1998, plaintiff filed a complaint for divorce, but withdrew
it a couple of months later. Thereafter, plaintiff decided that
the parties should close their joint bank accounts, and become
"financially separated," with each depositing their income into
their own checking accounts. Plaintiff paid the mortgage and
household expenses, while defendant paid for food and her own
personal expenses.
In 2003, plaintiff filed a second divorce complaint.
Defendant wanted the family to remain intact, and begged plaintiff
to drop his complaint. He stated that he would do so if she would
sign the Agreement, which plaintiff's attorney drafted with no
input from, or negotiation with, defendant's attorney.
Under the terms of the Agreement, defendant had to give up
any interest in Krisstone as a condition for maintaining the
marriage. In addition, the Agreement required her to waive alimony
if the parties later divorced. In the Agreement, plaintiff
promised "to pay for all carrying expenses associated with the
[marital home] until it is otherwise disposed of, which expenses
shall include, without limitation, the mortgage, property taxes,
basic utilities, and reasonable and necessary repairs and
3 A-3255-15T3
maintenance." Defendant signed the Agreement against the advice
of her attorney and without fully reading it.
Immediately thereafter, plaintiff ordered defendant to resume
paying half of the mortgage on the marital home, together with
half of the insurance and maintenance costs. Defendant complied
with this directive. With the exception of the well-appointed
basement portion of the house where plaintiff spent most of his
time and which he renovated to suit his needs, the home thereafter
fell into disrepair. Defendant did not have a working bathroom
for approximately one year and she and the parties' child had to
take showers at the houses of their friends and neighbors.
In July 2011, plaintiff filed his third complaint for divorce,
which resulted in the two orders that are the subject of
plaintiff's appeal. Before proceeding to discuss the specific
arguments he raises on appeal, we set forth our standard of review.
The scope of our review of the Family Part's orders is
limited. We owe substantial deference to the Family Part's
findings of fact because of that court's special expertise in
family matters. Cesare v. Cesare,
154 N.J. 394, 411-12 (1998).
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
4 A-3255-15T3
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 will not disturb the judge's "'factual
findings and legal conclusions . . . 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,
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)).
II.
Turning to the issues raised by plaintiff, we begin with the
denial of his cross-motion to enforce the Agreement, which he
filed in response to defendant's motion to compel production of
plaintiff's financial records.
After defendant filed a motion to compel the production of
plaintiff's financial records, plaintiff cross-moved to enforce
5 A-3255-15T3
the Agreement. Defendant opposed the cross-motion, arguing that
the Agreement should be declared void.
In considering the parties' motions, Judge Firko applied the
six-factor test we established in Nicholson v. Nicholson,
199 N.J.
Super. 525, 531 (App. Div. 1985), the seminal case governing the
enforcement of reconciliation agreements. In Nicholson, we stated
that courts "must proceed with care" when enforcing reconciliation
agreements "where the consideration for a spousal promise is said
to be the willingness of the other spouse to continue the
marriage." Ibid. We also identified six factors for courts to
consider when deciding whether to enforce reconciliation
agreements: (1) whether the marital rift was substantial when the
promise to reconcile was made; (2) whether the agreement complied
with the statute of frauds; (3) whether the circumstances under
which the agreement was entered into were fair to the party
charged; (4) whether the agreement's terms were conscionable when
it was made; (5) whether the party seeking enforcement acted in
good faith; and (6) whether changed circumstances rendered literal
enforcement inequitable. Id. at 532.
At the plenary hearing, defendant testified that plaintiff
never provided her with any tax returns or documents relating to
Krisstone, and never disclosed his income to her. She repeatedly
stated that she had been willing to "do anything" plaintiff asked
6 A-3255-15T3
in order to keep the family together. While defendant engaged an
attorney, who advised her not to sign the Agreement, defendant
ignored that advice.
Defendant's attorney testified that plaintiff and his
attorney did not provide him with any information from which he
could determine the value of the family's expenses, assets, or
liabilities. Plaintiff did submit a Case Information Statement,
but it was incomplete, and did not contain any valuation for
Krisstone.
Plaintiff testified that the Agreement was his idea and that
every time defendant asked him to return to the marital bedroom,
he asked her when she would sign the Agreement. He admitted that
Krisstone was very profitable, earning millions of dollars through
large commercial projects, including several shopping malls.
Plaintiff claimed that he and defendant orally agreed to modify
the Agreement after it was signed to require her to pay 50% of the
carrying costs on the marital home.2 The parties stipulated to
the admission of a joint expert report that set the value of
plaintiff's interest in Krisstone at $500,000 as of April 2004,
when the Agreement was signed.
2
However, Paragraph 32 of the Agreement stated that "no
modification" of the Agreement "shall be valid unless same is
freely and voluntarily entered into in writing and duly executed
by the parties in the same form and manner as [the] Agreement."
7 A-3255-15T3
Judge Firko found defendant's testimony credible, and
plaintiff's account much less so. She concluded that the
Agreement's terms governing the equitable distribution of
Krisstone and defendant's waiver of alimony were unconscionable
and that defendant signed the Agreement under duress, as she
"honestly[] testified that she would have signed anything to save
the marriage."
On appeal, defendant argues in Point I that "the trial court
should have enforced the . . . Agreement." Applying our
deferential standard of review, we reject this contention and
affirm substantially for the reasons set forth in Judge Firko's
thoughtful oral opinion. Cesare,
154 N.J. at 412. We add the
following comments.
Judge Firko's declaration that the Agreement was "void ab
initio" was plainly supported by substantial credible evidence in
the record as viewed through the prism of the Nicholson factors.3
The circumstances at the time plaintiff presented the Agreement
to defendant were certainly not fair to defendant under factor
three of the Nicholson test. As we stated in Orgler v. Orgler,
3
As to factors one and two, the parties agreed there was a
substantial rift in the marriage and that the Agreement complied
with the statute of frauds.
8 A-3255-15T3
237 N.J. Super. 342, 349 (App. Div. 1989), a case involving an
antenuptial agreement:
[A]n essential precondition to the validity
of such an agreement is ". . . [sic] full
disclosure by each party as to his or her
financial conditions, including the nature and
extent of assets, income, and anything else
which might bear on the other party's
conclusion that the proposed agreement is
fair, and his or her decision to enter into
the agreement."
[Ibid. (quoting Marschall v. Marschall, 195
N.J. Super. 16, 29 (Ch. Div. 1984)).]
Here, the judge found that plaintiff did not provide defendant
with full financial disclosure relative to his income or the value
of Krisstone before she signed the Agreement. As a result, the
judge concluded "[t]here was insufficient information for
defendant to make a permanent waiver of alimony in a case [that]
could be a permanent alimony case" and that defendant had no
"opportunity to ascertain and become acquainted with the income
of [plaintiff's] business" before waiving her right to equitable
distribution of Krisstone.
Plaintiff argues that defendant cannot complain about the
terms of the Agreement because she was represented by an attorney
when he presented it to her. However, although defendant received
advice from her attorney, that advice was clearly not "meaningful"
9 A-3255-15T3
absent a full disclosure of the value of Krisstone and plaintiff's
"true financial worth." Orgler,
237 N.J. Super. at 350.4
Moreover, the record fully supports Judge Firko's conclusion
that defendant signed the Agreement under duress and "was
intimidated by plaintiff into signing the . . . Agreement with the
threat of a pending divorce complaint looming over her." As the
judge found, defendant signed the Agreement "all in an effort to
save the marriage. She was not dealing with reality. This was
just a process that she had to do to satisfy her husband to dismiss
the complaint for divorce. She, clearly, was not rational."
For similar reasons, the judge properly found that factor
four of the Nicholson test weighed in favor of invalidating the
Agreement because its terms as to alimony and equitable
distribution were unconscionable at the time they were made and
at the time plaintiff sought enforcement. In light of the lack
of full financial disclosure at the time the Agreement was
executed, it was neither fair nor equitable to bar defendant from
receiving alimony in this long-term marriage or equitable
distribution of the parties' assets, including Krisstone.
Judge Firko's finding that plaintiff did not act in good
faith under the fifth Nicholson factor also finds strong support
4
Indeed, the attorney told defendant that the Agreement was
inequitable for these very reasons.
10 A-3255-15T3
in the record. After plaintiff obtained defendant's signature on
the document, he immediately violated the provision that required
him to pay all of the carrying costs of the home. He ordered
defendant to resume paying half of the mortgage and insurance
costs, and he allowed the portion of the home where defendant and
the parties' child lived to fall into disrepair to the point where
it became virtually unlivable for a time.5
Finally, even if the Agreement had been fair at its inception,
circumstances had changed by the time of plaintiff's third
complaint for divorce so as to render enforcement inequitable
under the sixth Nicholson factor. By that time, plaintiff had
assumed sole ownership of Krisstone and the value of the company
had nearly doubled in value, from $500,000 to $900,000.
In sum, Judge Firko's findings and conclusions relative to
the Nicholson factors are supported by substantial, credible
evidence. We therefore affirm her determination that the Agreement
was unenforceable.
5
Contrary to plaintiff's argument in Point II, the record does
not support his claim that the parties orally modified the terms
of the Agreement at defendant's request to require her to make
these payments. The judge found that defendant credibly testified
she never asked plaintiff to modify the Agreement in this fashion,
and that he "made her" make the payments.
11 A-3255-15T3
III.
In Point III, plaintiff argues that "no alimony should have
been awarded to" defendant. We disagree.
With regard to alimony, a trial judge must consider and weigh
thirteen statutory factors in determining whether an award of
alimony is appropriate, and the amount and duration of any such
award. Gnall v. Gnall,
222 N.J. 414, 429 (2015);
N.J.S.A. 2A:34-
23(b). Alimony findings will not be disturbed on appeal unless
the trial court either "clearly abused its discretion," or "failed
to consider all of the controlling legal principles," or "made
mistaken findings, or reached a conclusion that could not
reasonably have been reached on sufficient credible evidence
present in the record after considering the proofs as a whole."
J.E.V. v. K.V., 426 N.J. Super. 475, 485 (App. Div. 2012).
"Substantial weight should be given to the judge's observations
of the parties' demeanor and credibility." Ibid.
Judge Siegal thoroughly considered each of the statutory
factors in her written decision, and ordered plaintiff to pay
defendant $42,000 per year in open durational alimony. As the
judge noted, this was a long-term, twenty-nine year marriage.
According to the parties' joint forensic expert, plaintiff earned
$192,307 per year before taxes, while defendant earned
approximately $70,000. The judge found that the parties' marital
12 A-3255-15T3
lifestyle totaled $13,288 net per month, or $159,456 net per year.
Based upon these calculations, the judge determined that plaintiff
had the clear financial ability to pay defendant alimony in order
to meet her demonstrated need. In so ruling, Judge Siegal rejected
plaintiff's claim that the parties did not have a "marital
lifestyle" because they each paid for their own expenses during
the marriage, finding that plaintiff's assertion was simply "not
credible."
After reviewing the record, we conclude that Judge Siegal's
factual findings are fully supported and, in light of those facts,
her legal conclusions are unassailable. We therefore affirm the
alimony award substantially for the reasons that the judge
expressed in her well-reasoned opinion.
IV.
In Point IV, plaintiff next argues that Judge Siegal erred
when she granted equitable distribution of Krisstone and one of
his money market accounts to defendant. Again, we disagree.
A trial judge must evaluate sixteen factors in determining
how the parties' assets should be equitably distributed.
N.J.S.A.
2A:34-23.1. The judge must also make "specific findings of fact
on the evidence relevant to all issues pertaining to . . .
equitable distribution, including specifically, but not limited
to, the factors" listed in the statute. Ibid.
13 A-3255-15T3
"Where the issue on appeal concerns which assets are available
for distribution or the valuation of those assets, . . . the
standard of review is whether the trial judge's findings are
supported by adequate credible evidence in the record." Borodinsky
v. Borodinsky,
162 N.J. Super. 437, 443-44 (App. Div. 1978).
"However, where the issue on appeal concerns the manner in which
allocation of the eligible assets is made," a reviewing court
"determine[s] whether the amount and manner of the award
constituted an abuse of the trial judge's discretion." Id. at
444.
Applying these standards, we conclude that the trial court
neither erred in identifying or valuing Krisstone and the money
market account as assets subject to equitable distribution, nor
abused her discretion in their allocation. Judge Siegal devoted
over thirty-five pages of her eighty-one page written decision to
a discussion of the equitable distribution factors as applied to
the information provided by the parties and their joint forensic
expert at the trial.
Turning first to plaintiff's business, the uncontradicted
expert testimony, which the judge found was "sound and credible,"
demonstrated that plaintiff's 100% ownership interest in Krisstone
was valued at $900,000 as of December 31, 2010. After applying
the statutory factors, the judge determined that defendant was
14 A-3255-15T3
entitled to one-third of Krisstone's value, $300,000, as her
equitable share of the business. The judge further ordered that
this amount should "be credited against what [p]laintiff owes
[d]efendant for her retention of the marital residence[.]"
The judge properly rejected plaintiff's argument that
Krisstone was only worth about $200,000. As noted above, the
joint expert's valuation was uncontradicted and, in arguing
otherwise, plaintiff failed to submit any competent documentation
supporting his assertion that the value of the company was falling.
Therefore, we detect no basis for disturbing Judge Siegal's
determination on this point.
Plaintiff next argues that his Valley National Bank money
market account (MMA) should not have been subject to equitable
distribution because it contained "actual business funds" and "no
longer existed" at the time of the trial. However, the record
simply does not support plaintiff's claim.
At trial, plaintiff stipulated that he owned the MMA as of
July 12, 2011, and that it contained $153,400. Judge Siegal
rejected plaintiff's assertion that this account was used solely
for business reasons because documentation submitted at trial
demonstrated that plaintiff used it for personal purposes. For
example, plaintiff took $100,000 from the MMA to give the parties'
child a loan, removed $10,000 to establish a college fund for
15 A-3255-15T3
their grandchild, and withdrew additional amounts for litigation-
related expenses. Immediately after the judge ordered plaintiff
to access money in the MMA for the parties' joint legal expenses,
plaintiff removed at least $50,000 from it for his own use. Under
these circumstances, Judge Siegal properly determined that the MMA
was a marital asset subject to equitable distribution and ordered
that the parties equally share it.
Therefore, we affirm Judge Siegal's equitable distribution
determinations.
V.
Finally, plaintiff argues in Point V that both judges
incorrectly ordered him to pay counsel fees.6 This argument also
lacks merit.
The award of fees and costs in matrimonial matters is left
to the discretion of the trial court; reversal is only appropriate
when the trial court has abused its discretion, exceeded its
authority, or made a determination that is not supported by the
record. Mani v. Mani,
183 N.J. 70, 94-95 (2005) (citing Williams
v. Williams,
59 N.J. 229, 233 (1971)). It "is warranted only when
6
Judge Firko ordered plaintiff to pay defendant $76,710.07 in
counsel fees following the plenary hearing on the enforceability
of the Agreement. Judge Siegal ordered plaintiff to pay defendant
$40,200 in counsel fees incurred by her in connection with the
trial in the dissolution case.
16 A-3255-15T3
a mistake must have been made because the trial court's factual
findings are 'so manifestly unsupported by or inconsistent with
the competent, relevant and reasonably credible evidence as to
offend the interests of justice[.]'" Reese v. Weis,
430 N.J.
Super. 552, 567 (App. Div. 2013) (quoting Rova Farms Resort, Inc.
v. Investors Ins. Co.,
65 N.J. 474, 484 (1974)).
"New Jersey does not subscribe to a system that 'loser pays.'
Statutory provisions,
N.J.S.A. 2A:34-23, court rules, R. 5:3-5(c),
R. 4:42-9(a), and interpretative case law, see, e.g., [Mani,
183 N.J. at 94-95], clearly outline necessary considerations when
imposing a counsel fee award." Ricci v. Ricci,
448 N.J. Super.
546, 580 (App. Div. 2017). In exercising its discretion, the
trial court must abide by
N.J.S.A. 2A:34-23, requiring
consideration of "the factors set forth in the court rule on
counsel fees, the financial circumstances of the parties, and the
good or bad faith of either party." Mani,
183 N.J. at 94 (quoting
N.J.S.A. 2A:34-23). If the court performs its obligation under
the statute, and we conclude there is "satisfactory evidentiary
support for the trial court's findings, '[our] task is complete
and [we will] not disturb the result, even though [we] . . . might
have reached a different conclusion were [we] the trial tribunal.'"
Reese,
430 N.J. Super. at 568 (quoting Beck v. Beck,
86 N.J. 480,
496 (1981)).
17 A-3255-15T3
Applying these principles, we are satisfied that both judges
properly granted defendant's counsel fee applications, and we
affirm the judges' determinations substantially for the reasons
set forth in their thorough decisions. We add the following
comments.
Plaintiff first argues that Judge Firko's counsel fee ruling
should be reversed because she "took a mechanical approach" in
addressing defendant's request. However, the record plainly does
not support plaintiff's claim. As detailed in her extensive oral
opinion, Judge Firko reviewed defendant's attorneys' billing rates
and billing history records. She then considered the applicable
factors, and made detailed findings concerning same, including the
parties' ability to pay and whether they acted in good faith during
the plenary hearing.
Plaintiff's challenge to Judge Siegal's counsel fee
determination is likewise unavailing. Contrary to plaintiff's
argument, the judge also considered all of the appropriate factors
and detailed her findings in a twenty-page section of her written
decision. Because the judge's findings are fully supported by the
record, there is no basis for disturbing them.
As for the balance of any of plaintiff's arguments not
expressly discussed above, they are without sufficient merit to
18 A-3255-15T3
warrant discussion in a written opinion. R. 2:11-3(e)(1)(A) and
(E).
Affirmed.
19 A-3255-15T3
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