"[A] finding of marital lifestyle must be made by explaining the characteristics of the lifestyle and quantifying it."
How later courts described this case
- "[A] finding of marital lifestyle must be made by explaining the characteristics of the lifestyle and quantifying it."
- "[T]he burden of establishing immunity from distribution of a particular marital asset or portion of an asset rests upon the spouse who asserts it."
- upon concluding that a remand was warranted pertaining to equitable A-3782-19 34 distribution, the court also remanded for consideration of "any effect distribution may have upon child support and alimony" due to their interrelated nature
Written by the judges who cited it.
The opinion
NOT FOR PUBLICATION WITHOUT THE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-3782-19
JOAN EISINGER,
Plaintiff-Respondent,
v.
DOUGLAS HERMAN,
Defendant-Appellant.
_______________________
Argued February 1, 2022 – Decided April 4, 2022
Before Judges Hoffman, Whipple and Susswein.
On appeal from the Superior Court of New Jersey,
Chancery Division, Family Part, Union County, Docket
No. FM-20-0523-14.
Bonnie C. Frost argued the cause for appellant
(Einhorn, Barbarito, Frost & Botwinick, PC, attorneys;
Bonnie C. Frost, Matheu D. Nunn, and Jessie M. Mills,
on the briefs).
John E. Clancy argued the cause for respondent
(Townsend, Tomaio & Newmark, LLC, attorneys; John
E. Clancy, on the brief).
PER CURIAM
Defendant, Douglas Herman, appeals from a June 18, 2018 dual final
judgment of divorce (JOD) and a April 30, 2020 order awarding plaintiff
attorneys' fees and costs in the amount of $110,000 and denying defendant's
request for attorney fees and costs.
After trial, the court entered its decision divorcing the parties
accompanied by a written statement of reasons. The JOD provides, in essence:
1. Commencing July 1, 2018 defendant shall pay
limited duration alimony to plaintiff for ten years of
$3,000 per month.
2. Commencing July 1, 2018, defendant shall pay child
support of $600 per month.
3. Defendant shall maintain life insurance for $200,000
designating the parties' son as beneficiary with plaintiff
as trustee for as long as the child is unemancipated;
plaintiff shall maintain life insurance in the amount of
$100,000 designating the parties' son as beneficiary
with defendant as trustee for as long as the child is
unemancipated.
4. Commencing July 1, 2018, each party shall be solely
responsible for their own debts and credit card accounts
held in their own names; however, defendant shall be
solely responsible for the $170,000 loan from his
parents and the debt shall not be deducted from the
sales proceeds of the sale of the former marital
residence.
5. Defendant shall not receive a credit at closing of
$80,000 for the paydown of the mortgage principal of
the October 2, 2010 refinance.
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2
6. Defendant's request for credits pursuant to Mallamo
v. Mallamo, 280 N.J. Super. 8 (App. Div. 1995), 1 is
denied.
7. Defendant shall pay pendente lite arrears in the
amount of $8,622.76 by July 1, 2018; defendant shall
also pay any additional pendente lite arrears for the
period from November 10, 2016 through June 20, 2018,
by July 15, 2018.
8. The marital portion of the defendant's NAF Pension
and NAF 401(k) Account shall be divided equally.
9. Plaintiff shall retain her Vanguard Roth individual
retirement account (IRA) and her Fidelity IRA free and
clear from any claim from defendant; defendant
previously liquidated his Vanguard Roth IRA with a
value of $10,969 as of September 13, 2013 to satisfy
the $10,000 advance for counsel fees to plaintiff in the
Order dated September 12, 2014.
10. The marital portion of the defendant's Vanguard
Voyager Rollover IRA shall be divided equally.
11. Defendant shall pay plaintiff $7,531.36, equaling
one-half of the cash withdrawal that the defendant
retained when he liquidated the Sony Music
Entertainment, Inc. Employee Investment Fund and
rolled over the remaining balance into the Vanguard
Rollover IRA in 2010.
12. The parties shall list the former marital residence
for sale by July 1, 2018.
13. Commencing July 1, 2018, plaintiff shall be
responsible for the carrying costs associated with the
marital residence and shall receive a credit for any
principal paid down on the mortgage; the sales proceeds
of the marital home shall be divided 65% plaintiff, 35%
defendant.
1
The application of Mallamo credits refer to the modification of pendente lite
support orders at the time final judgment is entered. Slutsky v. Slutsky, 451 N.J.
Super. 332, 368 (App. Div. 2017).
A-3782-19
3
14. Parties shall make any repairs to the residence
recommended by the realtor with defendant advancing
the funds which shall be shared 35% by plaintiff, 65%
by defendant and, with defendant being reimbursed
from plaintiff's share of the sales proceeds.
15. For the tax year 2018, defendant shall claim the
mortgage interest and property taxes incurred from
January 1, 2018 to June 30, 2018; commencing July 1,
2018, plaintiff shall claim the mortgage interest and
property taxes incurred until the residence is sold.
16. The parties shall retain individual checking and/or
savings accounts in their names, free and clear of any
claim by the other. Defendant shall pay plaintiff
$1,486, which is one half of the Provident Joint
Checking account as of September 29, 2013. Defendant
shall pay plaintiff $22,504, which is one half of the
Provident Joint Savings account prior to defendant's
withdrawal of $44,012.52 between June 10, 2013 and
September 29, 2013.
17. Defendant shall retain the Scottrade investments
except for the following: 127 shares of Fifth and Pacific
Companies and 250 shares of Oracle Corporation,
which shall be distributed to the parties equally, in-
kind.
18. Plaintiff shall retain the 2000 Toyota Camry valued
at $1,084. Defendant shall maintain the 2003 BMW
gifted to him by his parents and the 2014 Hyundai
which was purchased on March 15, 2014.
19. Defendant shall pay plaintiff one half of the trade-
in value for the 2012 Hyundai Genesis, which was
$18,000, less defendant's one-half share of the Toyota
Camry value, totaling $8,458.
20. Defendant shall pay plaintiff one half of
$23,055.94, or $11,528, representing plaintiff's share of
the marital funds defendant used to make repairs on the
2003 BMW made between 2012 and 2015.
A-3782-19
4
21. Defendant's Vanguard Voyager Select Brokerage
(VVSB) account, which had a balance of $356,037.65
as of September 30, 2013, shall be divided equally.
The court entered its decision on counsel fees twenty-two months later,
on April 30, 2020, awarding legal fees to plaintiff of $110,000. This appeal
followed.
On appeal, defendant argues broadly that the court's decision was an abuse
of discretion because every discretionary decision was made to his detriment.
Specifically, he asserts error in the setting of alimony without a numeric al
quantification of the marital lifestyle and for an erroneous term; erroneous
imputation of income to plaintiff; the inclusion of exempt assets and erroneous
credits for automobiles and the marital residence under equitable distribution;
erroneous pendente lite support; denial of Mallamo credits; and counsel fees.
We affirm the dual final JOD in part, reverse in part, and remand for further
proceedings as directed below.
Our review of a Family Part judge's factual findings is limited. Cesare v.
Cesare, 154 N.J. 394, 411-12 (1998). Such findings "are binding on appeal when
supported by adequate, substantial, credible evidence." Ibid. Appellate courts
"accord particular deference to the judge's factfinding because of 'the family
A-3782-19
5
courts' special jurisdiction and expertise in family matters.'" Clark v. Clark, 429
N.J. Super. 61, 70 (App. Div. 2012) (quoting Cesare, 154 N.J. at 413).
"Deference is especially appropriate 'when the evidence is largely
testimonial and involves questions of credibility.'" Cesare, 154 N.J. at 412
(quoting In re Return of Weapons to J.W.D., 149 N.J. 108, 117 (1997)). "[A]
trial judge who observes witnesses and listens to their testimony, develops 'a
feel of the case' and is in the best position to 'make first-hand credibility
judgments about the witnesses who appear on the stand.'" Slutsky, 451 N.J.
Super. at 344 (quoting N.J. Div. of Youth & Fam. Servs. v. E.P., 196 N.J. 88,
104 (2008)). We "review the trial court's legal conclusions de novo" and "do
not pay special deference to its interpretation of the law." Thieme v. Aucoin-
Thieme, 227 N.J. 269, 283 (2016).
Thus, the trial record informs our conclusions. The parties married on
November 3, 1996, and have one unemancipated child, a son, who was attending
college at the time of trial.
Between 1988 and 1998, plaintiff worked as a Licensed Clinical Social
Worker (LCSW) in New York City, earning approximately $36,000 per year,
until she became pregnant with their son in 1998. Her LCSW license in New
York is no longer active and she is not licensed in New Jersey. After their son
A-3782-19
6
was born, the parties decided that she would be his primary caregiver while
defendant supported them and took care of the maintenance of the house.
Between 1998 and 2016, defendant worked at various companies, most
recently, at Marine Corps Community Services in Quantico, Virginia, where he
remained employed at the time of trial. Excluding 2010, during which he was
unemployed for several months, his W-2 Medicare earnings averaged
approximately $165,000 between 1998 and 2012 but varied from a low of
$128,395 in 2004 to a high of $262,657 in 2000. Between 2012 and 2015, his
W-2 Medicare earnings were as follows: $136,109 in 2012; $132,312 in 2013;
$135,846 in 2014; and $144,286 in 2015. He also garnered approximately
$7,000 per year in unearned income from investment dividends and annual
distributions from two trusts established by his parents.
From July 2000 until May 2010, the parties lived together in a 2,800-
square-foot, four-bedroom marital home in Berkeley Heights that they
purchased for $600,000. It was then, after having been unemployed for almost
a year, defendant moved to Virginia to work for the federal government in the
information technology field as a manager of business systems for Marine Corps
Community Services. Plaintiff remained in the home with their son, never
moving to Virginia with defendant. When defendant returned to New Jersey to
A-3782-19
7
visit their son on the weekends, the parties slept in the same bed in the marital
home until spring or summer of 2013 when defendant started sleeping in the
guest room or at his parents' apartment.
In 2010, plaintiff began working as a self-employed psychic, healer and
"medical intuitive." She reports she channels departed ones and pets, clears
spaces in person and remotely, works on people's auras, clears and aligns
chakras, and works on karmic issues by going into past lives. She has numerous
clients, with about 250 repeat clients that return to see her every few weeks or
monthly, and she charges $90 per half-hour or $165 per hour with different rates
for group events.
On September 24, 2013, plaintiff filed a complaint for divorce alleging
irreconcilable differences. Defendant answered the complaint and filed a
counterclaim. On September 12, 2014, under a pendente lite order, the court
required defendant to pay all of plaintiff's Schedule A and Schedule B expenses,
plus 78% of her Schedule C expenses each month. It also ordered defendant to
pay plaintiff $10,000 to enable her "to have continued legal representation."
On July 27, 2016, trial commenced and concluded on December 12, 2016.
Plaintiff's witnesses were herself, her accounting expert Jeffrey Lieberman,
CPA, and her employability expert Dr. Charles Kincaid. Defendant testified, as
A-3782-19
8
well as Herbert Herman, defendant's father, and Donna Kolsky, his
employability expert.
It was clear that defendant handled the finances during the marriage.
Defendant said that plaintiff knew "next to nothing" about the finances, other
than the annual budget spreadsheets he shared with her. He described the marital
lifestyle as a "comfortable," "upper-middle class lifestyle."
According to plaintiff, defendant "controlled every aspect of the finances"
because "[t]hat was his forte" and she was comfortable with that arrangement.
Although they had a joint checking account, she did not know what the marital
expenses were at any point between 1997 and 2012, never saw any of the bills,
and "had no idea what the marital standard of living was." Their credit cards,
which she used, were in defendant's name only. Even after he moved to
Virginia, defendant still handled the finances including the filing of their joint
federal income tax returns for 2010, 2011, and 2012.
During the marriage, the parties seldom traveled or vacationed. Plaintiff
said that they dined out twice per month and had a housekeeper. Defendant
described that they "were house poor" during the marriage and rarely dined out.
He thought plaintiff bartered with the housekeeper and didn't have to pay her.
He regularly contributed money to his 401(k), typically the maximum allowed,
A-3782-19
9
and he testified that any other marital savings was used to repair or improve the
marital home or to pay down the mortgage.
The marital home was worth $725,000 per a recent appraisal and the
mortgage balance was $280,000 as of May 2016. Plaintiff testified that
defendant said his parents gave them $190,000 for a down payment as a gift,
though defendant testified his parents loaned him the money and he listed the
$190,000 as a loan on his 2016 case information statement (CIS). Defendant
said that he reduced the loan balance to $170,000 in 2000 through a gift from
his father.
Defendant also testified that in 2010, he paid down the mortgage principal
by $80,000 out of the parties' checking account. He "believe[d]" it was "gifted
money" from his parents that he used, but he admitted that he "can't point to
every record and every transaction to prove it" and did not "know the exact
origin of all of the money." Plaintiff's personal liabilities included multiple
loans from her parents totaling $76,700 to cover her legal fees.
Plaintiff drove a 2000 Toyota Camry valued at $1,000. Defendant drove
a 2003 BMW that his father gave him in September 2007, a 2012 Hyundai
Genesis that he purchased during the marriage, and later a 2015 Hyundai
Genesis that he purchased for $41,000 after he sold the 2012 Hyundai Genesis
A-3782-19
10
for $18,000 without plaintiff's knowledge. Defendant asserts that he acquired
the 2015 Hyundai Genesis from "exempt assets."
The parties had a joint checking account at Provident Bank, and defendant
had a Provident Bank money market account in his name only that plaintiff did
not know about until just before the divorce. After the divorce complaint was
filed, plaintiff opened business and personal checking accounts with TD Bank
and defendant opened checking and savings accounts with USAA Bank.
Plaintiff had two IRAs valued at approximately $20,000. Defendant had
a 401(k) valued at $71,034, which he claimed was acquired "post-separation,"
and an unvested pension which he again claimed was acquired "post-
separation." They maintained two Uniform Transfers to Minors Act (UTMA)
accounts for their son valued at approximately $92,000.
Other significant assets included:
A Scottrade investment account in defendant's name
valued at over $300,000, most of which plaintiff
conceded contained stocks exempt from equitable
distribution;
A VVSB investment account in defendant's name
valued at approximately $345,000 that defendant
contends is exempt from equitable distribution as it
contains cash gifts made to him from his parents that
plaintiff did not know about;
A-3782-19
11
A Vanguard Roth IRA in defendant's name valued at
approximately $11,000; and
A Vanguard Rollover IRA in defendant's name valued
at approximately $523,000, which defendant claims is
partially exempt from equitable distribution as it
contains both pre-marital and post-marital retirement
funds from prior employment at Sony Music
Entertainment, Scholastic, Liz Claiborne, and Grey
Global Group.
Plaintiff's CISs and federal income tax returns reflect a gross earned
income as follows: $19,239 in 2012; $23,827 in 2013; $32,643 in 2014; and
$28,479 in 2015. She is attempting to grow her client base such that she can
work full-time, or at least thirty-five hours per week in this field. She formed
relationships with two restaurants and a hair salon where she performs and hosts
private parties. She has not considered returning to the social work or
counseling fields because her current work is dichotomous with what a therapist
does, and it would be unethical for her to practice in both areas at the same time.
Plaintiff earned $12,730 between January and April 2016. Her business
expenses, which were not significant, included web hosting, liability insurance,
business cards, and other supplies. She testified that she works full-time, seven
days per week and responds to inquiries from her clients via telephone and
electronically. She testified, however, that her income differs each month. Her
time is also spent growing her business by advertising her services on social
A-3782-19
12
media and via email, networking, looking for locations to host events,
responding to client phone calls and emails, appearing on radio shows and
podcasts, publishing two books, and reading and researching to "stay on top of
things and to grow as a practitioner."
Plaintiff testified that the figures on her 2016 CIS reflect the joint marital
lifestyle in effect before defendant moved to Virginia and that she reviewed the
marital bills with a certified financial planner to estimate the expenses. The
joint monthly Schedule A, B, and C expenses totaled $6,410. The joint monthly
Schedule A expenses included a $1,368 mortgage payment, $1,294 in real estate
taxes, $154 for homeowners' insurance, utilities including gas, electric,
telephone, cable, internet, plus garbage removal, lawn care, pest control and
other home maintenance and repairs totaling $3908. Plaintiff did not know the
cost of the water and sewer expenses and had forgotten to include the association
fee of approximately $350.
The joint monthly Schedule B expenses included automobile maintenance
of $150. She testified that the parties did not have car payments until after
defendant moved to Virginia, when he purchased a new vehicle, and that she did
not know the cost of the automobile insurance. She drove a car with 168,000
miles on it that needed repairs. She omitted the cost of fuel. The joint monthly
A-3782-19
13
Schedule C expenses included food, prescriptions, toiletries, clothing, hair care,
domestic help, medical co-pays, eyeglasses, daycare, entertainment, and gifts
totaling $2,352.
With respect to her current lifestyle, plaintiff estimated that her joint
Schedule A, B, and C expenses had increased to $9,055. Her monthly Schedule
A expenses decreased slightly, but her monthly Schedule B expenses increased
substantially to $760 due to an anticipated $500 leased vehicle payment to
replace her old vehicle, and her payment of fuel and insurance costs. Her
monthly Schedule C expenses nearly doubled to $4,469 due to allotments for
counseling and pre-college expenses for their son, medical insurance, club dues
and memberships, vacations, savings, and life insurance. She included a savings
component of $850 per month but testified that she "never knew what the money
situation was during the marriage."
Defendant's 2016 CIS states that his gross earned income in 2015 was
$120,286. He also garnered unearned income in 2015 totaling $25,431, which
included dividend income from assets gifted to him by his father, as well as trust
income from two trusts arranged by his parents. His average gross weekly
earned income in 2016 was $2805 and, through May 14, 2016, he had earned
$58,046. For 2016, his annual salary was $145,860, plus bonuses.
A-3782-19
14
Defendant estimated the joint monthly marital lifestyle expenses at
$10,612, about $4,200 higher than plaintiff's estimate, as his estimate included
shelter expenses for both the marital home and his apartment in Virginia. The
joint monthly Schedule A expenses included his $1,502 monthly rent payment
in Virginia as well as the $1,368 mortgage payment, utilities for both residences,
real estate taxes, and maintenance costs totaling $6,207. The joint monthly
Schedule B expenses included auto insurance payments for three vehicles,
maintenance, fuel and oil costs, and other commuting expenses totaling $1,226.
The joint monthly Schedule C expenses included food, clothing, toiletries,
medical care, entertainment, and $400 for children's lessons totaling $3,179.
With respect to his current lifestyle, defendant's Schedule A expenses
increased while his Schedule B and C expenses decreased, for a total of $8,571
– about $2,000 less than the joint monthly marital lifestyle. His Schedule A
expenses included an increased rent payment of $1,933, reflecting the difference
in rent between a one-bedroom apartment and a two-bedroom apartment, plus
the existing mortgage payment for a total of $6,524. His Schedule B expenses
decreased, presumably because he was no longer paying for plaintiff's auto
insurance, for a total of $652. His Schedule C expenses decreased due to le ss
money spent on food, medical expenses, and entertainment, for a total of $1,395.
A-3782-19
15
Alimony and the Marital Lifestyle
Defendant contends that the court abused its discretion with respect to the
alimony award in that it: (1) did not make its own quantification of the marital
lifestyle; (2) failed to assess plaintiff's actual earning capacity as a social worker
when it imputed income of $42,000 per year to her as a psychic, healer and
channeler; and (3) failed to consider that the parties' marriage "termin ated" in
May 2010 when defendant moved to Virginia and plaintiff refused to relocate
with him.
"The award of spousal support is broadly discretionary." Steneken v.
Steneken, 367 N.J. Super. 427, 434 (App. Div. 2004), aff'd in part, modified in
part, 183 N.J. 290 (2005). The court may order alimony "as the circumstances
of the parties and the nature of the case shall render fit, reasonable and just."
N.J.S.A. 2A:34-23. "[A]limony is neither a punishment for the payor nor a
reward for the payee." Mani v. Mani, 183 N.J. 70, 80 (2005). "The basic
purpose of alimony is the continuation of the standard of living enjoyed by the
parties prior to their separation." Innes v. Innes, 117 N.J. 496, 503 (1990).
"[T]he goal of a proper alimony award is to assist the supported spouse in
achieving a lifestyle that is reasonably comparable to the one enjoyed while
A-3782-19
16
living with the supporting spouse during the marriage." Crews v. Crews, 164
N.J. 11, 16 (2000).
Alimony awards are "governed by distinct, objective standards defined by
the Legislature in N.J.S.A. 2A:34-23(b)." Gnall v. Gnall, 222 N.J. 414, 429
(2015). The court must consider the following statutory factors, with "[n]o
factor . . . elevated in importance over any other factor unless the court finds
otherwise":
(1) The actual need and ability of the parties to pay;
(2) The duration of the marriage or civil union;
(3) The age, physical and emotional health of the
parties;
(4) The standard of living established in the marriage
or civil union and the likelihood that each party can
maintain a reasonably comparable standard of living,
with neither party having a greater entitlement to that
standard of living than the other;
(5) The earning capacities, educational levels,
vocational skills, and employability of the parties;
(6) The length of absence from the job market of the
party seeking maintenance;
(7) The parental responsibilities for the children;
(8) The time and expense necessary to acquire
sufficient education or training to enable the party
seeking maintenance to find appropriate employment,
A-3782-19
17
the availability of the training and employment, and the
opportunity for future acquisitions of capital assets and
income;
(9) The history of the financial or non-financial
contributions to the marriage or civil union by each
party including contributions to the care and education
of the children and interruption of personal careers or
educational opportunities;
(10) The equitable distribution of property ordered and
any payouts on equitable distribution, directly or
indirectly, out of current income, to the extent this
consideration is reasonable, just and fair;
(11) The income available to either party through
investment of any assets held by that party;
(12) The tax treatment and consequences to both parties
of any alimony award, including the designation of all
or a portion of the payment as a non-taxable payment;
(13) The nature, amount, and length of pendente lite
support paid, if any; and
(14) Any other factors which the court may deem
relevant.
[N.J.S.A. 2A:34-23(b).]
The court must "make specific findings on the evidence about all of the
statutory factors" listed above. N.J.S.A. 2A:34-23(c). "[F]ailure to consider all
of the controlling legal principles requires a remand." Boardman v. Boardman,
314 N.J. Super. 340, 345 (App. Div. 1998).
A-3782-19
18
In its statement of reasons, the court addressed each of the requisite
statutory factors. Because defendant only challenges the adequacy of the court's
findings with respect to factor (4), the standard of living established during the
marriage, and factor (5), as it relates to plaintiff's earning capacity and
employability, we focus on those two aspects of the court's decision herein.
Marital Lifestyle
On statutory factor (4), the court's findings centered around the parties'
2016 CISs and, to a lesser extent, their testimony pertaining to the marital
lifestyle. The court found that while plaintiff asserted in her CIS that "[t]he total
monthly marital lifestyle was $6,410.00, or $76,920.00 a year, exclusive of car
payments, repairs required for the sale of the residence and significant savings
accumulated by the parties," defendant asserted in his CIS that "[t]he total
monthly marital lifestyle was $10,612.00, or $127,344.00 a year, exclusive of
various personal expenses, repairs required for the sale of the residence and
significant savings and investments accumulated by [him]."
Without numerically quantifying what it determined the marital lifestyle
to be, the court then examined the parties' proposed post-divorce budgets as
asserted in each CIS. It found that plaintiff "claim[ed] her post-divorce budget
is $9,055.00 a month, or $108,660.00 a year," but that said budget was "not
A-3782-19
19
comparable to the moderate marital lifestyle in light of her testimony regarding
the family's regular expenses." It concluded that her "revised post-divorce
budget" was "$5,995.00 a month, or $71,940.00 a year, which is $415.00 a
month less than the marital lifestyle [asserted in her CIS]."
In particular, the court determined that it was unlikely that, after the sale
of the marital residence, plaintiff "will incur shelter expenses of $3,826.00 a
month" and reduced her "reasonable Schedule A expenses for rent, insurance ,
utilities, water and sewer, maintenance, telephone, cable and internet" to $3,000
per month. It reduced her monthly Schedule B expenses from $760 to $560
upon concluding that a reasonable expense for a new automobile was $300 per
month and not $500 per month. It reduced her monthly Schedule C expenses
from $4,469 to $2,435 upon finding that most expenses listed were "subject to
reduction or deletion" as they were "no longer applicable or appear inflated."
As to defendant's post-divorce budget, which he asserted to be "$8,571.00
a month, or $102,852.00 a year," the court found that it was "not reflective of
the frugal lifestyle he described during the trial" and that "numerous expenses .
. . can be deleted, or modified, including the costs associated with the residence,
auto insurance, registration and license, vehicle maintenance, fuel and oil,
commuting expenses, child's clothing and child's lessons." Thus, the court
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20
concluded that defendant's "reasonable post-divorce lifestyle is $4,300.00 a
month, or $51,600.00 a year."
Defendant contends that the trial court erred when it set an alimony award
without having numerically quantified the marital lifestyle. This contention has
merit, as "[a]n alimony award that lacks consideration of the factors set for th in
N.J.S.A. 2A:34-23(b) is inadequate, and one finding that must be made is the
standard of living established in the marriage." Crews, 164 N.J. at 26 (citing
N.J.S.A. 2A:34-23(b)(4)).
"[I]n determining the marital standard, the trial court establishes the
amount the parties needed during the marriage to maintain their lifestyle."
Weishaus v. Weishaus, 180 N.J. 131, 145 (2004); accord S.W. v. G.M., 462 N.J.
Super. 522, 532 (App. Div. 2020) ("[A] finding of marital lifestyle must be made
by explaining the characteristics of the lifestyle and quantifying it."). "[A] trial
judge may calculate the marital lifestyle utilizing the testimony, the CISs
required by Rule 5:5-2, expert analysis, if it is available, and other evidence in
the record." Ibid.
"The judge is free to accept or reject any portion of the marital lifestyle
presented by a party or an expert, or calculate the lifestyle utilizing any
combination of the presentations." Ibid. "[O]nce a finding is made concerning
A-3782-19
21
the standard of living enjoyed by the parties during the marriage, the court
should review the adequacy and reasonableness of the support award against this
finding." Crews, 164 N.J. at 26.
In this case, the court failed to "establish[] the amount the parties needed
during the marriage to maintain their lifestyle." Weishaus, 180 N.J. at 145. Its
statement of reasons does not contain a numeric finding as to what the marital
lifestyle was. It somewhat inconsistently described the marital lifestyle as
"moderate" based upon plaintiff's testimony and "frugal" based upon defendant's
testimony. It found that plaintiff's 2016 CIS estimated the marital lifestyle at
$6,410 per month, and that defendant's 2016 CIS estimated the marital lifestyle
at $10,612 per month. But it never resolved the $4,000 discrepancy between the
two figures.
Although the court reviewed each party's 2016 CIS and reduced their
current lifestyle budgets prior to awarding alimony, those calculations should
have been undertaken in relation to the court's determination of what the marital
lifestyle was. Instead, the court reduced plaintiff's current lifestyle budget i n
relation to her marital lifestyle estimate of $6,410 as shown on her 2016 CIS and
reduced defendant's current lifestyle budget in relation to his marital lifestyle
estimate of $10,612 as shown on his 2016 CIS. This approach is contrary to
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22
well-established law, which emphasizes that establishment of the marital
lifestyle is "the touchstone" for the initial alimony award. Crews, 164 N.J. at
16. For these reasons, we agree that the court abused its discretion in calculating
the initial alimony award and remand to address the issue.
Marriage Termination Date
The court deemed the date that plaintiff filed the divorce complaint,
September 24, 2013, as the date of termination of the parties' sixteen-year
marriage. "[A] marriage is deemed to end on the day a valid complaint for
divorce is filed that commences a proceeding culminating in a final judgment of
divorce. Mere physical separation of the parties . . . will not be deemed to
terminate a marriage." Portner v. Portner, 93 N.J. 215, 225 (1983); accord Elkin
v. Sabo, 310 N.J. Super. 462, 472 (App. Div. 1998).
Thus, defendant's contention that the marriage ended in May 2010 when
he moved to Virginia and plaintiff refused to relocate with him is contrary to
well-established law. Similarly, his contention that the court should have
considered him to have been paying pendente lite support since May 2010 when
awarding alimony in connection with N.J.S.A. 2A:34-23(b)(13) is neither
supported by facts nor law.
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Mallamo Adjustment
Also, under the umbrella of the alimony, defendant contends that the court
abused its discretion when it denied his request for a Mallamo adjustment for
overpayment of pendente lite support and failed to consider his "paydown on
the principal of the mortgage on the marital home" between 2010 and 2018,
totaling $134,442. In particular, he asserts that because the court ultimately
awarded plaintiff $3,000 per month in alimony and $600 per month in child
support, he is entitled to a Mallamo adjustment because he paid pendente lite
support totaling "between $5,600 and $5,900 per month."
"[P]endente lite support orders are subject to modification prior to entry
to final judgment . . . , and at the time of entry of final judgment. . . ." Mallamo,
280 N.J. Super. at 12 (citations omitted). "In many instances the motion judge"
hearing a pendente lite application "is presented reams of conflicting and, at
times, incomplete information concerning the income, assets and lifestyles of
the litigants." Id. at 16. Often "a judge will not receive a reasonably complete
picture of the financial status of the parties until a full trial is conducted." Ibid.
In analyzing a request for a Mallamo adjustment, the court must consider
whether the amount of pendente lite support paid "was consistent with the
marital lifestyle." Slutsky, 451 N.J. Super. at 369. "Any changes in the initial
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orders rest with the trial judge's discretion" and are therefore reviewed under an
abuse of discretion standard. Id. at 368.
The court denied defendant's request for a Mallamo adjustment. It
reasoned that, pursuant to a September 12, 2014, pendente lite order, defendant
was responsible for payment of all of plaintiff's Schedule A and B expenses,
plus 78% of her Schedule C expenses during the pendente lite period. It found
that "[t]he parties agreed that the allocated lifestyle expenses paid by [d]efendant
were between $5,600.00 and $5,900.00 a month." It further found that
"[d]efendant did not pay child support and [p]laintiff was responsible for 22%
of Schedule C expenses." Without reference to any numerical findings
pertaining to the marital lifestyle, it concluded that "[t]he [d]efendant did not
overpay pendente lite support in this matter."
However, Mallamo adjustments are necessarily calculated in relation to,
and dependent upon, the court's final determination of the marital lifestyle.
Slutsky, 451 N.J. Super. at 368-69. Here, the court ruled upon the Mallamo
issue without having first numerically quantified the marital lifestyle. We
remand this issue for reconsideration following the court's entry of the necessary
numerical marital lifestyle finding.
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Imputation of Income to Plaintiff
On statutory factor (5), the court thoroughly considered plaintiff's
educational background, plaintiff's employment history and earnings as well as
her status after her son was born in 1998.
The court thoroughly evaluated and considered expert testimony from
plaintiff's expert, Kincaid, and defendant's expert, Kolsky, with respect to
plaintiff's employability. Based upon Kincaid's testimony, the court found that
plaintiff had "various vocational barriers to returning to her former career,"
which included lack of employment as a social worker for almost twenty years,
lack of the requisite license, and "limited skills related to technology and
virtually no computer skills." It determined that "the import of [Kincaid's]
testimony is that [p]laintiff could not just restart her career as a social worker
by sending in a check for $196.00 and getting a job." It credited his opinion that
plaintiff's "income would steadily increase from the $30,000.00 range if she
remained employed in her current capacity" and that, if she "re-entered the labor
market in the Berkeley Heights area as a social worker," she would earn an
"entry level salary . . . between $39,053.00 and $46,371."
The court also considered Kolsky's testimony "that [p]laintiff could
immediately return to work in New York as a social worker after paying $196.00
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to restore her professional license," that she "would then be eligible for
employment . . . at the annual salaries in 2014 of $54,558.00 to $67,000.00" or
"on a per diem basis at $55.00 per hour" and "could earn $75,982.00 within two
to three years" or "in five to seven years, . . . $145,600.00 per year." It noted
that Kolsky "based her opinion on the fact that [p]laintiff was [bilingual] in
Spanish, although this was never confirmed at trial."
Ultimately, the court rejected Kolsky's opinion that plaintiff "only needs
to send in a check for $196.00 and [then] she can resume her former career as a
social worker earning $67,000.00 per year." The court found that plaintiff
"would be required to pursue continuing education and training before she could
return to work as a social worker" and that, by comparison, if she "continues
with her current occupation as a psychic, healer and channeler, she does not need
to update her educational requirements or undergo additional training." It
further found that while plaintiff was self-employed "in a non-traditional
business . . . there is a potential for growth and success as pointed out by
[p]laintiff's expert." It also found that her "absence from her career as a social
worker, her age, her lack of continuing education and her current self-
employment makes [p]laintiff's return to the field of social work unreasonable
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and unrealistic" and that these factors did "not support her return to her prior
occupation."
In the end, the court concluded that plaintiff "is able to support herself in
her current capacity as a psychic, healer and channeler" and did not find "that
there is another alternative presently which would generate income for
[p]laintiff and allow her to maintain a moderate lifestyle, in conjunction with
the alimony award and distribution of marital assets." It imputed income to
plaintiff of $42,000 per year "based on her historical income between 2014 and
2016, along with the anticipated growth of her business."
"The court may impute income based on the . . . former income at that
person's usual or former occupation or the average earnings for that occupation
as reported by the New Jersey Department of Labor." Elrom v. Elrom, 439 N.J.
Super. 424 (App. Div. 2015). "[I]f potential earnings cannot be determined,"
the court may "impute income based on the [party's] most recent wage or benefit
record." Ibid. "Imputation may also be justified when examining income
reported by self-employed obligors, who control the means and the method of
their earnings." Id. at 436.
"A trial court is free to accept or reject the testimony of either side's
expert, and need not adopt the opinion of either expert in its entirety." Brown
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v. Brown, 348 N.J. Super. 466, 478 (App. Div. 2002). "A trial judge's decision
to impute income of a specified amount will not be overturned unless the
underlying findings are inconsistent with or unsupported by competent
evidence." Storey v. Storey, 373 N.J. Super. 464, 474-75 (App. Div. 2004).
"Credibility findings are given substantial weight and deference." Id. at 479.
Here, the court's decision to impute annual income of $42,000 to plaintiff
is supported by competent evidence, namely, Kincaid's expert report and opinion
which the court found credible.
We also reject defendant's contention that the court "imputed income
based on a net opinion" from Kincaid. "N.J.R.E. 703 sets forth the criteria for
determining whether an expert opinion may be admitted into evidence and
requires that the expert conclusions be founded in 'facts or data' and that those
facts be 'reasonably relied upon by [other] experts in the field.'" Harte v. Hand,
433 N.J. Super. 457, 464 (App. Div. 2013) (quoting N.J.R.E. 703) (alteration in
original). Kincaid's opinion is not a net opinion because it is supported by facts
and is not simply conclusory. Moreover, we see no reason to require the court
to determine that plaintiff must work in an occupation in which she is utilizing
her advanced degree — and impute income to her on that basis — where
demonstrated self-employment that does not require use of her advanced degree
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29
is a viable option that will allow her to earn a comparable income. The court
must "consider" and "realistically appraise" the party's educational background,
work experience, employment status, earning capacity, and job opportunities in
the region when determining how much income, if any, to impute. See Caplan
v. Caplan, 182 N.J. 250, 268-69 (2005); Elrom, 439 N.J. Super. at 435; Storey,
373 N.J. Super. at 474. The court did so here.
We conclude that the court's imputation of income to plaintiff in the
amount of $42,000 annually is supported by the record and should not be
disturbed on appeal. Storey, 373 N.J. at 474-75.
Equitable Distribution
Defendant contests the court's inclusion of two assets, the VVSB account
and 250 shares of Oracle stock, as assets subject to equitable distribution. He
also contests the court's allocation of other marital assets, including the 2012
Hyundai; the proceeds from the sale of the marital home; the Providen t Bank
money market account; the BMW repairs; and the Sony Music Entertainment
401(k) cash payment.
During divorce proceedings, the trial court is tasked with "effectuat[ing]
an equitable distribution of the property, both real and personal, which was
legally and beneficially acquired . . . during the marriage." N.J.S.A. 2A:34-
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30
23(h). The governing statute "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."'" Thieme, 227 N.J. at 284.
"The goal of equitable distribution is to effect a fair and just division of
marital assets." Steneken v. Steneken, 183 N.J. 290, 299 (2005). The trial court
must: (1) decide what specific property is eligible for equitable distribution; (2)
determine its value; and (3) decide how to equitably distribute it between the
parties. Rothman v. Rothman, 65 N.J. 219, 232 (1974). In terms of eligibility,
the governing statute exempts gifts from equitable distribution, providing that
"all such property, real, personal or otherwise, legally or beneficially acquired
during the marriage . . . by either party by way of gift, devise, or intestate
succession shall not be subject to equitable distribution." N.J.S.A. 2A:34-23(h).
"In making equitable distribution of property, the Family Part must
consider the factors outlined in N.J.S.A. 2A:34-23.1." Sauro v. Sauro, 425 N.J.
Super. 555, 576 (App. Div. 2012). Those factors include:
a. The duration of the marriage or civil union;
b. The age and physical and emotional health of the
parties;
c. The income or property brought to the marriage or
civil union by each party;
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d. The standard of living established during the
marriage or civil union;
e. Any written agreement made by the parties before
or during the marriage or civil union concerning
an arrangement of property distribution;
f. The economic circumstances of each party at the
time the division of property becomes effective;
g. The income and earning capacity of each party,
including educational background, training,
employment skills, work experience, length of
absence from the job market, custodial
responsibilities for children, and the time and
expense necessary to acquire sufficient education
or training to enable the party to become self-
supporting at a standard of living reasonably
comparable to that enjoyed during the marriage or
civil union;
h. The contribution by each party to the education,
training or earning power of the other;
i. The contribution of each party to the acquisition,
dissipation, preservation, depreciation or
appreciation in the amount or value of the marital
property, or the property acquired during the civil
union as well as the contribution of a party as a
homemaker;
j. The tax consequences of the proposed distribution
to each party;
k. The present value of the property;
l. The need of a parent who has physical custody of
a child to own or occupy the marital residence or
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residence shared by the partners in a civil union
couple and to use or own the household effects;
m. The debts and liabilities of the parties;
n. The need for creation, now or in the future, of a
trust fund to secure reasonably foreseeable
medical or educational costs for a spouse, partner
in a civil union couple or children;
o. The extent to which a party deferred achieving
their career goals; and
p. Any other factors which the court may deem
relevant.
[N.J.S.A. 2A:34-23.1.]
"Where the issue on appeal concerns which assets are available for
distribution or the valuation of those assets, . . . the standard of review is whether
the trial judge's findings are supported by adequate credible evidence in the
record." Borodinsky v. Borodinsky, 162 N.J. Super. 437, 443-44 (App. Div.
1978). "However, where the issue on appeal concerns the manner in which
allocation of the eligible assets is made," a reviewing court "determine[s]
whether the amount and manner of the award constituted an abuse of the trial
judge's discretion." Id. at 444; accord Steneken, 367 N.J. Super. at 435; Sauro,
425 N.J. Super. at 573 (quoting Genovese v. Genovese, 392 N.J. Super. 215, 223
(App. Div. 2007)).
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The court considered and entered findings pertaining to each of the
statutory factors listed at N.J.S.A. 2A:34-23.1, although some of its findings
overlapped with those it made in connection with the alimony award.
Defendant's contentions on appeal center less around the statutory factors and
more around the court's findings regarding seven specific assets.
However, separate and apart from defendant's contentions pertaining to
specific assets, since the court failed to quantify the marital lifestyle in
connection with its alimony award as discussed above, that error has carried
over into its rulings on the allocation of marital assets. In other words, both the
alimony and equitable distribution rulings were "bottomed on a misconception
of law." Sauro, 425 N.J. Super. at 573 (quoting Genovese, 392 N.J. Super. at
223).
N.J.S.A. 2A:34-23.1(d) requires the court to consider the standard of
living established during the marriage when equitably distributing marital
property. But in this case, the court failed to quantify the marital standard of
living, or marital lifestyle, thus we remand the court's allocation of all marital
assets for reconsideration once the marital lifestyle is quantified in the interest
of fairness. See, e.g., Tannen v. Tannen, 416 N.J. Super. 248, 283 (App. Div.
2010) (upon concluding that a remand was warranted pertaining to equitable
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34
distribution, the court also remanded for consideration of "any effect distribution
may have upon child support and alimony" due to their interrelated nature).
With that in mind, we now address defendant's more specific contentions
regarding the court's findings and conclusions about each contested asset. There
are additional reasons that a remand is warranted – at least with respect to
allocation of certain assets, including the Provident Bank money market account
and the credit for BMW repairs – due to the court's failure to enter sufficient
findings of fact and conclusions of law as required by Rule 1:7-4(a).
VVSB Account
The court determined that the value of the VVSB account was
$356,037.65 as of September 30, 2013. It ordered that the account "be
distributed equally to the parties along with any gains and/or losses through the
date of distribution" with the parties sharing the costs of distribution.
While the court credited testimony from defendant and his father that
defendant received annual cash gifts from his parents between 1996 and 2005,
it rejected defendant's testimony "that the cash gifts which eventually funded the
Vanguard [VVSB] account were never commingled with marital funds." It
found that defendant lacked "the documentary evidence needed to substantiate
his position" and that, without it, his "testimony is simply not believable." In
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35
sum, it concluded that defendant "did not establish by a preponderance of the
credible evidence that the cash gifts which eventually funded the Vanguard
[VVSB] account were not commingled with marital monies."
The court undertook a detailed analysis of the relevant testimony coupled
with the documentary evidence that defendant produced. It explained that,
according to defendant, the cash gifts "were initially put into Treasury bills" and
after they matured, "they were converted into Certificates of Deposit (CDs)." It
cited defendant's testimony "that over the course of twelve . . . years there could
have been twenty . . . CDs and perhaps a dozen annual Treasury bills before
that." Per defendant, "[e]ventually, the funds were transferred into" the VVSB
account.
However, the court determined that "[t]he evidence presented at trial
raises questions as to the location of the cash gifts before, during, and after their
various reincarnation as Treasury bills (which were never produced or [other]
documents), [m]oney [m]arket deposits, CDs, and Vanguard stock." It found
that "[t]he voluminous records presented at trial did not include any proof as to
where the cash was kept between January 9, 1996 and December 31, 2002." It
also found that defendant "did not provide financial records to show when and
how many Treasury bills he obtained with the cash gifts."
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36
More specifically, the court explained that "[d]efendant did not produce
bank statements to confirm where the funds were deposited as he received the
cash gifts from his parents, except for two . . . deposits into a World Savings
Bank Money Market account" of $35,000 on December 31, 2002, and
$51,864.28 on July 6, 2004. And yet, "[b]etween January 9, 1996, and February
1, 2005, . . . [d]efendant was gifted $182,000.00, as confirmed by the checks
presented at trial." It also cited defendant's testimony that he received
$24,000.00 in 2006 but found that he "did not produce a check or other document
to confirm the gift."
The court determined that as of December 31, 2002, "defendant had
collected $120,000.00 in gifts" but that "[a]fter he deposited the $35,000.00 on
December 31, 2002 there is no record of where the remaining $85,000.00 was
located." As to the July 6, 2004, deposit, it found that the funds "came from a
$50,000.00 CD defendant had opened on February 3, 2004" that "matured on
May 3, 2004" and had earned interest. Defendant then withdrew that money on
July 28, 2004. It further found that by February 2004, "the cash gifts to
[d]efendant totaled $160,000.00 but the statements provided by [d]efendant
documented deposits of only $85,000.00."
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37
With respect to the CD statements that defendant produced, the court
found that they "did not trace how these financial accounts evolved from the
cash gifts of $182,000.00 that were received between 1996 and 2005." Although
defendant testified that the VVSB account "was funded by three . . . CDs which
he opened at World Savings Bank that had a total value of $265,000.00" the
court found that "[t]he purchases of Vanguard stocks on February 28, 2006, May
30, 2007, and September 26, 2007 totaled $255,000.00." Moreover, it found
that "[d]efendant opened other CDs at Countrywide on dates that conflicted with
the World Savings Bank CDs" and "[t]here is no explanation for how
[d]efendant was able to fund the Countrywide CDs when, according to him, all
his gifted assets were already accounted for in the World Savings Bank CDs
and/or Vanguard Stocks." The court further found that it was "undisputed that
[p]laintiff had no knowledge of the cash gifts, Treasury bills, CDs, [m]oney
[m]arket deposits, and Vanguard stocks."
The court's conclusion that defendant did not prove, by a preponderance
of evidence, that the VVSB account was funded by gifts he received from his
parents is supported by "adequate credible evidence in the record." Borodinsky,
162 N.J. Super. at 443-44.
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38
250 Shares of Oracle Stock
The court also found that "[d]efendant did not sustain his burden of proof
and establish by a preponderance of the credible evidence that the 250 shares of
Oracle Corporation are exempt from equitable distribution as either a gift or a
premarital asset." Thus, it ordered that the Oracle stock "be distributed equally
to the parties, with the [p]laintiff receiving one-half . . . of the stocks . . . in
kind."
Just as he did with the VVSB account, defendant contends that the 250
shares of Oracle stock were also purchased with gift monies and that the court
therefore erred in determining that they were subject to equitable distribution.
The record supports the court's conclusion that defendant failed to sustain his
burden of proof, by a preponderance of evidence, that the 250 shares of Oracle
stock are exempt from equitable distribution.
2012 Hyundai
The court found that "defendant traded [] in the 2012 [Hyundai] vehicle
on April 10, 2014 for $18,000.00, . . . without [informing plaintiff]." A month
earlier, he had "purchased a 2014 Hyundai Genesis without the [p]laintiff's
knowledge or consent" with "exempt funds."
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39
The court ordered that defendant would retain the 2003 BMW gifted to
him from his father along with the 2014 Hyundai, and that plaintiff would retain
the 2000 Toyota Camry. The court also ordered defendant to pay plaintiff "one
[] half . . . of the trade-in value for the 2012 Hyundai Genesis acquired during
the marriage, which was $18,000.00, less [d]efendant's one-half . . . share of the
value of the Toyota Camry [$1,084.00]." Thus, defendant owed plaintiff $8,458.
Defendant contends that the court abused its discretion when it awarded
plaintiff a credit for one-half of the gross sales price of the 2012 Hyundai,
without considering his payoff of the $16,657.20 outstanding loan balance on
the vehicle, resulting in a "net gain" for him of only $1,342.80. He does not cite
legal authority for support of this. Considering defendant had the 2014 Hyundai
and the 2003 BMW, while plaintiff had a 2000 Toyota worth around $1,000, the
court's determination pertaining to the equitable distribution of the value of the
2012 Hyundai is not "an abuse of the trial judge's discretion." Borodinsky, 162
N.J. Super. at 444.
Proceeds from the Sale of the Marital Home
The court ordered that plaintiff shall receive sixty-five percent of the net
proceeds following the sale of the marital home, and defendant shall receive
thirty-five percent. It cited the "significant disparity in the financial
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40
circumstances of the parties" and reasoned that "[e]ven with her share of the
marital assets, [p]laintiff will not be able to maintain a lifestyle comparable to
that maintained during the marriage" and that defendant "is in a far superior
financial position" because "[h]e earns greater income, which is supplemented
by dividends from his investments and the trust distributions from his parents"
and "will continue to benefit from his parents' gifting and estate planning. . . ."
Defendant requested that the $170,000 balance of the $190,000 down
payment loan from his parents be repaid from the sales proceeds, but the court
found that his claim lacked credibility. It found that testimony from defendant
and his father acknowledged that plaintiff had no knowledge of the loan and she
was never shown the written promissory note signed by the defendant.
Additionally, there are no documents or other records presented during the trial
proving that there was a loan from the parents when the residence was
purchased. Furthermore, it cited the father's testimony that defendant only had
to repay the $170,000 if he and his wife needed the money.
Defendant also requested "a credit of $80,000.00 for having paid down
the mortgage with pre-marital monies when he refinanced the property on
October 2, 2010," but the court denied the request because his argument was not
credible. Defendant did not provide any statements or other records to
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41
substantiate his claim that he used pre-marital funds to reduce the mortgage or
provide any proof as to the source of the $80,000. It further found that the
Provident Bank money market statements from October 2010 confirmed that the
$80,000 was paid from the marital funds withdrawn on October 1, 2010.
Because the court's findings and ruling concerning the loan are based in
large part on its determination that defendant lacked credibility, they are entitled
to deference. Cesare, 154 N.J. at 412. The court did not abuse its discretion
when allocating the proceeds from the sale of the marital home. Borodinsky,
162 N.J. Super. at 444.
Provident Bank Money Market Account
The court found that the Provident Bank money market account
functioned as a "joint money market/savings" account. It noted plaintiff's
testimony that defendant had withdrawn approximately $45,000 from the joint
money market account without her knowledge and determined that bank
statements confirmed that between June 10, 2013, and September 23, 2013,
defendant liquidated $44,012.52 from the account and did not explain or
otherwise document the reason for the withdrawals. Accordingly, the court
ordered defendant to pay plaintiff $22,504, which was one half of the balance in
the account prior to defendant's withdrawals.
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42
Defendant contends that the court erred in finding that the account was a
joint account because the account was always in his sole name. We find no
support for that argument. Although it is true that the money market account
was not set up as a joint account, there is no evidence that it contained exempt
funds, such as gifts from his parents, or funds that predated the marriage. See
Pacifico v. Pacifico, 190 N.J. 258, 269 (2007) ("[T]he burden of establishing
immunity from distribution of a particular marital asset or portion of an asset
rests upon the spouse who asserts it.").
However, defendant also argues that the court's finding under N.J.S.A.
2A:34-23.1(i) that "[t]here was no testimony regarding the dissipation of assets"
conflicts with its treatment of the Provident Bank money market account; and
thus, the court failed to provide a dissipation analysis in its statement of reasons.
This argument has merit and warrants a remand because the court's findings do
not adequately comport with Rule 1:7-4(a).
Rule 1:7-4(a) requires that "[t]he court shall, by an opinion or
memorandum decision, either written or oral, find the facts and state its
conclusions of law thereon in all actions tried without a jury, on every motion
decided by a written order that is appealable as of right . . . ." "Naked
conclusions do not satisfy the purpose of [Rule] 1:7-4." Curtis v. Finneran, 83
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43
N.J. 563, 570 (1980). "Meaningful appellate review is inhibited unless the judge
sets forth the reasons for his or her opinion." Salch v. Salch, 240 N.J. Super.
441, 443 (App. Div. 1990).
As noted, "N.J.S.A. 2A:34-23.1(i) requires the court, in making an
equitable distribution of marital property, to consider the 'contribution of each
party to the acquisition, dissipation, preservation, depreciation or appreciation
in the amount of value of the marital property.'" Kothari v. Kothari, 255 N.J.
Super. 500, 506 (App. Div. 1992). Although the Legislature has not defined
"dissipation" in this context, courts have considered a variety of factors:
(1) the proximity of the expenditure to the parties'
separation; (2) whether the expenditure was typical of
expenditures made by the parties prior to the
breakdown of the marriage; (3) whether the expenditure
benefitted the 'joint' marital enterprise or was for the
benefit of one spouse to the exclusion of the other, and
(4) the need for, and amount of, the expenditure.
[Id. at 507 (quoting Spouse's Dissipation of Marital
Assets Prior to the Divorce as a Factor in Divorce
Court's Determination of Property Division, 41 A.L.R.
4th 421 (1985)).]
"The question ultimately to be answered by a weighing of these
considerations is whether the assets were expended by one spouse with the intent
of diminishing the other spouse's share of the marital estate." Ibid. When
"property has been dissipated during the marriage the asset subject to
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44
distribution may take the form of a cash indebtedness to be imposed by the court
upon one spouse in favor of the other." Id. at 510.
In its statement of reasons under statutory factor N.J.S.A. 2A:34-23.1(i),
the court found "no testimony regarding the dissipation of assets." That finding
conflicts with its clear findings in other parts of the statement of reasons that
plaintiff testified that defendant had withdrawn approximately $45,000 from the
Provident Bank money market account without her knowledge.
Thus, it appears that the court implicitly concluded that defendant had
dissipated $44,012.52 in cash from the Provident Bank money market account.
But the court never cited Kothari or completed any sort of legal analysis
pertaining to the dissipation of the Provident Bank money market account. It
did not make findings concerning the proximity of the expenditure to the parties'
separation, whether the expenditure was typical of those made by the parties
during the marriage, and whether the expenditure benefitted the marital
enterprise or solely defendant. We are constrained to remand for entry of the
requisite findings of fact and conclusions of law as required by Rule 1:7-4(a).
2003 BMW Repairs
The court found that defendant owned a 2003 BMW that was gifted to him
by his parents in September 2007. The court determined that defendant had
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45
exclusive use of the BMW and it was not a marital asset subject to distribution.
However, it determined that defendant used marital funds to make significant
repairs to the BMW and that between June 25, 2012, and August 8, 2015,
defendant spent $23,055.94 on the BMW. Consequently, the court ordered
defendant to pay plaintiff half of $23,055.94, or $11,528, which represented
plaintiff's share of the marital funds that defendant used to repair his BMW.
Defendant contends that the award constitutes a "double dip" because he
paid for the pre-complaint repairs with marital funds and the court also awarded
plaintiff part of the joint bank account. Based on our review, we conclude his
"double dip" contention is unsubstantiated.
Defendant also asserts the record shows that he only spent $20,216.89 on
repairs. The court failed to explain the source for the $23,055.9 4. Again,
"[n]aked conclusions do not satisfy the purpose of [Rule] 1:7-4," Curtis, 83 N.J.
at 570, and they inhibit "meaningful appellate review," Salch, 240 N.J. Super.
at 443. Because the court failed to explain how it determined that defendant
spent $23,055.94 on BMW repairs, we remand this issue for entry of findings of
fact as required by Rule 1:7-4(a).
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Sony Music Entertainment 401(k) Cash Payment
The court ordered defendant to pay plaintiff $7,531.36 as one half of the
cash withdrawal he retained when he liquidated a 401(k) retirement benefit he
had obtained while working for Sony Music Entertainment between 1993 and
January 2000. In determining whether the asset was subject to equitable
distribution, the court found that it was partially exempt because defendant was
only married during one-half of his employment at Sony. The court attached a
Schedule A to its opinion which lists the asset at issue as totaling $15,062.72.
The court designated $7,531.36 of the total as exempt and the remaining
$7,531.36 as marital, and, ultimately awarded plaintiff 100% of the marital
share.
Defendant contends that the court erred when it awarded plaintiff half of
these funds that were liquidated well over three years prior to the date of the
complaint, were from his partially pre-marital savings, and were used for the
parties' mutual benefit. He emphasizes that because the funds were used to pay
the parties' living expenses as defendant was unemployed during that time, it
was improper for the court to award plaintiff 100% of the marital share because
plaintiff is benefiting from the same money twice.
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But at trial, defendant offered inconsistent testimony about how he used
the money. He initially testified that he used it to pay the parties' living expenses
when he was unemployed. He later testified that he used the money to pay down
the mortgage but admitted that he had no concrete documentation. Because
defendant's testimony was inconsistent and he offered no documentation to
corroborate it, defendant's "double dip" contention as to this 401(k) is not
adequately supported by the record.
We do not conclude this was an abuse of the trial judge's discretion.
Borodinsky, 162 N.J. Super. at 444. However, on remand, the court will have
the opportunity to reconsider the allocation after it quantifies the marital
lifestyle if adjustments are needed in the interest of fairness. See Steneken, 183
N.J. at 293.
Attorney's Fees
Plaintiff had two different attorneys during the litigation. Her first
attorney, Toni Belford Damiano of Damiano Law Offices, submitted a
Certification of Services dated February 7, 2017, seeking $80,158.49 in attorney
fees, $1,000.50 in costs, and $6,704.90 in interest, for a total of $87,863.89. Her
second attorney, John E. Clancy of Townsend, Tomaio & Newmark, LLC,
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submitted Certifications of Services dated February 1, 2017; August 1, 2018;
and November 14, 2019, seeking a total of $174,556.02, excluding expert fees.
Defendant contends the court abused its discretion when it awarded
plaintiff $110,000 in attorney fees because it: (1) erroneously relied upon the
parties' settlement negotiations when it found that defendant had acted in bad
faith; (2) failed to consider the parties' respective receipt of marital assets in
determining their ability to contribute toward payment of fees; and (3)
considered trial and post-judgment fee requests at the same time, without
distinguishing between the two.
Although not specified in a point heading as required by Rule 2:6-2(a)(6),
defendant also contends that the court failed to determine the lodestar prior to
awarding plaintiff attorney fees. Because the court made no findings concerning
its determination of the lodestar and failed to explain how it calculated the
$110,000 attorney fee award to plaintiff, the court abused its discretion, and we
vacate the attorney fee award.
N.J.S.A 2A:34-23 states, in relevant part:
Whenever any other application is made to a court
which includes an application for pendente lite or final
award of counsel fees, the court shall determine the
appropriate award for counsel fees, if any, at the same
time that a decision is rendered on the other issue then
before the court and shall consider the factors set forth
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in the court rule on counsel fees, the financial
circumstances of the parties, and the good or bad faith
of either party.
If, upon consideration of all relevant factors, the court decides to award
fees, it must "determine the 'lodestar,' which equals the number of hours
reasonably expended multiplied by a reasonable hourly rate." J.E.V. v. K.V.,
426 N.J. Super. 475, 493 (App. Div. 2012) (citing Yueh v. Yueh, 329 N.J. Super.
447, 464 (App. Div. 2000)). In doing this, the court must exclude any hours
billed that are "not reasonably expended" and calculate the reasonable hourly
rate as per community standards. Yueh, 329 N.J. Super. at 465 (citing Rendine
v. Pantzer, 141 N.J. 292, 337 (1995)).
"Where this analytical framework is followed and the judge makes
appropriate findings of fact, a fee award is accorded substantial deference and
will be disturbed only in the clearest case of abuse of discretion." Id. at 466.
Additionally, "[i]n considering an award of counsel fees, the judge must comply
with [Rule] 1:7-4(a) and clearly set forth reasons for the exercise of discretion."
Scullion v. State Farm Ins. Co., 345 N.J. Super. 431, 439 (App. Div. 2001).
The court issued a twelve-page statement of reasons for its $110,000
attorney fees award to plaintiff and its denial of fees to defendant. It entered the
order on April 30, 2020, nearly two years after entry of the June 2018 dual
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judgment of divorce, and following numerous post-judgment proceedings.
Defendant has not appealed the denial of his attorney fees, so we are only
concerned with the amount of the court's award to plaintiff's counsel.
The court discussed the relevant procedural history, both pre-judgment
and post-judgment, cited the attorney certifications submitted by Damiano and
Clancy, and noted their hourly rates. It found that plaintiff incurred attorney
fees of $80,158.49 and costs of $1,000.50, for a total of $81,158.9 9, while
represented by Damiano and that the balance owed to Damiano, exclusive of
interest, was $63,983.30. It further found that plaintiff incurred and paid
attorney fees to Clancy totaling $115,355.42 between February 2, 2016, and
February 1, 2017. It also found that plaintiff incurred and paid additional
attorney fees of $59,200.70 between February 1, 2017, and October 4, 2019;
thus, plaintiff incurred and paid to Clancy a total of $174,556.12.
After citing relevant law, the court analyzed each Rule 5:3-5(c) factor and
ultimately granted plaintiff's request for attorney fees and awarded her
$110,000, to be paid in three installments. Although the court properly
considered the Rule 5:3-5(c) factors and made findings of fact relative to those,
its statement of reasons violates Rule 1:7-4(a) because it does not provide any
details about how, or if, it calculated the lodestar. The court did not determine
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whether the fees charged were reasonable. Its decision does not state how many
hours were billed, how many hours were reasonably expended, or how many
hours (if any) the court excluded. Consequently, it is unclear why the court
awarded $110,000 for attorney fees compared to any other amount.
Given the lack of "appropriate findings of fact," it is unclear whether the
court utilized the proper "analytical framework," or abused its discretion.
Hence, we are constrained to vacate the attorney fee award and remand for
further proceedings.
Defendant's additional arguments are without sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
We affirm the entry of divorce; the imputation of income to plaintiff; the
inclusion of the Vanguard investment account, 250 shares of Oracle stock, the
2012 Hyundai, and half the Sony 401(k) as marital assets subject to equitable
distribution; and the allocation of proceeds from the sale of the marital home,
because those rulings are adequately supported by the record. We reverse the
alimony award, the Provident Bank dissipation account conclusion, the amount
calculated for BMW repairs, and the attorney fee award and remand for further
proceedings, including statements of reason pursuant to Rule 1:7-4(a).
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On remand, the court should first quantify the marital lifestyle and then
reconsider the alimony award, the requested Mallamo adjustment, and the
allocation of marital assets as necessary in the interest of fairness. It should also
enter the requisite Kothari dissipation findings before making an award with
respect to the joint account and make N.J.S.A 2A:34-23 findings, including
calculation of the lodestar, before awarding attorney fees.
Affirmed in part, vacated in part, and remanded for further proceedings.
We do not retain jurisdiction.
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