NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4292-15T1
TIMOTHY R. KELLERS,
Plaintiff-Appellant,
v.
KATHLEEN M. KELLERS,
Defendant-Respondent.
______________________________________________
Argued telephonically May 24, 2017 –
Decided September 18, 2017
Before Judges O'Connor and Whipple.
On appeal from Superior Court of New Jersey,
Chancery Division, Family Part, Monmouth
County, Docket No. FM-13-0196-14.
Robert A. Abrams argued the cause for
appellant.
Brian D. Winters argued the cause for
respondent (Keith, Winters & Wenning, LLC,
attorneys; Mr. Winters, on the brief).
PER CURIAM
In this post-judgment matrimonial matter, plaintiff Timothy
R. Kellers appeals from a May 5, 2016 Family Part court order
denying his motion to compel defendant Kathleen M. Kellers to
contribute toward certain debts incurred during the marriage.
We affirm in part and remand for further proceedings.
I
In June 2014, the parties divorced after thirty-two years
of marriage. A matrimonial settlement agreement (MSA),
incorporated into the parties' dual final judgment of divorce,
includes provisions allocating marital debt. Various provisions
address how the parties are to handle an Internal Revenue
Service (IRS) tax lien that attached to the marital home during
the marriage.
Specifically, from 1999 to 2004, the parties failed to file
federal income tax returns and to pay any federal income taxes,
and eventually the IRS placed a lien against the marital home.
In the MSA, the parties agreed to pay such debt from the net
sale proceeds of their home, which ultimately sold in December
2015. At the time of the sale, the parties owed the IRS
$102,590.88 in back taxes, including interest and penalties.
However, from December 2011 to the time the marital home was
sold, the IRS also garnished $41,580 from plaintiff's wages.
Paragraph 2.1(d) of the MSA addresses the IRS debt, stating
in relevant part:
2
A-4292-15T1
The parties shall evenly split the net
proceeds from the sale of the Marital home
after paying the 1999-2004 tax liens set
forth in this Paragraph . . . . The parties
acknowledge that there were tax liens on the
Marital home as a result of the parties' not
filing their 1999-2004 income taxes. The
liens are being paid prior to the sale of
the home, via wage garnishment against
Husband's wages at the rate of $1,153.00 a
month. The parties shall continue to work
with accountant Joe Gunteshi in an attempt
to reduce the tax liens. The parties shall
use the proceeds from the sale of the
Marital home, after paying realty
commissions and other costs, if any, to pay
all of the 1999-2004 tax liens on the
Marital home.
As for other debt, paragraph 2.1(d) provides:
Any liens or judgments, if any, other than
the tax liens for failure to file and pay
the 1999-2004 taxes, shall be the
responsibility of the party whose name the
lien or judgment is in.
Paragraphs 2.7(a), (b), and (c) of the MSA similarly
address the IRS tax lien and how other debt is to be handled:
a. The 1999-2004 Tax liens that are on the
marital home shall be paid out of the net
proceeds from the sale of the Marital Home.
b. Other than as set forth in Paragraph
2.7(a) above, any and all debt in the name
of the Husband shall be the sole
responsibility of the Husband, and the
Husband shall hold the Wife harmless and
indemnify her for any and all liability for
any such debt. . . .
c. Other than as set forth in Paragraph
2.7(a) above, any and all debt in the name
3
A-4292-15T1
of the Wife shall be the sole responsibility
of the Wife, and the Wife shall hold the
husband harmless and indemnify her for any
and all liability for any such debt. . . .
In addition, paragraph 3.2 states:
The parties acknowledge there are tax liens
on the marital property for the years of
1999-2004 for which they had not filed their
tax returns. They agree to pay off the tax
liens out of the net proceeds from the sale
of the marital home.
Finally, paragraph 3.3 provides:
The parties agree that all tax liabilities
pursuant to this Agreement, and other than
for the tax years 1999-2004, shall be the
sole responsibility of the respective
parties and each agrees to hold the other
harmless for any past, present, or future,
tax liabilities assessed against either one
of the [parties] for state or federal income
taxes.
During the marriage, plaintiff and his mother co-owned a
business known as Kellers Auto Electric. They failed to pay
taxes to the State of New Jersey due in 1996 and 1997. By the
time the house sold in 2015, these taxes were, in the aggregate,
$130,175.62, including interest and penalties. These particular
taxes were not specifically addressed in the MSA.
At the time of the closing, the parties did not appear, but
their real estate attorney did and signed documents on the
parties' behalf pursuant to a power of attorney. Out of the net
sale proceeds, various sums were allocated between the parties
4
A-4292-15T1
to pay certain debts in accordance with the MSA. The parties'
attorney also signed an addendum on behalf of plaintiff that
made him entirely responsible for the tax debt owed to the
State.
After the closing, defendant filed a motion to enforce
certain provisions of the MSA, and plaintiff filed a cross-
motion seeking, among other things, the following relief.
First, plaintiff sought to have defendant contribute toward the
tax payments he made through the garnishment of his wages. He
contended the MSA makes clear the parties were to contribute
equally toward all of the taxes owed to the IRS, not just the
balance owed to the IRS at the time of the closing.
Plaintiff also sought to vacate the MSA, maintaining he had
not been aware of the tax debt owed to the State before entering
into the MSA. He claimed had he known of such debt, he would
have not have agreed to the terms of the MSA unless it provided
defendant was also responsible for these taxes.
The court rejected plaintiff's arguments and denied both
requests for relief. The court reasoned because the MSA did not
expressly state defendant was responsible for the IRS debt
garnished from plaintiff's wages, it could not compel her to
contribute toward these taxes. As for the taxes paid to the
State, the court's principal finding was plaintiff was aware of
5
A-4292-15T1
this debt before he entered into the MSA; thus, he had no
grounds to complain the MSA did not compel defendant to pay
toward this debt.
II
On appeal, plaintiff contends the court erred when it
denied his requests for relief. Plaintiff essentially reprises
the arguments made before the Family Part court, though added
some additional arguments.
Addressing plaintiff's request to vacate the MSA, we
disagree the court erred. The record is clear plaintiff knew of
the taxes owed to the State before he entered into the MSA, as
demonstrated by the letters exchanged between counsel well
before plaintiff signed the agreement. We affirm the court's
decision denying this relief for essentially the same reasons it
expressed in its written decision accompanying the May 5, 2016
order.
We further observe paragraph 3.3 of the MSA clearly states
all tax debt, other than that incurred from 1999 to 2004, shall
be "the sole responsibility of the respective parties and each
agrees to hold the other harmless for any past, present, or
future, tax liabilities assessed against either one of the
[parties] for state or federal income taxes." We are satisfied
the parties agreed defendant is not responsible for any of the
6
A-4292-15T1
tax debt owed to the State. However, we disagree with the
Family Part court's decision to reject, without an evidential
hearing, plaintiff's request to compel defendant to contribute
toward those tax payments he made through the garnishment of his
wages.
Review of a trial court's interpretation of an agreement is
de novo. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Cantone
Research, Inc., 427 N.J. Super. 45, 57 (App. Div.), certif.
denied, 212 N.J. 460 (2012). The reviewing court must evaluate
the common intention of the parties and the purpose they tried
to achieve. Tessmar v. Grosner, 23 N.J. 193, 201 (1957). The
"court's role is to consider what is 'written in the context of
the circumstances' at the time of drafting and to apply 'a
rational meaning in keeping with the expressed general
purpose.'" Sachau v. Sachau, 206 N.J. 1, 5-6 (2011). "To the
extent that there is any ambiguity in the expression of the
terms of a settlement agreement, a hearing may be necessary to
discern the intent of the parties at the time the agreement was
entered and to implement that intent." Quinn v. Quinn, 225 N.J.
34, 45 (2016) (citing Pacifico v. Pacifico, 190 N.J. 258, 267
(2007)).
Here, the MSA contains language that can be understood to
mean only the existing debt at the time of the house sale should
7
A-4292-15T1
be paid out of the proceeds. On the other hand, there is also
language that can be construed to mean the parties were to share
equally all of this debt.1 In our view, the ambiguity in the
agreement requires a plenary hearing so the court may properly
discern parties' intentions and whether they agreed defendant is
to contribute toward the debt garnished by the IRS.
Accordingly, we remand this matter so the court may conduct a
plenary hearing on this issue.
To the extent we have not addressed a particular argument,
it is because either our disposition makes it unnecessary or the
argument was without sufficient merit to warrant discussion in a
written opinion. R. 2:11-3(e)(1)(E).
Affirmed in part and remanded for further proceedings
consistent with this opinion. We do not retain jurisdiction.
1
We question, without deciding, whether plaintiff would be
entitled to any reimbursement of those wages paid to the IRS
before the complaint was filed, but leave such consideration to
the Family Part court.
8
A-4292-15T1