IN THE MATTER OF THE ESTATE OF EDWARD STEVEN OWENS
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3708-18T1
IN THE MATTER OF THE
ESTATE OF EDWARD
STEVEN OWENS,
Deceased.
________________________
Argued March 10, 2020 – Decided April 21, 2020
Before Judges Yannotti, Hoffman, and Firko.
On appeal from the Superior Court of New Jersey,
Chancery Division, Bergen County, Docket No. P-
000200-16.
Derek Scott Fanciullo argued the cause for appellant
Jose L. Rodriguez (Matsikoudis & Fanciullo, LLC,
attorneys; Derek Scott Fanciullo and William C.
Matsikoudis, on the briefs).
Thomas T. Kim argued the cause for respondents
Miriam Owens, Madison Avery Owens and Steven
Arron Owens (Koulikourdis & Associates, attorneys;
Peter John Koulikourdis and Thomas T. Kim, on the
brief).
PER CURIAM
The trial court entered an order dated January 18, 2019, which enforced a
mediation agreement between the parties. Defendant Jose L. Rodriguez appeals
from an order dated March 19, 2019, which denied his motion for
reconsideration of the January 18, 2019 order. We affirm.
Edward Steven Owens (Edward) died on August 24, 2012. At the time of
his death, Edward was unmarried. Edward had been married to Miriam Owens
(Miriam), but they divorced in May 2003. He left a last will and testament,
which was admitted to probate by the Surrogate of Bergen County on
September 5, 2012.
In the will, Edward made specific bequests to his children, Steven Arron
Owens (Steven) and Madison Avery Owens (Madison) and distributed his
residuary estate to them in equal shares. Among other things, the will provided
that if either child shall be under the age of twenty-seven years, that child's share
of the residuary estate would be held in trust. Defendant was designated
executor of Edward's estate and trustee of the trusts established for the benefit
of Steven and Madison. The Surrogate issued letters testamentary and of
trusteeship to defendant.
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On June 2, 2016, Steven and Madison (collectively, plaintiffs) 1 filed a
verified complaint in the Chancery Division, Probate Part. Among other things,
plaintiffs alleged that defendant misappropriated or misapplied estate assets,
filed an inaccurate federal tax return for the estate, overpaid federal estate taxes,
provided incomplete statements for their respective trust accounts, refused to
provide information about the estate's assets, and failed to provide an
explanation for apparent withdrawals from the trust accounts. They claimed
defendant failed to account for more than $200,000, which they alleged was
missing from the estate.
Plaintiffs sought the removal of defendant from his position as executor
of the estate and trustee of their respective trusts, and revocation of the letters
testamentary and of trusteeship that the Surrogate issued to him. Plaintiffs also
sought an order compelling defendant to turn over all financial records
pertaining to the estate and the trust accounts, and to produce an inventory of
the estate's assets. In addition, they sought an accounting of the estate's assets,
along with damages and attorney's fees.
1
The record does not include all of the pleadings; however, it appears that at
some point, Miriam Owens became a party to the action. Plaintiffs' attorney is
also representing Miriam in this case.
A-3708-18T1
3
The parties then participated in mediation. The parties were represented
by counsel. They reached an agreement on the major outstanding issues in
dispute, which were memorialized in a handwritten agreement prepared by the
mediator. The parties and their attorneys signed the agreement, which is dated
December 28, 2017.
The agreement states that defendant resigns as executor and trustee. It
also states that:
[Defendant] will pay the sum of $165,000 to the trust:
[$25,000] by [January 15, 2018]. The balance by a
[$140,000] note with interest at [five percent] with
payment[s] of [$1,000] a month. There will be a
balloon payment [seven] years from this date.
[Defendant] will designate this amount ($140,000)
from his current insurance policy for the benefit of the
trust[s] (or beneficiaries, as the case may be), and
provide proof thereof. The amount due shall be set
forth in a judgment in favor of the trust but may not be
deducted for the amount due less principal payments,
until two consecutive default payments. [Defendant]
agrees he shall not be able to discharge these financial
obligations pursuant to 11 U.S.C. [§] 523(a)(4).
The agreement further provides that the action would be dismissed with
prejudice and without costs, and the parties would exchange mutual releases.
In May 2018, plaintiffs' counsel sent defendant's attorney a proposed
consent order, which incorporated the terms of the mediation agreement and
stated that defendant resigned as executor of the estate and trustee of Steven's
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and Madison's trusts. It also stated that defendant shall turn over to plaintiffs
all monies in their respective trust accounts, along with the financial records and
other information in his possession concerning the estate and the trusts.
The proposed consent order also provided for the appointment of a new
executor and trustee. In addition, the order stated:
The parties agree that the [d]efendant, Jose Luis
Rodriguez, shall give the [p]laintiffs any and all monies
remaining in their respective Trust Accounts as of
December 28, 2017. Additionally, the [d]efendant
agrees to pay the [p]laintiffs the sum of [$165,000] to
be deposited in their Trust Accounts (50/50 each
[p]laintiff) in the form of: a lump sum of [$25,000] by
January 15, 2018. The remaining balance of [$140,000]
shall be paid at a fixed annual percentage rate of 5.00%
with payments of [$1,000] per month, made payable to
[p]laintiffs' Trusts. The parties agree that the
[d]efendant Jose Luis Rodriguez will have a balloon
payment due on December 28, 2024, in the sum of
$98,372.67 pursuant to the amortization scheduled
attached hereto as Exhibit "J-2".
Attached to the consent order was a loan summary, which calculated the
amount due with interest at a rate of five percent, amortized on a monthly basis.
According to the loan summary, there would be monthly payments of $1,000 for
eighty-four months, and the final payment due in December 2024 would be
$97,964.48.
A-3708-18T1
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On June 27, 2018, plaintiffs' counsel wrote to defendant's attorney. He
noted that despite several requests, he had not received the required proof that
defendant had designated $140,000 from his insurance policy for the benefit of
the trusts, and the proposed consent order had not been executed. He stated that
it appeared the parties "are at a standstill regarding the issue of counsel's fees."
He asked defendant's attorney to have defendant execute the proposed consent
order. Plaintiffs' counsel stated that if defendant refused to do so, he would be
"left with no choice but to file" a motion to enforce the agreement and seek
counsel fees and costs. Defendant did not execute the consent order or provide
proof that he had designated $140,000 of his insurance policy for the benefit of
the trusts.
On August 29, 2018, plaintiffs filed a motion for enforcement of the
mediation agreement, and for attorney's fees and costs. They alleged defendant
had not: executed the consent order provided to his attorney, provided the
required proof regarding his insurance policy, or turned over bank statements
regarding the trust accounts.
Among other relief, plaintiffs sought an order declaring that all provisions
of the agreement shall go into effect immediately, compelling the parties to
comply with the agreement, requiring defendant to resign as executor and
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trustee, and directing defendant to immediately change his life insurance policy
to designate $140,000 for the benefit of the trusts, with proof of that change.
Defendant opposed the motion. He filed a certification stating that he had
arranged for the designation of plaintiffs as beneficiaries of his life insurance
policy in the amount of $140,000. He also stated that he was ready and willing
to comply with the mediation agreement, but claimed plaintiffs were
misinterpreting the provision of the agreement pertaining to the payment of the
$140,000. He claimed he agreed to pay plaintiffs a total of $165,000, but
plaintiffs' calculation "brings the payments" to more than $200,000.
Defendant asserted that the mediator told him the final payment in year
seven would be $56,000. He noted that under the agreement, the first payment
was $25,000, and thereafter he would make monthly payments of $1000 per
month for eighty-four months and a final payment of $56,000, for a total of
$165,000.
The motion judge met with counsel and thereafter entered an order dated
October 19, 2018, which required the parties to return to mediation within forty-
five days "to determine the scope and applicability" of the provision of the
agreement pertaining to the five percent interest on the balance of $140,000,
A-3708-18T1
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which is to be paid over time. The order noted that the issue regarding
defendant's insurance policy had been resolved.
Thereafter, plaintiffs' counsel wrote to the mediator and stated that there
was a dispute regarding the application of the five percent interest on the
$140,000 which is to be paid in monthly installments. Plaintiffs' counsel asked
the mediator to clarify or provide an interpretation regarding the amortization of
the interest on the payments. Counsel stated that, upon receipt of that
clarification or interpretation, he and defendant's attorney were prepared to
return for another mediation session, if necessary.
On November 5, 2018, the mediator replied in an email and stated that he
had been unsuccessful in setting up a telephone conference. However, the
mediator provided his "review" of the provisions of the agreement "respecting
payments." He stated that:
The debt cited in the [December 28, 2017] settlement
sheet ($140,000) carries [five percent] interest that is
amortized on the basis of a $1,000 a month payment,
but which becomes due [December 28, 2024] when a
balloon payment is due and pays off the then existing
balance. You can produce an amortization schedule
from a number of app[lications] on the internet. For
example, when the first monthly $1,000 payment is
made, the interest [at five percent] is $583.33 and so the
principal payment is $416.67. The next month's
payment is allocated $581.60 to interest and $418.40 to
principal, and so on.
A-3708-18T1
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Plaintiffs' counsel sent the mediator an email thanking the mediator for
his response. He enclosed the amortization schedule that he had previously
provided to defendant's attorney and asked the mediator "if it accurately
summarize[d] the payment schedule." The mediator responded in an email. He
stated that "[t]he schedule you provided is as I described it." Plaintiffs' counsel
then asked defendant's attorney if he would join him in advising the court that
the issue regarding the interest had been "clarified." Defendant's attorney did
not respond.
On December 31, 2018, plaintiffs filed a motion to enforce the mediation
agreement. Defendant opposed the motion. The motion judge heard oral
argument and entered an order dated January 18, 2019, enforcing the agreement.
The order required defendant to make payments in accordance with the
amortization schedule that plaintiffs' counsel had provided to defendant's
attorney.
Thereafter, defendant filed a motion for reconsideration. He argued that
his total liability was $165,000 and the five percent interest was built into the
monthly payments. The judge heard oral argument on March 8, 2019, and filed
an order dated March 19, 2019, denying the motion.
A-3708-18T1
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In the attached statement of reasons, the judge rejected defendant's
contention that the interest was built into the total liability of $165,000. The
judge found the terms of the agreement were clear and unambiguous and there
was no indication the parties intended the monthly payments would encompass
the interest. The judge wrote, "To the contrary, the settlement agreement
explicitly calls for a [five percent] interest rate on the [$140,000] note on top of
the [$25,000 initial] payment."
The judge noted that, at oral argument on the motion, defendant's attorney
essentially had conceded defendant owed plaintiffs $165,000 and the judge
rejected defendant's contention that the parties agreed defendant would have a
seven-year, interest-free payment plan. The judge commented that defendant's
argument would make some sense if the parties had agreed defendant owed an
amount significantly less than $165,000.
The judge wrote that defendant's contention that the parties agreed to an
interest-free, seven-year payoff "is entirely inconsistent with the terms of the
agreement, which explicitly reference a [five percent] interest rate on the
$140,000.00 note, in addition to a balloon payment due in seven years." The
judge noted that the mediator had provided a further clarification and
A-3708-18T1
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interpretation of the agreement, which confirmed that plaintiffs ' amortization
schedule was consistent with the agreement.
The judge added that there was no reason the matter should be drawn out
further to allow defendant to return to mediation "for the sole purpose of telling"
the mediator and reporting back to court that he is dissatisfied with the
mediator's interpretation of the agreement. The judge concluded that defendant
had not met the high standard for reconsideration of the order enforcing the
agreement. This appeal followed.
On appeal, defendant argues that the March 19, 2019 order denying
reconsideration should be reversed. He contends the judge erred by considering
the statement of the mediator, which was not permitted by Rule 1:6-6. He argues
that the judge disregarded credible evidence, the mediator's statement violated
New Jersey law, and the order requiring him to make payments in accordance
with the amortization schedule should be vacated. Defendant contends that, at
a minimum, the matter should be remanded to the trial court for a plenary
hearing.
"Motions for reconsideration are governed by Rule 4:49-2, which provides
that the decision to grant or deny a motion for reconsideration rests within the
sound discretion of the trial court." Pitney Bowes Bank, Inc. v. ABC Caging
A-3708-18T1
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Fulfillment, 440 N.J. Super. 378, 382 (App. Div. 2015). Reconsideration is only
appropriate in those cases "that fall within that narrow corridor in which either
(1) the [c]ourt has expressed its decision based upon a palpably incorrect or
irrational basis, or (2) it is obvious that the [c]ourt either did not consider, or
failed to appreciate the significance of probative, competent evidence." Capital
Fin. Co. of Delaware Valley, Inc. v. Asterbadi, 398 N.J. Super. 299, 310 (App.
Div. 2008) (alterations in original) (quoting D'Atria v. D'Atria, 242 N.J. Super.
392, 401 (Ch. Div. 1990)).
On appeal, "a trial court's reconsideration decision will be left undisturbed
unless it represents a clear abuse of discretion." Pitney Bowes Bank, 440 N.J.
Super. at 382 (citing Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283
(1994)). "An abuse of discretion 'arises when a decision is made without a
rational explanation, inexplicably departed from established policies, or rested
on an impermissible basis.'" Ibid. (quoting Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)).
The construction of a contract is a question of law. Kieffer v. Best Buy,
205 N.J. 213, 222-23 (2011) (citing Jennings v. Pinto, 5 N.J. 562, 569-70
(1950)). We review the trial court's interpretation of a contract de novo. Id. at
222 (citing Jennings, 5 N.J. at 569-70). Furthermore, "[a] trial court's
A-3708-18T1
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interpretation of the law and the legal consequences that flow from established
facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp.
Comm., 140 N.J. 366, 378 (1995).
When construing a contract, our objective is to determine the intent of the
parties. Kieffer, 205 N.J. at 223 (citing Mantilla v. NC Mall Assocs., 167 N.J.
262, 272 (2001)). Generally, we give the terms of a contract their plain and
ordinary meaning. Ibid. (citing M.J. Paquet, Inc. v. N.J. Dep't of Transp., 171 N.J. 378, 396 (2002)). The court should not under the guise of interpretation
make for the parties a different or better contract than they have made for
themselves. Ibid. (citing Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001)).
Here, the trial court found the relevant provision of the mediation
agreement is clear and unambiguous. As noted, the agreement requires
defendant to make an initial lump sum payment of $25,000, and to pay the
remaining $140,000 "with interest at [five percent]" in monthly installments of
$1000 for seven years, along with a final balloon payment. As the motion judge
pointed out, the terms of the agreement do not support defendant's claim that he
is only required to pay a total of $165,000, and that this amount includes interest
at five percent.
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In his statement of reasons, the judge noted that there is nothing in the
agreement which suggests the parties agreed defendant would pay the balance
of $140,000 in monthly installments over seven years without any interest.
There is also nothing in the agreement indicating that the parties agreed
defendant would only be required to pay $165,000, and that the $165,000
included interest at five percent.
Indeed, as the judge pointed out, at oral argument, counsel for defendant
conceded that defendant's accountant had determined defendant owed the
plaintiffs $165,000. The judge observed that defendant's argument might make
sense if the parties had agreed defendant owed plaintiffs substantially less than
$165,000. There is no indication that they reached such an agreement.
Thus, the record does not support defendant's contention that he would
have a seven-year, interest-free loan of $140,000. If that is what the parties
intended, the agreement would have explicitly stated that the $140,000 would
be paid in monthly installments, without any additional interest.
Defendant contends that the motion judge erred by failing to consider his
contention that the mediator told him the balloon payment would only be
$56,000. He also contends the related provision pertaining to his insurance
A-3708-18T1
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policy shows that the parties agreed his total liability would be $165,000, and
he would not have to pay interest on the $140,000.
However, there is nothing in the agreement which states that the parties
agreed defendant's balloon payment would only be $56,000. The plain terms of
the agreement reflect that the balloon payment would consist of the unpaid
balance with interest at the agreed-upon rate of five percent.
Moreover, while the parties agreed to allocate only $140,000 of
defendant's life insurance policy for the benefit of the trusts, that provision does
not support the contention that defendant had no obligation to pay interest on
the balance due over a seven-year period. To the contrary, the agreement
expressly provides for $140,000 in monthly installments, over a seven-year
period, "with interest" at five percent.
Defendant further argues that the motion judge erred by considering the
mediator's statements clarifying the agreement. Defendant contends plaintiffs'
counsel improperly included those statements in the certification he filed in
support of the motion to enforce the agreement. He contends the mediator's
statements regarding the interpretation of the agreement and the amortization
schedule were inadmissible hearsay. He also contends the mediator's statements
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were not permitted under the Uniform Mediation Act, N.J.S.A. 2A:23C-1
to -13.
We need not address these arguments. We are convinced that even if the
trial court erred by considering the mediator's comments regarding the
agreement and the amortization schedule, the error was harmless. As we have
explained, the motion judge chose to enforce the agreement in accordance with
its plain language and the record supports that determination.
Where, as here, the terms of a contract are clear and unambiguous, there
is no room for interpretation and the court must enforce the agreement as written.
Schor v. FNS Fin. Corp., 357 N.J. Super. 185, 191 (App. Div. 2002) (citing
Karl's Sales and Serv., Inc. v. Gimbel Bros. Inc., 249 N.J. Super. 487, 493 (App.
Div. 1991)). The mediation agreement plainly requires defendant to pay interest
at five percent on the outstanding $140,000, and the amortization schedule
provided by plaintiffs was entirely consistent with that obligation.
Whether the mediator agreed or disagreed with this interpretation of the
agreement is of no moment. The issue was one for the court to resolve as a
matter of law, and it did so correctly. We conclude the trial court did not
mistakenly exercise its discretion by denying defendant's motion for
reconsideration.
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We have considered defendant's other arguments and conclude they lack
sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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