“Without Prejudice” but Not Without Importance: Devers v. Devers, A Cautionary Tale for Attorneys and Litigants

Divorce Settlement With Rings.

Divorces are oftentimes protracted and drawn out for years as disputes get litigated through the Court system if parties are unable to resolve issues amongst themselves. While divorces are pending in Court, interlocutory Orders or “temporary” Orders are issued pendente lite, i.e., “pending the litigation”. Almost always, those Orders are entered “without prejudice”, which simply and generally means that the Order is not “final” nor does it “fully resolve” an issue, rather, it is being entered without prejudice such that it may be modified and/or altered at the ultimate resolution of the case when a final Order is entered or a final settlement between the parties is reached. Such without prejudice pendente lite Orders can pertain to a variety of issues in a divorce, such as:

  1. Custody and Parenting Time (including “temporary” visitation schedules for children);
  2. Spousal Support;
  3. Child Support; and/or
  4. Maintenance/payment of historical and ongoing marital expenses.

The impact and effect of a trial court entering an Order “without prejudice” was recently addressed by the Appellate Division on April 11, 2022, in the published (precedential) case of Devers v. Devers. In Devers, the parties were married for 23 years and plaintiff-Wife (“PW”) filed a Complaint for Divorce in Essex County in 2009. After 7+ years of litigation, the parties reached a settlement agreement as to all issues except for one: PW’s claim to approximately $1.5 million in monies stemming from the wind-up of a hedge fund that defendant-Husband (“DH”) managed with locations throughout the US and Cayman Islands and which monies were transferred in ~2002 to an LLC (“Gauss Account”) solely owned by DH.

The trial court scheduled a plenary hearing to address and rule upon the issue. Prior to the plenary hearing, PW filed a motion for summary judgment asking the trial court to find that the $1.5 million held in the Gauss Account was marital property subject to equitable distribution. The trial court denied PW’s summary judgment motion on January 26, 2020, and more specifically ruled that PW’s motion:

“. . . is hereby denied, without prejudice, as this [c]ourt lacks subject matter jurisdiction to determine whether the $1,512,224.97 held by [Gauss Account] are marital assets of defendant or investor proceeds” (Emphasis added.)

PW filed a motion for reconsideration of the trial court’s order denying her summary judgment motion without prejudice approximately 3 months after the entry of the Order. The trial court denied PW’s motion for reconsideration and concluded that the January 26, 2020 order was in fact a final order and therefore PW’s motion for reconsideration was untimely pursuant to R. 4:49-2, which Rule requires motions to alter or amend final orders or final judgments within twenty (20) days of the order. In Devers, PW contended that January 26, 2020, was not a “final order” subject to R. 4:49-2, but rather was interlocutory as evidenced by the inclusion of “without prejudice” in the trial court’s January 26, 2020 denial order.

PW filed a notice of appeal in August 2020 seeking review of the 1/26/20 Order denying her summary judgment motion and also the 7/16/20 Order denying her motion for reconsideration for being untimely. The Appellate Division entertained briefs from both parties as to the scope of the appeal. The issue ultimately before the Appellate Division boiled down to the following: Is PW’s appeal out of time or does the inclusion of “without prejudice” in the trial court’s 1/26/20 Order render the order interlocutory as opposed to a final order?

The Appellate Division noted that “the ‘without prejudice’ label can give an order an interlocutory appearance despite its finality”. The trial court intended for the “without prejudice” language in the 1/26/20 Order to acknowledge that PW was not precluded from asserting her claim in another forum. The trial court intended for the 1/26/20 order to be a final order, but the inclusion of “without prejudice” in the denial order was inherently confusing. Ultimately, the Appellate Division agreed with PW and remanded the matter back to the trial court, and more specifically reasoned that:

“[PW’s] misunderstanding about the inclusion of “without prejudice” in the critical [1/26/20] order should not be the undoing of her appeal.”

The Devers case is instructive and important for lawyers and litigants to consider and be cognizant of. Lawyers must be keen to the crucial distinction between FINAL orders and interlocutory orders; the former are subject to R. 4:49-2 and the 20-day non-relaxable deadline for filing a motion to reconsider a final order/decision in the trial court. Interlocutory orders are not subject to the R. 4:49-2 deadlines as to filing a motion for reconsideration in the trial court, but there is no right to appeal said orders and any request to appeal must be done to the Appellate Division within 20 days of the order. The trial court in Devers was surely well-intentioned in endeavoring to enter a final order that denied PW’s summary judgment motion while simultaneously acknowledging that PW may pursue such a claim in another forum. Devers, however, provides a cautionary tale for attorneys moving forward – any reference or inclusion of “without prejudice” in an Order could be construed as not being a final order. If a final Order is anticipated and contains any “without prejudice” language, alarm bells should be sounding for the litigant/attorney that was anticipating a final Order and attorneys should address any ambiguity promptly to avoid a Devers situation.

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