Opinion
DOCKET NO. A-5167-14T3
02-09-2017
JENNIFER ROHRABACHER, Plaintiff-Appellant, v. JAMES GILBERT, Defendant-Respondent.
Marlyn E. Quinn argued the cause for appellant. Jayne M. Lambo argued the cause for respondent (Lambo & Lambo, LLC, attorneys; Ms. Lambo, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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. Before Judges Alvarez and Manahan. On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Somerset County, Docket No. FM-18-534-11. Marlyn E. Quinn argued the cause for appellant. Jayne M. Lambo argued the cause for respondent (Lambo & Lambo, LLC, attorneys; Ms. Lambo, on the brief). PER CURIAM
Hon. Carol E. Higbee participated in the panel before whom this case was argued. The opinion was not approved for filing prior to Judge Higbee's death on January 3, 2017. Pursuant to R. 2:13-2(b), "Appeals shall be decided by panels of 2 judges designated by the presiding judge of the part except when the presiding judge determines that an appeal should be determined by a panel of 3 judges." The presiding judge has determined that this appeal shall be decided by two judges. --------
Plaintiff Jennifer Rohrabacher appeals from an April 13, 2015 Family Part post-judgment order distributing retirement assets and awarding counsel fees, and from a June 22, 2015 decision denying reconsideration. We hereby vacate and remand for a plenary hearing on the issue of the allocation of the retirement assets in accordance with the parties' matrimonial settlement agreement (MSA).
By way of background, the parties married June 30, 2001, and have two children. Parenting time issues have been frequently litigated after the March 29, 2011 final judgment of divorce which incorporated the parties' MSA.
The MSA states in paragraph 16:
The parties shall equally share the coverture value of all forms of retirement accounts acquired during the marriage, including but not limited to Individual Retirement Accounts, 401Ks, Keogh's, Profit Sharing, pensions etc. Should the parties need a Qualified Domestic Relations Order to divide these retirement funds, the parties shall equally share the expense of preparation of this (these) Orders and shall each cooperate in the preparation of these documents, specifically by providing documentation and information as needed.
Despite the agreement, the parties did not effectuate the distribution of their retirement assets. Rather, post-judgment, and on appeal, the parties not only dispute which assets, and in what amounts, were premarital, and therefore excluded from distribution, but also an end date for investment growth or loss.
More than two years after the divorce, a first Family Part judge on August 26, 2013, ordered discovery, settlement conferences, and if necessary, a plenary hearing limited to implementation of paragraph 16. That order stated:
Plaintiff's motion to enforce litigant's rights by compelling defendant to cooperate in the transfer to plaintiff her equitable distribution share of defendant's retirement funds, as required by Paragraph 16 of the parties' MSA dated October 22, 2010 is GRANTED IN PART. The Court finds that a plenary hearing is warranted. However, prior to same, the Court is ORDERING that the parties attend a post-dissolution Early Settlement Program to mediate the retirement accounts issue. R. 5:5-6. The Court further ORDERS the following discovery schedule: (a) The parties may engage in discovery by serving financial interrogatories and Notice to Produce documents within twenty (20) days of entry of this Order, with answers to be exchanged within twenty [(]20) days. Should any party request any additional discovery and the opposing party objects, he or she may file an application with the court. Otherwise, the post-judgment ESP shall be scheduled within sixty (60) days of entry of this Order. If the parties are able to successfully reach a resolution of the litigated issues, then a Consent Order shall be prepared, signed and submitted for the court's signature. If unsuccessful, the matter will be scheduled by Family Case Management for an Intensive Settlement Conference followed by a Plenary Hearing.
Around that time, the parties engaged in correspondence that was aimed at settling the issue. Suffice it to say that the correspondence did not lead to an agreement. The meaning of the correspondence itself is now in dispute. Plaintiff's counsel's September 19, 2013 letter stated "I am [] attaching hereto my client's analysis of your client's retirement funds." Plaintiff calculated that defendant's marital retirement assets totaled $126,016. Defense counsel responded claiming to accept this calculation, but misinterpreted plaintiff's counsel's letter. Defense counsel responded: "[defendant] accepts your client's calculation of the parties' retirement assets," and stated that the total amount of retirement funds held by both parties subject to equitable distribution was $126,016.
The parties, both of whom are accountants, were employed by JH Cohn prior to the marriage. Plaintiff claims she rolled over her retirement funds from JH Cohn into a TD Waterhouse account. That company has since been acquired, and records regarding their retirement accounts are simply unavailable or extremely difficult to obtain, if they exist at all. When defendant saw documents regarding a Wells Fargo account in plaintiff's name, which as of October 2010 had a balance of $24,054.86, he claimed that the account was acquired during the marriage, which plaintiff disputed. She claimed the Wells Fargo account held funds rolled over from the TD Waterhouse account. Plaintiff gave an inconsistent explanation of the disposition of the retirement funds she accumulated during the marriage, all of which she asserted had been withdrawn for marital purposes and no longer existed. Plaintiff retained an IRA worth $1131.88 as of July 2004.
Conceding that he did not have the TD Waterhouse records of his JH Cohn rolled over funds either, defendant did acknowledge having retirement funds which included a Grant Thornton 401K having a March 2011 value of $162,668.33 and a value of $207,344.73 on March 31, 2014, and a Drew Marine 401K having a value of $6530.88 as of February 28, 2014. The value of his defined benefit Grant Thornton pension plan is unknown. Defendant also has a Wells Fargo $4178.24 IRA and a Drew Marine employee savings plan worth $5403.78.
Having reached no resolution by way of out-of-court settlement, nor complied with the Family Part order regarding discovery, formal court-initiated settlement efforts, and/or a plenary hearing, the parties continued substantial motion practice regarding distribution of retirement assets. Unfortunately, some of this financial post-judgment litigation became entangled with litigation regarding parenting time and information sharing regarding the children.
Ultimately, a second Family Part judge ordered plaintiff to submit complete documentation for her retirement accounts. He stated that if she did not do so, he would declare her retirement accounts to be marital assets and would distribute them equally. It is clear from this April 13, 2015 order that the judge assumed from defendant's certifications that plaintiff owned two retirement accounts, totaling in excess of $40,000, one the original premarital TD Waterhouse account, and the other a post-marriage Wells Fargo account. This was contrary to plaintiff's unqualified statement that the Wells Fargo account contained nothing more than the rollover from the TD Waterhouse account, and that because the company no longer existed in this country, she could not produce documentation to support her statement. The court did not order defendant to produce any documentation regarding his retirement assets.
As a result of what the judge perceived to be plaintiff's bad faith in failing to produce documentation, and his conclusion that the letters exchanged by counsel constituted an enforceable agreement, he awarded plaintiff $39,768.98 by way of retirement asset distribution from defendant. In his decision, he did not mention defendant's defined benefit plan. The ensuing motion for reconsideration was denied.
Plaintiff raises seven points on appeal:
POINT ONE
THE TRIAL COURT ERRED IN FINDING THAT THE ATTORNEYS' LETTERS OF SEPTEMBER 19, 2013 AND OCTOBER 17, 2013 CONSTITUTED AN AGREEMENT BETWEEN THE PARTIES WHEN IT IS CLEAR THERE WAS NO AGREEMENT AS TO THE ESSENTIAL TERMS AND THERE WAS NO MEETING OF THE MINDS
POINT TWO
THE TRIAL COURT ERRED IN NOT ORDERING A PLENARY HEARING WHEN THERE EXISTS A GENUINE DISPUTE AS TO A MATERIAL FACT AS TO THE DISTRIBUTION OF THE PARTIES' RETIREMENT ACCOUNTS AND BECAUSE JUDGE BORKOWSKI HAD ALREADY DETERMINED THAT A PLENARY HEARING WAS REQU[IR]ED
POINT THREE
THE TRIAL COURT ERRED IN FINDING THAT PLAINTIFF WAIVED HER INTEREST IN DEFENDANT'S DEFINED BENEFIT RETIREMENT ACCOUNT THAT WAS ACQUIRED IN ITS ENTIRETY DURING THE MARRIAGE
POINT FOUR
THE TRIAL COURT ERRED IN DENYING PLAINTIFF THE RIGHT TO MARKET FLUCTUATIONS ON HER SHARE OF THE RETIREMENT FUNDS FROM OCTOBER 22, 2010 TO THE DATE OF DISTRIBUTION
POINT FIVE
THE TRIAL COURT ERRED IN DETERMINING THAT DEFENDANT HAD PROVED THAT THE MARITAL PORTION OF PLAINTIFF'S RETIREMENT FUNDS WAS $46,478 BASED ON TWO ACCOUNT STATEMENTS DATED SIX YEARS APART WHEN PLAINTIFF ASSERTED THESE TO BE THE SAME MONIES
POINT SIX
THE TRIAL COURT ERRED IN DENYING PLAINTIFF'S MOTION FOR RECONSIDERATION
POINT SEVEN
THE TRIAL COURT ERRED IN COMPELLING PLAINTIFF TO PAY DEFENDANT'S ATTORNEY'S FEES AND COSTS
AND IN DENYING PLAINTIFF'S REQUEST FOR COUNSEL FEES
Rather than address the points individually, we explain the reasons we conclude the judge erred in making distribution of significant retirement assets without a plenary hearing. Appellate courts do not disturb the factual findings of the trial judge unless "they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." D'Agostino v. Maldonado, 216 N.J. 168, 182 (2013). No deference is owed to findings not based on witness testimony. Yueh v. Yueh, 329 N.J. Super. 447, 461 (App. Div. 2000).
"[A] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty L.P. v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995). A trial court's construction of a contract is a legal assessment and is not accorded any deference. NAACP of Camden Cty. East v. Foulke Mgmt. Corp., 421 N.J. Super. 404, 430 (App. Div. 2011). A trial court's award of attorney's fees is "only disturbed upon a clear abuse of discretion." J.E.V. v. K.V., 426 N.J. Super. 475, 492 (App. Div. 2012) (quoting City of Englewood v. Exxon Mobil Corp., 406 N.J. Super. 110, 122 (App. Div.), certif. denied, 199 N.J. 515 (2009)).
The attorney exchange of letters clearly did not result in an agreement. A "meeting of the minds" on all the terms of an agreement is an essential element of a contract. Morton v. 4 Orchard Land Trust, 180 N.J. 118, 120 (2004). "[I]f the parties do not agree to one or more essential terms, the agreement is unenforceable." Graziano v. Grant, 326 N.J. Super. 328, 340 (App. Div. 1999).
Plaintiff's counsel's letters referred only to defendant's retirement funds, making no specific mention of either plaintiff's retirement funds or defendant's defined benefit pension plan. She assumed plaintiff's retirement assets were included in the discussion, but not defendant's defined benefit plan. Defendant's attorney's response included all of defendant's retirement assets, but none of plaintiff's accounts. The parties were negotiating regarding different items, and therefore no agreement could be reached. There cannot be a meeting of the minds if each party, unbeknownst to the other, is including different assets in the negotiation.
Therefore, the judge should not have assumed an enforceable agreement existed and issued an order based on that assumption. The judge's interpretation of the attorneys' exchange of letters as creating a contract, an opinion not entitled to any deference, is a legal conclusion with which we simply do not agree. See NAACP of Camden County, supra, 421 N.J. Super. at 430. The parties had a different understanding of the items under consideration — it was impossible for a meeting of the minds to be reached under these circumstances.
We also conclude it was error for the court to have fixed the value of plaintiff's retirement account by way of sanction. Plaintiff in no uncertain terms certified that she did not have two accounts totaling in excess of $40,000, but only one rollover account having a value in excess of $20,000. The trial judge nonetheless set value at $40,000, and distributed the retirement funds accordingly, because he found plaintiff's failure to produce documents supporting her claim to be in bad faith. He did not believe her representations.
After our review of the record, we do not agree with the judge's conclusion that plaintiff willfully disobeyed his order. Plaintiff explained the reason she could not produce documents, although the judge rejected this for reasons not clearly stated in the record. Whether plaintiff had one retirement account with more than $20,000, or two with over $40,000 was a material fact in dispute, and a hearing should have been conducted before she was found to be "incredible." Because the judge did not believe her, he potentially doubled the value of her retirement account.
Furthermore, the judge should have required defendant to produce complete documentation with regard to the value of his far more substantial retirement accounts. Compounding the potential harm of his omission, the judge inadvertently failed to include defendant's defined benefit account in his calculations.
A plenary hearing is necessary when a genuine issue exists as to a material fact. Failure to conduct such a hearing is reversible error. K.A.F. v. D.L.M., 437 N.J. Super. 123, 137-39 (App. Div. 2014).
The judge's decision should not have been made in the absence of the exchange of complete discovery as required by the first Family Part judge's order. That order unequivocally stated that on a similar record, a plenary hearing was warranted because no values could be assessed without one. We agree.
It is a commonplace that Family Part judges decide narrow questions of post-divorce judgment equitable distribution upon certifications. But in this case the issues involved substantially disputed facts as to which portion of the significant retirement assets were premarital, in addition to disputes as to value, and the end date for distribution purposes. There were genuine issues of material fact which only a plenary hearing could fairly resolve. If neither party has access to the TD Waterhouse records, for example, the judge must decide credibility in order to track funds brought into and through the marriage, and determine the amounts that should be distributed.
Turning to the judge's decision regarding legal fees, he awarded defendant $500 based on what he perceived to be plaintiff's recalcitrant failure to comply with his April 13, 2015 order. Additionally, he considered her application for reconsideration to be baseless.
Without even reaching the judge's minimal analysis of the parties' financial status, it is clear that fees were granted in order to punish plaintiff. Since we do not consider, at this point, that her inability to produce documents resulted from bad faith, nor do we consider the attorneys' exchange to have created an enforceable contract, we therefore vacate the fees. Additionally, the relative financial status of the parties should have been included in deciding attorney's fees. See J.E.V. v. K.V., 426 N.J. Super. 475, 493 (App. Div. 2012) (quoting Kelly v. Kelly, 262 N.J. Super. 303, 307 (Ch. Div. 1992)).
Reversed and remanded. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION