Michael J. Thieme v. Bernice F. Aucoin-Thieme(076683)

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the

convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the

interest of brevity, portions of any opinion may not have been summarized.)

Michael J. Thieme v. Bernice F. Aucoin-Thieme (A-51-15) (076683)

Argued September 26, 2016 -- Decided December 12, 2016

Patterson, J., writing for a unanimous Court.

In this appeal, the Court construes New Jersey’s equitable distribution statute, N.J.S.A. 2A:34-23(h) and

-23.1, and considers the equitable remedy of a constructive trust, in the setting of a post-judgment dispute with

respect to deferred compensation.

In 1999, plaintiff Michael J. Thieme (Thieme) began employment at a biometrics consulting firm. He

worked over ninety hours a week and frequently traveled for his job. In late 2000 or early 2001, Thieme met

defendant Bernice F. Aucoin-Thieme (Aucoin-Thieme). In May 2002, Aucoin-Thieme discovered that she was

pregnant, and she and Thieme began to cohabitate. Their daughter was born in January 2003.

Although Thieme held no ownership interest in the firm, the firm’s principals offered to compensate him

for his contributions to the firm’s success, in the event that they sold the firm. Thieme and Aucoin-Thieme

determined that, given the demanding nature of Thieme’s schedule, Aucoin-Thieme would not pursue employment,

but rather would care for their daughter, maintain their residence, and manage their rental properties.

The couple’s relationship was volatile from its inception, and Thieme and Aucoin-Thieme would

frequently exchange angry emails. At the end of one such exchange in 2010, Thieme explicitly acknowledged in an

email that Aucoin-Thieme had given up her own career and educational aspirations so that Thieme could pursue

his—which Thieme described as a “great sacrifice”—and noted that “it is appropriate that I support you fully in

recognition of this sacrifice.” Later that year, Thieme and Aucoin-Thieme wed. They filed for divorce fourteen

months later. In the course of negotiations about the division of their assets, Thieme reiterated his view that Aucoin-

Thieme would be entitled to a portion of any bonus he received upon the sale of the firm.

In April 2012, Thieme and Aucoin-Thieme executed their Property Settlement Agreement. Three months

after the entry of their judgment of divorce, the firm was sold and Thieme was offered a one-time Closing Bonus of

$2,250,000. Thieme did not inform Aucoin-Thieme of the Closing Bonus. She first learned of the Bonus when

Thieme deposited $200,000 into a bank account that, unbeknownst to Thieme, remained a joint account despite the

divorce. With no notice to Thieme, Aucoin-Thieme withdrew the deposited funds. Thieme filed a complaint.

After a three-day bench trial, a Family Part judge determined that Thieme earned the Closing Bonus over

his entire employment with the firm and that Aucoin-Thieme was entitled to thirty percent of the post-tax portion of

the Bonus earned during their fourteen-month marriage. The court awarded $30,288, to Aucoin-Thieme and ordered

her to return the remaining amount that she had withdrawn from the joint account, totaling $169,712, to Thieme.

Aucoin-Thieme appealed, asserting that she was also entitled to a share of the Closing Bonus for the period

during which she cohabitated with Thieme prior to marriage under both the equitable distribution statute and

equitable theories including unjust enrichment and constructive trust. In an unpublished opinion, an Appellate

Division panel affirmed the trial court’s judgment, substantially for the reasons stated by the trial judge.

The Court granted Aucoin-Thieme’s petition for certification. 224 N.J. 245 (2016).

HELD: N.J.S.A. 2A:34-23(h) authorizes the equitable distribution of Thieme’s Closing Bonus only to the extent that

the compensation was earned during the parties’ marriage because, under that statute, the property to be divided is that

which was earned, or otherwise acquired, during a marriage or civil union. The Court holds, however, that the

extraordinary circumstances of this case warrant the imposition of a constructive trust as a remedy for Aucoin-Thieme’s

1

claim of unjust enrichment and that Aucoin-Thieme is entitled to a percentage of the portion of the Closing Bonus

earned during the parties’ cohabitation.

1. The equitable distribution statute authorizes the Family Part to distribute assets “in all actions where a judgment

of divorce, dissolution of civil union, divorce from bed and board or legal separation from a partner in a civil union

couple is entered.” N.J.S.A. 2A:34-23(h). The statute reflects the public policy recognition that marriages and civil

unions are joint undertakings similar to partnerships. (pp. 17-18)

2. The equitable distribution statute does not govern disputes over property between parties who have cohabited but

have never entered into a marriage or civil union, nor does it treat property acquired during a period of cohabitation

prior to a marriage or civil union as equivalent to property acquired during that marriage or civil union. (pp. 19-22)

3. The Court agrees with the trial court and Appellate Division that if the portion of Thieme’s Closing Bonus that

was earned prior to the marriage were held to be a marital asset, such a ruling would contravene the plain language

of N.J.S.A. 2A:34-23(h). The Court holds that the trial court correctly allocated the distribution of Thieme’s

Closing Bonus to premarital and marital periods, and properly deemed only the portion of the compensation that was

earned during the parties’ marriage to be a marital asset subject to equitable distribution. (pp. 22-23)

4. Having rejected Aucoin-Thieme’s claim for equitable distribution of the portion of the Closing Bonus allocated

to the period prior to the parties’ marriage, the Court turns to her claims based on equitable principles. The Court

notes that the Family Part is a court of equity, and that “[e]quities arise and stem from facts which call for relief

from the strict legal effects of given situations.” Carr v. Carr, 120 N.J. 336, 351 (1990). (pp. 23-24)

5. To prove a claim for unjust enrichment, a plaintiff must demonstrate that the defendant received a benefit and

that it would be unjust for the defendant to retain that benefit without compensating the plaintiff. In the event that a

court finds unjust enrichment, it may impose a constructive trust. (pp. 24-25)

6. In Carr, the plaintiff’s statutory claim that she was entitled to the equitable distribution of assets owned by her

husband failed because the husband died during their protracted divorce proceedings, such that no judgment of

divorce was entered. Notwithstanding this failure, the Court affirmed the imposition of the equitable remedy of

constructive trust because the estate’s retention of “the share beneficially belonging to Mrs. Carr” could give rise to

unjust enrichment. Carr, supra, 120 N.J. at 353-54. (pp. 25-27)

7. The principles expressed in Carr apply with equal force to this appeal and warrant the imposition of a

constructive trust governing a portion of Thieme’s Closing Bonus in the unusual circumstances of this case. The

firm’s acknowledgment that Thieme would be generously compensated upon the sale of the company was a

significant factor in the parties’ personal and financial planning from the early stages of their relationship. Thieme

firmly opposed any suggestion that he pursue less demanding employment and take on a more active role in their

daughter’s care so that Aucoin-Thieme could seek a job. Aucoin-Thieme’s efforts enabled Thieme to focus almost

exclusively on the firm, and thus supported his career. Indeed, Thieme himself explicitly recognized that Aucoin-

Thieme’s contributions to their family should be rewarded and that his obligation to financially support Aucoin-

Thieme implicated, to some extent, any compensation that he would receive if the company were sold. (pp. 27-30)

8. Under these facts, a decision constraining Aucoin-Thieme to the nominal share of the Closing Bonus that is

authorized by the equitable distribution statute would result in unjust enrichment. As a remedy, a percentage of the

portion of the Closing Bonus that was earned by Thieme during the period in which the parties cohabited prior to

their marriage should be deemed to be held by Thieme in constructive trust for Aucoin-Thieme. The Court directs

the trial court on remand to determine the specifics of that constructive trust. (pp 30-31)

The judgment of the Appellate Division is AFFIRMED IN PART and REVERSED IN PART, and the

matter is REMANDED to the Family Part for proceedings consistent with this opinion.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-VINA,

SOLOMON, and TIMPONE join in JUSTICE PATTERSON’s opinion.

2

SUPREME COURT OF NEW JERSEY

A-51 September Term 2015

076683

MICHAEL J. THIEME,

Plaintiff-Respondent,

v.

BERNICE F. AUCOIN-THIEME,

Defendant-Appellant.

Argued September 26, 2016 – Decided December 12, 2016

On Certification to the Superior Court,

Appellate Division.

Michael J. Confusione argued the cause for

appellant (Hegge & Confusione, attorneys).

Linda M. Coronato argued the cause for

respondent.

JUSTICE PATTERSON delivered the opinion of the Court.

In this appeal, the Court construes New Jersey’s equitable

distribution statute, N.J.S.A. 2A:34-23(h) and -23.1, and

considers the equitable remedy of a constructive trust, in the

setting of a post-judgment dispute over deferred compensation.

Plaintiff Michael J. Thieme (Thieme) and defendant Bernice

F. Aucoin-Thieme (Aucoin-Thieme) were briefly married after an

eight-year cohabitation. Before and during the marriage, Thieme

was a salaried employee of a biotechnology consulting business,

International Biometrics Group (IBG). Although Thieme had no

1

ownership interest in IBG, its principals committed in writing

to compensate him for his contributions to IBG’s success, in the

event that they sold their company. Thieme and Aucoin-Thieme

made personal and financial decisions with the expectation that

if IBG were sold, Thieme would receive substantial compensation.

Thieme worked long hours and traveled extensively on IBG’s

behalf; Aucoin-Thieme devoted her attention to their child and

home and did not seek employment. IBG, however, was not sold

during the parties’ marriage.

When Thieme and Aucoin-Thieme divorced, they agreed upon

the terms of a Property Settlement Agreement (PSA), and their

assets were divided in accordance with its terms. Three months

after the Family Part’s entry of a judgment of divorce, IBG was

sold. IBG paid Thieme $2.25 million, characterized as a

“Closing Bonus” (the Closing Bonus or the Bonus), granted in

compensation for his contributions to the business for more than

a decade of service.

In post-judgment proceedings before a Family Part judge,

Aucoin-Thieme sought a share of the Closing Bonus. After a

bench trial, the trial judge ruled that Aucoin-Thieme was

entitled to equitable distribution; however, the equitable

distribution was limited to the portion of Thieme’s Closing

Bonus that was attributable to his work during the parties’

marriage and excluded any share of the remainder of that

2

compensation. The Appellate Division affirmed the trial court’s

determination.

We affirm in part and reverse in part the Appellate

Division’s judgment. We concur with the trial judge and the

Appellate Division that N.J.S.A. 2A:34-23(h) authorizes the

equitable distribution of Thieme’s Closing Bonus only to the

extent that the compensation was earned during the parties’

marriage. We hold, however, that the extraordinary

circumstances of this case warrant the imposition of a

constructive trust as a remedy for Aucoin-Thieme’s claim of

unjust enrichment, and that Aucoin-Thieme is entitled to a

percentage of the portion of the Closing Bonus that Thieme

earned during the parties’ cohabitation. We remand this case to

the trial judge for an allocation of the deferred compensation.

I.

We derive our summary of the facts from the trial record.

In 1999, Thieme was hired by a longtime friend, Raj

Nanavati, to be the first employee of IBG, a company that Raj

Nanavati founded with his brother, Samir Nanavati. IBG was a

start-up biometrics consulting firm. It provided security

services, including fingerprinting and facial identification

technology, to businesses. Thieme began his employment with IBG

as a consultant and later was assigned the title “Director of

Special Projects.”

3

From the inception of his employment at IBG, Thieme worked

“non-stop” for the company; he devoted between ninety and one

hundred hours per week to his job. He traveled to sixty

countries in the course of his employment and was away from home

for extended periods. Thieme was not given stock or any other

ownership interest in the company. He was initially paid a

salary of approximately $40,000 per year, and his salary

eventually reached $180,000 per year.

Aucoin-Thieme was a resident of Mississippi, working for a

rental car company, when she was introduced to Thieme by his

sister in late 2000 or early 2001. A few months later, Aucoin-

Thieme moved to Jersey City, where she temporarily lived in an

apartment that Thieme shared with his sister. Aucoin-Thieme and

Thieme began dating. During that period, Aucoin-Thieme held a

series of jobs in retail businesses.

In May 2002, Aucoin-Thieme discovered that she was

pregnant. According to Aucoin-Thieme, she and Thieme put money

aside for a wedding that would follow their child’s birth, but

delayed their marriage because they needed to spend the money on

other priorities. Thieme testified that they discussed marriage

only “in the abstract” at that time, and made no definite plans.

They moved into an apartment in Jersey City shortly after they

learned of Aucoin-Thieme’s pregnancy.

4

That month, Thieme approached IBG’s owners about his

position and compensation at the company. He drafted and sent

to IBG’s owners a document entitled “Statement of

Understanding,” which provided:

It is the intention of Raj Nanavati and Samir

Nanavati, partners of International Biometric

Group, LLC, that Michael Thieme, Director of

Special Projects, be provided with

remuneration and compensation commensurate

with his past and present role in the execution

and delivery of IBG products and services,

enabling company revenue and employee growth,

and enhancing IBG’s position as the industry’s

leading provider of biometric consulting and

integration services.

Such remuneration and compensation will be

above and beyond monies already paid in the

form of regular salary and bonus.

The form and relative amount of remuneration

and compensation are to be determined at a

later date, and are anticipated to be

commensurate with Mr. Thieme’s relative value

to IBG since his employment in November 1999,

reflective of the unwritten and non-explicit

agreement between Mr. Thieme and Raj Nanavati

and Samir Nanavati to this effect.

This remuneration and compensation may take the

form of an equity position in IBG, or in a

company or venture principally formed through,

with, or by IBG, prior or subsequent to

acquisition, liquidation, major partnership,

or substantive change in ownership or corporate

structure. In lieu of any such development,

this remuneration and compensation may also

take the form of salary or other tangible

method of compensation.

5

A copy of this statement will be placed in Mr.

Thieme’s permanent employee file.1

Raj Nanavati testified that he and his brother executed the

Statement of Understanding with the “understanding if we sell

the company, or cash out, we will take care of [Thieme]. We

will give [Thieme] something extra.” Thieme, however, testified

that he considered the Statement of Understanding to be

unenforceable because it did not quantify the proposed

compensation. Thieme and Aucoin-Thieme dispute whether Aucoin-

Thieme was aware of the Statement of Understanding during that

period; he contends that he informed her about it, and she

denies that he did so.

Shortly thereafter, Aucoin-Thieme left her retail position.

She testified that she did so because she was concerned about

the impact of her job and long commute on her pregnancy. The

parties’ daughter was born in January 2003.

Before and after their child’s birth, the parties discussed

the division of responsibilities in their personal and

professional lives. Although Aucoin-Thieme hoped to pursue a

career, Thieme and Aucoin-Thieme agreed that she would not seek

a job outside the home, but would take care of their daughter

1 The record contains only an unsigned copy of the “Statement of

Understanding.” Thieme testified that he did not know whether

the document was signed; Raj Nanavati testified that he recalled

“signing a document in around . . . 2000, early 2000.” No

signed version was presented to the trial judge.

6

and maintain their residence, as he continued to work on a

demanding schedule. Thieme characterized this agreement as a

“trade off” that enabled the parties to live on his salary, in

light of their shared view that his earning capacity

substantially exceeded hers. He recalled that the parties

agreed that a return to work would not be cost-effective for

Aucoin-Thieme because, if she obtained a job, they would incur

significant expenses for child care. With the exception of a

brief per diem job as a substitute teacher at her daughter’s

preschool, Aucoin-Thieme was not employed outside the home after

the birth of the child.

According to Aucoin-Thieme, in addition to caring for her

daughter and performing nearly all of the household tasks, she

conducted minor repairs on the home, paid the bills, and managed

the parties’ rental properties. The parties dispute the extent

of Aucoin-Thieme’s assistance in the advancement of Thieme’s

career. She contends that she actively participated in social

activities connected with his job, and he denies that his

employment involved significant social obligations.

In 2006, IBG’s owners conducted what Thieme characterized

as “very preliminary discussions” with a biometric vendor about

the potential sale of the business. According to Aucoin-Thieme,

Thieme told her at that time that he had a contract that would

entitle him to share in the proceeds of any sale, and the

7

parties bought a new home in anticipation of that compensation.

The discussions, however, did not lead to a sale of IBG.

Shortly thereafter, Thieme, Aucoin-Thieme, and their daughter

moved to Virginia so that Thieme could oversee an important

government contract for IBG. They remained in Virginia for

approximately three years and moved back to New Jersey in 2009.

The parties’ relationship, volatile from its inception,

deteriorated following their return to New Jersey. The primary

focus of their dispute was Thieme’s employment at IBG. Aucoin-

Thieme resented Thieme’s work hours and disliked the owners of

the company. At various times, Thieme and Aucoin-Thieme accused

one another of verbal and physical abuse, often using e-mail to

exchange angry communications.

At the conclusion of a series of acrimonious e-mails

written in July 2010, Thieme wrote:

This email is an acknowledgment that you have

had to give up your career and educational

aspirations in order to stay at home with [our

daughter] while I worked and pursued my career.

You have put your career aside so I could

advance mine. I understand that this has been

a great sacrifice for me and for our family.

I also understand that in the future,

regardless of our circumstances, it is

appropriate that I support you fully in

recognition of this sacrifice.

In an e-mail discussion about a potential settlement of

their dispute with the assistance of legal counsel, written

after Aucoin-Thieme threatened to move to Mississippi with their

8

daughter, Thieme advised Aucoin-Thieme that her counsel would

“be shocked as to how much money I will give you,” but that he

needed “to have the situation with my daughter resolved.”

Notwithstanding their frequent discord and vitriolic e-mail

exchanges, Thieme and Aucoin-Thieme married in August 2010.

Although the parties agree that their marriage began on a

positive note, their relationship worsened shortly after their

wedding. According to Thieme, Aucoin-Thieme’s demands that he

shorten his hours and respond immediately to e-mail messages

that she sent to him during the workday imperiled his job at

IBG.

The parties’ conflict reached a critical point in October

2011. In the wake of a dispute over e-mails that Thieme

exchanged with a co-worker, Aucoin-Thieme sent a series of

inflammatory e-mails about Thieme to IBG’s owners and employees.

In the e-mails, Aucoin-Thieme contended that she had a video of

an altercation between the two in the presence of their

daughter. She called the company’s owners disparaging names and

demanded that they pay her money that she insisted was owed to

her. Aucoin-Thieme then sent an e-mail to Thieme, asking

whether he was “ready to give [her] a divorce” in the wake of

that episode.2

2 At trial, Aucoin-Thieme testified that when she sent that e-

mail, she was under the mistaken impression that New Jersey law

9

Only fourteen months after the parties’ wedding, Thieme

filed a complaint for divorce in the Family Part. With the

assistance of counsel, Thieme and Aucoin-Thieme negotiated the

equitable distribution of their assets, alimony, child support,

and the custody of their child.

During their negotiations, the parties communicated by e-

mail about the prospect that IBG would pay deferred compensation

to Thieme. Thieme advised Aucoin-Thieme that he did not “expect

to get any large lump-sum bonuses,” but that “if some magical

$50K bonus appeared, then I’d wind up clearing $30K, and we can

make some arrangement - e.g. split it 50/50?” A week later,

Thieme confirmed to Aucoin-Thieme that, notwithstanding their

“discussions . . . about me someday getting an ownership stake

[in IBG],” he had “no idea if it will ever happen, or how it

will be structured, or the value.” He added that IBG’s grant of

an ownership interest “may never happen. It will certainly not

happen anytime soon.” In another e-mail, Thieme added that any

stake in IBG awarded to him “would be defined, probably, as

stocks,” and that he did not anticipate “a big cash payment.”

Thieme also asked Aucoin-Thieme to identify what she

considered to be her fair percentage share of any “potential

income/assets I make if I ever accept a buyout[.]” Aucoin-

authorized one spouse to bar another spouse from obtaining a

divorce.

10

Thieme did not commit to any specific percentage. Again by e-

mail, Thieme stated that although there had been no discussions

of a sale of IBG since 2006, he viewed Aucoin-Thieme’s claim to

his assets to date back to the time of their daughter’s birth.

He reiterated his view that IBG would not be sold “soon,” but

again asked her to quantify her claim to “a future ownership

stake” in the company. She did not do so.

A month later, Thieme urged Aucoin-Thieme not to delay the

settlement of their dispute “based on something that may never

happen.” He reassured her that if he were awarded “ownership in

IBG” in the future, “we are going to need to revisit” the issue.

Thieme reiterated that he had no contract with IBG; he

represented that there was “absolutely nothing at all stating

that I am going to ever get any part of” the company. He

suggested that the parties discuss the issue later, in the event

that he acquired an interest in IBG.

In April 2012, Thieme and Aucoin-Thieme executed their PSA.

Pursuant to its terms, the parties evenly divided their

identified assets -- whether those assets were acquired during

their lengthy period of cohabitation or their brief marriage --

and resolved issues of alimony, child support, and visitation.

The PSA provided that neither party owned “any businesses or any

interests whatsoever in any businesses which are subject to

equitable distribution” and that the agreement had no binding

11

effect on undisclosed assets. The PSA did not address any

deferred compensation anticipated by the parties.

Shortly after the trial court entered a final judgment of

divorce on June 20, 2012, Aucoin-Thieme moved to Mississippi

with the parties’ daughter. Thieme rented an apartment near

Aucoin-Thieme’s Mississippi home and spent time with the child

in accordance with the visitation schedule set forth in the PSA.

Three months after the entry of the parties’ judgment of

divorce, IBG’s owners entered into an agreement to sell IBG to

another company. Shortly before the closing, Raj and Samir

Nanavati executed a document offering Thieme the Closing Bonus,

described as “a one-time bonus in the amount of $2,250,000”

contingent on the closing of the sale. The document referenced

the “Statement of Understanding” that was executed in 2002.

IBG’s owners represented that the Closing Bonus was offered

pursuant to the Statement of Understanding, “to show our

appreciation for [Thieme’s] contributions in helping [IBG] grow

into the successful organization that it is today.”

In a deposition taken in this action, Raj Nanavati

testified that IBG offered Thieme the Closing Bonus in

accordance with the Statement of Understanding. He stated that

the Closing Bonus was “[b]ased upon [Thieme’s] contribution to

the company over the 13 years[.]” He testified that Thieme was

not told about the sale of IBG until the sale was completed.

12

It is undisputed that Thieme did not inform Aucoin-Thieme

that IBG had awarded him the Closing Bonus. She first learned

of the Bonus when Thieme deposited $200,000 into a bank account

that, unbeknownst to Thieme, remained a joint account despite

the divorce. With no notice to Thieme, Aucoin-Thieme withdrew

the deposited funds from the joint account.

II.

Thieme filed a complaint in the Chancery Court of Harrison

County, Mississippi, Second Judicial Circuit. In addition to

seeking the Mississippi court’s intervention in a visitation

dispute, Thieme asked the court to hold Aucoin-Thieme in

contempt for withdrawing the contested funds from the bank

account. Aucoin-Thieme filed a counterclaim. Among other

claims, she alleged that Thieme committed fraud by failing to

inform her, prior to the parties’ divorce, that he would be

receiving a substantial amount of money by virtue of IBG’s sale.

Aucoin-Thieme then relocated to New Jersey, and the Mississippi

matter was transferred to the Family Part.

After discovery, a Family Part judge conducted a three-day

bench trial addressing two related issues: whether Aucoin-

Thieme was entitled to a share of Thieme’s Closing Bonus, and

whether she would be permitted to retain, or ordered to return,

the $200,000 that she withdrew from the parties’ joint account.

13

At the conclusion of the trial, the court determined that

the Closing Bonus was earned by Thieme throughout his entire

employment with IBG. The trial court found that Aucoin-Thieme

was entitled to a share of that portion of the Closing Bonus

that was earned by Thieme during the parties’ fourteen-month

marriage. It concluded, however, that Aucoin-Thieme was not

entitled to equitable distribution of any portion of the Closing

Bonus that was earned by Thieme during the period in which the

parties cohabited prior to their marriage, because of N.J.S.A.

2A:34-23(h)’s limitation of equitable distribution to marital

assets.

In accordance with its ruling, the trial court allocated

the $2,250,000 Closing Bonus. It concluded that in the course

of his employment, Thieme earned the Closing Bonus at a rate of

$14,423 per month. Multiplying that amount by a factor of

fourteen, the court ruled that during the parties’ marriage,

Thieme earned deferred compensation in the amount of $201,923.

The trial court then determined that Thieme’s net income from

the allocated portion of his Bonus, after the deduction of

taxes, was $100,961. It subjected that amount to equitable

distribution under N.J.S.A. 2A:34-23.1, awarding thirty percent

of that amount, or $30,288, to Aucoin-Thieme. The court ordered

Aucoin-Thieme to return the remaining amount that she had

14

withdrawn from the joint account, totaling $169,712, to Thieme.

It denied the parties’ applications for attorneys’ fees.

Aucoin-Thieme appealed the trial court’s judgment. She

contended that she was entitled to a share of the portion of the

Closing Bonus that the trial court allocated to the years in

which the parties cohabited prior to their marriage. She

premised that claim on alternative theories: equitable

distribution under N.J.S.A. 2A:34-23(h), and several common law

claims seeking equitable relief, including unjust enrichment and

constructive trust. In an unpublished opinion, an Appellate

Division panel affirmed the trial court’s judgment,

substantially for the reasons stated by the trial judge.

We granted Aucoin-Thieme’s petition for certification. 224

N.J. 245 (2016).

III.

Aucoin-Thieme argues that the trial court improperly

construed the equitable distribution statute, N.J.S.A. 2A:34-

23.1, to authorize the distribution of only the portion of the

Closing Bonus that was attributed to Thieme’s work for IBG

during the parties’ marriage. Relying on the Appellate

Division’s opinions in Weiss v. Weiss, 226 N.J. Super. 281, 287

(App. Div.), certif. denied, 114 N.J. 287 (1988), and Berrie v.

Berrie, 252 N.J. Super. 635, 646 (App. Div. 1991), Aucoin-Thieme

argues that when cohabiting parties express their intention to

15

create a marital partnership prior to the marriage ceremony,

premarital property acquired in “contemplation of marriage”

should be subject to equitable distribution. In the

alternative, Aucoin-Thieme contends that she is entitled to a

portion of the Closing Bonus under one or more quasi-contractual

and equitable theories, such as quantum meruit, breach of

implied contract, breach of joint venture, breach of

partnership, unjust enrichment, and detrimental reliance.

Citing Carr v. Carr, 120 N.J. 336, 351 (1990), Aucoin-Thieme

argues that her unjust enrichment claim warrants the remedy of a

constructive trust.

Thieme counters that the trial court correctly concluded

that N.J.S.A. 2A:34-23.1 authorizes equitable distribution based

upon a marital relationship, and that any extension of the

statute to cohabiting partners should be made by the

Legislature, not by a court. He contends that Weiss, supra, 226

N.J. Super. at 287-90, and Berrie, supra, 252 N.J. Super. at

644-48, are factually distinguishable from this matter. Thieme

argues that Aucoin-Thieme failed to prove the elements of her

claims for equitable relief.

IV.

A.

We review the Family Part judge’s findings in accordance

with a deferential standard of review, recognizing the court’s

16

“special jurisdiction and expertise in family matters.” Cesare

v. Cesare, 154 N.J. 394, 413 (1998). Thus, “findings by the

trial court are binding on appeal when supported by adequate,

substantial, credible evidence.” Id. at 411-12 (citing Rova

Farms Resort, Inc. v. Inv’rs Ins. Co., 65 N.J. 474, 484 (1974)).

A more exacting standard governs our review of the trial

court’s legal conclusions. “Although a family court’s factual

findings are entitled to considerable deference, we do not pay

special deference to its interpretation of the law . . . . [T]he

trial court is in no better position than we are when

interpreting a statute or divining the meaning of the law.”

D.W. v. R.W., 212 N.J. 232, 245 (2012) (citations omitted).

Accordingly, we review the trial court’s legal conclusions de

novo. Id. at 245-46; see also N.J. Div. of Youth & Family

Servs. v. I.S., 202 N.J. 145, 183 (2010) (citations omitted).

B.

We first review the trial court’s determination that only

the portion of Thieme’s Closing Bonus attributed to the work

that he performed during the parties’ fourteen-month marriage

was subject to equitable distribution, and that the remainder of

the Bonus, earned prior to the marriage, was exempt from

equitable distribution.3

3 In light of the trial court’s finding, undisputed on appeal,

that the Closing Bonus compensated Thieme for his work during

17

The equitable distribution statute authorizes the Family

Part to distribute assets “in all actions where a judgment of

divorce, dissolution of civil union, divorce from bed and board

or legal separation from a partner in a civil union couple is

entered.” N.J.S.A. 2A:34-23(h).4 It reflects a public policy

that is “at least in part an acknowledgment ‘that marriage is a

shared enterprise, a joint undertaking, that in many ways [] is

akin to a partnership.’” Smith v. Smith, 72 N.J. 350, 361

(1977) (quoting Rothman v. Rothman, 65 N.J. 219, 229 (1974)).

The statute clearly addresses the distribution of property only

in the context of an action for divorce or the dissolution of a

civil union. N.J.S.A. 2A:34-23(h); see also Crowe v. De Gioia,

90 N.J. 126, 132 (1982) (finding that N.J.S.A. 2A:34-23 “does

not embrace an action on a contract between unmarried

cohabitants,” and “[t]he Legislature has proscribed common law

the period in which the parties cohabited and during their

marriage, neither party contends that the provision of their PSA

precluding claims to after-acquired property bars any

distribution of a portion of the Closing Bonus to Aucoin-Thieme.

4 Applying the equitable distribution statute, a Family Part

judge undertakes a three-step analysis. Rothman v. Rothman, 65

N.J. 219, 232 (1974). First, the court must “decide what

specific property of each spouse is eligible for distribution”;

second, it “must determine [the property’s] value for purposes

of such distribution”; and finally, it “must decide how such

allocation can most equitably be made.” Ibid. The statute sets

forth a non-exhaustive list of factors for the court’s

consideration as it divides the parties’ marital assets.

N.J.S.A. 2A:34-23.1.

18

marriages”); Kozlowski v. Kozlowski, 80 N.J. 378, 383 (1979)

(noting that equitable distribution statute then in effect

authorized award “only in actions for divorce”).5 Thus, the

equitable distribution statute does not govern disputes over

property between parties who have cohabited but have never

entered into a marriage or civil union. Crowe, supra, 90 N.J.

at 132; Kozlowski, supra, 80 N.J. at 383.

The Legislature has limited the property that is subject to

equitable distribution to “property, both real and personal,

which was legally and beneficially acquired by them or either of

them during the marriage or civil union.” N.J.S.A. 2A:34-23(h).

Although the language “during the marriage or civil union” is

not defined in the statute, it is unambiguous. It is evident

that the Legislature did not intend to treat property acquired

during a period of cohabitation prior to a marriage or civil

union as the equivalent of property acquired during that

marriage or civil union, for purposes of equitable distribution.

N.J.S.A. 2A:34-23(h).

5 In January 2010, the Legislature amended the Statute of Frauds

to include “[a] promise by one party to a non-marital personal

relationship to provide support or other consideration for the

other party, either during the course of such relationship or

after its termination,” and to require that both parties have

the benefit of legal counsel in arriving at such an agreement.

N.J.S.A. 25:1-5(h). See generally Maeker v. Ross, 219 N.J. 565,

580-82 (2014). No claim governed by that provision has been

made in this case.

19

“[T]he sole function of the courts is to enforce [the

statute] according to its terms.” Velazquez v. Jiminez, 172

N.J. 240, 256 (2002) (quoting Hubbard ex rel. Hubbard v. Reed,

168 N.J. 387, 392 (2001)). Accordingly, the property to be

divided is that which was earned, or otherwise acquired, during

the period in which the parties acted in pursuit of the shared

enterprise of a marriage or civil union. See Smith, supra, 72

N.J. at 361.

Aucoin-Thieme relies on two Appellate Division decisions,

Weiss, supra, 226 N.J. Super. at 287-90, and Berrie, supra, 252

N.J. Super. at 644-648, for the proposition that property

acquired or earned prior to marriage may be subject to equitable

distribution. In Weiss, supra, the divorcing spouses disputed

the status of their marital home. 226 N.J. Super. at 284-85.

The husband had purchased the home in his own name as the

parties planned their wedding, and both parties remodeled the

home prior to and after their marriage. Ibid. An Appellate

Division panel affirmed the trial court’s determination that the

house was a marital asset, even though it was purchased prior to

the parties’ wedding. Id. at 289. The panel held that property

acquired prior to marriage may be included in equitable

distribution “where the parties have adequately expressed that

intention and have acquired assets in specific contemplation of

their marriage.” Id. at 287. The panel applied the same logic

20

to the husband’s business and remanded for an evaluation of any

enhancement of the value in the husband’s business, but only to

the extent that the value increased during the parties’

marriage. Id. at 290.

In Berrie, supra, the contested asset was the increase in

the value of the husband’s stock in his business during the

several years prior to the parties’ marriage. 252 N.J. Super.

at 637-38. Before the parties married, the wife went to work

for the business as a liaison to foreign trading partners. Id.

at 639-40. The Appellate Division panel found that “[i]f the

parties by their combined efforts work as part of [a marital]

‘partnership’ to increase the value of an asset held by one of

them, such increase in value under established principles also

might be subject to treatment as a partnership interest, which

in turn might be subject to equitable distribution.” Id. at

646. The panel determined that the increased value of the stock

might constitute an asset “acquired [or, as here, enhanced] in

specific contemplation of [the] marriage,” and therefore be

treated as a partnership interest. Id. at 647 (alteration in

original) (quoting Weiss, supra, 226 N.J. Super. at 287). It

remanded for the trial court’s consideration of the nature and

terms of the wife’s premarital employment in the husband’s

business and other issues. Id. at 648-49.

21

Neither Weiss nor Berrie supports Aucoin-Thieme’s argument

that the portion of Thieme’s Closing Bonus that he earned prior

to their marriage is subject to equitable distribution under

N.J.S.A. 2A:34-23(h). Nothing in Weiss suggests that premarital

compensation earned by a spouse is subject to equitable

distribution; indeed, the Appellate Division panel in that case

limited the wife’s claim for equitable distribution of the

increased value of the husband’s business to the period during

which the parties were married. Weiss, supra, 226 N.J. Super.

at 289-90. In Berrie, supra, the Appellate Division heavily

relied on the wife’s direct contribution to the business as a

key employee -– a contribution recognized as a “tremendous

asset[]” in a certification executed by the husband. 252 N.J.

Super. at 639. Neither Appellate Division opinion generally

construes the equitable distribution statute to treat assets

acquired prior to marriage as the equivalent of assets acquired

during a marriage or civil union. Id. at 645-48; Weiss, supra,

226 N.J. Super. at 287-90. Any such construction would run

afoul of the statute’s terms.

We agree with the trial court and Appellate Division that

if the portion of Thieme’s Closing Bonus that was earned prior

to the marriage were held to be a marital asset, such a ruling

would contravene the plain language of N.J.S.A. 2A:34-23(h). We

hold that the trial court correctly allocated the distribution

22

of Thieme’s Closing Bonus to premarital and marital periods and

properly deemed only the portion of the compensation that was

earned during the parties’ marriage to be a marital asset

subject to equitable distribution.

C.

Our rejection of Aucoin-Thieme’s claim for equitable

distribution of the portion of the Closing Bonus allocated to

the period prior to the parties’ marriage does not end the

inquiry. Aucoin-Thieme has also asserted claims based on

equitable principles. As a remedy for alleged unjust

enrichment, Aucoin-Thieme seeks a constructive trust and an

allocation of a percentage of the Closing Bonus that was earned

by Thieme while they cohabited prior to their marriage.

“The Family Part is a court of equity.” Randazzo v.

Randazzo, 184 N.J. 101, 113 (2005); see also Carr, supra, 120

N.J. at 351 (noting that “[t]he Legislature has recognized that

courts’ equitable powers are particularly appropriate in the

context of domestic relations”); A.W. v. T.D., 433 N.J. Super.

365, 370-71 (Ch. Div. 2013). A “court [of equity] must exercise

its inherent equitable jurisdiction and decide the case based

upon equitable considerations.” Kingsdorf ex rel. Kingsdorf v.

Kingsdorf, 351 N.J. Super. 144, 157 (App. Div. 2002). As an

Appellate Division panel observed,

23

cases must ultimately be decided on facts. Our

law is not to be applied in the abstract, but

must be considered in light of the factual

circumstances in an individual

case. Depending on such facts, an adjustment

of the rights of the parties may vary from one

case to another. This is particularly true in

a court of equity, where a family court may

give full range to equitable doctrines in

dealing with matrimonial controversies.

[A.W., supra, 433 N.J. Super. at 370

(citations omitted).]

As this Court has noted, “[e]quities arise and stem from

facts which call for relief from the strict legal effects of

given situations.” Carr, supra, 120 N.J. at 351 (quoting

Untermann v. Untermann, 19 N.J. 507, 518 (1955)).

To prove a claim for unjust enrichment, a party must

demonstrate that the opposing party “received a benefit and that

retention of that benefit without payment would be unjust.”

Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 110 (2007)

(quoting VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554

(1994)). “That quasi-contract doctrine also ‘requires that

plaintiff show that it expected remuneration from the defendant

at the time it performed or conferred a benefit on defendant and

that the failure of remuneration enriched defendant beyond its

contractual rights.’” Ibid. (quoting VGR Corp., supra, 135 N.J.

at 554).

In the event that a court finds unjust enrichment, it may

impose a constructive trust. That remedy has been described as

24

“the formula through which the conscience of equity finds

expression. When property has been acquired in such

circumstances that the holder of the legal title may not in good

conscience retain the beneficial interest, equity converts him

into a trustee.” Carr, supra, 120 N.J. at 351 (quoting Beatty

v. Guggenheim Expl. Co., 122 N.E. 378, 380 (N.Y. 1919)); see

also Hill v. Warner, Berman & Spitz, P.A., 197 N.J. Super. 152,

168 (App. Div. 1984) (defining constructive trust). Equitable

remedies such as constructive trusts “are not based on the

actual intent of the parties, but ‘are arbitrarily imposed by

the court to prevent an unjust enrichment.’” Carr, supra, 120

N.J. at 352 (quoting Coney v. Coney, 207 N.J. Super. 63, 75 (Ch.

Div. 1985)). As this Court has observed, “[g]enerally all that

is required to impose a constructive trust is a finding that

there was some wrongful act, usually, though not limited to,

fraud, mistake, undue influence, or breach of a confidential

relationship, which has resulted in a transfer of property.”

D’Ippolito v. Castoro, 51 N.J. 584, 589 (1968).

In Carr, supra, the trial court considered the plaintiff

wife’s claims that she was entitled to equitable distribution or

an elective share of assets owned by her husband, who died

during their protracted divorce proceedings. 120 N.J. at 339-

40. Citing the plain language of the equitable distribution

statute, the Court noted that the statute afforded relief to a

25

party only upon the entry of “a judgment of divorce” and that

its remedy was accordingly unavailable to the plaintiff. Id. at

341 (citing N.J.S.A. 2A:34-23). The Court held that an elective

share under the probate code was similarly barred by virtue of

the plaintiff’s separation from her husband and the pendency of

divorce proceedings prior to his death. Id. at 344-46. The

Appellate Division and this Court affirmed the trial court’s

rejection of both statutory claims. Id. at 354.

Notwithstanding the failure of the plaintiff’s statutory

claims in Carr, the trial court imposed a constructive trust,

awarding to the plaintiff a share of the marital assets

controlled by the husband’s estate. Id. at 350-51. The

Appellate Division concurred with the trial court that a

constructive trust was an appropriate remedy, and this Court

affirmed that determination. Id. at 351-54.

The Court observed that judges can “[‘]presume that the

parties []intended to deal fairly with [each other’] [and will]

[‘]employ the doctrine of quantum meruit, or equitable remedies

such as constructive or resulting trusts[] in order to [i]nsure

that one party has not been unjustly enriched, and the other

unjustly impoverished, on account of their dealings.’” Id. at

352 (fourth alteration in original) (quoting Kozlowski, supra,

80 N.J. at 390-91) (Pashman, J., concurring). It concluded that

equitable relief in the setting of Carr was consistent with the

26

protective policies advanced by the Legislature in the equitable

distribution and probate laws. Id. at 352-54. The Court agreed

with the trial court that in the setting of that case, the

estate’s retention of “the share beneficially belonging to Mrs.

Carr” could give rise to unjust enrichment. Id. at 353-54. It

held that “if warranted by the evidence, the equitable remedy of

constructive trust should be invoked and imposed on the marital

property under the control of the executor of [the deceased

husband’s] estate.” Id. at 353.

The principles expressed in Carr apply with equal force to

this appeal, and warrant the imposition of a constructive trust

governing a portion of Thieme’s Closing Bonus in the unusual

circumstances of this case. As the evidence presented at trial

made clear, the prospect that Thieme would be generously

compensated was a significant factor in the parties’ personal

and financial planning from the early stages of their

relationship. Thieme and Aucoin-Thieme each relied on the

expectation of deferred compensation if IBG were sold as they

made important decisions for themselves and their family.

The parties’ shared anticipation that Thieme would be paid

deferred compensation was more than wishful thinking. Given

IBG’s written commitment to Thieme, and its owners’ genuine

desire to reward their valued employee, both parties had reason

to anticipate a significant payment in the event of a sale.

27

Whether the Statement of Understanding constituted a legally

binding contract or an unenforceable expression of IBG’s plan,

it conveyed an important message. IBG’s owners acknowledged

their intention to compensate their key employee and longtime

friend in a manner commensurate with his pivotal role in the

success of their business. That confirmation occurred early in

the relationship between the parties. Although the parties

dispute the timing and content of their discussions about the

Statement of Understanding, it is clear that on multiple

occasions Thieme advised Aucoin-Thieme about his expectation

that any sale of IBG could generate a substantial financial

reward for their family.

Although the prospects for IBG’s sale were for many years

uncertain, and the company’s owners were not in a position to

quantify Thieme’s compensation until the September 2012 sale,

IBG’s commitment to reward him was an important consideration in

the decisions made by the parties throughout their cohabitation

and marriage. Despite his grueling schedule and its impact on

his family, Thieme was determined to retain his job. Although

he understood Aucoin-Thieme’s desire to work outside of the

home, Thieme firmly opposed any suggestion that he pursue less

demanding employment and take on a more active role in their

daughter’s care so that she could seek work outside the home.

He reasoned that his work at IBG was crucial to the family’s

28

future. In short, as they planned their finances and personal

lives, Thieme and Aucoin-Thieme anticipated that they might

someday share in the proceeds of the company’s sale.

During the parties’ eight years of cohabitation, and for

most of their brief marriage, Aucoin-Thieme undertook

significant efforts to support Thieme’s challenging career. As

Thieme acknowledged, Aucoin-Thieme ably shouldered almost all of

the responsibility for caring for their daughter. She

maintained and repaired their homes, managed their rental

properties, and paid the bills. With the exception of a brief

per diem job substitute teaching at her child’s preschool,

Aucoin-Thieme did not pursue a career or return to school. She

moved with Thieme and their daughter to Virginia to accommodate

IBG’s need to assign Thieme to an important contract. There is

no doubt that Aucoin-Thieme was at times disruptive and abusive

when Thieme was working, and the series of inflammatory e-mails

that she sent to his employer and co-workers in October 2011

could have derailed his career. Thieme was not without fault

either, as he admitted.6 Despite their disputes, for most of

their time together, Aucoin-Thieme’s efforts enabled Thieme to

6 We do not find the conduct of either party to be sufficiently

egregious to constitute an appropriate factor on the allocation

of the Closing Bonus on remand.

29

focus almost exclusively on IBG, and thus supported his

professional development.

Indeed, Thieme himself recognized that Aucoin-Thieme’s

contributions to their family should be rewarded. He

acknowledged Aucoin-Thieme’s “great sacrifice” of her “career

and educational aspirations” to care for their daughter. He

committed to support her “fully.” Thieme expressly recognized

that his obligation to financially support Aucoin-Thieme

implicated, to some extent, any compensation that he would

receive in the event that IBG were sold. He assured Aucoin-

Thieme that if he received an unexpected bonus, they would split

that bonus, after the deduction of taxes. Thieme represented

that he viewed Aucoin-Thieme’s claim to share in his assets to

date back to 2003, when their child was born.

Accordingly, the record supports the conclusion that

Aucoin-Thieme’s decision not to seek further education and

employment was made, at least in part, in reliance on Thieme’s

financial commitment to her. Aucoin-Thieme clearly made

decisions regarding her future in light of IBG’s unequivocal

expression of its intent to fairly compensate Thieme if it had

the opportunity to do so, and Thieme’s repeated representations

that he would generously support her in return for her efforts

on the family’s behalf. Even as the parties negotiated the

terms of their divorce, Thieme suggested to Aucoin-Thieme that

30

if IBG were sold and he were afforded a portion of the proceeds,

that payment would be shared with her.

Thieme’s Closing Bonus, however, materialized three months

after the parties’ divorce was finalized -- too late to be

divided, along with other assets, in the PSA.7 By virtue of the

trial court’s proper application of N.J.S.A. 2A:34-23(h) to the

Closing Bonus, Aucoin-Thieme was awarded less than two percent

of the Bonus by equitable distribution. As the husband’s death

in Carr deprived the wife of relief under the equitable

distribution and probate statutes, by virtue of the timing of

the critical events in this case, only a limited statutory

remedy was available to Aucoin-Thieme. We conclude that a

decision constraining Aucoin-Thieme to the nominal share of the

Closing Bonus that is authorized by the equitable distribution

statute would result in unjust enrichment, and that Aucoin-

Thieme has proven the elements of that equitable claim.

As a remedy, a percentage of the portion of the Closing

Bonus that Thieme earned during the period in which the parties

cohabited prior to their marriage should be deemed to be held by

7 Like the trial court, we do not find that Thieme defrauded

Aucoin-Thieme with respect to the Closing Bonus; no evidence

rebuts his assertion that IBG’s owners did not inform him of

IBG’s sale until it was concluded, and the testimony of Raj

Nanavati supports Thieme’s contention.

31

Thieme in constructive trust for Aucoin-Thieme.8 We make no

determination as to the precise time period for which the

Closing Bonus should be shared by the parties, the percentage of

the Closing Bonus that should be allocated to Aucoin-Thieme to

avoid unjust enrichment, or the impact of taxes imposed on

Thieme by virtue of the Closing Bonus.

On remand, the court should make those determinations based

on the comprehensive record presented at trial.9 That record

includes evidence of the contributions made by each party to

their home and family, Aucoin-Thieme’s impact on Thieme’s

employment at IBG, and the parties’ financial status at the time

of trial. The court may, in its discretion, permit the parties

to supplement the record as appropriate.

V.

The judgment of the Appellate Division is affirmed in part

and reversed in part, and the matter is remanded to the Family

Part for proceedings consistent with this opinion.

8 We do not reach Aucoin-Thieme’s claims for quantum meruit,

breach of implied contract, breach of joint venture or breach of

partnership.

9 Although the equitable distribution statute does not govern

the allocation of the Closing Bonus, some of the factors

identified in N.J.S.A. 2A:34-23.1(a) to –(p) may be relevant to

the trial court’s allocation of a portion of the Closing Bonus

on remand. See N.J.S.A. 2A:34-23.1(a) to –(p).

32

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN,

FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE PATTERSON’s

opinion.

33