The courts have made it clear that the fact that a party could have done better is an insufficient basis to justify looking behind a property settlement agreement itself. New Jersey has long espoused a policy favoring the use of consensual agreements to resolve marital controversy. Konzelman v. Konzelman, 158 N.J. 185 [(1999)]. New Jersey law further finds that settlement agreements, if found to be fair and just, are specifically enforceable in equity, Schlemm v. Schlemm, 31 N.J. 557 [(1960)].

Generally, a settlement agreement may be reformed if found to be unconscionable or overreaching by one of the parties. See Addesa v. Addesa, 392 N.J. Super. 58 [(App. Div. 2007)].

Court Rule 4:50-1 provides avenues for property settlement agreements to be attacked. Courts in New Jersey are more likely to set aside a property settlement agreement if there’s been a showing of fraud, coercion or overreaching by one of the parties. See Harrington v. Harrington, 281 N.J. Super. 39 [(App. Div.), certif. denied, 142 N.J. 455 (1995)] and Peskin v. Peskin, 271 N.J. Super. 261 [(App. Div.), certif. denied, 137 N.J. 165 (1994)].

Courts have the equitable authority to modify negotiated property settlement agreements for the purpose “of ensuring fairness and equity in the dissolution of marriages.” Miller v. Miller, 160 N.J. 408, 418 (1999). See also Conforti v. Guliadis, 128 N.J. 318, 323 (1992). However, “[v]oluntary accommodations regarding matrimonial differences are highly desirable and make a major contribution to the fulfillment of ‘the strong public policy favoring stability of arrangements.’” Petersen v. Petersen, 85 N.J. 638, 645 (1981); see also Weishaus v. Weishaus, 180 N.J. 131, 143 (2004). Because they are “essentially consensual and voluntary in character,” such agreements are “entitled to considerable weight with respect to their validity and enforceability.” Petersen, supra, 85 N.J. at 642.

Applications for relief from property settlement agreements are subject to Rule 4:50-1. Miller, supra, 160 N.J. at 418. Courts are directed to use the Rule “sparingly, in exceptional situations; the Rule is designed to provide relief from judgments in situations in which, were it not applied, a grave injustice would occur.” Hous. Auth. of Morristown v. Little, 135 N.J. 274, 289 (1994). Motions under the Rule are addressed to the sound discretion of the trial court, guided by equitable principles, St. James AME Dev. Corp. v. Jersey City, 403 N.J. Super. 480, 487 (App. Div. 2008), whose decision is “left undisturbed unless it represents a clear abuse of discretion.” Hous. Auth. of Morristown, supra, 135 N.J. at 283-84.

Upon making this motion, the burden is on the moving party to set forth facts that trigger one of the Rule’s provisions. See Connor v. Connor, 254 N.J. Super. 591, 601 (App. Div. 1992). To be entitled to a hearing on a motion to reform the property settlement agreement, the applicant must provide facts in her submissions to “show that there is a genuine issue as to a material fact.” Shaw v. Shaw, 138 N.J. Super. 436, 440-41 (App. Div. 1976); see also Palmieri v. Palmieri, 388 N.J. Super. 562, 564 (App. Div. 2006). In the “absence of unconscionability, fraud, or overreaching in the negotiations of the settlement . . . no legal or equitable basis exists to reform the parties’ property settlement agreement.” Miller, supra, 160 N.J. at 419. See also Addesa v. Addesa, 392 N.J. Super. 58, 66 (App. Div. 2007).

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.

Child support, even child support for a child enrolled in postsecondary school, is governed by law not an agreement between the parents. In other words, parents “cannot waive their obligation to pay child support in the Property Settlement Agreement.”

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

NOTE: Adwokat / Prawnik Pawel Kostro mowi po polsku.

“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.

Where the parties’ JOD or property settlement agreement omits an essential term, the court may supply “‘a term which is reasonable in the circumstances.’” Pacifico v. Pacifico, 190 N.J. 258, 266 (2007) (quoting Restatement (Second) of Contracts § 204). The Restatement explains the circumstances under which an omission of an essential term typically occurs:

The parties to an agreement may entirely fail to foresee the situation which later arises and gives rise to a dispute; they then have no expectations with respect to that situation . . . . Or they may have expectations but fail to manifest them, either because the expectation rests on an assumption which is unconscious or only partly conscious, or because the situation seems to be unimportant or unlikely, or because discussion of it might be unpleasant or might produce delay or impasse.
[Restatement (Second) of Contracts § 204(b).]

A court should supply an omitted term whenever the parties “fail[] to agree regarding an issue, generally because they did not anticipate that it would arise or [they] merely overlooked it.” Pacifico, supra, 190 N.J. at 266.

As the Court observed in Pacifico, when the parties’ property settlement agreement or JOD is silent on the valuation date, the date of sale is presumed to be the appropriate date for valuation purposes in the absence of any contrary evidence. Supra, 198 N.J. at 269.

NOTE: This Blog/Blawg, NJ Family Issues, is managed by Paul G. Kostro, Esq., an attorney/lawyer/mediator in Linden, Union County, New Jersey.
My legal and mediation services are offered to Polish-speaking and other clients in Union, Middlesex, Somerset, Essex, Hudson, Bergen, and Morris counties in NJ.
My legal and mediation services are offered to Polish-speaking and other clients in Fanwood 07023; Garwood 07027; Kenilworth 07033; Mountainside 07092; New Providence 07974; Roselle Park 07204; Roselle 07203; Elizabeth 07201; Linden 07036; Plainfield 07060; Rahway 07065; Summit 07901; Westfield 07090; Berkeley Heights 07922; Clark 07066; Cranford 07016; Hillside 07205; Scotch Plains 07076; Springfield 07081; Union 07083; Winfield; Carteret 07008; Dunellen 08812; East Brunswick 08816; Edison 08817; Jamesburg 08831; Metuchen 08840; New Brunswick 08901; Old Bridge 08857; Perth Amboy 08861; Sayreville 08871; South Amboy 08878; South River 08877; Avenel 07001; Colonia 07067; Iselin 08830; Woodbridge 07095; Somerset 08873; Somerville 08876 and Watchung 07069, New Jersey.
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.
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
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In determining whether and to what extent a modification of a PSA is appropriate, the trial court may consider whether any of the equitable distribution was intended to provide for future needs. For example:

[A]lthough a spouse cannot maintain the marital standard of living on the support payments received, this would not ordinarily warrant modification if it were shown that a single large cash payment made at the time of divorce was included with the express intention of meeting the rising cost of living. In other cases, the equitable distribution award — which we have recognized is intimately related to support, — might have been devised to provide a hedge against inflation.

[Lepis v. Lepis, 83 N.J. 139, 153 (1980).]

Moreover, in determining the extent of the defendant’s alimony benefit, the court may consider the “trade-off” that the defendant bargained for and received in the PSA. As the court has previously recognized,

in exchange for receiving a larger share of assets, a spouse may agree to limit either the amount or the duration of alimony, or both. Where such trade-offs are shown to have occurred, this may be taken into account along with all other circumstances in determining whether an award of alimony should be modified and, if so, to what extent . . . .

[Shifman v. Shifman, 211 N.J. Super. 189, 195 (App. Div. 1986).]

See related Blog Post by Sandra C. Fava, Esq.

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.

As stated in Massar v. Massar, 279 N.J. Super. 89, 93 (App. Div. 1995):

This State has a strong public policy favoring enforcement of agreements. See Dep’t of Pub. Advocate v. N.J. Bd. of Pub. Utils., 206 N.J. Super. 523, 528 (App. Div. 1985). Marital agreements are essentially consensual and voluntary and as a result, they are approached with a predisposition in favor of their validity and enforceability. Petersen v. Petersen, 85 N.J. 638, 642 (1981); Dworkin v. Dworkin, 217 N.J. Super. 518, 524 (App. Div. 1987). Marital agreements, however, are enforceable only if they are fair and equitable. Petersen, supra, 85 N.J. at 642; Carlsen v. Carlsen, 72 N.J. 363, 370 (1977); Guglielmo v. Guglielmo, 253 N.J. Super. 531, 541 (App. Div. 1992); Capanear v. Salzano, 222 N.J. Super. 403, 407 (App. Div. 1988). Any marital agreement which is unconscionable or is the product of fraud or overreaching by a party with power to take advantage of a confidential relationship may be set aside. Guglielmo, supra, 253 N.J. Super. at 541; Dworkin, supra, 217 N.J. Super. at 523. In fact, the law affords particular leniency to agreements made in the domestic arena and similarly allows judges greater discretion when interpreting these agreements. Guglielmo, supra, 253 N.J. Super. at 542. Such discretion is based on the premise that, although marital agreements are contractual in nature, “contract principles have little place in the law of domestic relations.” Id. [(citing Lepis v. Lepis, 83 N.J. 139, 148 (1980))]. Nevertheless, the contractual nature of such agreements has long been recognized and principles of contract interpretation have been invoked particularly to define the terms of the agreement and divine the intent of the parties. Capanear, supra, 222 N.J. Super. at 407. In interpreting the agreement, the court will not draft a new agreement for the parties. Aarvig v. Aarvig, 248 N.J. Super. 181, 185 ([Ch.] Div. 1991).

NOTE: My legal and mediation services are offered to Polish-speaking and other clients in Fanwood 07023; Garwood 07027; Kenilworth 07033; Mountainside 07092; New Providence 07974; Roselle Park 07204; Roselle 07203; Elizabeth 07201; Linden 07036; Plainfield 07060; Rahway 07065; Summit 07901; Westfield 07090; Berkeley Heights 07922; Clark 07066; Cranford 07016; Hillside 07205; Scotch Plains 07076; Springfield 07081; Union 07083; Winfield; Carteret 07008; Dunellen 08812; East Brunswick 08816; Edison 08817; Jamesburg 08831; Metuchen 08840; New Brunswick 08901; Old Bridge 08857; Perth Amboy 08861; Sayreville 08871; South Amboy 08878; South River 08877; Avenel 07001; Colonia 07067; Iselin 08830; Woodbridge 07095; Somerset 08873; Somerville 08876 and Watchung 07069, New Jersey.

Although the interpretation and application “of divorce agreements are not governed solely by contract law[,]” those “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).

NOTE: My legal and mediation services are offered to Polish-speaking and other clients in Union, Middlesex, Somerset, Essex, Hudson, Bergen, and Morris counties in NJ.

A property settlement agreement may be reformed if the negotiations leading up to the property settlement agreement suffered from unconscionability, fraud, overreaching, or because of “a common mistake, or mistake of one party accompanied by concealment of the other, [or] the agreement fails to express the real intent of the parties,” Miller v. Miller, 160 N.J. 408, 419 (1999); see Addesa v. Addesa, 392 N.J. Super. 68, 75 (App. Div. 2007); Dworkin v. Dworkin, 217 N.J. Super. 518, 523 (1987).

NOTE: Adwokat / Prawnik Pawel Kostro mowi po polsku.

A PSA 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)). A PSA is accordingly “approached with a predisposition in favor” of its “validity and enforceability.” Massar v. Massar, 279 N.J. Super. 89, 93 (App. Div. 1995).

“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); Berkowitz v. Berkowitz, 55 N.J. 564, 569 (1970); Schlemm v. Schlemm, 31 N.J. 557, 581-82 (1960). However, a PSA is only upheld to the extent that the agreement is consensual and voluntary, Konzelman, supra, 158 N.J. at 194, and complies with “equitable precepts.” Weishaus v. Weishaus, 180 N.J. 131, 143 (2004).

Marital property settlements agreements can only be enforced if they are fair 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). Nonetheless, a PSA is basically contractual in nature. Pacifico v. Pacifico, 190 N.J. 258, 265 (2007), see Harrington v. Harrington, 281 N.J. Super. 39, 46 (App. Div.), certif. denied, 142 N.J. 455 (1995). Therefore, the usual rule of contractual interpretation that a court must discern and implement the common intention of the parties applies to the interpretation of a PSA, Pacifico, supra, 190 N.J. at 266; see Tessmar v. Grosner, 23 N.J. 193, 201 (1957), and the terms of a contract must be enforced as written if those terms are unambiguous. County of Morris v. Fauver, 153 N.J. 80, 103 (1998).

In contrast with alimony or support awards, a property agreement cannot be “adjusted after divorce to reflect unanticipated changes in the parties’ circumstances,” because to do so would undermine the finality of a PSA. Schwartzman v. Schwartzman, 248 N.J. Super. 73, 77 (App. Div.), certif. denied, 126 N.J. 341 (1991); see Pressler, Current N.J. Court Rules, comment 6.1 on R. 4:50-1 (2010) (“‘changed circumstances’ standard” does not apply for applications of relief from marital property settlement agreements). “Subsequent events which should have been in contemplation of the parties as possible contingencies when they entered into the contract will not excuse performance” as long as the “contract has been fairly procured and its enforcement will work no injustice or hardship.” Schiff v. Schiff, 116 N.J. Super. 546, 560-61 (App. Div. 1971), certif. denied, 60 N.J. 139 (1972). Once the parties of a marital property settlement have reached an agreement, the court may not draft an improved contract for them. Massar, supra, 279 N.J. Super. at 93.

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

In Lepis, supra, 83 N.J. at 151, the Supreme Court recognized

“changed circumstances” that warrant modification [of support obligations] in a variety of settings. Some of them include
(1) an increase in the cost of living;
(2) increase or decrease in the supporting spouse’s income;
(3) illness, disability or infirmity arising after the original judgment;
(4) the dependent spouse’s loss of a house or apartment;
(5) the dependent spouse’s cohabitation with another;
(6) subsequent employment by the dependent spouse; and
(7) changes in federal income tax law . . . .

Parties may waive the right to seek modification of alimony by agreeing to a provision specifically stating such an intention, known as an “anti-Lepis clause.” Such a clause was first enforced in Finckin v. Finckin, 240 N.J. Super. 204, 205 (Ch. Div. 1990), in which Judge Conrad Krafte determined that this type of agreement did not violate public policy where “[t]he agreement . . . [was] explicit.”

In Morris v. Morris, 263 N.J. Super. 237 (App. Div. 1993), the court concluded that an anti-Lepis clause could be enforceable provided certain conditions were met by the parties. In that case, the parties had executed a property settlement agreement, unlike the situation in this case. Under those circumstances, we held that “the parties can with full knowledge of all present and reasonably foreseeable future circumstances bargain for a fixed payment or establish the criteria for payment to the dependent spouse, irrespective of circumstances that in the usual case would give rise to Lepis modifications of their agreement.” Id. at 241.

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

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