In a long line of decisions, our Supreme Court has “emphasized repeatedly that matrimonial agreements between spouses relating to [equitable distribution], alimony and support, which are fair and just, fall within the category of contracts enforceable in equity.” Petersen v. Petersen, 85 N.J. 638, 642 (1981) (citing Carlsen v. Carlsen, 72 N.J. 363, 370-71 (1977); Berkowitz v. Berkowitz, 55 N.J. 564, 569 (1970); Schlemm v. Schlemm, 31 N.J. 557, 581-82 (1960)). “Marital agreements are essentially consensual and voluntary and as a result, they are approached with a predisposition in favor of their validity and enforceability.” Massar v. Massar, 279 N.J. Super. 89, 93 (App. Div. 1995) (citing Petersen, supra, 85 N.J. at 642; Dworkin v. Dworkin, 217 N.J. Super. 518, 524 (App. Div. 1987)).

Nevertheless, strong public policy considerations mandate that marital settlement agreements be closely scrutinized. Any marital agreement that is unconscionable or is the product of fraud or overreaching may be set aside. Guglielmo v. Guglielmo, 253 N.J. Super. 531, 541 (App. Div. 1992); Capanear v. Salzano, 222 N.J. Super. 403, 407 (App. Div. 1988). “[T]he law affords particular leniency to agreements made in the domestic arena . . . .” Massar, supra, 279 N.J. Super. at 93. “Marital property settlement agreements ‘involve far more than economic factors’ and must serve the strong public and statutory purpose of ensuring fairness and equity in the dissolution of marriages.” Conforti v. Guliadis, 128 N.J. 318, 323 (1992) (quoting Rothman v. Rothman, 65 N.J. 219, 229 (1974)). “Even when a divorce order incorporates agreements reached privately between the parties, such orders can be modified ‘in light of all the facts’ bearing on what is ‘equitable and fair.’” Ibid. (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)).

If there has been moral compulsion sufficient to overcome the will of a person otherwise competent to contract, any agreement made under such circumstances is considered to be lacking in voluntariness and therefore invalid. Rubenstein v. Rubenstein, 20 N.J. 359, 365 (1956). The legal concept of duress is based upon the “unreality of the apparent consent” of a party. Id. at 366. “In determining whether a contracting party is entitled to be absolved from his [or her] contractual obligations due to duress, the court must . . . look to the condition of the mind of the person subjected to coercive measures.” Shanley & Fisher, P.C. v. Sisselman, 215 N.J. Super. 200, 212 (App. Div. 1987). “‘The question is whether consent was coerced; that is, was the person complaining induced by the duress or undue influence to give his consent, and would not have done so otherwise.’” Ibid. (quoting Rubenstein, supra, 20 N.J. at 366).

“[T]he test for duress is subjective, rather than objective, and does not turn on whether the duress is of ‘such severity as to overcome the will of a person of ordinary firmness.’” Id. at 212-13 (quoting S. P. Dunham & Co. v. Kudra, 44 N.J. Super. 565, 570 (App. Div. 1957)). All the attendant circumstances must be considered. Id. at 212. In addition to considering the subjective mindset of the complaining party, the pressure imposed must be wrongful. Rubenstein, supra, 20 N.J. at 367. “The act or conduct complained of . . . [must be] ‘so oppressive under given circumstances as to constrain one to do what his free will would refuse.’” Ibid. (quoting First State Bank v. Fed. Reserve Bank, 219 N.W. 908, 909 (Minn. 1928)); see also Segal v. Segal, 278 N.J. Super. 218, 223-24 (App. Div. 1994).

As the court held in Dworkin, supra, 279 N.J. Super. at 523, “any [matrimonial] agreement may be set aside when it is the product of fraud or overreaching by a party with power to take advantage of a confidential relationship or is unconscionable.”

NOTE: My Law Office is located at 726 West Saint Georges [W. St. Georges] Avenue (Route 27), Linden, Union County, NJ. Telephone: 908-486-2200; EM@IL

Any matrimonial agreement may be set aside when it is the product of fraud or overreaching by a party with power to take advantage of a confidential relationship or is unconscionable originally appeared on NJ Family Issues on January 17, 2012.

Settlement agreements are contracts to be honored and enforced by the courts. Brundage v. Estate of Carambio, 195 N.J. 575, 601 (2008) (citing Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.), certif. denied, 94 N.J. 600 (1983)).

“A material breach by either party to a bilateral contract excuses the other party from rendering any further contractual performance.” Magnet Resources, Inc. v. Summit MRI, Inc., 318 N.J. Super. 275, 285 (App Div. 1998).

A material breach is one that “‘goes to the essence of a contract,’” Goldman S. Brunswick Partners v. Stern, 265 N.J. Super. 489, 494 (App. Div. 1993) (quoting Ross Sys. v. Linden Dari-Delite, Inc., 35 N.J. 329, 341 (1961)), and should be evaluated under the following “flexible criteria”:

“(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected;
(b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
(c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture;
(d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;
(e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.”

[Neptune Research & Dev., Inc. v. Teknics Indus. Sys., Inc., 235 N.J. Super. 522, 532 (App. Div. 1989) (quoting Restatement (Second) of Contracts § 241 (1981)).]

NOTE: This Blog/Blawg, NJ Family Issues, is managed by Paul G. Kostro, Esq., an attorney/lawyer/mediator in Linden, Union County, New Jersey.

A material breach by either party to a bilateral contract excuses the other party from rendering any further contractual performance originally appeared on NJ Family Issues on May 14, 2011.

A decision to vacate a judgment under Rule 4:50-1(f) lies within the sound discretion of the trial judge, guided by principles of equity. Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994). The trial court’s decision will not be overturned unless there has been a clear abuse of discretion. Ibid.; see also Eaton v. Grau, 368 N.J. Super. 215, 222 (App. Div. 2004).

Courts have the authority to modify a spousal agreement on the basis of unconscionability, misrepresentation, or fraud. Addesa v. Addesa, 392 N.J. Super. 58, 66 (App. Div. 2007). An application for substantial modification of a property settlement agreement may be made pursuant to Rule 4:50-1(f). Connor v. Connor, 254 N.J. Super. 591, 601 (App. Div. 1992). In order to meet the stringent requirements of Rule 4:50-1(f), the moving party must make a “showing of fraud, misconduct or mistake in the negotiations or a showing of fundamental inequity or unfairness in the agreement.” Id. at 601; see also Edgerton v. Edgerton, 203 N.J. Super. 160, 171 (App. Div. 1985). Relief from the judgment will only be granted under exceptional and compelling circumstances. Schwartzman v. Schwartzman, 248 N.J. Super. 73, 77 (App. Div. 1991).

A motion alleging fraud or misrepresentation under Rule 4:50-1(c) must be brought within one year of the judgment. R. 4:50-2. However, a motion under Rule 4:50-1(f) may be brought “within a reasonable time,” which is not limited to one year after the judgment. R. 4:50-2. If the request for relief under the Rule is premised on contested material facts, an evidential hearing must be provided. Eaton, supra, 368 N.J. at 222.

NOTE: My legal services include family law, divorce, child support, litigation, arbitration, mediation, child custody and visitation, alimony, equitable distribution, separation agreements, palimony, PSA, property settlement agreement, premarital and prenuptial agreements, midmarriage and marital agreements.

Courts have the authority to modify a spousal agreement on the basis of unconscionability, misrepresentation, or fraud originally appeared on NJ Family Issues on May 11, 2011.

The appellate court’s review of the trial court’s interpretation of a pre-marital agreement is de novo. Fastenberg v. Prudential Ins. Co., 309 N.J. Super. 415, 420 (App. Div. 1998). In interpreting agreements, the court give their terms their “usual and natural meaning,” Middlesex County Sewerage Authority v. Borough of Middlesex, 74 N.J. Super. 591, 604 (Law Div. 1962), aff’d o.b., 79 N.J. Super. 24 (App. Div.), certif. denied, 40 N.J. 501 (1963), read the documents as a whole and avoid interpretations that render terms or provisions meaningless. Cumberland County Improvement Auth. v. GSP Recycling Co., 358 N.J. Super. 484, 496 (App. Div.), certif. denied, 177 N.J. 222 (2003). To the extent that the documents are ambiguous, the parties’ practical interpretation — as reflected by their actions — is a “consideration of great weight.” Anthony L. Petters Diner, Inc. v. Stellakis, 202 N.J. Super. 11, 20-21 (App. Div. 1985).

NOTE: My Law Office is located at 726 West Saint Georges [W. St. Georges] Avenue (Route 27), Linden, Union County, NJ. Telephone: 908-486-2200; EM@IL

To the extent that pre-marital agreements are ambiguous, the parties’ practical interpretation — as reflected by their actions — is a consideration of great weight originally appeared on NJ Family Issues on May 11, 2011.

Matrimonial agreements are contractual in nature and “[a]s a general rule, courts should enforce contracts as the parties intended.” Pacifico v. Pacifico, 190 N.J. 258, 266 (2007); see also Flanigan v. Munson, 175 N.J. 597, 606 (2003). A material breach of a contract excuses the other party from further performance. Nolan v. Lee Ho, 120 N.J. 465, 472 (1990).

In interpreting a contract, the court “consider[s] what is written in the context of the circumstances at the time of drafting and apply a rational meaning in keeping with the ‘expressed general purpose.’” Pacifico, supra, 190 N.J. at 266 (quoting Northern Airlines, Inc. v. Schwimmer, 12 N.J. 293, 302 (1953)). In addition, the law grants particular leniency to agreements made in the domestic arena. Ibid. (quoting Guglielmo v. Guglielmo, 253 N.J. Super. 531, 542 (App. Div. 1992)). Thus, judges have “‘greater discretion when interpreting such agreements.’” Ibid. (quoting Guglielmo, supra, 253 N.J. Super. at 542).

In its analysis the court should be mindful that “fair and definitive arrangements arrived at by mutual consent should not be unnecessarily or lightly disturbed.” Konzelman v. Konzelman, 158 N.J. 185, 193-94 (1999) (quoting Smith v. Smith, 72 N.J. 350, 358 (1977)).

NOTE: My legal services include family law, divorce, child support, litigation, arbitration, mediation, child custody and visitation, alimony, equitable distribution, separation agreements, palimony, PSA, property settlement agreement, premarital and prenuptial agreements, midmarriage and marital agreements.

The law grants particular leniency to agreements made in the domestic arena originally appeared on NJ Family Issues on May 11, 2011.

NOTE: This Blog/Blawg, NJ Family Issues, is managed by Paul G. Kostro, Esq., an attorney/lawyer/mediator in Linden, Union County, New Jersey.

Prenuptial agreements in our current society originally appeared on NJ Family Issues on December 7, 2010.

“Settlement agreements in matrimonial matters, being essentially consensual and voluntary in character, . . . [are] entitled to considerable weight with respect to their validity and enforceability in equity, provided they are fair and just.” Dolce v. Dolce, 383 N.J. Super. 11, 20 (App. Div. 2006) (quoting Petersen v. Petersen, 85 N.J. 638, 642 (1981)); see also Lepis v. Lepis, 83 N.J. 139, 153 (1980).

An agreement like a Property Settlement and Separation Agreement (PSSA) is favored by the “‘strong public policy favoring stability of arrangements’ in matrimonial matters.” Konzelman v. Konzelman, 158 N.J. 185, 193 (1999) (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)). Accordingly, it is “approached with a predisposition in favor” of its “validity and enforceability.” Massar v. Massar, 279 N.J. Super. 89, 93 (App. Div.), certif. denied, 142 N.J. 455 (1995). However, a PSSA may only be validated to the extent that the agreement is consensual and voluntary, Konzelman, supra, 158 N.J. at 194, and comports with “equitable precepts.” Weishaus v. Weishaus, 180 N.J. 131, 143 (2004).

Marital property settlements agreements can only be enforced if they are fair to both parties because “‘contract principles have little place in the law of domestic relations.’” Conforti v. Guliadis, 128 N.J. 318, 323 (1992) (quoting Lepis, supra, 83 N.J. at 148). Nevertheless, matrimonial agreements such as the PSSA have long been recognized to be contractual in nature. Pacifico v. Pacifico, 190 N.J. 258, 265 (2007) (citing Massar, supra, 279 N.J. Super. at 93. “A basic principle of contract interpretation is to read the document as a whole in a fair and common sense manner.” Hardy ex. rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 103 (2009). Moreover, “the law grants particular leniency to agreements made in the domestic arena,” which consequently gives “judges greater discretion when interpreting such agreements.” Guglielmo v. Guglielmo, 253 N.J. Super. 531, 542 (App. Div. 1992).

Additionally, “[a]s a general rule, courts should enforce contracts as the parties intended.” Pacifico, supra, 190 N.J. at 266. See also Tessmar v. Grosner, 23 N.J. 193, 201 (1957) (noting that the court’s role in interpreting a contract is to enforce the parties’ common intent). Moreover, the court is required to “consider what is written in the context of the circumstances at the time of drafting and to apply a rational meaning in keeping with the ‘expressed general purpose.’” Pacifico, supra, 190 N.J. at 266 (quoting N. Airlines, Inc. v. Schwimmer, 12 N.J. 293, 302 (1953)).

“The polestar of contract construction is to discover the intention of the parties as revealed by the language used by them.” Karl’s Sales & Serv., Inc., v. Gimbel Bros., Inc., 249 N.J. Super. 487, 492 (App. Div.), certif. denied, 127 N.J. 548 (1991). As such, the court should not re-write a contract or grant a better deal than that for which the parties expressly bargained. Solondz v. Kornmehl, 317 N.J. Super. 16, 21 (App. Div. 1998).

See related Blog Post, published in the New Jersey Family Law blog.

NOTE: This Blog/Blawg, NJ Family Issues, is managed by Paul G. Kostro, Esq., an attorney/lawyer/mediator in Linden, Union County, New Jersey.

The polestar of contract construction is to discover the intention of the parties as revealed by the language used by them originally appeared on NJ Family Issues on June 21, 2010.

Under the three-prong test established in Marschall v. Marschall, 195 N.J. Super. 16, 29-31 (Ch. Div. 1984), and as clarified by Delorean v. Delorean, 211 N.J. Super. 432, 436-38 (Ch. Div. 1986), the proponent of an agreement must prove that there was: (1) no fraud or duress, (2) a lack of unconscionability, and (3) full and complete disclosure of financial wealth by the party looking to enforce the agreement. See Delorean, 211 N.J. Super. at 436-38.

Under the common law in New Jersey, an antenuptial agreement is generally valid “[s]o long as a spouse had sufficient opportunity to reflect on her actions, was competent, informed and had access to legal advice, and that of any relevant experts[.]”

Prior to the Legislature’s adoption of the Uniform Premarital Agreement Act (“UPAA”) in 1988, N.J.S.A. 37:2-31 to -41, the common law in New Jersey required that the proponent of such an agreement establish:

(1) that there be “full disclosure by each party as to his or her financial conditions;” (2) that the party sought to be bound by the agreement understood and accepted the terms and conditions of the agreement; and (3) that the agreement be fair and not unconscionable, that is, that the agreement will not “leave a spouse a public charge or close to it, or . . . provide a standard of living far below that which was enjoyed both before and during the marriage.”

[Rogers, supra, 404 N.J. Super. at 219 (quoting Marschall, supra, 195 N.J. Super. at 29-31).]

Our courts have embraced, for pre-Act cases, this three-part standard of Marschall, supra, as a “comprehensive exposition and analysis” of the law governing pre-Act agreements. D’Onofrio v. D’Onofrio, 200 N.J. Super. 361, 366 (App. Div.), certif. denied, 102 N.J. 366 (1985).

The UPAA specifically applies only to agreements “executed on and after [November 3, 1988].” N.J.S.A. 37:2-41. Therefore, any agreement executed prior to November 3, 1988 is governed by the common law of New Jersey. Rogers, supra, 404 N.J. Super. at 219.

“The easiest device [to ensure full disclosure] would probably be a schedule annexed to the agreement setting out, at least in general terms and with approximate values, the assets of the parties[,] as well as their income over the past few years.” Marschall, supra, 195 N.J. Super. at 33; see also Delorean, supra, 211 N.J. Super. at 438.

As stated in Marschall, “[a]n agreement which would leave a spouse a public charge or close to it, or which would provide a standard of living far below that which was enjoyed both before and during the marriage would probably not be enforced by any court.” Marschall, supra, 195 N.J. Super. at 30-31. (emphasis added). Marschall further noted that although “the applicable measure for judicially fixed support is the standard of living during the marriage, there does not seem anything inherently ‘unfair’ in an antenuptial agreement which uses a different standard?perhaps the somewhat lower standard at which one spouse lived before the marriage.” Id. at 31 (citing Lepis v. Lepis, 83 N.J. 139 (1980)).

As noted by Marschall, supra, 195 N.J. Super. at 30-31, considering a spouse’s standard of living prior to the marriage can be appropriate for evaluating a pre-Act agreement.

See related Blog Post, published in the New Jersey Family Law blog.

NOTE: My legal services include family law, divorce, child support, litigation, arbitration, mediation, child custody and visitation, alimony, equitable distribution, separation agreements, palimony, PSA, property settlement agreement, premarital and prenuptial agreements, midmarriage and marital agreements.

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An antenuptial agreement which would leave a spouse a public charge or close to it, or which would provide a standard of living far below that which was enjoyed both before and during the marriage would probably not be enforced by any court originally appeared on NJ Family Issues on March 31, 2010.

When you are considering marriage, there are so many things to think about and discuss: assets, liabilities, earnings, in-kind contributions, child-rearing, chauffeur and other family services, home-maker; who is responsible for what; who owns what; who contributes what?

For one person’s experience, read: When Bankers Get Too Personal, by Nicole Collins, published in The New York Times.

Premarital mediation and a Pre-Nuptial Agreement may be helpful to some — if you agree, and you want to discuss this further, please call me for an appointment.

NOTE: This Blog/Blawg, NJ Family Issues, is managed by Paul G. Kostro, Esq., an attorney/lawyer/mediator in Linden, Union County, New Jersey.

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Yous, Mine & Ours originally appeared on NJ Family Issues on November 20, 2009.

1. What are your individual “financial ancestries.” Discuss your personal pasts — how did your parents deal with money, how does that impact how you deal with it, and how might that impact your relationship?

2. Catalog your past mistakes and overall money habits — review your credit reports, and discuss the loan payments you may have missed and the credit cards you may not need. Discuss what you have learned (or still need to learn) about handling money.

3. Discuss who will pay the bills each month. If one person is making most or all of the money, discuss whether that person will get to make most or all of the financial decisions? Even under the best of circumstances, it may be a good idea, at a minimum, to hold regular household meetings, complete with spreadsheets and financial statements, so that the both persons are up to speed on the state of family finances.

4. Discuss how rich do we want to be one day? Discuss your individual career paths — are they going to be something that pull you together? If it is a possibility (or probability) in your lives, discuss whether you are both O.K. with one of you acting essentially as a single parent, with the other partner working 80 hours a week until the age of 80?

Mediation may be the most comfortable medium for preparing for marriage — a mediator can help both of you to explore the key financial issues that may be your greatest obstacles during marriage.

NOTE: My legal services include family law, divorce, child support, litigation, arbitration, mediation, child custody and visitation, alimony, equitable distribution, separation agreements, palimony, property settlement agreements, premarital and prenuptial agreements, midmarriage and marital agreements.

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Four financial issues that ought to be discussed before getting married originally appeared on NJ Family Issues on October 25, 2009.