It is quite common in divorce settlements to require payments to be made over time or in the future. Some people, for whatever reason, choose not to immediately go back to court for enforcement when there is non-compliance. Whether wise or not, rushing back to court is not always the answer. The problem arises when you wait years to enforce your rights. Often this gives rise to an equitable defense called laches.
The following provides a good primer on what laches is:
“The doctrine of laches applies when there is neglect for an unreasonable and unexplained length of time, under circumstances permitting diligence, to do what in law should have been done.” Zilberberg v. Bd. of Trs., Tchrs.’ Pension & Annuity Fund, 468 N.J. Super. 504, 513 (App. Div. 2021). “[L]aches is the failure to assert a right within a reasonable time resulting in prejudice to the opposing side . . . . The key factors are the length of delay, reasons for delay,
and change of position by either party during the delay.” Clarke v. Clarke ex rel. Costine, 359 N.J. Super. 562, 570 (App. Div. 2003). “Whether laches should be applied depends upon the facts of the particular case and is a matter within the sound discretion of the trial court.” Fox v. Millman, 210 N.J. 401, 418 (2012) (quoting Mancini v. Twp. of Teaneck, 179 N.J. 425, 436 (2004)).
While that may or may not seem fair because the offending party still violated an Order or Agreement, this is well settled law.
The case of G.G. v. J.G. , an unreported (non-precedential) Appellate Division decision dated August 8, 2024, from which the above quote comes from, is a cautionary tale on sitting on one’s rights.
In that case, the parties were divorced in 2000. With regard to the NJ marital home, the husband was required to pay the wife $17,900 per year for 10 years (without interest???) for her share of teh equity in the home. In addition, if the home sold for more than $600,000, she was to receive 25% of the net equity above $600,000 (the value at the time of the divorce.) The Husband was also supposed to pay the wife $50,000 within 30 days of the agreement. As to their Florida vacation home, they were to continue to jointly own/use it, with the husband responsible for all costs and a provision that either party could buy out the other.
Fast forward to 2019, 19 years after the settlement, when wife filed an enforcement motion seeking the sale of both properties and requiring the $50,000 payment due 19 years earlier. Also, husband failed to make a single $17,900 payment and failed to maintain the Florida home as required. She also alleged that he stopped paying alimony before she remarried and owed her one year’s worth of alimony.
She certified that she did not seek enforcement earlier because “… she was “petrified” due to plaintiff’s “abuse” and “coercive behavior.”” She also certified that she was diagnosed with PTSD, battered woman syndrome and major depressive disorder, all caused by husband. There was also post divorce domestic violence allegations resulting in TROs and civil restraints.
Husband didn’t dispute that the $179,000 or $50,000 weren’t paid and said he would pay from a medical malpractice settlement that he was expecting.
The trial judge heard oral argument in December 2019 and entered an order requiring that the parties get a joint appraisal of the NJ home and submit Case Information Statements. The house was appraised at $1,450,000 as of January 28, 2020. In September 2021, almost 2 years after the motion was originally filed, the trial judge asked the parties to submit updated position statements. Wife supplied the court with an updated appraisal from same appraiser valuing the home at $1,625,000 as of October 12, 2021.
On March 25, 2022, another 5 months later, the trial judge denied the request for the sale of the properties finding no “deliberate violation of litigant’s rights” because “[b]oth parties have delayed more than [nineteen] years before seeking enforcement.”” This, quite frankly, is perverse because violation of litigant’s rights simply requires the failure to comply with an order. Seeking enforcement is different.
The judge found that wife was entitled to the $179,000 she was owed and required the home to be refinanced. Since the Agreement was incorporated into the Judgment of Divorce, query why wife wasn’t also entitled to interest at the judgment rate, but I digress.
She was, however, also required husband to pay $376,625, which included a calculation of 25% of the equity over $600,000, but the judge used the 2020 value instead of the 2021 value. The judge also reduced it for $17,000 in taxes and $42,500 in hypothetical realtors fees (contrary to the long standing holding in the Wadlow case to the contrary.) The judge didn’t address the alimony claim and the claim regarding the Florida home because moot because the house was sold and the proceeds ordered to be divided equally, with the $50,000 payment also coming from husband’s share (and also without interest.)
The trial judge found that:
“… the PSA did not give plaintiff “infinity” to pay defendant the $179,000 he owed her and, to enforce the terms of the PSA, she would compel the sale of the New Jersey property if he failed to refinance the property or pay defendant.
The judge then addressed the wife’s delay:
“Because she delayed in seeking enforcement, and plaintiff relied upon it to his detriment, there will be no gross up of this amount. Defendant will receive substantial additional value because of the time that has gone by. The increased value in the property is substantial, and defendant benefits from the increase and as long as she is paid by plaintiff, she will be made
whole. If plaintiff cannot buy out defendant at the values established currently, he will have to face the fact that the home will be sold. He cannot simply continue to live in the home indefinitely and deprive defendant of her funds which he should have paid more than 10 years ago.
That’s all well and good but at the end of the day, was it fair?
On appeal, the Appellate Division essentially said yes and no.
The Appellate Division addressed the laches issue, as set forth above. The Court went on to note that while the parties anticipated deferred payments:
“The parties apparently did not anticipate what actually happened: plaintiff didn’t pay a penny of those obligations within those time periods, and defendant waited nearly twenty years to move to enforce them. The PSA is silent as to what would happen under those circumstances. It does not, for example, provide for an award of interest, alter the parties’ share in the property’s net equity, or compel the sale of the New Jersey property in the event plaintiff failed to pay defendant.
Because of that, the Appellate Division was ok with the judge splitting the equity over $600,000, but without interest. However, the Appellate Division took issue with the calculation of the net equity, first by not using the most recent appraisal noting that that “… using an already out-of-date appraisal was an insufficient remedy.” However, they found no fault with the deduction of taxes and realtor fees (which seems contrary to Wadlow), but noted that there was no support in the record for those figures.
As a result, the Appellate Division reversed and directed the trial court to order a new appraisal and allow the parties to make submissions as to what taxes and realtors’ commissions, if any, should be deducted.
As to the alimony piece, the Appellate Division gave wife the opportunity to address the issue because the judge made no finding on the second prong of laches, that is, that the husband was prejudiced by the wife’s delay in seeking enforcement. Accordingly, that issue was remanded too.
What is clear is that the delay in seeking enforcement created a real mess. Likely, wife will never be made whole.
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