Equitable Distribution

WIFE IS ENTITLED TO A PLENARY HEARING THAT SHE SIGNED THE PROPERTY SETTLEMENT AGREEMENT UNDER MISTAKE, FRAUD OR DURESS

After 10 years of marriage, the parties signed a property settlement agreement and were divorced. Defendant, the former wife, signed the PSA, which had been prepared by the attorney for plaintiff, her husband, when she was not represented by her own attorney. The PSA provided, among other things, that defendant waived alimony and equitable distribution for a lump sum payment of  $250,000, and plaintiff would be the parent of the primary  residential custody for the parties’ two  children. Defendant subsequently retained an attorney and moved to vacate PSA, which had been incorporated into the judgment of divorce. She contended at the time she signed the PSA, and when the judgment of divorce was entered, she was suffering from, and in treatment for, drug addiction and depression. Thus, she did not understand the PSA and was acting under mistake, fraud or duress. Among other things, she asserted that she did not know that plaintiff enjoyed an average annual income of over $600,000 for the three year prior to the divorce or what assets he had and, therefore, she did not knowingly or intelligently waive her right to alimony and equitable distribution. The Family Part denied the motion without holding a hearing. The panel reversed and remanded for a plenary hearing concluding that given the material disputed facts concerning the circumstances under which the PSA was signed, and the questionable nature of a number of the provisions of the PSA, defendant was entitled to discovery and plenary hearing.

Reference: L.B. vs. H.B., No. 20-2-1258, N.J. Super. App. Div., Case & Analysis, New Jersey Law Journal, 222 N.J.L.J. 2927 (September 12, 2016).

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