New Jersey Statutes Closing “Black Hole” of Litigation to be Applied Retroactively
Roik v. Roik, Docket No. A-2522-21 (N.J. Super. App. Div. Nov. 27, 2023)
In August 2020, plaintiff Paul Roik (“Paul”) filed for divorce from defendant Anita Roik (“Anita”), his spouse of 46 years. The couple had three children together, all of whom are adults. In 2013, long before filing for divorce, Paul had executed a Last Will and Testament (“2013 Will”) leaving his estate to his children and naming his eldest son as Executor.
Divorce
As part of the divorce proceedings, Paul filed a Case Information Statement (“CIS”) listing his assets and included a life insurance policy that he sold to his son (that was also listed in his original complaint for divorce). Anita filed her own CIS in response and the parties negotiated a Marital Settlement Agreement (“MSA”) through counsel. The MSA stated that it became effective “upon the date that the last party executes this [a]greement.” The parties also waived their rights to trial, acknowledged that they were fully informed of the financial structure of the marriage (including incomes, assets, liabilities, and expenses) and waived their rights of inheritance.
The MSA divided marital assets equally, with some exceptions. Paul agreed to purchase Anita’s interest in their marital home and Anita kept her pension, which she would use to pay alimony.
The parties agreed that the MSA would be incorporated into a judgment of divorce. Relying on the advice of one of her attorneys, Anita believed that an uncontested divorce hearing held by Zoom would be the most economical way to finalize the divorce (as opposed to a judgment of divorce on the papers). Accordingly, a Zoom hearing was scheduled for January 11, 2022. Paul, however, signed the certification in support of a judgment of divorce on the papers on December 25, 2021. He died on December 29, 2021.
Trial Court Proceedings
On January 19, 2022, Paul and Anita’s eldest son (the named executor of Paul’s estate under the terms of his 2013 Will) moved, in relevant part, to enforce the MSA, for a constructive trust or, alternatively, to intervene in the divorce litigation.
Anita certified that she knew about Paul’s 2013 Will when he executed it in 2013. Yet, Anita claimed that her children were “orchestrating the divorce,” seeking to claim Paul’s estate for themselves. Roik at *6. Anita claimed that enforcing the MSA would “impoverish” her. Id. She also contended that she did not know Paul’s life insurance policy was transferred.
The trial court determined it could not enforce the MSA because there was no way of discerning the parties’ mutual intent or determining whether they knowingly and willingly entered into it. The trial court found this to be true “[e]ven if the parties proceeded with a divorce on the papers.” Roik at *8. Finally, the trial court concluded that the estate was not entitled to a constructive trust because there was no evidence of wrongdoing by Anita showing that she would be unjustly enriched by this outcome. This was concluded even though Anita would receive the marital home by operation of law, as she and Paul owned the home as tenants by the entirety, and the MSA dictated that Paul would purchase her interest in the home. The estate appealed.
New Legislation
Following initial briefing for the Appellate Division and before oral argument, the New Jersey Legislature introduced proposed amendments to the state’s intestacy and equitable distribution statutes permitting courts to make equitable distributions where a party died during divorce. The parties filed supplemental briefs on the impact of these proposed laws. The new legislation was enacted on January 8, 2024.
Appellate Proceedings
The Appellate Division agreed with the trial court that there was no basis to invoke a constructive trust because there was no evidence that Anita engaged in “untoward conduct.” Roik at *13. However, the appellate court deviated from the trial court on the remaining issues.
The appellate court reasoned that Paul’s certification in support of a judgment of divorce on the papers that he signed on December 25, 2021, contained sufficient information to determine whether Paul entered into the MSA voluntarily. Even without this certification, the appellate court determined that, by signing the MSA, the parties agreed that the MSA was fair and equitable and that they wished to be bound by it. No evidence was presented to the contrary. Further, Anita did not present any evidence that the MSA was unfair or that she had planned to object to the entry of the judgment of divorce or the MSA had Paul not died before the Zoom hearing.
The Appellate Division was unpersuaded by Anita’s arguments about the life insurance policy and the marital residence. Anita knew about the policy and still chose to settle the case. She also agreed to allow Paul to purchase her interest in the marital home as part of the MSA. The “overwhelming evidence” showed that a final judgment would have been entered but for the delay in scheduling the divorce hearing and the equities weighed in favor of upholding the MSA.
Finally, the estate argued that the newly-passed statutes permitting judges to direct equitable distribution when a spouse dies during divorce proceedings applied in this case. Anita argued that the law took effect the day it was signed and should only be applied prospectively. The Appellate Division agreed with the estate and concluded that the New Jersey Legislature intended for the statutes to be applied retroactively. The appellate court relied on prior case law and the plain language of the new law to reach this conclusion.