Opinion
DOCKET NO. A-2097-11T3
04-03-2013
BELQUIS MARIA ESTEVEZ, f/k/a BELQUIS MARIA CANTU, Plaintiff-Appellant, v. ARCELLI MANGILIMAN, Defendant-Respondent, and RANDY CANTU, Respondent.
Gregory R. Preston argued the cause for appellant (Preston Wilkins & Martin, PLLC, attorneys; Mr. Preston and Lauren G. Bernard, on the brief). Michael D. Malloy argued the cause for respondent (Finestein & Malloy, LLC, attorneys; Russell M. Finestein and Geoffrey C. Jacobson, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Fuentes, Grall and Hayden.
On appeal from Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-91-11.
Gregory R. Preston argued the cause for appellant (Preston Wilkins & Martin, PLLC, attorneys; Mr. Preston and Lauren G. Bernard, on the brief).
Michael D. Malloy argued the cause for respondent (Finestein & Malloy, LLC, attorneys; Russell M. Finestein and Geoffrey C. Jacobson, on the brief). PER CURIAM
Plaintiff Belquis Maria Estevez, formerly known as Belquis Maria Cantu, commenced an action to quiet title naming as defendants her former husband, Randy Cantu, and Arcelli Mangiliman. Cantu was never served. On cross-motions for summary judgment, the judge dismissed plaintiff's complaint as to Mangiliman with prejudice and declared Mangiliman to have "good and valid title to the lands and premises" at issue. Plaintiff appeals from that judgment.
Plaintiff filed the complaint in the Law Division, but it was transferred to the Chancery Division on defendant Mangiliman's motion.
Because there is nothing in the record indicating that plaintiff's complaint as to Cantu was dismissed, we grant leave to appeal, as if a timely motion were filed, in the interests of justice. R. 2:10-2.
Our review is de novo. We, like the trial court, must "view the evidence in the light most favorable to the non-moving party" in determining whether Mangiliman was entitled to summary judgment as a matter of law. Murray v. Plainfield Rescue Squad, 210 N.J. 581, 584 (2012). For reasons not identical to those given by the judge, we affirm.
Plaintiff and Cantu married in December 1991. On August 29, 2001, the property was deeded to both of them by the prior owners. Plaintiff and Cantu separated in January 2003, and she left the marital residence with their two children.
A deed reflecting that plaintiff granted Cantu sole ownership of the property for $1.00 was executed on April 1, 2004, and recorded on May 27, 2004. Subsequently, on April 14, 2004, Cantu executed a deed conveying the property to Mangiliman. That deed was recorded on July 13, 2004. Mangiliman obtained mortgages to purchase the property for $429,000, and the parties stipulated that its fair market value is now $400,000.
Plaintiff claims that the signatures purporting to be hers on the April 1, 2004 deed and the affidavit of consideration accompanying it were forged. She acknowledges, however, that the mortgage on the marital residence may have been in default in March 2004 and that she obtained copies of the April 1 and 14, 2004 deeds in the summer of 2005, after being informed that Cantu had sold the property.
Upon learning about the deeds and the sale, plaintiff called Cantu. According to plaintiff, Cantu told her that he had done what he had to do and that if she did anything about it he would kill her. Plaintiff called her divorce lawyer, who told her that litigation to regain her interest would be costly. Because of the expense, she decided not to pursue the issue.
She continued to acquiesce. In August 2008, three years after learning about the deeds and sale of the marital residence and discussing the matter with her lawyer, plaintiff filed a complaint for divorce. Paragraph six of that complaint states: "There [sic] items of real and personal property acquired by the parties during the marriage have been distributed to each party's satisfaction." Plaintiff also signed a certification of non-collusion and verification in which she asserted that the allegations in the complaint were, to the best of her knowledge, true.
The judgment of divorce was entered on February 2, 2009. It incorporates a property settlement agreement (PSA) bearing signatures of plaintiff and Cantu that were notarized on January 30, 2009. The PSA designates plaintiff primary residential custodian of the parties' children and requires Cantu to pay $800 unallocated monthly child support.
The PSA also addresses the division of marital property. As does the complaint, Paragraph "5" of the PSA represents that the parties "have heretofore divided all marital assets to their satisfaction." Paragraph "10" states mutual waivers of claims and debts not specified in the PSA, and Paragraph "11" includes mutual waivers of "all rights, title and interest in any and all claims whatsoever including community property rights and interests, and including all rights derived pursuant to equitable [] distribution [] which he or she now or may hereafter acquire in the real or personal property or estates of the other . . . ." Finally, Paragraph "14" memorializes their mutual agreement to execute documents, including "deeds and releases, [and] waiver," as the "other may reasonably require" to give full effect to the PSA.
Plaintiff did not file her complaint to quiet title to the former marital residence until September 2010. During her deposition in this action, plaintiff gave several reasons for signing the PSA despite her awareness of the forged deed and the fact that the PSA did not provide her with any proceeds from the sale of the marital residence. She testified, "My understanding in the property settlement agreement was this was something I was signing in order to finalize my divorce." And she further explained that she did not seek a share of the proceeds because of the litigation expense. When asked why she commenced this action after the long delay, plaintiff's only response was, "I think it's fair."
As noted above, because Mangiliman was awarded summary judgment we must resolve all disputed facts in plaintiff's favor. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). Accordingly, we assume that plaintiff's signatures on the April 1, 2004 deed and affidavit of consideration were forged.
Generally, a deed that is forged is deemed void and a nullity. Sonderman v. Remington Const. Co., 127 N.J. 96, 115 (1992) (Stein, J., dissenting) (noting that a recorded deed that is a "'forgery'" or "'procured by fraud in the execution'" is void and "'the fact that it is recorded in no sense enhances its validity'" (quoting Roger A. Cunningham et al., The Law of Property § 11.9 at 782 (1984))). Despite the general rule, a person such as plaintiff wronged by a forgery may engage in a course of conduct that bars her from obtaining redress.
One who knows a deed transferring his or her ownership in property has been transferred and does nothing to repudiate it may be deemed to have ratified the forged deed and lose the right to challenge the forgery later, when an anticipated benefit does not materialize. See Thermo Contracting Corp. v. Bank of N.J., 69 N.J. 352, 363-64 (1976) (approving and relying upon Rakestraw v. Rodrigues, 500 P.2d 1401 (Cal. 1972) (a case involving a husband's forgery of a deed to property owned by his wife, who acquiesced in and did not object to the forgery until her marriage deteriorated)); Todd v. Mutual Aid Sav. & Loan Ass'n, 19 N.J. Super. 532, 537 (Law Div. 1952) (finding ratification by successors to an incompetent who knew about and would have been prejudiced by the loss). "Ratification requires intent to ratify plus full knowledge of all the material facts." Thermo Contracting Corp., supra, 69 N.J. at 361. While equities asserted by an innocent purchaser are irrelevant when a deed is a nullity, our cases suggest that such equities are relevant when a fraudulent deed has been ratified. See Knopf v. Alma Park, Inc., 105 N.J. Eg. 299, 301 (Ch. 1929), aff'd, 107 N.J. Eg. 140 (E. & A. 1930).
Here, plaintiff engaged in conduct amounting to a ratification. By Summer 2005, plaintiff was not only aware of the forged deed and resulting sale of her marital residence, but also had copies of the deeds, which she discussed with her attorney. Nevertheless, she did not repudiate the forged deed or act to invalidate the sale of the marital residence — a sale that relieved her of obligations under a mortgage that was in default. Her intent to ratify the deed she knew had been forged is demonstrated by her decision to forego litigation and her representation in the divorce action that she and her husband had divided all marital property to their mutual satisfaction.
We recognize that there is evidence that plaintiff's husband threatened to take her life if she took action to void the transaction. Giving plaintiff the benefit of an inference that she refrained from challenging the deed out of fear of her former husband does not change our view of her intent. In her deposition, plaintiff explained that she decided against litigation because of the expense. She is the person who filed the divorce complaint and opted to affirmatively assert her satisfaction with the division of marital property in that proceeding and urge the court to incorporate a PSA confirming her satisfaction in the judgment of divorce. That conduct compels a finding of intent to ratify the forgery and does not give rise to an inference of action taken under duress.
Respecting the balance of equities relevant to ratification, the evidence establishes, as the judge found, that Mangiliman had no way of knowing that the deed in her chain of title was forged, had been paying the mortgages and the property taxes for years and that, even though it may have declined in value, the property was Mangiliman's home. The judge determined, and we agree, that the equities favored Mangiliman, not plaintiff who had asserted in her divorce action that all marital property had been divided to her satisfaction.
The judge drew this conclusion on the balance of the equities in concluding that laches barred plaintiff's pursuit of a claim against Mangiliman.
For the foregoing reasons, we conclude that plaintiff, acting with knowledge of the material facts — that her ownership interest in the marital residence had been obliterated with the issuance of a forged deed — and the intent to forego its repudiation, ratified the deed and is, thereby, barred from seeking redress against an innocent purchaser for value.
There is an additional reason for barring plaintiff's attempt to seek redress for her husband's forgery of the April 1 deed from Mangiliman. Our courts "protect the integrity of the judicial process by not permitting a litigant" to take conflicting positions or make conflicting representations in the same or related judicial proceedings. McCurrie ex rel. Town of Kearny v. Town of Kearny, 174 N.J. 523, 534 (2002); accord State v. Galicia, 210 N.J. 364, 398 (2012); see Newell v. Hudson, 376 N.J. Super. 29, 30, 38 (App. Div. 2005) (noting that judicial estoppel applies to related litigation and applying the doctrine to bar a malpractice action arising from a settled divorce case). Although protecting judicial integrity is the purpose of this form of estoppel, courts invoke it only "when a party's inconsistent behavior will otherwise result in a miscarriage of justice." Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 365 (3d Cir. 1996); accord State v. Jenkins, 178 N.J. 347, 359 (2004) (quoting Kimball Int'l, Inc. v. Northfield Metal Prods., 334 N.J. Super. 596, 608 (App. Div. 2000), certif. denied, 167 N.J. 88 (2001)).
Plaintiff's conduct in the divorce warrants application of judicial estoppel. In that action, she attested to the truth of the allegation in her complaint, one of which was that to her knowledge all marital property had been divided to her and her husband's satisfaction. In addition, plaintiff urged the judge to incorporate the parties' PSA in the final judgment. That PSA not only memorialized her agreement that marital property had been divided to her satisfaction but also agreements favorable to her, such as the award of primary residential custody of the children and $800 monthly child support.
Plaintiff's presentation of the parties' agreement facilitated her goals — on this evidence, her goals were more likely than not foregoing a challenge to equitable distribution to obtain some terms favorable to her and finalizing her divorce. With the PSA, plaintiff was able to obtain a judgment of divorce expeditiously and without the need to demonstrate "extraordinary circumstances" and "good cause" that would have been required to obtain a judgment of divorce before equitable distribution of marital property, custody and child support had been resolved. R. 5:7-8.
To the extent that application of judicial estoppel depends upon a court's acceptance of the inconsistent position in a prior proceeding, Kimball, supra, 334 N.J. Super. at 607-08, that element is satisfied in this case. In the divorce action, the judge accepted and incorporated the PSA in its judgment.
Neither the fact that plaintiff and her former husband settled questions of custody, child support and equitable distribution nor the fact that Mangiliman was not a party to that action precludes judicial estoppel. This court and others have applied the doctrine to bar a legal malpractice action against a third party that arose from a property settlement agreement in a divorce action. See Newell, supra, 376 N.J. Super. at 30, 38-40 (applying judicial estoppel in that circumstance and discussing cases involving grants of summary judgment "in legal malpractice actions based on the doctrine of judicial estoppel where a litigant repudiates a prior, sworn inconsistent statement made in order to secure an advantage in or judicial approval of the underlying settlement"). Given that precedent, there is no principled basis for concluding that the doctrine cannot be applied here.
It is also evident that application of judicial estoppel is necessary to avoid a miscarriage of justice in this case. If we were to hold otherwise, Mangiliman, the innocent purchaser of the marital residence, would be left, as the trial judge found, without a home, with the debt secured by her mortgage, and without realistic means of recovering her loss from the apparent wrongdoer, Cantu, who has at this point apparently disappeared. Noting that plaintiff knowingly misrepresented her satisfaction with the division of property, the judge found that equity could not abide upsetting title that had passed effectively to Mangiliman. We could not agree more.
The judge concluded that judicial estoppel was probably inapplicable because Mangiliman was not privy to the position plaintiff asserted in her divorce and had not relied upon it. But the rationale for judicial estoppel is preservation of the integrity of judicial proceedings and avoidance of a miscarriage of justice. Detrimental reliance is not an essential element of this form of estoppel.
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The judgment declaring Mangiliman to have good and valid title, free and clear of any title, interest, right, agreement, encumbrance or lien of plaintiff, is affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION