725 A.2d 56 (N.J. Sup. 1999)
The parties married in June 1975.1 Antonio Pacelli was forty-four years old and Francesca Pacelli was twenty.2 Antonio was a builder and real estate developer who also owned a restaurant.3 He testified that he was worth three million dollars at the time of the marriage but presented no documents to support that statement.4 Two children were born of the marriage: Tony in 1976 and Franco in 1977.5 The family lived in a substantial home in Passaic County and enjoyed a high standard of living, with gross income of $540,000 in 1984 and $476,000 in 1985.6 Francesca contributed no income to the family.7
In mid-1985 Antonio informed Francesca that he would divorce her unless she agreed to terms limiting his exposure for equitable distribution and alimony.8 To punctuate his demand he moved out of the marital bedroom and into an apartment above their garage.9 At or about the same time Antonio sought the advice of matrimonial counsel Barry Croland.10 Croland testified that Antonio admitted a net worth of $4.7 million in 1985.11 Francesca consulted matrimonial lawyer Gary Skoloff in July 1985 after being informed of Antonio's demand.12
In the fall of 1985 Francesca informed Skoloff that Antonio was going to pay her $500,000 in the event of a future divorce as full satisfaction of his equitable distribution and alimony obligations.13 Skoloff advised her not to sign such an agreement.14 Francesca did not take that advice and informed Skoloff that she wanted to preserve the marriage and did not want her children to grow up in a broken family.15 Skoloff received a form of agreement drafted by Croland along with the family's tax returns for four years through 1984 and financial statements.16 Francesca signed the agreement in February 1986 and Antonio signed it in March 1986.17
The parties resumed their marriage until 1994 when Antonio filed a complaint for divorce.18 In 1994 Antonio's assets totaled $14,291,500 and he had a net worth of $11,241,500.19 Francesca contended that in 1989 she and Antonio agreed to nullify the agreement. They signed a paper to that effect. However, she could not produce the signed paper at trial and contended that Antonio had stolen it from her and destroyed it.20
After a plenary trial the trial court determined that the agreement was enforceable.21 An order entered on October 25, 1996 memorialized that determination.22 On July 9, 1997 the court entered a judgment of divorce.23 Francesca appealed.24
Whether the mid-marriage agreement was the result of coercion or duress?25
Mid-marriage agreements arise in an inherently coercive context because one spouse presents an ultimatum while the marriage remains intact and the other spouse seeks to preserve the family unit rather than face dissolution.26
No. The trial court determined after a plenary trial that the agreement was not the result of coercion or duress.27 The context in which plaintiff made his demand was inherently coercive because he moved out of the marital bedroom and conditioned continuation of the marriage on execution of the agreement.28 Nevertheless, the appellate court accepted the trial court's credibility findings and did not reverse on that ground.
The agreement was not unenforceable on the ground of coercion or duress.29
Whether the agreement was unfair?30
Yes. The agreement promised defendant only $540,000, representing roughly eighteen percent of the 1985 marital estate after correction of plaintiff's net-worth calculation, while waiving substantial alimony that could have approached six figures annually given plaintiff's average income of $500,000.33 When measured in 1994 the same sum constituted approximately seven percent of post-marital assets, rendering the terms unfair and the agreement unenforceable.34
The agreement is unfair and unenforceable.35
Whether the fairness of the agreement should be measured as of the facts in 1985 or as of the facts in 1994?36
Yes. The agreement was unfair when signed in 1986 because it captured only half the low end of a probable equitable-distribution range and eliminated alimony exposure for a spouse with a twenty-year life expectancy.40 The agreement remained unfair in 1994 when plaintiff's net worth exceeded eleven million dollars and the fixed payment represented a dramatically smaller fraction of the augmented estate.41
Fairness must be measured at both times.42
Whether the parties nullified the agreement in 1989?43
A trial court's factual finding that the parties did not nullify an agreement is affirmed on appeal when the finding rests on substantial credible evidence in the record.44
No. The trial court found defendant's claim that the parties executed a nullification document in 1989 not credible.45 The court reached this conclusion after a plenary trial during which it considered all the evidence presented by the parties.46 That determination is supported by substantial credible evidence in the record and is therefore affirmed.47
The parties did not nullify the agreement in 1989.48