Opinion
DOCKET NO. A-1427-11T1
06-02-2014
JENNIFER CONRAD GILLIKIN, Plaintiff-Appellant, v. STEPHEN GILLIKIN, Defendant-Respondent.
Jeremy S. Price, attorney for appellant. Bielory & Hennes, P.C., attorney for respondent (Abraham M. Bielory, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Nugent and Accurso.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Ocean County, Docket No. FM-15-1532-08.
Jeremy S. Price, attorney for appellant.
Bielory & Hennes, P.C., attorney for respondent (Abraham M. Bielory, on the brief). PER CURIAM
Plaintiff Jennifer Conrad Gillikin appeals two post-judgment family court orders. The first denied her application for an order "[v]acating the settlement agreement and re-opening this matter." The second denied her motion for reconsideration of the first order, and also awarded defendant Stephen Gillikin $7,500 in counsel fees. Having considered plaintiff's arguments in light of the record and controlling law, we conclude the trial court did not abuse its discretion by denying either plaintiff's first motion or her motion for reconsideration. The trial court did, however, fail to adequately evaluate defendant's fee application and explain its fee award. Accordingly, we affirm the orders denying plaintiff's motions but reverse the award of counsel fees and remand that issue for further consideration.
The procedural events that occurred through the court's entry of the judgment of divorce (JOD) are undisputed. The parties married on August 27, 2000, had one child, and divorced on June 24, 2008. Plaintiff filed the divorce action. Defendant acknowledged service, but defaulted. Thereafter, plaintiff served defendant with a notice for equitable distribution, which defendant acknowledged. When the divorce action came before the court for final disposition, plaintiff appeared. Defendant did not. Following the hearing, the court entered the JOD, which provided, among other things, that plaintiff would have custody of the child and defendant would pay $150 in weekly child support; that defendant would pay plaintiff monthly alimony of $500 for five years; and that "the equity from the sale of the marital home will be divided 60% Plaintiff, 40% Defendant."
The court's decision concerning the marital residence was based on plaintiff's sworn testimony. During the hearing, plaintiff testified under oath as follows:
[The court]: You're going to split the equity from the sale of the marital home sixty percent to you and forty percent to him?Significantly, plaintiff had worked as a realtor "off and on" for eleven years as of the date of the hearing.
[Plaintiff]: Yes.
[The court]: And you feel that's fair?
[Plaintiff]: Yes.
[The court]: And what equity is there in the marital home?
[Plaintiff]: There's about [$]300,000 in equity in our house.
[The court]: And was that acquired during the marriage?
[Plaintiff]: Yes.
. . . .
[The court]: Well, why sixty-forty? Why did you come up with that?
[Plaintiff]: Because he kept the [parties' trucking] business with the income, he gave me sixty percent instead of fifty-fifty - -
[The court]: All right.
[Plaintiff]: - - and it helps me purchase another home for me and his daughter.
[The court]: But anyway, that's agreed to and he acknowledged that in his documents.
[Plaintiff]: Yes.
[The court]: And the home equity loan; what is the home equity loan?
[Plaintiff]: We have a line of credit on our house of $8,000.
[The court]: This is going to have to be paid if you sell the home; you understand that?
[Plaintiff]: Yes, yes.
[The court]: So he'll have to pay it out of his share right away.
[Plaintiff]: Right.
Two years after the court entered the June 2008 JOD plaintiff filed a motion seeking, among other things, an order compelling defendant within sixty days "to either refinance the marital home and pay plaintiff $180,000 in equitable distribution; or to list the home with a realtor who shall set a sales price, and set dates for incremental decreases in said price." Defendant cross-moved for, among other relief, an order requiring that the marital home be immediately listed for sale and that upon its sale the net proceeds be paid sixty percent to plaintiff and forty percent to defendant as required by the "property settlement agreement."
Construing plaintiff's motion as an enforcement motion, the court granted plaintiff's application in part and ordered the parties to immediately list the home with an MLS broker, at a price to be determined by the listing agent.
Nearly a year later, in July 2011, plaintiff filed a motion seeking an order "[v]acating the settlement agreement and reopening this matter." In her supporting certification, plaintiff alleged that she was unrepresented by counsel during the divorce action but defendant had been represented by an attorney. Plaintiff admitted she drafted the agreement that resulted in the JOD, but claimed she originally drafted language that she would receive $180,000 from the sale of the marital residence. She claimed defendant contacted her, said he had spoken with an attorney, and said the agreement "'had to be'" written in terms of a percentage. Assuming this to be "some 'legal' requirement," plaintiff agreed to allocate the net sale proceeds on a sixty percent-forty percent basis. She claims defendant "confirmed 'up and down' before and after the agreement was signed, that [plaintiff] would get [her] $180,000."
Conceding there was "a slight chance that the [d]efendant was 'mistaken,' or that [they] never had a true 'meeting of the minds,'" plaintiff felt "compelled" to express her belief that defendant had deliberately tricked her "on more than one occasion during the divorce process." Plaintiff then went on in her certification to describe how defendant reneged on his promise to pay her $180,000, and how he had forced her to leave the house based on the false premise that he would pay all but $60,000 upon refinancing if she moved out. She left, but defendant never paid her.
Defendant opposed plaintiff's motion, arguing that it was time-barred and, alternatively, that it did not establish the grounds contained in Rule 4:50-1 for relief from a judgment or order. Defendant denied that he was represented by counsel when plaintiff filed the divorce action and denied guaranteeing that she would receive $180,000 when the house was sold. Defendant cross-moved for various relief, including counsel fees.
Following oral argument, the court ruled that plaintiff had not established a right to relief under either Rule 4:50-1 or 4:50-2. In its order denying plaintiff's motion, the court further found that there was no merit to plaintiff's position that she had been misled. The court explained that plaintiff, a realtor, had filed the divorce action; prepared the admission of service and waiver for defendant to sign; prepared the notice of equitable distribution; and had come before the court on a default hearing, "at all times seeking a 60/40 split of the equity in the home." The court determined that plaintiff had "failed to establish why the court should grant this motion three years after the [j]udgment was entered. R. 4:50-2."
The court also denied defendant's request for counsel fees. At oral argument, the court explained:
I don't, as a general rule, order counsel fees because someone doesn't succeed on a legal argument, but I do warn the plaintiff in this regard. . . . [I]f there is another motion that is exactly the same as this, I may consider counsel fees in the future for both this [motion] and for the next motion.
Plaintiff moved for reconsideration and made essentially the same arguments she made in her original motion. The court denied the motion without oral argument, concluding that plaintiff had failed to meet the standard for a motion for reconsideration of a previous order. The court also granted defendant's cross-motion for counsel fees and awarded defendant $7,500. The court gave only the following reason for awarding counsel fees: "Plaintiff shall pay counsel fees in the amount of $7,500.00 from her share of closing proceeds at the time of sale on the former marital residence for the necessity of defendant having to respond to plaintiff's meritless and unreasonable motions to reopen the []JOD[.] R. 5:3-5(c)(3)."
Plaintiff filed this appeal. She contends she is entitled to relief from the JOD under Rule 4:50-1 because she "made a 'mistake' with regard to the language that required sixty percent (60%) versus $180,000 in cash," and "committed 'excusable neglect'" because she did not have counsel and believed she would receive $180,000 when the marital residence was sold. She maintains that she has produced evidence of "fraud, misrepresentation, or other conduct of an adverse party," which entitles her to relief under Rule 4:50-1(c). Alternatively, she argues that she is entitled to relief under Rule 4:50-1(e) because the JOD is no longer equitable. To emphasize her argument that she is entitled to equitable relief, she explains that the marital home has been sold and that the net proceeds she received were disproportionate to the value of defendant's trucking business, in which she waived any right to equitable distribution. Based on all of the foregoing circumstances, she claims she is also entitled to relief under Rule 4:50-1(f).
As to the issue of counsel fees, plaintiff argues that the court did not comply with Rule 1:7-4(a) because it did not state the facts and conclusions of law upon which it based its decision to award fees. Plaintiff insists the award was not warranted and was unsupported by any facts in the record.
We begin our analysis by restating basic principles that apply to motions filed under Rule 4:50 for relief from a judgment or order. The rule includes six categories of reasons for which the court may relieve a party from a final judgment or order:
(a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under [R.] 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of the judgment or order.
[R. 4:50-1.]
A court's decision to vacate or not vacate a judgment on one of these grounds is a determination left to the court's sound discretion, "guided by principles of equity." F.B. v. A.L.G., 176 N.J. 201, 207 (2003). Nevertheless, the Supreme Court has cautioned that "[c]ourts should use [Rule] 4:50-1 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). For those reasons, when we review a trial court's denial of a motion for relief from a judgment or order, we will not disturb the court's decision "'unless it represents a clear abuse of discretion.'" DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 261 (2009) (quoting Little, supra, 135 N.J. at 783).
The trial court acted well within its discretion when it denied plaintiff's motion. Although plaintiff did not clearly explain in her trial court brief what subsection of Rule 4:50 she was arguing, the court determined that plaintiff "ha[d] not made any kind of an argument that support[ed] her argument under either [Rule] 4:50-1 or 4:50-2." We discern no reason to disturb that ruling.
In her appellate brief, plaintiff argues that she is entitled to relief under subsections (a), (c), (e), and (f). Her arguments under subsections (a) and (c) are barred by Rule 4:50-2, which requires a motion under Rule 4:50-1 "be made within a reasonable time, and for reasons (a), (b) and (c) . . . not more than one year after the judgment, order or proceeding was entered or taken." The JOD was entered on June 24, 2008. Plaintiff waited for more than two years to file her first post-judgment motion. Consequently, her arguments here that she is entitled to relief under subsections (a) and (c) are explicitly time-barred.
Plaintiff also argues that she is entitled to relief under Rule 4:50-1(e), which provides that the court may relieve a party from a final judgment if:
the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application[.]
Plaintiff claims the judgment is no longer equitable because "the marital home was sold on April 10, 2012 and the net effect of this [o]rder is that [she] received less than ten thousand dollars as equitable distribution of a marital business that was providing a sizeable income to the parties at the time of the divorce, not to mention the value of the various trucks and equipment." Plaintiff is referring to defendant's trucking business.
To obtain relief under the last clause of Rule 4:50-1(e), "[t]he party seeking relief bears the burden of proving that events have occurred subsequent to the entry of a judgment that, absent the relief requested, will result in 'extreme' and 'unexpected' hardship." Little, supra, 135 N.J. at 285.
In DEG, LLC, supra, 198 N.J. at 267-68, the Court acknowledged "the more flexible standard" of Rufo v. Inmates of Suffolk Cnty. Jail, 502 U.S. 367, 379-85, 112 S. Ct. 748, 757-60, 116 L. Ed. 2d 867, 883-87 (1992), which applies to Fed. R. Civ. P. 60(b)(5), the federal counterpart of Rule 4:50-1(e). Because of the relationship between the two rules, our courts have relied on federal precedent in fashioning the strict standards for Rule 4:50-1(e) motions. DEG, LLC, supra, 198 N.J. at 266. However, the Court in DEG, LLC did not resolve whether the more lenient Rufo standard applies to all litigation or only to "institutional reform litigation." Id. at 267.
Plaintiff has not met her burden. We do not consider fluctuation in the real estate market an "unexpected" event, particularly for a realtor. And even if such fluctuation could be considered an unexpected event, to establish such fluctuation as the basis for a subsection (e) application, plaintiff must show more than personal expectations or beliefs about the real estate's market value. Here, plaintiff has provided no evidence of the fair market value of the home at the time the JOD was entered. Under those circumstances, the trial court did not abuse its discretion in denying plaintiff's motion.
Lastly, plaintiff argues that her motion should have been granted under Rule 4:50-1(f). As plaintiff correctly notes, our Supreme Court has stated that "'[n]o categorization can be made of the situations which would warrant redress under subsection (f). . . . [T]he very essence of (f) is its capacity for relief in exceptional situations. And in such exceptional cases its boundaries are as expansive as the need to achieve equity and justice.'" DEG, supra, 198 N.J. 269-70 (second and third alterations in original) (quoting Court Inv. Co. v. Perillo, 48 N.J. 334, 341 (1966)). "However, like subsection (e), due to the importance ascribed to the finality of judgments, exceptional circumstances must be present in order to justify relief." F.B., supra, 176 N.J. at 208.
The existence of exceptional circumstances "is determined on a case by case basis according to the specific facts presented." In re Guardianship of J.N.H., 172 N.J. 440, 474 (2002). In the context of seeking relief from a "negotiated equitable distribution scheme" under subsection (f), a party must make "a showing of fraud, misconduct or mistake in the negotiations or a showing of fundamental inequity or unfairness in the agreement." Connor v. Connor, 254 N.J. Super. 591, 601 (App. Div. 1992).
Here, plaintiff has not demonstrated that defendant fraudulently induced her to enter into their verbal, equitable distribution agreement. To the contrary, it appears that plaintiff decided on her own what was fair and equitable. And though she claims that defendant insisted on a percentage distribution of the net proceeds of the marital home rather than a specific cash payment because a lawyer said that the distribution should be by percentages, defendant's statement, if true, did not amount to fraud. And, as the trial court pointed out, the declining real estate market decreased not only plaintiff's, but also defendant's distribution from the sale of the marital residence.
Plaintiff argues that she is entitled to relief under subsection (f) because "this case presents some unique factors that would permit vacating this judgment under this subsection." She identifies those factors as the "'agreement' or 'agreements' between the parties in the prejudgment and post-judgment stages"; a "pro se litigant and a hearing regarding the . . . [JOD] that was unique, at best"; and "certifications by the [plaintiff] about a post-judgment 'agreement' regarding a partial payment of $120,000 cash in exchange for her moving out with payment of the remaining $60,000 upon sale of the home." Plaintiff also points to her certifications evidencing her frustration with respect to the listing and sale of the marital residence.
None of these factors is particularly unique. In fact, plaintiff does not even attempt to explain why the JOD hearing, in which she was the sole party to testify, was "unique." As to the alleged "post-judgment agreement" in which defendant said he would pay her $120,000 if she vacated the marital residence, plaintiff never moved to enforce that oral promise. In any event, assuming defendant made such a "post-judgment promise," we fail to see how the alleged promise was dispositive of the fairness of the parties' equitable distribution agreement when they entered into that agreement. In short, plaintiff has failed to demonstrate by competent evidence grounds for relief under subsection (f).
Plaintiff's argument that the trial court erroneously denied her motion for reconsideration warrants little discussion. A motion for reconsideration is addressed to the "'sound discretion of the [c]ourt, to be exercised in the interest of justice.'" Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996) (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)). Reconsideration is reserved for "cases which fall into that narrow corridor" where the prior decision was "based upon a palpably incorrect or irrational basis"; where the court failed to consider or appreciate "probative, competent evidence"; or where a "litigant wishes to bring new or additional information to the [c]ourt's attention which it could not have provided on the first application." D'Atria, supra, 242 N.J. Super. at 401.
Here, the court did not fail to consider or appreciate any of plaintiff's arguments. Nor did plaintiff present anything new on her motion for reconsideration. We therefore conclude that the court's denial of the motion was an appropriate exercise of its discretion.
In the final point of plaintiff's brief, she argues that the court did not properly evaluate defendant's fee application or explain the reasons for awarding defendant counsel fees. We agree.
An award of counsel fees in family actions is permitted by N.J.S.A. 2A:34-23, Rule 5:3-5(c), and Rule 4:42-9(a)(1). See Berkowitz v. Berkowitz, 55 N.J. 564, 570 (1970); Mani v. Mani, 183 N.J. 70, 93-94 (2005). Although the award is discretionary, the court should consider the following factors:
(1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties both during and prior to trial; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.
[R. 5:3-5(c); see also Mani, supra, 183 N.J. at 94).]
Here, it is not evident from the record that the court properly considered the relevant factors under Rule 5:3-5(c).
There was no hearing or oral argument on the motion for reconsideration, and the court devoted only one line of its decision to defendant's application for counsel fees. It explained its decision by referencing "the necessity of defendant having to respond to plaintiff's meritless and unreasonable motions to reopen the [F]JOD." The court, at best, only considered one factor in granting defendant's application: "the reasonableness and good faith of the positions advanced by the parties both during and prior to trial." R. 5:3-5(c)(3).
Because we cannot discern from the record whether the court appropriately considered all of the factors contained Rule 5:3-5(c), we reverse the counsel fee award and remand this matter. The trial court on remand should consider all factors relevant to the award of counsel fees before determining whether fees should be awarded, and if so, in what amount. The court may permit the parties to supplement their submissions, but should permit oral argument.
Affirmed in part, reversed in part, and remanded for further proceedings.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION