SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
IN THE MATTER OF
THE ESTATE OF JOHN P.
BOYLE, DECEASED.
March 11, 2011
Argued December 8, 2010 - Decided
Before Judges Axelrad, R. B. Coleman and Lihotz.
PER CURIAM
We are called upon to review the Probate Part's enforcement of decedent's agreement to maintain a $250,000 life insurance policy for the benefit of his unemancipated son. The obligation was set forth in the final judgment of divorce (FJOD). Petitioner John M. Boyle filed a verified complaint against the estate of his father, decedent John P. Boyle, seeking $250,000. The complaint was challenged by the executor of decedent's estate, Cheryl Martin, who was living with decedent at the time of his death.
Following a bench trial, the court found decedent had an obligation to maintain a $250,000 life insurance policy for petitioner's benefit until he was emancipated; at the time of decedent’s death petitioner was not emancipated; and decedent breached his legal obligation when he failed to maintain the stated life insurance policy. Therefore, the court concluded the estate was obligated to pay petitioner $250,000.
On appeal, the estate, in its multi-point brief, challenges the Probate Part's jurisdiction to enforce a Family Part FJOD and argues the court erred in its interpretation of the divorce provisions and the application of the law when entering judgment and awarding petitioner attorney's fees. Finally, the estate seeks reversal based on an alleged conflict of interest by the trial judge.
Following our review of these arguments, in light of the record and applicable law, we affirm.
I.
Petitioner was the sole child of decedent born during his marriage to Susan Boyle. The couple divorced on July 5, 1995. They had reached a resolution of the issues collateral to the request for divorce, which were set forth in the FJOD. The insurance obligation at issue here was stated in paragraph 6, as follows:
The husband shall continue to provide a life insurance policy through his place of employment in the amount of $250,000 and name both the wife and the wife as trustee for the benefit of the child of the marriage as beneficiaries until such [] time [as] alimony terminates. Once alimony has terminated, the husband shall continue to provide said policy naming the child as beneficiary of the entire policy.
At the time of divorce, decedent was a practicing trial attorney and his firm provided the designated life insurance policy. Nine months after the divorce, decedent's alimony obligation to Susan terminated, and he changed the designated beneficiary of the life insurance death benefit to petitioner.
Many years later, decedent began suffering from depression, which limited his ability to work as a full-time litigator. In July 2002, decedent filed a motion to reduce child support, which was unopposed. In light of his changed financial circumstances, the requested relief was granted. Decedent's motion did not request, and the court did not address, any modification of the life insurance obligation in paragraph 6.
Decedent left his law firm and began performing per diem work for other firms. He also learned he had lung cancer, which eventually prevented him from working.
In 2005, petitioner, who continued to live with his mother, graduated from high school and enrolled as a full-time student at Ocean County Community College. The following year, when petitioner was nineteen, decedent passed away.
Petitioner learned decedent had terminated the life insurance contract that had been in effect. Although he was the sole beneficiary of the policy, petitioner had not received notice that the policy had been canceled.
Martin, who was named the sole beneficiary of decedent's estate, probated decedent's will and was issued Letters Testamentary. Petitioner filed a verified complaint in the Probate Part seeking payment from the estate assets, including the sum of $250,000 based on decedent's obligation in paragraph 6 of the FJOD.
At the conclusion of the bench trial, Judge Cleary found decedent breached his obligation to maintain a life insurance policy for the benefit of his son and entered a judgment awarding him $250,000 on November 21, 2008. The estate appealed from the judgment. Thereafter, an enforcement application was filed and granted by an order dated February 18, 2010. The Notice of Appeal was amended to also include this order.
II.
“The scope of appellate review of a trial court's fact-finding function is limited.” Cesare v. Cesare, 154 N.J. 394, 411 (1998). Generally, “findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence.” Id. at 411-12 (citing Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974)). "Deference is especially appropriate when the evidence is largely testimonial and involves questions of credibility." Id. at 412 (internal quotations and citations omitted). Because a trial court hears the case and observes the witnesses, it has a better perspective than a reviewing court in evaluating the veracity of witnesses. Ibid. (citing Pascale v. Pascale, 113 N.J. 20, 33 (1988)). Accordingly, in our review, we will not disturb the "factual findings and legal conclusions of the trial judge unless convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Rova Farms, supra, 65 N.J. at 484.
The estate's appeal also presents legal challenges, which are subject to de novo review, Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 382 (2010), as "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Reality, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
III.
The estate submits a myriad of factual and legal arguments designed to support its request to vacate the final judgment. We will review these issues, combining related arguments.
A.
Characterizing petitioner's claim as one for child support, the estate, citing Rule 5:1-2(a), maintains petitioner's request is cognizable only before the Family Part through a motion to enforce a FJOD. The estate did not move to transfer the matter to the Family Part; it argued this issue in its opening remarks at the commencement of trial. On appeal, the estate seeks reversal of the judgment arguing the probate judge lacked jurisdiction "to rule on such issues arising from matrimonial actions." We reject this contention.
The Probate Part, like the Family Part, is in the Chancery Division of the Superior Court. R. 4:83-1. Although the scope of jurisdiction of the Surrogate's Court is limited, see R. 4:82, "the most commonly filed matters in the Probate Part are those that relate to proceedings to probate wills and to settle questions that concern or touch on a decedent's estate." In re Estate of Stockdale, 196 N.J. 275, 301 (2008). Petitioner's complaint sought to enforce decedent's obligation and beneficiaries of the estate take subject to the decedent's legal obligations. Koidl v. Schreiber, 214 N.J. Super. 513, 516 (App. Div. 1986).
The estate could have moved for a transfer of the issues to the Family Part. See R. 4:3-1(b) (requiring motion to transfer between the trial divisions of the Superior Court to be made within ten days after filing of responsive pleadings). Absent such an application, the objections are deemed waived. Ibid.
Further, the estate's suggestion that Rule 5:1-2(a) establishes the Family Part's "jurisdiction" over matters arising from the obligations in a FJOD misconstrues the concepts addressed. Rule 5:1-2(a) states: "All civil actions in which the principal claim is unique to and arises out of a family or family-type relationship shall be brought in the Family Part." This court rule, like Rule 4:3-1(b) governing transfers to the Family Part from any other trial division or Part of a trial division of the Superior Court, is not jurisdictional but "simply establish[es] a preference and procedure for determining the appropriate forum for a specific claim." Boardwalk Prop., Inc. v. BPHC Acquisition, Inc., 253 N.J. Super. 515, 526 (App. Div. 1991). Jurisdiction defines a court's authority. The Superior Court has "original general jurisdiction throughout the State in all causes," N.J. Const. Art. VI, § III, par. 2 (1947). The Superior Court, Probate Part most assuredly has the jurisdictional authority to afford the necessary legal relief petitioner sought.
B.
The next question challenges Judge Cleary's interpretation of paragraph 6 of the FJOD. The estate argues the plain language of the insurance clause, which required decedent "shall continue to provide a life insurance policy through his place of employment," imposes no obligation to procure a life insurance policy beyond the duration of his employment. This argument is unpersuasive.
It is well established that matrimonial agreements are basically contractual in nature. Pacifico v. Pacifico, 190 N.J. 258, 265 (2007);Flanigan v. Munson, 175 N.J. 597, 606 (2003). A question regarding the interpretation or construction of a contract is a legal determination and our review is plenary, with no special deference to the trial judge's interpretation of the law and the legal consequences that flow from the established facts. Zabilowicz v. Kelsey, 200 N.J. 507, 512-13 (2009).
One "basic principle of contract interpretation is to read the document as a whole in a fair and common sense manner." Hardy ex. rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 103 (2009). "We do not supply terms to contracts that are plain and unambiguous, nor do we make a better contract for either of the parties than the one which the parties themselves have created." Maglies v. Estate of Guy, 193 N.J. 108, 143 (2007); Graziano v. Grant, 326 N.J. Super. 328, 342 (App. Div. 1999). So too, we enforce the contract as written. Pacifico, supra, 190 N.J. at 266 (internal citations omitted). The parties are bound by the contracts they make for themselves, with the understanding that "a meeting of the minds is an essential element to the valid consummation" of any agreement. Center 48 Ltd. P'ship v. May Dept. Stores Co., 355 N.J. Super. 390, 406 (App. Div. 2002). Accordingly, in interpreting an agreement, we "must try to ascertain the intention of the parties as revealed by the language used, the situation of the parties, the attendant circumstances, and the objects the parties were striving to attain." Celanese Ltd. v. Essex Cnty. Imp. Auth., 404 N.J. Super. 514, 528 (App. Div. 2009) (citing Onderdonk v. Presbyterian Homes of N.J., 85 N.J. 171, 183-84 (1981)).
In discerning the parties' intent, we remain mindful "that children of a marriage are third-party beneficiaries of a settlement agreement between their parents." Flanigan, supra, 175 N.J. at 606. "In that regard, a court in a matrimonial matter is authorized to direct parents to maintain life insurance naming their minor children as beneficiaries to secure the parents' continued support obligations." Ibid.
In her oral opinion, Judge Cleary stated:
In the instant case, the [c]ourt determines that the words, [] "through his place of employment" in [p]aragraph 6 of the judgment of divorce are merely descriptive of the Kemper policy. The evidence is that the decedent had in effect a policy of insurance with Kemper . . . . Decedent was required under the terms of the judgment of divorce to maintain this policy whether he was employed or not, since the purpose of the policy was to provide a benefit to his son. And there is no indication in the judgment of divorce that the maintenance of the policy was conditioned on his employment[.]
We agree. When the life insurance requirement is read along with the surrounding provisions of the FJOD that detail decedent's obligations to petitioner, its purpose is clear; life insurance was required to assure the unemancipated child would be provided for in the unfortunate event of decedent's premature death. See Raynor v. Raynor, 319 N.J. Super. 591, 613 (App. Div. 1999) (interpreting phrase "life insurance policy provided by his employer[,]" to provide security of continued support for the children without regard to where defendant was employed); Meerwarth v. Meerwarth, 71 N.J. 541, 544 (1976) (holding husband required to obtain life insurance for protection of former wife and children). Thus, the obligation terminates upon the child's emancipation, not decedent's change of employment.
This interpretation is consistent with parents' statutory obligation to support their children until emancipated. Kiken v. Kiken, 149 N.J. 441, 446 (1997). N.J.S.A. 2A:34-23 authorizes courts in matrimonial actions to order parties to provide for education and maintenance of children and to create "trusts or other security devices" for that purpose. See also Grotsky v. Grotsky, 58 N.J. 354, 361 (1971) (stating the Chancery Division "may enter a support order for minor children to survive their father's death and may direct the father to maintain his insurance, naming the minor children as beneficiaries," to ensure they are provided for adequately).
Just as decedent was not relieved of his obligation to pay child support prior to his death, once the life insurance obligation was incorporated into the FJOD, decedent "could not have modified it unilaterally without applying to the trial court." Flanigan, supra, 175 N.J. at 607.
The responsibility to seek modification rested with decedent, not Susan Boyle or petitioner. In 2002, when he sought to reduce his financial burden for support, he could have requested the court also examine the life insurance requirements imposed by the FJOD. He failed to do so, leaving his obligations unchanged.
C.
We reject as meritless the estate's position that the court erred in not finding petitioner was emancipated or that he was "estopped from seeking any claim to life insurance proceeds" because the order for child support was terminated. R. 2:11-3(e)(1)(E). We add these brief comments.
Although the event of emancipation eliminates the right to receive child support, Mahoney v. Pennell, 285 N.J. Super. 638, 643 (App. Div. 1995), here, the termination of child support resulted from decedent's death, not because petitioner was emancipated. Moreover, decedent's demise prior to petitioner's emancipation was precisely the circumstance for which the life insurance obligation was imposed.
Emancipation is the conclusion of the fundamental dependent relationship between parent and child. The unequivocal evidence revealed that, when his father passed away, petitioner was a full-time college student, living in his mother's home and working two nights per week. He related his plans to continue his educational endeavors at Wesley University in Dover, Delaware once his Associates Degree was completed. Under these circumstances, petitioner is not emancipated. Colca v. Anson, 413 N.J. Super. 405, 415 (App. Div. 2010); Teare v. Bromley, 332 N.J. Super. 381, 391 (Ch. Div. 2000).
In a related argument, the estate asserts the court's limitation on cross-examination precluded its presentation of evidence to show the factors set forth in Newburgh v. Arrigo, 88 N.J. 529, 545 (1982), required the amount of funds due petitioner should be limited. The argument lacks sufficient merit to warrant extensive discussion. R. 2:11-3(e)(1)(E).
Newburgh details the method to compute a divorced parent's contribution to the college costs incurred by an unemancipated child.Ibid. College expenses are separate and apart from child support. The question for resolution by Judge Cleary was not whether decedent was obligated to contribute to petitioner's college costs; the dispute was the nature of the contractual obligations imposed by paragraph 6. The evidential rulings of the court will not be disturbed.
D.
Based upon our conclusion, we need not address the estate's argument that the court erred in retroactively applying the notification requirements of N.J.S.A. 2A:34-23d, which was enacted following the FJOD and in subsection (b) compels a party whose insurance benefits change as a result of a change in employment to notify the other party. N.J.S.A. 2A:34-23d(b). The statute reflects the Legislature's intention to assure that courts have authority to require the maintenance of insurance coverage. Capaccio v. Capaccio, 321 N.J. Super. 46, 59 (App. Div. 1999). Mention of the statutory provisions causes no harm to the court's correct findings upholding the decedent's contractual obligation.
E.
The estate additionally challenges the order to pay petitioner $250,000, arguing that only so much of the death benefit necessary to provide for petitioner's support should be remitted, to avoid an unfair windfall to petitioner. The estate cites Konczyk v. Konczyk, 367 N.J. Super. 551 (Ch. Div. 2003), aff'd, 367 N.J. Super. 512 (App. Div. 2004), suggesting the payout must be limited. In Konczyk, the decedent-former husband was obligated to provide life insurance to assure payment of his limited duration alimony obligation. Id. at 554. The parties' agreement provided that the financial assurance would be reduced over time as the alimony obligation decreased. Ibid. The plaintiff-former wife had a remaining alimony claim of $2000 at the time of decedent's demise and the insurance death benefit was $15,000. Id. at 555. Finding the terms of the parties' agreement to be unambiguous on this issue, the Family Part judge limited the funds payable to plaintiff to the extent of what she was due. Id. at 562.
The facts at bar are distinguishable from those in Konczyk. Here, the designated insurance death benefit was $250,000. There were no step-down or reduction provisions, suggesting the intent was for petitioner to receive the entire death benefit. Admittedly, the insurance was to secure petitioner's child support obligation, which would include college costs. See Newburgh, supra, 88 N.J. at 543 (holding "in appropriate circumstances, the privilege of parenthood carries with it the duty to assure a necessary education for children"); see also Khalaf v. Khalaf, 58 N.J. 63, 71 (1971) (observing "the trend [over time] has been toward greater education"); Ross v. Ross, 167 N.J. Super. 441, 448 (Ch. Div. 1979) (cited with approval in Newburgh, supra, 88 N.J. at 544, stating a parent's support obligation may continue through graduate school). However, unlike Konczyk, this obligation was neither finite nor calculable. Moreover, nothing in the FJOD suggests the sum should diminish as petitioner ages.
Petitioner had embarked on a program of higher education. He was concluding the requirements for an Associate's Degree and expected to continue his higher education at a four-year university. Under these circumstances, we find no flaw with Judge Cleary's determination denying the estate's contention that decedent would not have been required to provide for petitioner's college costs. This contention ignores the reality that the life insurance to be maintained by decedent was intended to assure petitioner was provided for if he remained unemancipated.
F.
We also take no issue with the award of counsel fees and costs imposed. The assessment of counsel fees is discretionary, and will not be reversed except upon a showing of an abuse of discretion. Packard-Bamberger & Co., Inc. v. Collier, 167 N.J. 427, 444 (2001). An abuse of discretion "arises when a decision is 'made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002) (quoting Achacoso-Sanchez v. Immigration & Naturalization Serv., 779 F.2d 1260, 1265 (7th Cir. 1985)). No abuse of discretion is demonstrated.
G.
Finally, the estate suggests the court's subsequent recusal warrants reversal. Apparently, a tangential relationship existed as the judge's spouse was represented in an unrelated matter by a law firm that merged with the firm representing petitioner. The merger occurred on August 1, 2009, following the trial and entry of judgment. Once the information of the merger was known, the judge acted promptly to discontinue her handling of this matter. We find no basis to question Judge Cleary's conduct, or that her determinations were anything but fair and unbiased.
IV.
We have considered each of the claims raised by the estate in its request to reverse the October 21, 2008 Judgment. Finding the arguments wanting, we have no basis to interfere.
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