LAWRENCE GUBLER v. STEPHANY GUBLER
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2552-20
LAWRENCE GUBLER,
Plaintiff-Respondent,
v.
STEPHANY GUBLER,
Defendant-Appellant.
_______________________
Submitted March 24, 2022 – Decided April 5, 2022
Before Judges Alvarez, Mawla, and Mitterhoff.
On appeal from the Superior Court of New Jersey,
Chancery Division, Family Part, Bergen County,
Docket No. FM-02-1112-19.
Ziegler, Resnick & Epstein, attorneys for appellant
(Steven M. Resnick and Jonathan H. Blonstein, on the
briefs).
Phillips Nizer LLP, attorneys for respondent (Stephanie
F. Lehman and Fara K. Rodriguez, on the brief).
PER CURIAM
Defendant Stephany Gubler appeals from an April 1, 2021 order denying
her motion to amend a default judgment of divorce (JOD) incorporating the
parties' mediated settlement agreement, and alternatively seeking discovery and
a plenary hearing. We affirm.
Defendant and plaintiff Lawrence Gubler were married for twenty-three
years and had three children who were ages twenty, eighteen, and fifteen at the
time of entry of the JOD on December 11, 2018. At the time of divorce, plaintiff
was the Chief Financial Officer (CFO) of an investment and lending firm and
earned approximately $400,000 per year. He also served as a board member of
a sports drink company in which the parties invested $435,000 and received
equity shares. Plaintiff provided tax advice to the company and was also
compensated with profit interest shares. Defendant earned a business degree
and worked on Wall Street for several years before leaving the workforce to
become a homemaker and raise the children. At the time of divorce, plaintiff
was fifty-four and defendant fifty years of age.
In August 2018, the parties retained a divorce mediator. They signed a
mediation retainer agreement, stipulating they would provide "full disclosures
of all information relevant to the issues to be negotiated" and "produce any and
all pertinent documents" requested by the mediator or either party. They agreed
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to retain neutral experts if an appraisal of their assets and income was required.
The retainer agreement also "strongly urged" the parties to obtain separate legal
counsel during the mediation process.
Mediation occurred on August 10 and 31, 2018, resulting in a sixteen-
page memorandum of understanding (MOU) prepared by the mediator. The
MOU stated it was not a binding contract unless the parties took action to make
it binding. To that end, it stipulated "[t]he parties recognize their right to review
the terms with separate and independent legal counsel, however, they have
specifically decided to waive their right to do so and enter into an [a]greement
without the benefit of separate and independent counsel." The MOU further
stated the parties would have to execute a section entitled "Waiver of Attorney
and Agreement" to make the MOU binding.
The waiver read as follows:
The parties have reviewed the terms and
conditions of this agreement with the mediator and by
themselves and may or may not have consulted with
legal counsel with regard to the terms and conditions of
this as well as their rights and obligations legally from
the marriage. Nonetheless, they have chosen to accept
the terms and conditions hereof without further
assistance or any assistance of legal counsel. They
represent that at no time were they under undue
influence or duress, and that, knowing all of the
undertakings set forth herein and knowing all of their
rights, they freely and voluntarily enter into this
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agreement, waiving their respective rights to have the
[c]ourt decide each issue, with or without the assistance
of counsel, and substituting their judgment for the
judgment of the [c]ourt. They understand that they
have the right to have a full disclosure of all of the
assets, liabilities and income of the other under the
supervision of independent attorneys and the [c]ourt,
and with their respective rights to further discovery.
They agree to be bound by this agreement as if it were
an order of the [c]ourt.
Relevant to the issues raised on appeal, the MOU required plaintiff to pay
limited duration alimony for four and one-half years at $100,000 per year. There
was no direct child support payments for the parties' youngest child but the
parties were obligated to pay for the child's expenses during their own parenting
time. Plaintiff was solely responsible for the youngest child's extracurricular
activities costs and all three children's college educations, including room and
board, tuition, fees, books, and transportation after exhaustion of the children's
529 accounts; and the children's health insurance and unreimbursed medical
expenses until their emancipation. The parties agreed to share the children's
auto insurance expense.
The MOU attached a balance sheet prepared by plaintiff, which the parties
concurred "sets forth the agreed upon distribution of assets. . . . The balance
sheet is based on actual assets and some estimated values of assets" as of August
1, 2018. The balance sheet valued the marital estate at $11,668,044, from which
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defendant would receive an equitable distribution of $5,822,221 and plaintiff
$5,845,824. The equitable distribution represented an equal division of the
value of the parties' real estate, five investment accounts, retirement accounts,
and personalty. Defendant's equitable distribution included $3,095,113 in cash
and plaintiff received $1,479,888 in cash. The parties divided the equity shares
equally in-kind. Each retained two of the four vehicles they owned.
The MOU stated plaintiff received profit interest shares from the sports
drink company "[a]s compensation for serving as a board member and tax
consulting." The profit interest shares were governed by Restricted Membership
Interest Agreements (RMIAs), which stated the shares were offered under the
company's "Equity Incentive Plan" and were "in consideration for services
performed or to be performed for the [c]ompany by [plaintiff.]" The RMIAs
contained a provision stating non-vested shares would be forfeited if a
"[t]erminating [e]vent" occurred, which included "termination of [plaintiff's]
[s]ervice [r]elationship with the [c]ompany for any reason or no reason."
The parties agreed to "equally share the vested profit interest shares . . .
and that [plaintiff] shall retain all unvested profit interest shares." The MOU
cited the balance sheet, which noted there were four tranches of profit interest
shares granted, namely: 10,000 shares granted on July 30, 2014 (tranche one);
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5,000 shares granted on July 1, 2015 (tranche two); 5,000 shares granted on June
1, 2017 (tranche three); and 5,000 shares granted on April 15, 2018 (tranche
four). Tranches one and two vested over four years at a rate of twenty-five
percent per year and tranches three and four vested over five years at the
following percentages: ten in year one; fifteen in year two; and twenty-five in
years three through five.
As of the date of the MOU, tranche one, seventy-five percent of tranche
two, and ten percent of tranche three had vested, totaling 14,250 shares. The
balance sheet noted the parties received $885,926 to date for the profit interest
shares, which they deposited into their Fidelity account. The Fidelity account
provision of the MOU explained the parties acknowledged this sum "represented
[fifteen percent] of unvested and vested shares. Thus if [plaintiff] leaves [the
company] and is required to repay [it] for the unvested shares, [defendant] shall
contribute equally to this repayment . . . ."
The MOU contained a dispute resolution provision. The parties agreed
"that in the event they cannot resolve any dispute between them, they will
participate in a[t] least one mediation session before either party brings an
application to the [c]ourt . . . ."
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On November 30, 2018, the parties executed the waiver and the MOU and
plaintiff filed the complaint for divorce. The same day, defendant executed an
acknowledgement of service of the complaint and waiver stating: "I hereby
waive my right under the Rules of Court to respond to the annexed [c]omplaint.
. . . The plaintiff and I have entered into a written agreement, and I prefer that
this matter proceed as expeditiously as possible on a default basis." The parties
divorced the following month.
Sometime in early 2020, defendant expressed dissatisfaction with the
MOU and requested mediation. The parties attended a half hour mediation
session on May 8, 2020, but were unable to resolve the dispute.
In January 2021, defendant filed a post-judgment motion to amend the
JOD to equally distribute the unvested profit interest shares, for open durational
alimony, and to increase alimony to $150,000 per year. Alternatively, the
motion requested the court find plaintiff in violation of litigant's rights for not
attending mediation and order the parties to return to mediation. The motion
also asked the court to set a discovery schedule and a plenary hearing to resolve
the alimony and equitable distribution issues.
Defendant certified the MOU was unconscionable because it was the
product of financial information plaintiff alone controlled and presented during
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the mediation. She claimed plaintiff used his superior financial knowledge to
dictate the outcome of the mediation and she "obtained new information which
confirmed that [p]laintiff intentionally and knowingly concealed at least
hundreds of thousands of dollars []and as much as several million dollars
pending the current valuation of the unvested shares . . . ." She certified
"[p]laintiff recently told [her] . . . the shares will likely be sold for anywhere
between $500 to $650 per share, in which case the unvested shares retained by
. . . [p]laintiff would be worth anywhere between $5,000,000 and $7,000,000."
Defendant claimed there was no exchange of discovery during mediation
other than the balance sheet plaintiff prepared and "nowhere in the [balance
sheet] is there any mention of the values of the unvested shares." She asserted
plaintiff knew there was a value to the unvested shares "at the time of the
mediation and purposefully excluded same from his disclosures." According to
defendant, plaintiff had an advantage in the negotiations because he was a
trained CPA and successful CFO while she was "inexperienced in financial
matters, and especially ignorant as to [the] family's finances . . . ." She noted
her attorney received a spreadsheet prepared by plaintiff in October 2020
valuing the unvested shares at $694,470.
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Defendant claimed the length of the parties' marriage warranted open
durational alimony. She asserted the alimony amount was unjust because it
represented only twenty-five percent of plaintiff's gross income and she could
not meet her needs or the marital lifestyle. Further, the lack of direct child
support for the youngest child and the requirement each party pay the child's
expenses during parenting time demonstrated the MOU's unfairness.
Defendant argued "[t]here was never a determination that [she] entered
into the [MOU] freely and voluntarily or that [she] understood its terms" because
the matter proceeded in default, and she was never voir dired. Further, she
lacked the advice of counsel.
Plaintiff's opposition to the motion denied that he pressured or coerced
defendant into signing the MOU or that she was a financial novice. In addition
to defendant's business degree, plaintiff pointed out she was "an accomplished
financial services accountant" who worked for Lehman Brothers and Fidelity
Investments and served as a "personal financial assistant" to the founder of a
hedge fund. He noted defendant "oversaw all the family's finances" during the
marriage.
Plaintiff described the negotiation process in detail and noted it was
amicable. He "provided several documents to [the mediator] and [d]efendant[,]
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including operating agreements evidencing the unvested shares . . . ." He
explained defendant was not entitled to the unvested shares because "[t]he
purpose of [the RMIAs] is to incentivize those who perform future services to
the [c]ompany. . . . The [i]nterests vest over a specified period of time . . . to
ensure that recipients are incentivized to perform services at a high level
throughout the vestment period." He pointed out the MOU provision requiring
defendant repay the value of any unvested shares deposited into their Fidelity
account in the event he left the company or was terminated as evidence the
parties understood the unvested shares were compensation for his "post-divorce
efforts and continued employment" with the company. Plaintiff stated:
The profit sharing was awarded to ensure that I
consistently perform throughout the vesting period—a
period which extends well past the date of the
[MOU]/divorce. The [c]ompany intended the shares to
vest for future services and not as a form of deferred
compensation attributable to the award dates. These
unvested shares are contingent on my commitment to
the employment and remaining employed by the
[c]ompany.
Plaintiff noted the RMIAs were provided to defendant and the mediator,
and the issue was discussed because the MOU expressly granted plaintiff the
unvested shares. Plaintiff explained "[a]t the time of the [MOU], these shares
were not vested and did not have a readily ascertainable value." Furthermore,
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when he provided the spreadsheet in October 2020, ascribing a value to the
shares, he "used a theoretical value based on potential future events[,]" namely
that he would still be alive, working for the company through the vestment
periods and "that [the company] would potentially consummate the sale of the
last [eighty-five percent] of the company by the end of 2022." He stated: "[T]his
value was simply an estimation made by me years later, based on potential
events." He denied telling defendant the shares were worth $500 to $650 apiece.
Plaintiff asserted defendant's unconscionability argument was rebutted by
the fact she benefitted from the MOU by receiving her equitable distribution,
nearly two years of alimony, as well as the significant expenses paid for the
children, including their college educations. Moreover, the court could not
assess defendant's claims regarding the alleged unfairness of the alimony
because she did not include a Case Information Statement (CIS) with her motion.
He noted he agreed to return to mediation and participated in one session.
Defendant's reply certification repeated her claims alleging unfairness of
the agreement. She claimed a CIS was unnecessary because "[t]he [c]ourt does
not need to see a [CIS] to know that a four-year alimony term on a twenty-four[-
]year marriage is facially unconscionable at the time the [MOU] was signed."
She also disputed that the parties participated in post-judgment mediation
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because there was no signed mediation retainer and the parties only had one
thirty-minute phone call with the mediator.
The motion judge heard lengthy oral argument and found "no proof" to
support defendant's allegation that she was "bullied and intimidated into
entering . . . mediation without counsel" by plaintiff. He noted the terms of the
MOU and the acknowledgement she signed "certify[ing] . . . that there was no
force, threat, or coercion in getting her to sign this document." He also pointed
out defendant's experience in the financial sector.
Further, citing M.G. v. S.M., 457 N.J. Super. 286 (App. Div. 2018), the
judge concluded the evidence established the profit interest shares were "being
granted, not because of the work that had been done by [plaintiff] in the past,
but . . . in order to incentivize him to work . . . in the future and to use his best
efforts in order to help the business." The judge found no proof plaintiff
"intentionally and knowingly concealed as much as several million dollars
pending the current valuation of the unvested shares." He rejected defendant's
claim she did not know the value of the unvested shares until she received the
October 2020 spreadsheet because the number of unvested shares could be
discerned from the balance sheet and plaintiff had ascribed a fair market value
to the shares contained in all four tranches. The judge found no material issues
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of fact warranting a hearing because the MOU expressly contained "at least three
indications that there were these profit interest [shares] that were being held."
The judge found the agreement enforceable because "[t]here was complete
and full disclosure" and "no proof of overreaching in the negotiations[,]" which
occurred at arms-length with "a very well[-]regarded mediator." Furthermore,
the equitable distribution of the marital assets was "basically [fifty-fifty]."
The judge rejected defendant's request to revisit the alimony provision of
the MOU because defendant did not file a CIS. As a result, the judge could not
discern defendant's needs or the marital standard of living. He concluded
plaintiff "can't engage in a modification without having any information.
There's no financial disclosure. There's no showing of changed circumstances."
Rejecting plaintiff's argument the alimony duration was itself proof of
unconscionability, the judge noted the substantial equitable distribution, that
defendant was advised to speak to an attorney about the settlement, and could
have appeared in court and contested entry of the JOD.
The judge found the terms of the settlement were clearly worded and there
was no "objective information to refute what was put in writing" or an
explanation why plaintiff waited two years to file the motion. He declined to
second guess the terms of the MOU.
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The judge denied defendant's request to find plaintiff in violation of
litigant's rights for refusing to attend mediation. After reviewing the mediator's
billing statements, he concluded plaintiff complied with the MOU by contacting
and addressing the dispute with the mediator. He noted the MOU did not require
mediation for a set amount of time and both parties "admit that they did have a
conversation" with the mediator.
Defendant raises the following points on appeal:
POINT I
THE TRIAL COURT ERRED BY DENYING
[DEFENDANT'S] REQUEST FOR A PLENARY
HEARING AND DISCOVERY GIVEN THE
CONFLICTING MATERIAL ISSUES OF FACT AND
CONFLICTING CERTIFICATIONS.
POINT II
THE TRIAL COURT ERRED BY DENYING
[DEFENDANT'S] REQUEST TO AMEND AND
CORRECT THE PARTIES' [JOD] INCORPORATING
THE PARTIES' [MOU].
POINT III
THE TRIAL COURT ERRED BY DENYING THE
[DEFENDANT'S] REQUEST FOR A PLENARY
HEARING AND DISCOVERY GIVEN THE
NATURE OF THE UNVESTED SHARES IN
QUESTION WHICH REQUIRED A PLENARY
HEARING TO DETERMINE WHETHER THE
SHARES WERE ATTRIBUTABLE TO POST
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DIVORCE EFFORTS AS WELL AS WHETHER
THERE WAS CONSIDERATION FOR
[DEFENDANT'S] WAIVER OF OPEN
DURATIONAL ALIMONY.
POINT IV
[DEFENDANT] DID NOT HAVE THE
INFORMATION NECESSARY TO MAKE A VALID
WAIVER OF HER RIGHTS.
POINT V
THE TRIAL COURT ERRED BY DENYING
[DEFENDANT'S] REQUEST TO REQUIRE THE
PARTIES TO ATTEND MEDIATION GIVEN THE
PARTIES' [MOU] WHICH REQUIRED THE
PARTIES TO ATTEND PRIVATE MEDIATION TO
RESOLVE ANY ISSUE ARISING OUT OF THE
[MOU].
POINT VI
AS AN ISSUE OF FIRST IMPRESSION, GUIDANCE
FROM THE COURT IS REQUIRED AS TO
DISCOVERY AND COUNSEL WAIVERS WHERE
THERE IS NO PENDENTE LITE TRIAL COURT
INVOLVEMENT.
Rule 4:43-3 states the court may set aside a "judgment by default . . . in
accordance with Rule 4:50." "Rule 4:50-1 provides for relief from a judgment
in six enumerated circumstances." In re Est. of Schifftner, 385 N.J. Super. 37,
41 (App. Div. 2006). Rule 4:50-1 does not provide "an opportunity for parties
to a consent judgment to change their minds; nor is it a pathway to reopen
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litigation because a party either views his [or her] settlement as less
advantageous than it had previously appeared, or rethinks the effectiveness of
his [or her] original legal strategy." DEG, LLC v. Twp. of Fairfield, 198 N.J.
242, 261 (2009). "Rather, the rule is a carefully crafted vehicle intended to
underscore the need for repose while achieving a just result." Ibid.
Rule 4:50-1(f) allows a party to petition for relief from a final judgment
or order for "any . . . reason justifying relief." A movant must show that the
enforcement of the judgment "would be unjust, oppressive or inequitable."
Eaton v. Grau, 368 N.J. Super. 215, 222 (App. Div. 2004) (quoting Harrington
v. Harrington, 281 N.J. Super. 39, 48 (App. Div. 1995)). Relief is granted
sparingly and only in "truly exceptional circumstances." DEG, LLC, 198 N.J.
at 270 (quoting Manning Eng'g, Inc. v. Hudson Cnty. Park Comm'n, 74 N.J. 113,
122 (1977)).
We review a decision on a Rule 4:50-1 motion for an abuse of discretion.
U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012). An abuse of
discretion exists "when a decision is 'made without a rational explanation,
inexplicably departed from established policies, or rested on an impermissible
basis.'" Id. at 467-68 (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123
(2007)). If a judge makes a discretionary decision but acts under a
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misconception of the applicable law or misapplies the law to the facts, we "need
not extend deference." Johnson v. Johnson, 320 N.J. Super. 371, 378 (App. Div.
1999).
Having considered the arguments raised on appeal, we affirm substantially
for the reasons expressed by the motion judge. There was no objective evidence
of overreaching or that defendant was coerced, under duress, deprived of the
right to counsel or discovery, rendering the MOU unconscionable. We likewise
affirm the judge's findings that the alimony, equitable distribution, and the
overall settlement were fair and equitable and that he could not address an
alimony modification without a CIS. His denial of the request to compel further
mediation also was not an abuse of discretion. We add the following comments
to further elucidate why the claims relating to the unvested profit interest shares
are unpersuasive.
Defendant likens this matter to Addesa v. Addesa, 392 N.J. Super. 58, 73
(App. Div. 2007), where the court invalidated a mediated settlement finding the
plaintiff withheld information regarding the value of a marital business and
misled the defendant. Like the spouse in Addesa, defendant asserts she was
materially misled about the true value of the unvested profit interest shares.
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In Addesa, neither party was represented by counsel during mediation. Id.
at 66. The parties agreed to an equal equitable distribution and the defendant
received $153,569 as her share of a business operated by the plaintiff,
representing one-half of the book value. Id. at 70-71. However, five months
after the divorce, the business sold for approximately sixteen million dollars.
Id. at 71. The defendant challenged the settlement, alleging she was misled
regarding the value of the business. Id. at 68-69. The trial court concluded the
settlement was unconscionable because the discrepancy in the value of the
plaintiff's business did not align with the parties' intent to equally divide their
assets. Id. at 70-71. We affirmed the trial court's finding of unconscionability.
Id. at 75.
Addesa is inapposite because here neither party made an affirmative
representation regarding the value of the unvested shares. The parties did not
place a value on the shares during mediation and waived their right to the advice
of counsel or valuation of the asset. This leads us to the second and more
important reason Addesa is distinguishable: the parties agreed the unvested
shares were not subject to equitable distribution.
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As we have stated before, an equitable distribution does not require an
equal distribution of marital assets. M.G., 457 N.J. Super. at 295. Moreover, in
M.G. we held
(1) Where a stock award has been made during the
marriage and vests prior to the date of complaint it is
subject to equitable distribution;
(2) Where an award is made during the marriage for
work performed during the marriage, but becomes
vested after the date of complaint, it too is subject to
equitable distribution; and
(3) Where the award is made during the marriage, but
vests following the date of complaint, there is a
rebuttable presumption the award is subject to equitable
distribution unless there is a material dispute of fact
regarding whether the stock, either in whole or in part,
is for future performance.
[Id. at 302.]
We explained that "the analytical framework is not when the stock was received,
but rather, the efforts required for it to vest." Id. at 297. If the stock becoming
payable is contingent on a party's post-divorce employment efforts, then the
stock is not subject to equitable distribution. Id. at 297-98. The party seeking
to exclude a stock award from equitable distribution bears the burden of
producing objective evidence to prove "the employer intended the stock to vest
for future services and not as a form of deferred compensation attributable to
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the award date." Id. at 302. We described the types of proofs the court could
consider, including the incentive plan document and any other factors or
circumstances surrounding the grant of the incentive award. Id. at 301.
Plaintiff rebutted the presumption of equitable distribution because:
defendant did not contradict his certification explaining the company's reasons
for granting the profit interest shares; the express terms of the MOU excluded
the shares from equitable distribution; and he produced the RMIAs showing the
unvested shares were contingent upon his continued performance and service to
the company. For these reasons, the MOU was not unconscionable because it
did not deprive defendant of her share of the marital assets as the unvested shares
were not a marital asset subject to equitable distribution.
Finally, to the extent we have not addressed an argument raised on the
appeal, it is because it lacks sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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