Lourdy Jordonne v. Lucien Saint Louis ( 2024 )

NOT FOR PUBLICATION WITHOUT THE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-3503-22
LOURDY JORDONNE,
Plaintiff-Appellant,
v.
LUCIEN SAINT LOUIS,
Defendant-Respondent.
________________________
Submitted April 29, 2024 – Decided July 16, 2024
Before Judges Gilson and DeAlmeida.
On appeal from the Superior Court of New Jersey,
Chancery Division, Family Part, Union County, Docket
No. FM-20-0516-22.
Robert Brotman, attorney for appellant.
Respondent has not filed a brief.
PER CURIAM
Plaintiff appeals from two orders of the Family Part in this matrimonial
matter: (1) the March 31, 2023 order invalidating the parties' settlement
agreement and dismissing their pleadings; and (2) the May 26, 2023 order
denying plaintiff's motion for reconsideration. We vacate both orders and
remand for further proceedings.
I.
The parties were married in 2008 and have no children together. On
September 13, 2021, plaintiff filed a complaint in the Family Part seeking a
divorce from defendant. After defendant filed an answer and counterclaims, the
parties exchanged discovery requests. Neither party formally responded to those
requests.
Instead, the parties exchanged case information statements, tax returns,
current wage statements, early settlement panel (ESP) case profiles, and an
appraisal of a multi-family house owned by defendant. Although the parties
were unable to reach a settlement in the ESP, they subsequently agreed to
participate in economic mediation.
The mediation resulted in a signed settlement agreement dated November
10, 2022. The agreement provided: (1) defendant will pay lump-sum alimony
of $50,000 in two payments; (2) the funds in the parties' bank accounts as of the
date of the filing of the complaint will be divided equally; (3) the equity in the
house owned by defendant will be divided equally either through a sale or
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defendant's purchase of plaintiff's interest within one year. The parties
acknowledged that division of the equity in the house, and payment of a portion
of the lump-sum alimony would likely be delayed pending resolution of an
insurance claim in excess of $200,000 relating to the property.
Prior to mediation, plaintiff's counsel subpoenaed bank records relating to
the couple's accounts. The records for one account were not produced until after
the parties had signed the settlement agreement. According to plaintiff, those
records established that a Wells Fargo account had a balance of $106,134.88 two
days before she filed the complaint. Within a month of service of the complaint,
defendant withdrew $90,000 from the account. He made further withdrawals
from that account and another account in the following months, ultimately
removing more than ninety percent of what had been on deposit just before the
complaint was filed.
On February 5, 2023, plaintiff moved for an order: (1) scheduling a
plenary hearing to address modifying or reforming the settlement agreement to
address defendant's bad faith removal of assets subject to equitable distribution
and alleged fraudulent activity; (2) requiring defendant to restore the funds he
removed from the bank accounts; (3) mandating defendant make the lump-sum
alimony payment immediately; (4) invalidating certain provisions of the
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settlement agreement deferring defendant's obligation to make payments; and
(5) scheduling a plenary hearing with respect to the insurance claim.
Defendant opposed the motion and cross-moved for an order
incorporating the settlement agreement into a final judgment of divorce (JOD)
or, in the alternative, to hold a hearing to determine whether the agreement
should be invalidated.
On March 31, 2023, the family court issued an oral opinion denying the
parties' motions and dismissing the pleadings. The court concluded the
settlement agreement was invalid because the parties had not exchanged
discovery responses before executing the agreement. The court stated:
No one moved to enforce discovery. No one moved to
dismiss any pleadings for the discovery. . . .
The parties went to . . . mediation . . . and apparently,
were able to hammer out this agreement that everyone
acknowledges was signed.
How you settle a case without knowing what the issues
are from doing orderly discovery, I will – there's no
possible way that could be the case. So, under these
circumstances, as soon as anyone comes in and says, "I
didn't know what I was signing; I wasn't . . . fully
apprised of what was available for distribution," there's
no possible way this [c]ourt could ever find that the
agreement was knowingly and voluntarily entered into
with a full understanding of [that] person's rights and
responsibilities. So, there's no possible way this [c]ourt
can . . . enforce that agreement.
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Although no party had requested dismissal of the pleadings, the court then
concluded:
So, now, we're left with a year-and-a-half old case,
where no one has done what they are supposed to do.
And basically, you would have to start over again.
. . . I'm not willing to do that. I don't think it's fair to
the court. I will provide that the date of – for equitable
distribution and alimony would be September 22, 2021.
In all other respects, the pleadings in this case are
dismissed. If you want to come back to me and you
have an agreement that everyone is going to say was
knowing and voluntarily (sic), I'll reinstate these
pleadings. Otherwise, you can start over again by filing
a new complaint.
A March 31, 2023 order memorializes the court's decision.
Plaintiff thereafter moved for reconsideration. She argued that the court
erred when it: (1) failed to making findings of fact and conclusions of law
regarding the parties' knowing and voluntary assent to the settlement agreement;
(2) predicated the validity of the agreement on the parties having not responded
to discovery requests; (3) failed to follow Rule 4:23-5 before dismissing the
pleadings for failure to respond to discovery; (4) found the settlement agreement
invalid rather than reformed the agreement pursuant to its equitable authority;
(5) failed to fashion an equitable remedy based on defendant's fraudulent
conduct; and (6) incorrectly found that the equitable distribution date was
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September 22, 2021, rather than September 13, 2021. Defendant opposed the
motion.
On May 25, 2023, the court issued a written opinion denying plaintiff's
motion, except with respect to correcting the equitable distribution date. The
court found no basis on which to reconsider its prior decision and clarified that
it dismissed the pleadings pursuant to "its equitable discretion," and not Rule
4:23-5. A May 26, 2023 order memorializes the court's decision.
This appeal followed. Plaintiff argues the family court: (1) erred when it
invalidated the settlement agreement because the parties exchanged financial
information sufficient to make an informed decision to accept the agreement,
which was fair and equitable; (2) erred by failing to remedy defendant's
fraudulent behavior; (3) failed to issue sufficient findings of fact and
conclusions of law explaining it decisions; (4) erred by not holding an
evidentiary hearing to resolve disputed issues of fact; and (5) committed plain
error when it dismissed the pleadings on its own initiative based on the parties'
failure to respond to discovery requests.
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II.
Generally, our review of Family Part orders is limited. Cesare v. Cesare,
154 N.J. 394, 411 (1998). Given the court's "special expertise in the field of
domestic relations," substantial deference is owed to its factual findings so long
as they are supported by "adequate, substantial, [and] credible evidence." Id. at
412. "[W]e do not overturn those determinations unless the court abused its
discretion, failed to consider controlling legal principles, or made findings
inconsistent with or unsupported by competent evidence." Storey v. Storey, 373
N.J. Super. 464, 479 (App. Div. 2004). The family court's legal conclusions are
reviewed de novo. Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378
(1995).
The settlement of matrimonial disputes is encouraged and highly valued
in our court system. Quinn v. Quinn, 225 N.J. 34, 44 (2016). "The basic
contractual nature of matrimonial agreements has long been recognized."
Pacifico v. Pacifico, 190 N.J. 258, 265 (2007) (citing Harrington v. Harrington,
281 N.J. Super. 39, 46 (App. Div. 1995)). A settlement agreement becomes an
enforceable contract when the parties agree on and manifest their intent to be
bound by the essential terms of the agreement. See Hagrish v. Olson, 254 N.J.
Super. 133, 138 (App. Div. 1992). A mediated settlement, like other contracts,
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must be knowingly and voluntarily reached. Minkowitz v. Israeli, 433 N.J.
Super. 111, 139 (App. Div. 2013).
"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." Pacifico, 190 N.J. at 266(citations omitted). "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.'" Ibid. (quoting Atlantic Northern
Airlines, Inc. v. Schwimmer, 12 N.J. 293, 302 (1953)).
"'Agreements between separated spouses executed voluntarily and
understandingly for the purpose of settling the issue of [alimony and child
support] are specifically enforceable, but only to the extent that they are just and
equitable.'" Quinn, 225 N.J. at 48 (quoting Berkowitz v. Berkowitz, 55 N.J. 564,
569 (1970)) (alteration in original). "[S]uch agreements are subject to judicial
supervision and enforcement." Ibid. "A court of equity will enforce a contract
between [spouses] if it is not unconscionable to do so and if the performance to
be compelled is not contrary to public policy." Minkin v. Minkin, 180 N.J.
Super. 260, 262 (Ch. Div. 1981) (citations omitted). A contract will be held
unenforceable if it was "procured by fraud or falsehood," or if such enforcement
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would produce "great hardship or manifest injustice." Schiff v. Schiff, 116 N.J.
Super. 546, 561 (App. Div. 1971).
In addition, Rule 1:7-4(a) states that a court "shall, by an opinion or
memorandum decision, either written or oral, find the facts and state its
conclusions of law thereon . . . on every motion decided by a written order that
is appealable as of right . . . ." "The rule requires specific findings of fact and
conclusions of law . . . ." Pressler & Verniero, Current N.J. Court Rules, cmt. 1
on R. 1:7-4 (2024).
We have carefully reviewed the record and conclude that the court erred
when it invalidated the settlement agreement based solely on the parties' failure
to respond to discovery requests. Neither party requested that relief. Plaintiff
sought an order enforcing or modifying the agreement. Defendant asked the
court to incorporate the agreement into a JOD or, in the alternative, for a hearing
to determine if the agreement was enforceable.
In addition, the court made no findings of fact with respect to whether the
parties, who exchanged financial information prior to engaging in mediation,
knowingly and voluntarily entered into the agreement. Plaintiff acknowledges
that her counsel did not have all the bank records relating to the parties' accounts
when the agreement was executed. She argues, however, that she had sufficient
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information, both from records produced by defendant prior to mediation and
her knowledge of the couple's finances over a fourteen-year marriage, to
knowingly and voluntarily sign the agreement. The family court did not address
these contentions, instead summarily deciding that because of the parties' failure
to respond to discovery requests there was "no possible way" the settlement
agreement could be enforceable. We are aware of no requirement that parties in
a matrimonial action must formally respond to discovery requests before they
may enter into a settlement agreement.
The issues essential to determining the validity of a matrimonial
settlement agreement are whether the parties knowingly and voluntarily entered
into the agreement and whether its terms are fair and equitable. The family court
did not make findings of fact and conclusions of law on either of those questions.
In addition, the court did not resolve plaintiff's allegations that defendant
engaged in fraudulent activity warranting modification of portions of the
agreement or other remedial action. Plaintiff's motion and defendant's cross-
motion raised disputed issues of material fact that require an evidentiary hearing.
In light of these conclusions, we vacate the March 31, 2023 order to the
extent it invalidates the settlement agreement and remand for an evidentiary
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hearing on the plaintiff's February 5, 2023 motion and defendant's subsequent
cross-motion. We offer no views with respect to the outcome of those motions.
With respect to the remainder of the March 31, 2023 order, we review a
court's decision whether to reinstate or dismiss a complaint under an abuse of
discretion standard. St. James AME Dev. Corp. v. City of Jersey City, 403 N.J.
Super. 480, 484 (App. Div. 2008); Abtrax Pharms., Inc., v. Elkins-Sinn, Inc.,
139 N.J. 499, 517 (1995). "[B]ecause dismissal with prejudice is 'the ultimate
sanction,' it should be imposed 'only sparingly' and 'normally . . . ordered only
when no lesser sanction will suffice to erase the prejudice suffered by the non -
delinquent party.'" Salazar v. MKGC + Design, 458 N.J. Super. 551, 561-62
(App. Div. 2019) (quoting Robertet Flavors, Inc. v. Tri-Form Constr. Inc., 203
N.J. 252, 274 (2010)).
We conclude that the family court mistakenly exercised its discretion
when it dismissed the pleadings. The court relied on its equitable discretion
based on the parties' failure to respond to discovery requests. The court,
however, made no findings of fact or conclusions of law addressing the
circumstances surrounding their failure to respond. After discovery requests
were served, the parties exchanged financial information and reached a
settlement. These developments are a readily apparent explanation for their
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failure to formally respond to the discovery requests. The record contains no
indication that either party demanded formal responses to their discovery
requests, put the opposing party on notice that they would seek dismissal of their
pleadings if such responses were not forthcoming, or ever sought such drastic
relief.
Nor did the family court explore alternatives to dismissal of the pleadings.
Given that the parties exchanged financial information prior to the mediation, it
would be reasonable to conclude that they could provide formal discovery
responses in a relatively short period in the event the court does not enforce or
modify the settlement agreement. This alternative would be preferable to
dismissing the pleadings and suggesting one of the parties file a new complaint
for divorce. Thus, in the event the court determines, after the evidentiary
hearing, that the settlement agreement cannot be enforced or modified, the
pleadings shall be restored and the matter shall proceed to discovery.
Because we vacate the March 31, 2023 order, we also vacate the May 26,
2023 order denying plaintiff's motion for reconsideration.
The orders are vacated and the matter is remanded for further proceedings
consistent with this opinion. We do not retain jurisdiction.
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