In a recent unpublished decision, the appellate division affirmed a trial court’s denial of a motion to set aside a final judgement. The defendant signed a settlement agreement and then later claimed that she lacked the mental capacity to understand what she was doing. The trial court held a hearing and enforced the agreement. After the divorce, the defendant filed a motion to set aside that judgment again claiming lack of mental capacity to contract.
Rule 4:50-1(f) provides a court may relieve a party from a final judgment or order for “any . . . reason justifying relief from the operation of the judgment or order.” To prevail the party filing the motion must demonstrate “exceptional circumstances” such that enforcement of the order would be unjust, oppressive, or inequitable. The case law on this tells us that relief under the Rule should be granted sparingly. The person filing the motion is therefore entitled to a hearing on the issues if she can show a genuinely disputed issue of material fact. In fact, not every factual dispute in a matrimonial action requires a plenary hearing.
Whether the Rule can be invoked to vacate an agreement in light of claims of one party’s incapacity turns on the evidence of the incapacity at the time of the agreement, not when the motion was made. The evidence must establish that the party seeking to set aside the agreement lacked capacity at the time he entered into an agreement. That person’s medical records from that time are key to the determination, as is evidence that the person was in fact capable of understanding what was going on.
Since expert opinions and medical documentation are generally needed to prove (or disprove this claim), the issues are complicated. Even though a treating physician may be permitted to testify as a fact witness based on their observations, such testimony is limited to issues relevant to the diagnosis and treatment of the individual patient. If a particular claim requires medical testimony extending beyond the plaintiff’s own diagnosis and treatment, the plaintiff may require the testimony of an expert. The net opinion rule is a corollary of N.J.R.E. 703 and prevents an expert’s bare conclusions, unsupported by factual evidence. In other words, the expert must correlate the facts to the exact issue and specifically opine about the person’s mental state during the relevant time period, or when the contract was signed.
If you entered into an agreement and believe that you did not have the capacity to do so based on medical or mental health issues, please contact our office for a consultation. These are highly complicated motions, which should not be made without the assistance of counsel.