Throughout my career as a divorce attorney here in my hometown of East Brunswick, New Jersey, I have had many folks come to visit my office after their divorce has already been concluded and are now seeking my advice. Sadly, sometimes the lawyer who represented these folks did not exclusively practice divorce and family law. Consequently, myself and the associate attorneys at our law firm often find poorly written Property Settlement Agreements (“PSA”) that do not protect the client to the fullest extent. Many times this lawyer’s lack of experience in New Jersey divorce cases inhibits their ability to see problems down the road and therefore the PSA does not contain the proper language required to best protect the client.
On the other hand, if the client had a more savvy divorce attorney in the first place, the PSA would extremely clear as to certain issues that would serve to protect the client down the road. The following case is an example of a litigant who lost out on a significant amount of money because their attorney failed to include specific language to that would have provided the client certain credits. However, as this PSA did not include specific language regarding these credits, they lost their motion. Let’s take a closer look.
In Tinfow v. Tinfow, Cary Tinfow appealed an order of the Superior Court of New Jersey, Family Part of Essex County dated April 25, 2008, that denied his motion to be reimbursed for the payments he made to pay down the mortgages on two properties, from the date of the divorce to the date the properties were sold. The New Jersey Appellate Division found that the matrimonial settlement agreement provided that Cary was to be responsible for paying the mortgage for the time until the properties were sold, and how the proceeds from the sale of each home would be distributed, but did not contain any provisions that granted Cary a credit for any money paid on the mortgages until the houses were sold. The appellate panel held that the PSA failed to include any language in the settlement agreement that granted him the entirety of the mortgage pay downs, when he (and his attorney) had every opportunity to do so, and affirmed the decision of the Family Part.
Cary and Deborah Tinfow got married on June 15, 1991 and had two children together. When they got divorced on June 19, 2007, they entered into a matrimonial settlement agreement. The settlement agreement had provisions within it that directed for the immediate sale of the marital home located in North Caldwell, the summer house in Lavallette, and a condominium in Dover.
Deborah filed a motion on March 14, 2008, in which she sought to have the proceeds from the future sales of the North Caldwell and Lavallette houses placed in escrow. Conversely, Cary crossed-moved, and sough reimbursement for the principal he had paid for the mortgages on the two houses between June 2007, the divorce date, and April 2008, the date Deborah filed the present motion. The Family Part entered an order on April 25, 2008 that resolved the issue of money Cary owed to Deborah, and denied Cary’s motion for reimbursement of the principal balance he had paid for the mortgages on the two homes. Cary then appealed to the New Jersey Appellate Division.
According to Section X of Cary and Deborah’s matrimonial settlement agreement, both of them agreed to sell the three properties they had previously owned jointly. The North Caldwell house was to be listed and sold immediately, and each spouse was to receive 50% of the proceeds from sale. Similarly, the Lavallette house was also supposed to be listed for sale and sold immediately with Cary and Deborah sharing equally in the proceeds. The settlement agreement also required the former couple to cooperate in the sale of the houses, and not to act in a way that might adversely affect the value of those houses.
As per Section II of the matrimonial settlement agreement until the marital home closed, the pendente lite support orders would remain in place. Cary would be required to be responsible for payment on all mortgages, homeowners insurance, real estate taxes, household maintenance costs, and home equity loans. Further, if the marital home closed before the beach home, then Cary would be required to continue payment for the expenses related to the beach house until it was sold.
While the condominium was sold right after the settlement agreement was signed, the North Caldwell and Lavallette properties were the center of substantial litigation. On March 14, 2008, right before the Lavallette house was about to close, Deborah filed a motion to put Cary’s share of the proceeds from sale of the Lavallette and North Caldwell houses in escrow, until such time that he paid her money that was owed to her under the pendente lite order, and the matrimonial settlement agreement. In response, Cary cross-moved and requested to be paid first from the sale of the houses in the amount of $ 55,600 to represent the money he paid toward the mortgages on the two houses between June 19, 2007, the date of divorce, and April, 15, 2008.
A hearing was held on the cross-motions on April 25, 2008 and issues of money owed to Deborah was resolved. The court then heard oral argument on the issue of the mortgage pay downs. Initially, Cary admitted that he was not entitled to reimbursement for the mortgage pay downs under the matrimonial settlement agreement or any other order, but argued that it was not covered in the settlement agreement because it was not a marital issue. On the other hand, Deborah argued that Cary was not entitled to all of the mortgage pay downs. She requested an equal split of the proceeds from sale, and contended that a 50-50 split would not result in her being unjustly enriched, and that Cary was just “maintaining a marital asset.” The Family Part agreed with her.
On appeal, Cary argued that by allowing Deborah to share in the pay down of the mortgage principal, the Family Part basically gave her a more favorable agreement than she had originally bargained for. Cary further contended the matrimonial settlement agreement did not contain any language addressing the division of post-divorce mortgage pay downs because, the former couple had mutually agreed to sell the houses immediately, and did not think about creating asset out of the post-divorce principal pay down. He asserted that the court inappropriately made a new agreement by awarding half of the post-divorce pay down amount to Deborah when the matrimonial settlement agreement did not explicitly provide for it, and should have instead filled the ambiguity by awarding full repayment of the principal of the pay down to him alone.
The New Jersey Appellate Division explained that the State of New Jersey favors a public policy of enforcing marital settlement agreements. If a contract is fairly executed, and the enforcement of the contract will not result in hardship or injustice, it will generally be enforced as a matter of right. Modification of marital settlement agreements is not granted without a showing of compelling and exceptional circumstances. A Family Part judge has the authority and discretion to decide whether or not to order a modification, and that judge’s determination will not be reversed unless the appellant can prove the judge committed a clear abuse of discretion.
The New Jersey Appellate Division explained that Cary and Deborah’s property settlement agreement did not contain any provisions that granted Cary a credit for any money paid on the mortgages until the houses were sold. Furthermore, in contradiction of Cary’s argument, the appellate panel found that the settlement agreement did in fact touch upon the issue of post-divorce mortgage pay downs. The agreement stated the party that was to be responsible for paying the mortgage for the time until the properties were sold, and how the proceeds from the sale of each home would be distributed. The New Jersey Appellate Division stated that if Cary wanted to get reimbursed for the mortgage payments made after the divorce, he could have included the such a provision in the matrimonial settlement agreement, but he failed to do so.
The New Jersey Appellate Division also held that the $ 55,564 Cary paid toward the mortgages of the two homes did not qualify as a compelling and exceptional circumstance according to Rule 4:50-1(f), to warrant a modification of the matrimonial settlement agreement. As such, the appellate panel reasoned that the Family Part court did not abuse its discretion by declining to modify the matrimonial settlement agreement to grant Cary all of the post-divorce mortgage pay downs. Therefore, the appellate panel affirmed the decision of the Family Part.
If you or a loved one is facing a potential divorce, your inquiry is invited.