Court Opinion

ID: 4505646
Source: CourtListenerOpinion
Date Created: 2020-02-07 15:07:09.221641+00
Date Added: 2024-06-11T15:04:26.167545
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-2370-18T3

JAMES L. MOLLOY,

          Plaintiff-Appellant,

v.

JOAN C. MOLLOY,

     Defendant-Respondent.
_________________________

                    Argued telephonically January 23, 2020 -
                    Decided February 7, 2020

                    Before Judges Koblitz, Whipple, and Mawla.

                    On appeal from the Superior Court of New Jersey,
                    Chancery Division, Family Part, Bergen County,
                    Docket No. FM-02-1679-13.

                    Paul J. Concannon and Shelley D. Albert argued the
                    cause for appellant (Dario, Albert, Metz, Eyerman,
                    Canda, Concannon, Ortiz & Krouse, attorneys; Paul J.
                    Concannon and Shelley D. Albert, on the briefs).

                    Matheu D. Nunn argued the cause for respondent
                    (Einhorn, Barbarito, Frost & Botwinick, attorneys;
                    Matheu D. Nunn and Jessie M. Mills, on the brief).
PER CURIAM

       Plaintiff James L. Molloy appeals from a January 9, 2019 post-judgment

order requiring him to pay defendant Joan C. Molloy additional alimony based

on his total income, which included income from restricted stock units (RSUs)

that were equitably distributed pursuant to the terms of their marital settlement

agreement (MSA). For the following reasons, we reverse and remand for a

plenary hearing.

       The parties divorced in March 2014, following a twenty-six-year

marriage. Paragraph fourteen of their MSA required plaintiff to pay a base

alimony of $66,667 per year, and an additional lump sum alimony of

             33.3% of the gross pretax amount of "compensation for
             lump sum alimony purposes[,]" . . . defined as any
             salary above $220,000 gross per year and any incentive
             award, stock, restricted stock award, stock option
             award, bonus, commission, or other compensation that
             would be characterized as W-2 or 1099 income paid to
             [plaintiff] by his employer(s).

       In relevant part, paragraph forty-one of the MSA provided defendant 200

of an 1122 award of RSUs from plaintiff's employer. Plaintiff retained the

remaining 922 RSUs, and the MSA required he hold defendant's RSUs in a

Callahan1 trust for her benefit. A separate paragraph of the MSA stated:

1
    Callahan v. Callahan, 142 N.J. Super. 325 (App. Div. 1976).
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                                        2
               Except as provided in this [a]greement, each party may
               dispose of his or her property in any way. Each party
               waives and relinquishes any and all rights he or she may
               now have or hereafter acquire under the present or
               future law of any jurisdiction to share in the property or
               the estate of the other as a result of the marital
               relationship.

      In 2018, the parties disputed whether the additional lump-sum alimony

plaintiff calculated and paid to defendant was accurate for 2015 through 2017.

The parties engaged counsel to resolve the dispute but were unsuccessful.

Plaintiff insisted defendant owed him a credit and refused to pay the additional

alimony until she paid the sum. Defendant filed a motion to enforce litigant's

rights to recover the lump sum alimony she purported was owed. We focus on

the parties' dispute regarding the 2015 alimony calculation, which is related to

this appeal.

      In her motion, defendant included the 1122 RSUs in her calculation of

plaintiff's gross 2015 earnings and calculated his income to be $429,609.69.

Pursuant to the MSA, to determine plaintiff's 2015 additional lump sum alimony

obligation, defendant subtracted $220,000 and the value of the 200 RSUs

attributable to her. She divided the net figure by 33.3%, yielding $59,728.77 as

the additional lump sum alimony. She subtracted $13,367.65, which plaintiff

previously paid for 2015, leaving $46,361.12 outstanding.

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       Plaintiff's calculations differed.       Utilizing the same total earnings of

$429,609.69, he subtracted the total value of the 1122 RSUs, other expenses,

and the $220,000 yielding $19,224. Dividing this sum by one-third, plaintiff

netted $6408 as the additional lump sum amount. He reasoned because he had

paid defendant $13,367, she owed him $69592, representing an overpayment.

       The motion judge heard oral argument and concluded the following:

                   The parties were . . . represented by counsel as
             they negotiated this agreement . . . and had . . . an
             opportunity to thoroughly [vet] each and every
             paragraph within the [MSA] before signing [it].

                   As such, the [c]ourt finds that this agreement
             would not appear . . . to be based on any form of
             coercion, duress, or fraud.

                   So[,] in light of the absence of any finding of
             coercion, duress, or fraud the MSA stands as it is
             written.

                   Now, [three] and a half years later plaintiff has
             buyer's remorse and wants to upend the agreement. . . .
             Clearly and carefully [the MSA] sets forth a base
             alimony under Paragraph [fourteen.]

                   And the crux of this argument is . . . the initial
             lump sum alimony and the amounts and the calculation
             for the additional lump sum alimony, and what the
             additional lump sum alimony entails.

2
    Plaintiff's final sum was $6960, which we assume was a product of rounding.
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                 Paragraph [fourteen] clearly articulates the term
           "Compensation for lump sum alimony purposes shall be
           defined as any salary above $220,000 gross per year,
           any incentive award, stock, restricted stock award,
           stock option award, bonus commission, or other
           compensation that would be characterized as a W-2 or
           1099 income paid to husband by his employer."

                 Therefore, any item that's listed on his W-2, with
           the exception, I think, of the changed tax law regarding
           the health insurance, would be characterized as the
           income.

                  Now, plaintiff speaks to whether or not the
           [RSUs] issued in . . . 2012 based on past and future
           retention was addressed in Paragraph . . . [forty-one],
           which does not state that it needs to be read in
           conjunction with, or separate and apart from Paragraph
           [fourteen].

                And the . . . [1122] RSU[]s issued to plaintiff on
           or about November 22, 2012[,] were issued well in
           advance of the date on which the parties executed the
           [MSA] and the final judgment of divorce was entered.

                 As such, the distribution of the . . . [RSUs] was
           contemplated at the time the parties executed the
           MSA. . . . [P]laintiff [cannot] at this point have
           buyer[']s remorse. He has lived with this agreement
           since March of 2014.

                 As a result, I'm going to enforce all provisions of
           the [MSA] as a valid and enforceable agreement.

     The motion judge also rejected plaintiff's argument that relief from the

MSA was warranted under Rule 4:50-1. Pursuant to Rule 4:50-2, she found the

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                                      5
grounds for relief under Rule 4:50-1(a)-(c) were time-barred and the relief

sought under (d)-(f) was also barred because plaintiff's motion was not brought

within a reasonable time.

                                       I.

      Although we typically defer to a trial court's factual determinations,

"[d]iscretionary determinations, supported by the record, are examined to

discern whether an abuse of reasoned discretion has occurred." Ricci v. Ricci,

448 N.J. Super 546, 564 (App. Div. 2017). A trial court's interpretation of the

law is reviewed de novo on appeal. S.D. v. M.J.R., 415 N.J. Super. 417, 430

(App. Div. 2010) (citing Manalapan Realty, LP v. Twp. Comm. of Manalapan,

140 N.J. 366, 378 (1995)). A motion for relief under Rule 4:50-1 should be

granted sparingly and is similarly addressed to the sound discretion of the trial

court, whose determination will not be disturbed absent a clear abuse of

discretion. U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J. 449, 467 (2012).

      Plaintiff argues the motion judge's award of additional lump sum alimony

based on a calculation of his income using the 922 RSUs he retained under the

MSA "constituted an impermissible double-dipping." He asserts defendant's

failure to include the income from the sale of the 200 RSUs she received in

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                                       6
equitable distribution proves she understood the 1122 tranche of RSUs w as

excluded from income for purposes of calculating additional lump sum alimony.

      Plaintiff argues the MSA contained an express mutual waiver of all rights

each party had in the other's property, including the RSUs distributed pursuant

to the MSA. He asserts the MSA should be reformed to cure "a drafting error

by [d]efendant's counsel, to avoid an unconscionable result" because defendant's

receipt of "[seventy-three percent] of the net value of the RSUs" was

"unconscionable." Plaintiff contends he did not intend such a result and the

motion judge erred in resolving the material factual dispute without a plenary

hearing.

                                         A.

      A marital settlement agreement is a contract that is enforceable to the extent

it is fair and equitable. Peterson v. Peterson, 85 N.J. 638, 642 (1981) (citations

omitted). "The very consensual and voluntary character of these agreements render

them optimum solutions for abating marital discord, resolving matrimonial

differences, reaching accommodations between divorced couples, and assuring

stability in post-divorce relationships." Konzelman v. Konzelman, 158 N.J. 185,

194 (1999). "Marital agreements . . . are approached with a predisposition in favor

of their validity and enforceability." Massar v. Massar, 279 N.J. Super. 89, 93 (App.

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                                         7
Div. 1995) (citation omitted). Such arrangements "'should not be unnecessarily or

lightly disturbed.'" Konzelman, 158 N.J. at 193-94 (quoting Smith v. Smith, 72 N.J.
350, 358 (1981)).

      At the outset, we reject plaintiff's argument the lump sum alimony

calculation required the motion judge to include defendant's share of the RSUs.

The MSA clearly states "[i]ncreases in [defendant's] earned income shall reduce

[plaintiff's] alimony obligation." The liquidation of defendant's share of the

RSUs constituted a realization of unearned income and did not affect alimony.

      We also reject plaintiff's argument the MSA created an "impermissible

double-dipping" pursuant to Innes v. Innes, 117 N.J. 496 (1990) and N.J.S.A.

2A:34-23(b). Innes and the statute stand for the proposition that retirement

benefits treated as assets for purposes of equitable distribution shall not be

considered income for purposes of determining alimony. 117 N.J. at 504-05.

The RSUs were not a retirement benefit but earned income.

      In Steneken v. Steneken, 183 N.J. 290 (2005), our Supreme Court upheld

the use of a normalized income calculation for purposes of determining

equitable distribution of a business operated by the supporting spouse and an

entirely different income amount based on the spouse's actual earnings for

purposes of calculating alimony. The Court stated:

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                                        8
                     Although some jurisdictions do prohibit the
            disparate alimony and equitable distribution
            calculations defendant finds objectionable, others allow
            it. . . . Because we embrace the premise that alimony
            and equitable distribution calculations, albeit
            interrelated, are separate, distinct, and not entirely
            compatible financial exercises, and because asset
            valuation methodologies applied in the equitable
            distribution setting are not congruent with the factors
            relevant to alimony considerations, we conclude that
            the circumstances here present a fair and proper method
            of both awarding alimony and determining equitable
            distribution.

                   We find no inequity in the use of the individually
            fair results obtained due to the use of an asset valuation
            methodology normalizing salary in an on-going close
            corporation for equitable distribution purposes, and the
            use of actual salary received in the calculus of alimony.
            The interplay of those two calculations does not
            constitute "double counting."

            [Id. at 301-02.]

      The same principles apply here. Plaintiff's share of the 1122 tranche of

RSUs was not liquidated and paid to defendant as alimony. He retained his

equitable distribution. However, under one reading of the MSA those shares

were reported as plaintiff's income for 2015, and were therefore includable for

purposes of calculating his overall income and the additional lump sum alimony

award.

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                                        9
                                        B.

      We are constrained to remand the matter for a plenary hearing because the

parties' common intent respecting the treatment of the 1122 RSU tranche is not

readily discernable. Our Supreme Court has stated:

                   As a general rule, courts should enforce contracts
            as the parties intended. . . . Similarly, it is a basic rule
            of contractual interpretation that a court must discern
            and implement the common intention of the parties.
            Tessmar v. Grosner, 23 N.J. 193, 201 (1957). The
            court's role is 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 v. Pacifico, 190 N.J. 258, 266 (2007)
            (citations omitted).]

      Although "not every factual dispute that arises in the context of

matrimonial proceedings triggers the need for a plenary hearing[,] . . . we have

repeatedly emphasized that trial judges cannot resolve material factual disputes

upon conflicting affidavits and certifications." Harrington v. Harrington, 281
N.J. Super. 39, 47 (App. Div. 1995). Plenary hearings are necessary where they

are helpful to resolve material factual disputes. Jacoby v. Jacoby, 427 N.J.

Super. 109, 123 (App. Div. 2012). This case presents such a situation.

      Indeed, it is possible to read the additional lump sum alimony language

consistent with defendant's argument the parties intended to include plaintiff's

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                                       10
share of the 1122 tranche in the calculation of the additional lump sum alimony.

However, when the provision is read in conjunction with the parties' mutual

express waiver of any interest in the other's equitable distribution, plaintiff's

argument the 1122 tranche was not a part of the lump sum alimony calculation

is equally plausible. Moreover, the "[e]xcept as provided in this [a]greement"

language contained in the waiver paragraph did not resolve whether plaintiff's

share of the RSUs were excluded from the alimony calculation because the

parties had opposite explanations regarding the reason for the disproportionate

distribution of the RSUs in question. The motion judge's findings did not

resolve these issues. Therefore, a plenary hearing was necessary to determine

the parties' common intention regarding the 1122 RSUs.

                                       C.

      Finally, because we remand the matter for a hearing, we do not reach

plaintiff's argument concerning reformation of the MSA on grounds of

unconscionability. Additionally, this argument was not addressed to the motion

judge in the first instance. We decline to consider arguments not raised before

the trial court. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973).

      Reversed and remanded. We do not retain jurisdiction.

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                                      11