Negotiated Property Settlement Agreements (a “PSA” or “MSA”) Can be Tough to Change in New Jersey

A New Jersey appellate court has stated a former couple’s equitable distribution of marital assets may not be revisited absent extraordinary circumstances. In an unpublished opinion, a New Jersey couple divorced in 2002 after more than 30 years of marriage. At the time, a mutually agreed upon property settlement agreement (“PSA”) was incorporated into the court’s final judgment of divorce. The PSA required the husband to pay his former wife “limited duration alimony” on a monthly basis until June 2023. The PSA also included a handwritten note that stated alimony payments would terminate if the wife remarried or either party passed away.

In addition to the alimony payment provision, the PSA divided the former couple’s assets equitably between them. In exchange for maintaining ownership of a memorabilia collection and the full vested interest in his pension, the husband agreed to pay his former wife a second monthly payment that was identical to the alimony schedule in both amount and duration, except that the payments were not scheduled to cease upon the death of either party. The wife lived with her boyfriend at the time of the former couple’s divorce.

In October 2010, the former husband sought to terminate his alimony payments as a result of changed circumstances. According to the man, he was forced to retire from his job due to disability. Because of this, the former husband claimed that he was no longer capable of paying the prescribed alimony. He also argued his former wife no longer needed the payments because her salary was more than twice what she earned at the time of the divorce. The man added that he felt alimony was no longer required because his former wife was cohabiting with her boyfriend. In response, the woman asked the trial court to deny the man’s motion. In the alternative, she asked the court to increase her equitable distribution payments if it chose to modify or terminate her alimony.

Following a hearing on the matter, the trial court granted the former husband’s motion to terminate the alimony payments. According to the court, alimony was no longer merited because the former wife earned considerably more than she did at the time of the parties’ divorce and she incurred fewer living expenses. Despite this, the court also found that the total amount of the equitable distribution payments which the parties negotiated at the time of their divorce, which the wife expressly agreed to accept as her total payout of her remaining share of  equitable distribution,  were insufficient. Because of this, the court ordered that the payments be doubled until 2023. In addition,  the trial court also ordered the former husband to pay the ex-wife’s ’s legal fees. The former husband then filed an appeal with the Superior Court of New Jersey, Appellate Division to challenge the trial judge’s rulings.

On appeal, the former husband  argued that the trial court abused its discretion when it modified the parties’ PSA by increasing the total amount of the equitable distribution he now had to pay; He also appealed the judge’s ruling that he had to pay his former wife attorneys’ fees. The Appellate Division stated in its ruling that in order for the trial judge’s decision to have been valid, the trial court would have to have determined that  the woman demonstrated  ” exceptional circumstances”, which is a requirement under Rule 4:50-1(f),  to justify such drastic relief.    The appellate court said that  negotiated marital settlement agreements –  like the one at issue in this case,  are generally valid and enforceable as long as they are fair and do not violate public policy. In addition, the court said such an agreement should not be modified “absent clear and convincing evidence of fraud or other compelling circumstances,” such as coercion or mental incapacity.

Next, the Appellate Division said a voluntary agreement to accept a lower equitable distribution settlement is not enough to merit the modification of a PSA. The appeals court stated such a decision may involve tangible and intangible trade-offs made by the parties during settlement negotiations. The New Jersey Appellate court added that the woman’s decision to settle her case back when they got divorce for a lesser amount  appeared, from the trial testimony,  to be voluntary, and she offered no evidence to suggest a PSA modification was warranted. In addition, both parties were represented by counsel when the PSA was negotiated, and each had the opportunity to review the document prior to signing it, and that each (in particular, the wife) found it to be fair and reasonable in light of all facts and circumstances surrounding their case.  One of the very “facts and circumstances” she testified to was the fact it brought finality and closure to her case, something she stated would never have achieved from her husband if she didn’t capitulate to these terms contained in her PSA in which she agreed to accept less than she may otherwise have been entitled to receive, which the judge at this hearing wrongfully (as determined by the Appellate Division) awarded to her now. Since the former wife failed to demonstrate sufficient grounds to alter the PSA existed, the Superior Court of New Jersey, Appellate Division reversed the trial court’s decision which had ordered  the former husband to pay his former wife increased equitable distribution payments and legal fees.

If you are faced with  an alimony dispute,  or the need to seek or defend  a motion or application to modify the terms of your divorce settlement agreement (PSA or MSA),   you need a diligent New Jersey family law attorney on your side. The hardworking lawyers at Goldstein Law Group have the experience and ability needed to help you achieve a workable result. To request a confidential consultation with a knowledgeable alimony attorney, do not hesitate to call Goldstein Law Group today at 732-967-6777 or contact us through our website.

Additional Resources:

Kurbel v. Kurbel, NJ: Appellate Div. 2015

More Blog Posts:

Husband’s Reduced Salary Due to Attempt to Save Failing Business Allowed Alimony Modification by New Jersey Family Court Judge, February 3, 2015, New Jersey Divorce Lawyers Blog

New Jersey Wife’s Improved Income Still Not Enough to Warrant Termination of Alimony, January 14, 2015, New Jersey Divorce Lawyers Blog


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