Enforcement of Agreements

In the recent unpublished (non-precedential) decision of Mathurin v. Matrhurin, the Appellate Division again confirmed that (1) agreements reached in mediation are not binding unless the terms are reduced to a  writing signed by the parties and, ostensibly, their attorneys if present, and (2) absent such a writing, the court cannot consider discussions, unsigned agreements or memoranda from mediation or other settlement negotiations because such writings/discussions are confidential by virtue of the Rules of Evidence that provide privilege to settlement negotiations.  It therefore follows that such confidential writings and/or oral communications cannot be relied upon to convince a court that an agreement was reached in mediation.

The post-divorce litigation in Mathurin arose when Plaintiff/ex-husband filed a motion to enforce the Marital Settlement Agreement (“MSA”) in order to compel Defendant/ex-wife to accept the offer for sale of the marital residence.  The parties agreed to sell the home within the MSA, but after they received this offer, Defendant proposed to buyout Plaintiff’s interest in the home for the same amount.  Plaintiff did not accept this alternative resolution.  Two other enforcement applications followed – one dismissed for procedural issues and the other denied without prejudice (meaning it can be refiled) pending the parties attending mediation because the MSA had a mediation clause that requires the parties to seek such intervention before filing an application with the Court.  The mediation session that followed gave rise to this appeal.

The mediator prepared and signed a Memorandum of Understanding (MOU) listing the terms reached in mediation and further stating the parties’ agreement that the MOU reflects an enforceable settlement reached between the parties.  Plaintiff reneged on the terms in the MOU because of credits sought by Defendant that he found objectionable, and he refused to sign a formal agreement that his attorney prepared incorporating the terms of the MOU.  Plaintiff fired his attorney and filed another motion to enforce the MSA.  Defendant filed a cross application to enforce the MOU to which she attached the MOU and signed certifications from herself and both parties’ counsel wherein those parties disclosed the contents of mediation. Ultimately, the trial court found that it cannot consider the MOU and/or the certifications because they are confidential settlement documents, and that the MOU was not binding.  The Appellate Division affirmed, finding that the MOU and certifications represent confidential settlement material and that the MOU is not binding because it was not signed by the parties or counsel.

The Appellate Division cited to a New Jersey Supreme Court case, Willingboro Mall, Ltd. v. 240/242 Franklin Ave., LLC, 215 N.J. 242, 245 (2013), confirming that the all agreements reached in mediation must be reduced to a signed written agreement and that mediation discussions cannot be relied upon to prove an agreement was reached unless the parties waive the mediation privilege.  The Appellate Division differentiated this case from a 2017 decision, GMAC Mortg., LLC v. Willoughby, 230 N.J. 172 (2017), because in that case the writing was signed by the parties’ attorneys.  Although those cases are not family law matters, the same principals apply to all settlement discussions.

This issue here is one that attorneys and litigants face in mediation all to often – was an agreement reached just because there seemed to have been a meeting of the minds?  The simple answer is no.  Although we do not suggest, nor would we propose, rushing into signing an agreement, if a party in mediation wishes to make sure that the agreement reached in the session is binding, then the terms must be in writing and signed by both parties, as well as counsel if present.  This does not have to be formal – a piece of paper with handwritten terms will suffice – but there is no question that written terms and signatures are required.  At minimum, terms can be memorialized in an MOU but as we all now know, the MOU is not binding.  What may result then is a Harrington hearing, which you can read about in this post: https://njfamilylaw.foxrothschild.com/2014/03/articles/mediation-arbitration/harrington-is-still-alive/

Oftentimes in mediation, the mediator explains at the outset that nothing reached in their session will represent a final agreement unless the terms are reduced to writing and signed by those present (i.e.: parties/parties and counsel).  This is a common instruction, presumably in an effort to avoid a future Harrington situation, and one that I find beneficial so that everyone in the room is starting out on the same proverbial page.

The takeaway – it’s not over until it’s signed, sealed and delivered!


Lindsay A. Heller is an associate in the firm’s Family Law practice, based in its Morristown, NJ office. You can reach Lindsay at 973.548.3318 or lheller@foxrothschild.com.

Lindsay A. Heller, Associate, Fox Rothschild LLP

You see it all of the time.  In defense of an enforcement motion, a litigant says “I didn’t knowingly violate the Order”, “I didn’t willfully violate the Order”, “it wasn’t my fault”, “it was an honest mistake.”  In fact, just last week someone was trying to add the term “willful” to an agreement to essentially make enforcement impossible because he would just blame is non-compliance on oversight or some other excuse.  Worse yet, judges sometimes buy the excuse and fail to find a party in violation of litigants rights even though there is no dispute that an Order or Agreement was breached.

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But is “willful violation” actually the standard for enforcement?  Well yesterday, the Supreme Court reminded us that it was not the standard in In re Adoption of N.J.A.C. 5:96 & 5:97 by N.J. Council on Affordable Housing.   This case is not a family law case, mind you, but rather, another in the long line of affordable housing cases.  That said, the Supreme Court told us once again what the standard is, as follows:

Although Rule 1:10-3 encompasses the notion of civil contempt, we have expressly stated that “we view the process [under Rule 1:10-3] as one of relief to litigants.” In re Daniels, 118 N.J. 51, 60 (per curiam) (emphasis added) (citing R. 1:10-5, now R. 1:10-3), cert. denied, 498 U.S. 951, 111 S. Ct. 371, 112 L. Ed. 2d 333 (1990). The focus being on the vindication of litigants’ rights, relief sought pursuant to Rule 1:10-3 does not necessarily require establishing that the violator of an order acted with intention to disobey. Indeed, courts have recognized that “demonstration of a mens rea, wilful disobedience and lack of concern for the order of the court, is necessary for a finding of contempt, but irrelevant in a proceeding designed simply to enforce a judgment on a litigant’s behalf.” Lusardi v. Curtis Point Prop. Owners Ass’n, 138 N.J. Super. 44, 49 (App. Div. 1975) (emphasis added); see also N.J. Dep’t of Health v. Roselle, 34 N.J. 331, 347 (1961) (“The Appellate Division correctly held that upon a litigant’s application for enforcement of an injunctive order, relief should not be refused merely because the violation was not willful.”).

It bears repeating in connection with this present application that our Court Rules generally are to be construed and applied to secure a just determination and to achieve simplicity in procedure. R. 1:1-2. That admonition has particular force when it comes to assisting a litigant in securing vindication of rights.

The Court Rules overall evince an intent toward flexibility when the enforcement of rights is at stake. They provide various means for securing relief and allow for judicial discretion in fashioning relief to litigants when a party does not comply with a judgment or order. In addition to the mechanism of Rule 1:10-3, Rule 4:59-2(a) provides related support for assisting a litigant in securing relief:

 If a judgment or order directs a party to perform a specific act and the party fails to comply within the time specified, the court may direct the act to be done at the cost of such defaulting party by some other person appointed by the court, and the act when so done shall have like effect as if done by the defaulting party.

[See also Roselin v. Roselin, 208 N.J. Super. 612, 618 (App. Div.) (citing R. 4:59-2(a) when noting alternatives available to trial court for enforcing party’s rights), certif. denied, 105 N.J. 550 (1986).]

In Roselin, supra, for example, Judge Pressler invoked Rule 1:10-3’s predecessor rule when assessing the alternatives available to a trial court where a party failed to sign a contract as ordered. 208 N.J. Super. at 618. Highlighting the hardship that the failure was foisting on another of the contract’s parties, the panel observed that “[i]ntervening rights of innocent third persons have arisen,” id. at 617, and declared that the innocent’s “rights must be enforced,” id. at 618 (citing R. 1:10-5). Judge Pressler noted Rule 4:59-2(a)’s ability to secure relief through the directed actions of others, which adds to a court’s flexibility when vindicating the rights of litigants. See ibid.

In sum, then, although punitive or coercive relief under the Rule cannot be used against one who is not a willful violator of a judgment, see, e.g., Schochet v. Schochet, 435 N.J. Super. 542, 548-49 (App. Div. 2014) (citing Pasqua v. Council, 186 N.J. 127, 141 n.2 (2006), for same and noting “objective of [Rule 1:10-3] hearing is simply to determine whether . . . failure [to comply with an order] was excusable or willful”); Milne v. Goldenberg, 428 N.J. Super. 184, 199 (App. Div. 2012) (upholding imposition of community service under Rule 1:10-3 against plaintiff where record established willful noncompliance), that does not foreclose the vindication of litigants’ rights through other forms of non-punitive and non-coercive orders entered pursuant to Rule 1:10-3’s authority enabling the enforcement of rights.

Simply put, while a court may not be able to impose punitive sanctions unless there is a finding that the conduct is willful, it can certainly find the offender in violation of litigant’s rights and order enforcement.  Why is this important?  Because willfulness or not, if someone is entitled to enforcement they are entitled to enforcement.  Moreover, since it is not uncommon to see repeat offenders, the finding that someone previously violated litigant’s right may be useful if there is a subsequent motion (1) as to whether that conduct was “willful” and (2) as to the issue of counsel fees.  Moreover, since Rule 1:10-3 allows for an award of legal fees, if someone is required to come to court to get that which they are already entitled to, should not they be made whole by the other party who violated an Agreement or Order – even if it was not willful?  The policy reasons noted by Judge Pressler in the above quote suggest so.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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I have recently had a case where the other attorney would tell us one thing on the phone and another to the Court or in Court papers.  When called on this about face in court, the attorney made a weak denial before saying that it does not matter what he said and that it only matters what his client believes.  In this situation, the assertion was curious, if not comical, because at issue was the interpretation of a court order.

That said, was opposing counsel right?  I think that, in most cases, the answer is no.  More importantly, there is a sufficient body of law that what a lawyer says could possibly bind a client.  Of equal significance, if counsel relies on the representation of opposing counsel, only for opposing counsel to backtrack or lie about making the representation, the case will no doubt get more contentious, if not more expensive.  In addition, thereafter, perhaps all communications will have to be in writing so that there can be no backtracking, etc. Moreover, this type of conduct raises ethical concerns regarding duties of candor to the court and duties of fairness to the opposing party, to name a few.

Some situations where an attorney can bind a client are as follows.  If an attorney has authority to settle and makes a proposal or accepts an offer on behalf of a client, it may be possible to enforce that agreement.  If an attorney takes a position in court, the client may very well be stuck with that position. 

I have had situations where attorneys have made factual misrepresentations to a judge on the record at a motion or conference with the client sitting right next to them.  In these situations, I have ordered the transcript for use at trial.  During cross examination, I have asked the other party, if they were present, if they heard what was said, and if they concede it was incorrect.  I then ask them to confirm that they were sitting there yet they never corrected the misrepresentation that they knew was wrong.  In several trials, I have seen judges cite this to justify the finding that the party lacked credibility.

Family law cases are hard enough and emotionally charged enough that what we don’t need is sharp and dishonest practices by the lawyers.  While bad for the system in general, this conduct also risks hurting their client’s case.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501 or esolotoff@foxrothschild.com.

It is common and often unfortunate that I meet with clients who decided, for whatever reason, that they would represent themselves during a divorce proceeding.  There are cases where that decision may be perfectly acceptable.  More often than not, the people I have met are coming to me because they are totally unsatisfied and/or unhappy with the deal they’ve made for themself and are looking to an attorney to get them a better deal.  Sometimes this is a possibility.  However, when the ink is dry on that formal agreement, it makes things more complicated.

Recently, the Appellate Division affirmed a lower court’s decision regarding the enforceability and conscionability of an Agreement negotiated and reached by the parties and formalized by husband’s attorney.  Wife chose to remain self represented during the negotiations and execution of the Agreement.

After husband made a post-divorce application in the trial court to enforce the Agreement, wife challenged its validity, claiming unconscionability, inequity, unfairness and that it was obtained through fraud.  The trial court conducted a two day hearing during which both parties and husband’s attorney testified.  Thereafter, the trial court rejected wife’s arguments that the Agreement was invalid, unfair, inequitable and procured through fraud.

Continue Reading Be Careful What You Bargain For Without the Advice of Counsel

I have recently blogged about the need for courts to award counsel fees when a party successfully enforces an agreement or an Order.  As noted, all too often, court’s do not award counsel fees, or when then do, the award is not the entire amount of fees incurred.  This potentially empowers to wrong doer because there is no ramifications to their non-compliance.

That issue arose in the unreported (non-precedential) opinion in the case of Bello v. Bello decided on April 1, 2011.  After the parties’ divorce, the wife was forced to file 5 post-judgment enforcement applications.  She was successful and was awarded fees for each.  However, at the fifth motion, she was only awarded $1000 because the trial judge "stated that "I don’t want to cut off support for the [wife] in favor of counsel fees."  The wife unsuccessfully sought reconsideration contending that the amount was too low given the husband’s lavish lifestyle and significant assets.  She then appealed.

The Appellate Division reversed and remanded the matter back to the trial court to determine the proper amount holding:

After carefully considering the entire record, we conclude that the judge’s reasoning for limiting counsel fees to $1000 contradicted his finding that the husband had a substantial income and several assets. The husband lives in a home worth $1,000,000 with a tennis court and swimming pool, drives a 2007 Mercedes sedan, owns two other cars, pays $1500 per month for his mortgage, is the sole proprietor of Mendham Eyecare business, earns more than $200,0001 a year, and refused to pay his child support and alimony obligations. In addition to finding that the husband had "plenty of resources to pay his obligations," the judge found that a review of the husband’s case information statement demonstrated "at least $14,000 of excess [money available]."

We therefore reverse because the judge’s finding that the husband cannot afford a fee greater than $1000 is "manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence."

Perhaps this decision will be a deterrent and ensure future compliance. 

Very often, when parties settle their cases, in their Marital Settlement Agreement (a/k/a Property Settlement Agreement), there is a provision to the effect that if a party does not comply with the Agreement, they will be liable for the other party’s fees if the Agreement has to be enforced in Court.  That said, court’s more often than not disregard that paragraph (as well as the Rule 1:10-3 which suggests an award of counsel fees when a party fails to comply with an Order), and apply the typical matrimonial case law and court rules regarding fee shifting in a matrimonial matter, if the court gives any real consideration to the issue, at all.  The aggrieved litigant is often frustrated by the fact that they had to incur fees to get something that they were already entitled to.  The offending party is sometimes empowered because he or she has suffered no negative result from the failure to comply.

However, in a refreshing unreported (non-precedential) opinion in the case of Ullmann v. Ullmann decided on March 23,2011, the Appellate Division held that it was improper for the trial court to ignore that provision in the parties’ agreement.

Continue Reading Provision for Payment of Counsel Fees for Non-Compliance in Settlement Agreement Enforced by the Appellate Division