K.D.E. v. J.E.: A Lesson in How Vague Language in an MSA Can Cost You Money

On October 12, 2018, the Appellate Division handed down an unpublished decision in K.D.E. v. J.E., a post-judgment matrimonial matter in Monmouth County. 

The parties married in 1988, had two children, and divorced in June 2009.  The parties negotiated a Marital Settlement Agreement (MSA) which was incorporated into their Judgment of Divorce.  At the time of the divorce, both parties resided in the marital residence.  The MSA allowed for Plaintiff and the children to remain in the marital residence until it sold.  It also allowed Defendant to remain in the home until she found alternate housing approved by her GAL. 

Defendant moved out of the marital residence approximately one month after the parties signed the MSA.  Plaintiff and the children ended up living in the marital residence for six years thereafter.  Plaintiff later claimed that he tried to sell the home but that Defendant refused to cooperate; however, Plaintiff did not file a motion in those six years.  Finally, the parties agreed to list the home for sale in 2015 and the house sold on November 30, 2015.   

The parties were unable to agree on how the sale proceeds should be distributed, so Plaintiff filed a motion seeking certain credits, including a credit for the mortgage principal he had paid down in the six years following the divorce.  Defendant opposed Plaintiff’s motion and pointed out that Plaintiff received the benefit of the mortgage deduction on his taxes as well as the benefit of not having to spend more money to buy/rent a new residence.  The trial court did not hold a plenary hearing on the matter, but instead, issued a written decision based upon the conflicting certifications filed by the parties.  The trial court granted Plaintiff’s request and commented that the parties did not anticipate the lengthy delay in the sale of the home and that Defendant was the sole cause of the delay. The decision did not address Defendant’s arguments that Plaintiff reaped tax benefits and saved money by not moving.  Defendant appealed. 

The Appellate Division lamented about the fact that there was no language in the MSA stating that the Plaintiff was supposed to receive credit for reducing the mortgage while remaining in the home, and that the language was ambiguous at best.  The Appellate Division ultimately reversed the trial court’s decision and remanded the case for a plenary hearing to be held as to the issues concerning the proper interpretation of the MSA.  Further the Appellate Division commented that when courts are determining the meaning of matrimonial agreements, they must “discern and implement the common intention of the parties.” Pacifico v. Pacifico, 190 N.J. 258, 266 (2007) but not use extrinsic evidence to rewrite the MSA.  (citing Conway v. 287 Corporate Ctr. Assocs., 187 N.J. 259, 268-70 (2006)).  Ultimately, the Appellate Division reversed and remanded the case for the trial court to hold a plenary hearing to parse out the parties’ conflicting stories and their intentions with respect to their MSA. 

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