Edward R. Weinstein, Esq.Edward R. Weinstein, Esq.

When May A Property Settlement Agreement Be Voided After A Divorce In New Jersey?

In New Jersey, the law clearly promotes settlements, which is usually memorialized in writing in a property settlement agreement that is prepared by an attorney once a divorce agreement has been achieved.  However, there are times that a divorce agreement can be set aside, by way of a post-judgment motion by a lawyer, by a judge of the Family Part of the Superior Court of New Jersey.  Following is a legal analysis of this issue as it pertains to both a lack of financial disclosure, ambiguous language in the property settlement agreement and cases wherein no lawyers were involved.

Question Presented: You asked me whether an arbitrator would hold a divorce agreement and legal separation agreement as non-binding when: 1. There was no financial disclosure when executing these documents; 2. No case information statements were exchanged; 3. It appears that the language is not only vague but contradictory in the two documents; 4. Neither party was represented by an attorney with regard to these documents.  

Short Answer:  The Family Part has a duty to enforce the terms of a marital settlement agreement as long as it was executed and entered into by fully informed parties, each represented by counsel, without any proof of fraud, overreaching, or coercion. Catabran, 445    N.J. Super 574, 590. While New Jersey Family Part courts favor the enforcement of agreements, there is a case to be made that these agreements should be thrown out in equity because neither party was represented by counsel, the terms were not clear, and there was no fair financial disclosure made before the agreements were signed because the parties did not exchange case information statements, nor did the agreements explicitly state each account or asset. 

Analysis: New Jersey has a strong public policy that favors stability in matrimonial matters. Quinn v. Quinn, 225 N.J. 34, 36 (2016). (where the Court enforced the termination of an alimony obligation according to the parties’ settlement agreement). The Supreme Court of New Jersey held that there was no compelling reason for them to depart from the unambiguous, clear, and mutually understood language in the property settlement agreement. 

Similarly, in Avelino-Catabran v. Catabran, the New Jersey Appellate Division found that the Family Part correctly enforced the terms of a property settlement agreement that required plaintiff mother to be equally responsible for college contributions. 445 N.J. Super 574, 589 (App. Div. 2016). The appellate panel reiterated the “compelling reasons to depart form the clear, unambiguous, and mutually understood terms standard” standard. 

Property settlement agreements are given substantial weight in relation to their enforceability and validity, as long as they are fair and just. Dolce v. Dolce, 382 N.J. Super. 11, 20 (App. Div. 2006) If there is no evidence of inequity or unanticipated change of circumstances, the Family Part has a duty to enforce the terms of the marital settlement agreement as long as it was executed and entered into by fully informed parties, each represented by counsel, without any proof of fraud, overreaching, or coercion. Catabran, 445 N.J. Super 574, 590. In the present case, the parties were not fully informed because the contract does not list all of the accounts with values, nor did the parties exchange case information statements. Furthermore, neither party was represented by counsel. 

According to the doctrine of Contra Proferentem, when a contractual term is ambiguous, a court should implement the meaning most favorable to the non-drafting party. Pacifico v. Pacifico, 190 N.J. 258, 268 (2007). This doctrine is used if, upon a court’s examination of the contract, it is unable to determine the meaning of a term, but only as a doctrine of last resort. Id at 269. The reasoning behind this doctrine of interpretation is that when one party states the term of a contract, he or she is likely to have taken extra care in protecting his or her own interest than the other party. As such, this doctrine is only appropriate for circumstances where there is unequal bargaining power between the parties. Id. In the present case, neither party was represented by counsel, therefore, neither party had greater bargaining power. In this situation, an application of the doctrine of Contra Proferentem would be inequitable and inappropriate. 

A dispute of material fact should not be resolved in reliance of ambiguous terms in a property settlement agreement. Palmieri v. Palmieri, 388 N.J. Super. 562, 564 (App. Div. 2006). Furthermore, when there is a dispute as to how a marital settlement agreement should be applied, a Family Part court has the authority to apply basic principles of equity in an effort to resolve the ambiguities that stem from the absence of clarifying language. In the case at hand, the divorce agreement does not explicitly state which accounts each spouse would get. Nor does it mention the value of those accounts. While it states that “Individual and joint accounts, all accounts will be divided equally (50% to each),” It never states how many accounts there are, or the value of those accounts. The parties did not have the benefit of exchanging case information statement’s either, therefore one possible argument could be that the parties did not have true knowledge of what they were agreeing too, and equity would be better served by holding the agreements non-binding. 

Post nuptial agreements made at the end of a marriage made while the parties are contemplating divorce are enforceable as long as: (1) the agreement is in writing; (2) the agreement is notarized; and (3) the agreement must be done with fair disclosure between the parties. Pacelli v. Pacelli, 319 N.J. Super. 185, 188 (App. Div. 1999). Fair disclosure means that the agreement can be made “only after full disclosure of relevant information regarding the parties’ assets.” Id. In the present case, the parties did not fully disclose their assets because they did not exchange case information statements, nor explicitly state all the assets in the agreement. Furthermore, while Pacelli, does not state that both parties “must” be represented by counsel, it did state that they “should be represented by counsel.” Id. (emphasis added). Here neither party was represented by counsel. 

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