In order to set aside the property settlement agreement based on defendant's fraudulent concealment, plaintiff must prove by clear and convincing evidence that defendant made a material misrepresentation with the intent that it be relied upon, as well as

Law Lessons from LINDA M. GEFFNER v. RAMI E. GEFFNER, App. Div., A-2896-08T2, May 11, 2011: Under Rule 4:50-1, a party may move for relief from a judgment or order for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under R. 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; . . . or (f) any other reason justifying relief from the operation of the judgment or order. Under Rule 4:50-2, the motion "shall be made within a reasonable time, and for reasons (a), (b) and (c) of R. 4:50-1 not more than one year after the judgment, order or proceeding was entered or taken." Moreover, relief under Rule 4:50-1(f) "is available only when truly exceptional circumstances are present and only when the court is presented with a reason not included among any of the reasons subject to the one year limitation." Baumann v. Marinaro, 95 N.J. 380, 395 (1984). A motion to reopen a judgment under Rule 4:50-1 "'is addressed to the sound discretion of the trial court, guided by equitable principles.'" In re Adoption of Child of Indian Heritage, 219 N.J. Super. 28, 42 (App. Div. 1987) (quoting Hodgson v. Applegate, 31 N.J. 29, 37 (1959)), aff'd, 111 N.J. 155 (1988). The trial court's ruling will be upheld in the absence of a mistaken exercise of discretion. Ibid. See also Quick Chek Food Stores v. Springfield Tp., 83 N.J. 438, 446 (1980) (holding that motions under R. 4:50-1 "are addressed to the sound discretion of the trial court and will not be disturbed unless that discretion has been clearly abused"). "'Settlement of litigation ranks high in our public policy.'" Nolan v. Lee Ho, 120 N.J. 465, 472 (1990) (quoting Jannarone v. W.T. Co., 65 N.J. Super. 472, 476 (App. Div.), certif. denied, 35 N.J. 61 (1961)). Thus, New Jersey courts "have refused to vacate final settlements absent compelling circumstances." Ibid. "In general, settlement agreements will be honored 'absent a demonstration of fraud or other compelling circumstances.'" Ibid. (quoting Pascarella v. Bruck, 190 N.J. Super. 118, 125 (App. Div.)(internal quotation omitted), certif. denied, 94 N.J. 600 (1983)). The party seeking to vacate a settlement agreement must provide "clear and convincing proof" that the agreement should be vacated. Ibid. A motion to set aside a final divorce judgment must be founded upon a showing of inequity and unfairness under Rule 4:50-1(f). Rosen v. Rosen, 225 N.J. Super. 33, 36 (App. Div.), certif. denied, 111 N.J. 649 (1988). To determine whether compelling circumstances are present, the court must look to the totality of the facts and on a case-by-case basis. In re Guardianship of J.N.H., 172 N.J. 440, 473-74 (2002). The movant must demonstrate that continued enforcement of the judgment would be "unjust, oppressive or inequitable." Quagliato v. Bodner, 115 N.J. Super. 133, 138 (App. Div. 1971), superseded by statute on other grounds, Comparative Negligence Act, L. 1987, c. 146, as recognized in Reichert v. Vegholm, 366 N.J. Super. 209 (App. Div. 2004). "[W]here there is a showing of fraud or misconduct by a spouse in failing to disclose the true worth of his or her assets, relief may be granted under R. 4:50-1(f) if the motion is made within a reasonable time." Rosen, supra, 225 N.J. Super. at 37. If the party seeking to rescind the agreement is not seeking damages, that party needs to establish only equitable fraud. Jewish Ctr. of Sussex Cnty. v. Whale, 86 N.J. 619, 625 (1981). An action for fraud may be either legal or equitable in nature. Id. at 624. "In order to prove equitable fraud, a plaintiff must demonstrate a material misrepresentation made with intent that it be relied on, coupled with actual detrimental reliance." Nolan, supra, 120 N.J. at 472. It is not necessary to prove knowledge of the falsity and an intention to obtain an undue advantage, as would be necessary to prove legal fraud. Jewish Center, supra, 86 N.J. at 625. In order to set aside the PSA based on defendant's inaccurate CIS, plaintiff would have had to demonstrate by clear and convincing evidence that enforcement of the property settlement agreement would be unjust, oppressive or inequitable. Nolan, 120 N.J. at 472; Quagliato, supra, 115 N.J. Super. at 138. In order to set aside the property settlement agreement based on defendant's fraudulent concealment, plaintiff must prove by clear and convincing evidence that defendant made a material misrepresentation with the intent that it be relied upon, as well as actual detrimental reliance. Nolan, supra, 120 N.J. at 472. Note: There is a print link embedded within this post, please visit this post to print it. 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