PETER GARFINKEL v. LORI GARFINKEL

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4500-03T24500-03T2

PETER GARFINKEL,

Plaintiff-Respondent,

v.

LORI GARFINKEL,

Defendant-Appellant.

________________________________________________________________

 

Argued February 8, 2006 - Decided June 8, 2006

Before Judges Stern, Parker and Grall.

On appeal from the Superior Court of New

Jersey, Chancery Division, Family Part,

Morris County, Docket No. FM-14-1203-01.

Joseph P. Cadicina argued the cause for

appellant (Laufer, Knapp, Torzewski &

Dalena, attorneys; William M. Laufer, of

counsel; Danyel E. Thomson, on the brief).

Karin Duchin Haber argued the cause for

respondent (Haber & Silver, attorneys;

Ms. Haber, of counsel; Ms. Haber and

Carol Matula, on the brief).

PER CURIAM

Defendant Lori Garfinkel appeals from a judgment of divorce entered on March 11, 2004 after a seventeen-day trial. The judgment was supplemented three times: on June 28, 2004 to incorporate the terms of the oral decision rendered on March 11, 2004; and by two orders entered on August 25, 2004, one of which clarified the terms of a pendente lite order entered on July 11, 2003.

The facts relevant to this appeal are as follows. The parties were married on July 1, 1995. Twins, Ashley and Brandon, were born on August 15, 1998, and Jared was born on June 12, 2000. Plaintiff left the marital home in March 2001 to live with his mother, to whom he paid no rent, leaving defendant in the marital home with the three children under three years old. The complaint for divorce was filed on March 27, 2001. Defendant filed a counterclaim alleging marital torts: transmission of sexual disease (Count Two); negligent infliction of emotional distress (Count Three); intentional infliction of emotional distress (Count Four); and wiretapping (Count Five).

The parties were particularly litigious pendente lite. On September 14, 2001, plaintiff was ordered to pay the mortgage and utilities on the marital residence, as well as $200 per week in alimony and $255 per week in child support.

On December 13, 2001, an order to show cause was entered requiring plaintiff to make all payments required of him pursuant to the September 14 order, including $5,250 in past due support. Following a hearing on December 19, 2001, plaintiff's alimony obligation was reduced to $100 per week and child support to $200 per week.

On March 1, 2002, defendant filed another order to show cause seeking plaintiff's incarceration for failure to meet his financial obligations and immediate payment of all past due amounts. On March 22, 2002, an order was entered providing that all prior orders remained in effect.

On April 1, 2002, another judge found plaintiff in violation of litigant's rights for failure to pay all ordered support. On April 25, 2002, defendant again moved for plaintiff's incarceration for failure to comply with the support orders. On May 16, 2002, an ability to pay hearing was conducted and on March 20, 2003 the judge entered an order staying and suspending the enforcement of support arrears, but requiring the husband to pay $200 per week in child support and $100 per week in alimony from March 21, 2003 forward. On March 25, 2003, the parties were ordered to list the marital residence for sale immediately. On the same date, the judge clarified the March 20, 2003 order, indicating that support payments were not suspended but, rather, enforcement was. The order also relieved plaintiff of his obligation to pay the mortgage on the marital residence, pending the sale.

On May 8, 2003, defendant sought another order to show cause for immediate payment of support for February, March and April 2003 and payment of utilities. Following a hearing on May 23, 2003, the judge entered an order on June 10, 2003 providing that the suspension of enforcement of plaintiff's arrears did not excuse him from making utility and other support payments and that the suspension of his obligation to pay the mortgage on the marital home was conditioned on his meeting his other support obligations.

On July 11, 2003, a third judge entered an order (1) authorizing defendant to use $290,000 from the net proceeds of the sale of the marital home to purchase a new home for herself and the three children; and (2) directing that the equity of defendant's new home "shall be held 'in trust' [for plaintiff] pending disposition of this action." On the same date, the judge entered a second order denying defendant's motion to compel plaintiff to pay the accumulated child support arrears.

On July 16, 2003, an order was entered staying and suspending the enforcement of plaintiff's support arrears accrued prior to February 5, 2003, but maintaining his obligation to pay $200 per week in child support and $100 per week in alimony from February 5 forward. The order also continued plaintiff's obligation to pay all utilities on the marital home. In the context of this pre-trial history, the matter was tried over seventeen days between October and December 2003.

On March 11, 2004, a decision was rendered on the record and a judgment was entered the same day, subject to plaintiff's counsel preparing a more detailed supplemental judgment of divorce to include the court's decision.

On April 26, 2004, defendant filed a notice of appeal and on June 17, 2004, she filed a petition for Chapter 13 bankruptcy protection. As a result, on June 18, 2004, all pending post-judgment motions were stayed. Nevertheless, the judge signed the supplemental judgment of divorce on June 28, 2004.

On July 28, 2004, the bankruptcy stay was lifted and on August 25, 2004, a second supplemental judgment of divorce was entered, but apparently not signed by the judge. On the same day, the judge issued a supplemental order clarifying the pendente lite order entered on July 11, 2003, authorizing defendant to purchase a new house provided she held the new house "in trust for plaintiff."

Not surprisingly, defendant questions which judgment "is in effect" for the purpose of this appeal, since the supplemental judgments were all entered after the notice of appeal was filed. Because the notice of appeal was not amended to include the supplemental judgments, we will address the original judgment entered on March 11, 2004 as supplemented by the June 28, 2004 judgment which memorialized the court's decision.

Plaintiff, now forty-one years old, has a Bachelor's Degree in business. When the parties married on July 1, 1995, he was working for Sysco Corporation as a sales representative, earning $600 gross income per week. After leaving Sysco in 1996, plaintiff purchased a health food store in Livingston. He claimed that he paid $25,000 for the business and $12,000 for inventory, for a total of $37,000. He testified that his father provided the money for the purchase and plaintiff was the sole shareholder. Defendant claimed, however, that plaintiff paid $60,000 for the business and $75,000 for the inventory and that most of the money came from the sale of plaintiff's condominium in which the parties resided immediately after they married, with plaintiff's father making a small contribution to the purchase price.

The health food store was located in a strip mall with a fitness center. The fitness center closed in April 2002, however, resulting in a loss of business to the health food store. The rent was $2,100 per month, but plaintiff claimed he paid only $1,500 beginning in July 2003, resulting in back rent due. Plaintiff's application for a small business loan was denied in November 2001, and he borrowed money from family and friends. He also owed $2,500 to distributors.

In September 2001, while the divorce was pending, plaintiff decided to sell the business. He reached an agreement with Wayne Wasserman for a sale price of $60,000, including $30,000 for inventory, $15,000 for fixtures, $5,000 for good will, and $10,000 for a non-compete clause. When plaintiff sought permission from the court to enter into the agreement, defendant objected because she believed it was not an arm's length transaction and that the sale price was substantially below market value. Defendant claimed the purchaser was a close friend of plaintiff. The deal was ultimately terminated.

The business was valued as of December 31, 2000 by a court-appointed expert, Rufino Fernandez, who interviewed both parties. Fernandez was advised by defendant that plaintiff paid $135,000 for the business ($60,000 for the business and $75,000 for inventory) and that he purchased another $50,000 in inventory. Fernandez found that gross receipts earned by the business declined from $383,618 in 1998 to $255,162 in 2000, that plaintiff's income from the business went from $20,600 in 1998 to $19,500 in 2000, and the total adjusted income decreased from $91,063 to $47,160. Fernandez noted that some gross receipts were not recorded by the business but were estimated and added to additional income earned by the business. Fernandez ultimately found that the business had total assets of $56,902, including $36,149 in inventory and $14,183 in furniture and equipment, but no good will because it had not produced any excess earnings. The liabilities included loans to shareholders and accounts payable, amounting to approximately $22,084. Fernandez concluded that reasonable compensation for plaintiff was $56,819 in 1998 and $59,985 in 2000. His valuation of the business did not take the closing of the fitness center into account because that occurred after the complaint for divorce was filed.

Plaintiff's father died in November 1998 and plaintiff's inheritance included substantial sums in annuities and IRA's and a one-half share in an office building at One Oak Road in Fairfield, which provided him with $1,550 per month in income, plus $5,000 to pay taxes on that income. The property was assessed at $418,000. Plaintiff's net worth as of July 31, 2002 was $998,917; he was living rent-free with his mother since leaving the marital home in March 2001; and he reported a net income for 2001 of $47,563, including unearned income from his inherited assets.

Defendant, now thirty-eight, has a Bachelor's Degree in psychology. Prior to the marriage, she received $221,000 in proceeds from the settlement of her claims arising out of an automobile accident. She received another $50,000 in settlement proceeds during the marriage.

By December 2003, defendant had completed a Master's Degree in clinical psychology at Fairleigh Dickinson and was eligible to take her license exam as a clinical psychologist. She intends to obtain a Ph.D., ultimately allowing her to earn a greater income. At the time of trial, she was working in an unpaid hospital internship as required for her license.

Defendant testified that, during the marriage, the parties purchased expensive gifts for each other, went on frequent vacations, ate out several times per week and hosted "elaborate birthday parties" for the children. Both parties acknowledged that they lived beyond their means and that many checks bounced during the marriage. Defendant testified that she made substantial withdrawals from her accident settlement proceeds and used those monies for "treats" for the family, such as an inground swimming pool and major home improvements.

After plaintiff left the marital home, defendant remained there with the three children and had to spend more of her settlement proceeds on family expenses. There was a dispute, however, as to whether defendant had transferred some of her settlement monies to the children before trial. Her financial consultant, Robert D'Alia, testified that she had discussed the idea of transferring money to the children in 2001 but did not do so at the time. In April 2002, after a court hearing in which she represented that the money had already been transferred to the children, she called D'Alia and instructed him to transfer the monies.

When they first married in July 1995, the parties lived in plaintiff's condominium in Montclair. The condominium was sold in 1996, and they purchased a home in Oak Ridge with each contributing $35,000 to the deposit money. In 1998, they sold that house and moved to a home in Randolph for which they paid $295,000. Plaintiff's father contributed to the down payment on the Randolph house and the parties obtained a mortgage in the amount of $125,000.

After the court approved the sale of the Randolph home, defendant purchased a three-bedroom home in Long Valley for herself and the three children for $359,000. She obtained a mortgage in the amount of $80,000. Her major assets are the Long Valley house and $66,748 remaining from the settlement of her claims arising out of the automobile accident.

During the trial, the judge dismissed the marital tort claims in Counts Two, Three and Four of the counterclaim. Plaintiff admitted to the allegation in Count Five that he had "wiretapped" defendant's computer with a device that allowed him to track her computer transactions and record her e-mails.

In the decision rendered on the record on March 11, 2004, the trial judge found that defendant lacked credibility and that she misrepresented her income, assets and expenses. He found plaintiff credible, however, notwithstanding his finding that plaintiff failed to report substantial amounts of income in 1998, 1999 and 2000.

The judge rejected defendant's claim for rehabilitative or limited duration alimony and imputed $54,000 in annual income to her, although she had not earned that amount in any year of the marriage. Plaintiff was ordered to pay $303 in weekly child support and to reinstate health insurance for the children after he had allowed it to lapse, although he had more than $90,000 available to him at the time.

The court also (1) awarded plaintiff $20,000 "in equity" for over-paid pendente lite support, even though he found plaintiff had been hiding income; (2) ordered defendant to reimburse plaintiff $1,800 for withdrawals from his PNC bank account; (3) reduced defendant's share of the proceeds from the sale of the marital home by $16,193 because she used the money to pay moving expenses and attorney's fees; (4) awarded plaintiff the entire value of the business because of defendant's "perfidy, bad faith and misrepresentation;" and (5) awarded plaintiff $50,000 in counsel fees. In short, plaintiff was awarded a total of $237,371 in equitable distribution, which defendant was ordered to pay by selling the house in Long Valley in which she and the parties' three children, now ages seven and five, reside. Defendant was awarded $7,500 on the wiretapping claim.

After the judgment of divorce was entered on March 11, 2004, defendant appealed and argues:

POINT ONE

THE TRIAL COURT ABUSED ITS DISCRETION IN DETERMINING THAT DEFENDANT COMPLETELY LACKED CREDIBILITY THROUGHOUT THE COURSE OF THE DIVORCE PROCEEDINGS AND ENTERED A BIASED AWARD BASED ON THIS ERRONEOUS PERCEPTION.

A. Trial Judge's Prejudicial Conduct

(1) Inappropriate Treatment of Defendant

(2) Ignorance of Plaintiff's Lack of Credibility

B. Issues Addressed in Questioning Defendant's Credibility

(1) Domestic Violence Filing

(2) Status of Defendant's Solomon Smith Barney account

(3) Defendant's financial disparity during the pendente lite period and Plaintiff's ability to pay pendente lite support

POINT TWO

THE TRIAL COURT ERRED BY FAILING TO PROPERLY EVALUATE THE STATUTORY FACTORS AND AWARD DEFENDANT A TERM OF ALIMONY COMMENSURATE WITH THE ACTUAL MARITAL LIFESTYLE AND BY IMPROPERLY IMPUTING INCOME TO DEFENDANT.

A. Failure to Consider Actual Marital Lifestyle

(1) Use of Solomon Smith Barney Account

B. Wrongful Imputation of Income

(1) Imputation of Income to Defendant

(2) Imputation of Income to Plaintiff/Valuation Business

POINT THREE

THE TRIAL COURT IMPROPERLY IMPUTED INCOME TO THE DEFENDANT IN DETERMINING CHILD SUPPORT

POINT FOUR

THE TRIAL COURT ERRED BY FAILING TO DISTRIBUTE THE PROPERTY ACQUIRED AND DEBTS INCURRED DURING THE MARRIAGE IN AN EQUITABLE AND COMPLETE MANNER

A. Plaintiff's Business

B. Defendant's Residence

C. Credit for Overpayment of Pendente Lite Support

D. Credit for Defendant Utilizing Plaintiff's Checks

E. Marital Debt/Medical Expenses

F. Counsel Fees

We note initially that at oral argument before us the parties expressly requested that we exercise our original jurisdiction under R. 2:10-5 to make findings and conclusions if we find the trial court's findings and conclusions deficient, rather than remand the matter to the trial court. After reviewing the very extensive record, however, we find that we are unable to exercise original jurisdiction because the record, although extensive, is insufficient with respect to defendant's earning potential for us to make a determination of whether income should be imputed to her and, if so, how much. Since alimony, child support and equitable distribution are dependent on the parties' respective incomes, we cannot make determinations on those issues.

I

Defendant first argues that in remarks during her testimony, the trial judge exhibited bias against her and that this bias affected his judgment. In our review of the record, we find that the judge expressed his frustration with both parties but his remarks were made in an effort to focus the testimony on relevant evidence. Consequently, we do not believe that the judge's remarks were more offensive to defendant than to plaintiff.

Defendant further argues that the trial judge erred in finding her lacking in credibility and in failing to recognize plaintiff's lack of credibility. We generally defer to a trial court's findings on credibility. Cesare v. Cesare, 154 N.J. 394, 412 (1998) (citing In re Return of Weapons to J.W.D., 149 N.J. 108, 117 (1997)). "[T]he trial court has had the opportunity to observe the witnesses and determine their credibility." See also State v. Jamerson, 153 N.J. 318, 341 (1998); Bonnco Petrol., Inc. v. Epstein, 115 N.J. 599, 607 (1989); Dolson v. Anastasia, 55 N.J. 2, 7 (1969). We are, therefore, constrained to defer to the credibility findings of the trial court.

II

Defendant next argues that the trial judge erred in imputing income to her, denying rehabilitative alimony and calculating child support. We agree. A court may impute income to a party for both alimony and child support when that party is, without just cause, intentionally and voluntarily unemployed or under employed. Caplan v. Caplan, 182 N.J. 250, 268 (2005); Golian v. Golian, 344 N.J. Super. 337, 341 (App. Div. 2001). When a spouse is not earning his or her potential income, "an imputation of income based upon that potential is appropriate." Stiffler v. Stiffler, 304 N.J. Super. 96, 101 (Ch. Div. 1997). The "[i]mputation of income is a discretionary matter[, however,] not capable of precise or exact determination but rather requiring a trial judge to realistically appraise capacity to earn and job availability." Storey v. Storey, 373 N.J. Super. 464, 474 (App. Div. 2004). The imputed income should be an amount the party is capable of earning. Halliwell v. Halliwell, 326 N.J. Super. 442, 448 (App. Div. 1999) (holding that the realistic earning capacity of the parties and not their actual income should be considered); Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998). Before imputing income, a judge must first find that the spouse was voluntarily unemployed without just cause. Caplan, supra, 182 N.J. at 268; Dorfman, supra, 315 N.J. Super. at 516. The decision to impute income should not be disturbed unless it is inconsistent with or unsupported by competent evidence. Overbay v. Overbay, 376 N.J. Super. 99, 106-07 (App. Div. 2005).

Here, the trial judge apparently found that defendant voluntarily removed herself from the job market to continue her education. He referred to Department of Labor statistics identified in the court rules and in case law as an appropriate source to consider in imputing income. Child Support Guidelines, Pressler, Current N. J. Court Rules, Appendix IX-A (12)(a) on R. 5:6A at 2310 (2006); Storey, supra, 373 N.J. Super. at 475. The judge stated that the source indicated a clinical psychologist or a school psychologist could earn $26 per hour. If defendant worked forty hours per week for fifty-two weeks a year, she could earn $54,000, the amount imputed to her. Obviously, the court failed to consider several significant factors in reaching its conclusion.

First, defendant had not held a full-time job and had not worked in a school setting since before the children were born, and she never earned the level of income imputed to her during the marriage. Second, she had never worked as a clinical psychologist, had no experience and no prospective employers. At the time of trial, she was just completing her Masters Degree and had not yet obtained her license, although she anticipated obtaining it shortly. Third, there was no evidence of job offers or full-time positions available to her, nor was there any evidence that $26 per hour was an appropriate rate for an inexperienced, recently licensed clinical psychologist in New Jersey. Fourth, there was no consideration of her working fewer than forty hours per week or fifty-two weeks per year.

In short, although the judge used the appropriate source for imputing income, he did not take other significant, relevant factors into consideration. Clearly, $54,000 is an excessive amount to impute, but as we stated previously, the record is insufficient for us to determine whether any income should be imputed to defendant and, if so, how much. We, therefore, remand to allow the parties to present appropriate evidence of defendant's "realistic" earning potential, "job availability" and for the court to reconsider imputed income. We find, therefore, that the amount of income imputed to defendant was not supported by the evidence. Overbay, supra, 376 N.J. Super. at 106-07.

An award of alimony is authorized by N.J.S.A. 2A:34-23(b) and is governed by the factors enumerated therein:

In all actions brought for divorce, divorce from bed and board, or nullity the court may award one or more of the following types of alimony: permanent alimony; rehabilitative alimony; limited duration alimony or reimbursement alimony to either party. In so doing the court shall consider, but not be limited to, the following factors:

(1) The actual need and ability of the parties to pay;

(2) The duration of the marriage;

(3) The age, physical and emotional health of the parties;

(4) The standard of living established in the marriage and the likelihood that each party can maintain a reasonably comparable standard of living;

(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, 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 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; and

(13) Any other factors which the court may deem relevant.

When a share of a retirement benefit is treated as an asset for purposes of equitable distribution, the court shall not consider income generated thereafter by that share for purposes of determining alimony.

"[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 living with the supporting spouse during the marriage." Crews v. Crews, 164 N.J. 11, 16 (2000) (citing Lepis v. Lepis, 83 N.J. 139 (1980)). In determining whether alimony should be awarded, a court must consider the dependent spouse's needs and ability to contribute toward those needs, and the supporting spouse's ability to maintain the dependent spouse in the former standard of living. Crews, supra, 164 N.J. at 24.

Here, the trial judge found that defendant had almost completed her Masters Degree in clinical psychology, expected to be licensed in April 2004, and imputed $54,000 in income to her. Moreover, he found that

[t]hroughout the marriage, except for certain periods when the children were born or there were health conditions, [defendant] worked. And she worked in various ways, and she had abilities and she does have an ability. She is an intelligent, resourceful and productive individual and she will be able by virtue of her ability to continue.

With respect to the statutory factors, the judge found the marriage to be "relatively short term," since the parties were married only six years before they separated. He found both parties to be relatively young and healthy and determined that their standard of living was relatively modest and "perhaps to a certain extent subsidized by [plaintiff's] parents, but nevertheless one which in many respects reflected the efforts, work and resources of both parties."

The court rejected defendant's argument that her absence from the job market for child rearing would affect her future earning potential and apparently overlooked the fact that when plaintiff left the marital home in March 2001, defendant had three children under three years old to care for while she was working part-time and earning her Masters Degree. The judge found that the parties contributed equally to the marriage and that equitable distribution should not factor into the alimony equation, although he acknowledged that the equitable distribution award was "skewed in favor of the plaintiff." The court concluded that "alimony is inappropriate in this case and will not be allowed." Because the trial judge erred in imputing $54,000 in income to defendant, his denial of rehabilitative alimony is incorrect, particularly in light of the evidence of the parties' respective incomes during the marriage and the disparity in the assets available to each of them. Accordingly, this issue is remanded for reconsideration as well.

III

The incorrect imputation of income to defendant similarly affected the child support calculations. We, therefore, remand for the court to reconfigure income imputed to defendant based upon all of the relevant factors and recalculate child support.

IV

Defendant next argues that the trial court erred in distributing the marital property. Again, we agree. The judge specifically rejected plaintiff's claim that defendant's bad faith in interfering with the sale of the business entitled plaintiff to damages. Nevertheless, in awarding plaintiff the full value of his business, the trial judge did "not allow any equitable distribution with regard to the business" because "[h]er perfidity, bad faith and misrepresentation will have a consequence and that consequence will be the awarding of a 100% interest or the value of business to [plaintiff]. Essentially, this places $17,500 on his side of the table."

Defendant argues that the court erred in failing to "consider the statutory factors" relevant to equitable distribution of the business. Indeed, the trial judge did not even cite the relevant factors set forth in N.J.S.A. 2A:34-23.1. Rather, he held that plaintiff was entitled to the entire business solely because of defendant's misrepresentations during the pendente lite period.

The purpose of equitable distribution is to recognize "the essential supportive role played by the wife in the home, acknowledging that as housemaker, wife and mother she should clearly be entitled to a share of family assets accumulated during the marriage." Rothman v. Rothman, 65 N.J. 219, 228-29 (1974). Equitable distribution serves to recognize the "'contribution of each spouse to [the] acquisition of marital property, including [the] contribution of a spouse as a homemaker.'" Brandenburg v. Brandenburg, 83 N.J. 198, 210 (1980) (quoting Painter v. Painter, 65 N.J. 196, 212 (1974)). "The theory of equitable distribution is that marriage is a partnership whose assets should be fairly and equitably distributed when the partnership breaks up." Brown v. Brown, 348 N.J. Super. 466, 490 (App. Div.), certif. denied, 174 N.J. 193 (2002).

Neither bad faith nor "marital fault" is a statutory factor relevant to equitable distribution. Kinsella v. Kinsella, 150 N.J. 276, 313-14 (1997) (holding that the equitable distribution statute "does not refer to concepts of fault"); Kothari v. Kothari, 255 N.J. Super. 500, 511 (App. Div. 1992). If marital fault occurring during the marriage does not impact upon equitable distribution, clearly a party's conduct during the litigation should not have untoward consequences on equitable distribution.

The litigation conduct of neither party during the pendency of the divorce should affect the equitable distribution of the business. We, therefore, reverse the award of the entire business to plaintiff and find that the evidence supports distribution of the business value equally between the parties. The judgment of divorce should, therefore, be amended to reflect an equal distribution of the $26,969 value attributed to the business after taxes by Fernandez. See N.J.S.A. 2A:34-23.1.

Defendant next argues that the court erred in awarding $20,000 to plaintiff for overpayment of pendente lite support. With respect to this issue, the trial judge stated:

Now there's a big issue in this case regarding overpayment by the plaintiff of his support obligations pendente lite. This is a difficult issue for the Court because this was a moving target throughout this proceeding. Plaintiff claims a total credit of $42,200 and is arrived at by way of a formula. He calculates his credit by taking the total amount that he was charged, what he paid, deducting so much, giving a credit for what he didn't pay, comes to forty-two, two.

I find that he did in fact over pay . . . but he's been hiding some income as I said earlier. In equity, I will give him a $20,000 credit in addition to the credits I've already expressed at this point[:] $16,000 and some odd, he'll get another $20,000 credit. I'll talk about that later.

In the event of an appeal, I will rationalize that, but at this point I believe when looking at the totality of the various orders which were stepped down over a series of years, all the problematic issues, $20,000 I believe is a fair and reasonable credit.

[Emphasis added.]

This award is completely lacking in foundation and the trial judge has provided no "rationalization" or any other ground for awarding plaintiff the $20,000 credit "in equity." We reverse the award of $20,000 to plaintiff.

Similarly, we find no support in the record for the judge's reduction of defendant's share of the proceeds from the sale of the marital home by $16,193 for monies she used to pay moving expenses and attorney's fees. Defendant conceded that she used money for those expenses, even though the court order only authorized her to use the money to buy a new home for the children and herself. The fact remains, however, that each of the parties were entitled to fifty percent of the proceeds. Plaintiff received his fifty percent and is not entitled to a greater share because defendant used some of her share to pay moving expenses and attorney's fees. We, therefore, reverse the credit of $16,193 awarded to plaintiff from defendant's share of the marital home proceeds. See Kinsella, supra, 150 N.J. at 313-14.

Nor, do we find support in the record for the judge's award of $1,800 for withdrawals made by defendant from plaintiff's PNC account. The bank refunded the money to plaintiff and he suffered no loss. Thus, plaintiff received an unwarranted windfall. We, therefore, reverse the award of $1,800 to plaintiff.

Defendant next argues that the trial court erred in failing to require plaintiff to repay certain expenses and debts incurred during the marriage. N.J.S.A. 2A:34-23.1(m) requires a court to consider "the debts and liabilities of the parties" in distributing marital property. Thus, "in dividing marital assets the court must take into account the liabilities as well as the assets of the parties." Monte v. Monte, 212 N.J. Super. 557, 567 (App. Div. 1986).

We defer to the trial court's factual findings when those findings are supported by competent evidence in the record. Brown, supra, 348 N.J. Super. at 475. The characterization of a debt as a marital or non-marital liability "is fact-sensitive and - once made - final." Clark v. Clark, 324 N.J. Super. 587, 596 (Ch. Div. 1999).

At trial, defendant sought to introduce a summary of bills together with the underlying charges for which plaintiff was responsible pendente lite. Defendant sought a credit for these expenditures, and plaintiff objected, claiming that the summary did not accurately reflect the underlying bills and that some of the bills were not his responsibility.

Plaintiff claimed that he had inadequate discovery of the bills, some of which were medical bills for defendant's treatment. After hearing the testimony, the court characterized the evidence as "a mish-mosh." On the next trial date, defendant attempted to demonstrate that she paid for items that plaintiff was obligated to pay, such as pharmacy costs, automobile insurance, counsel fees and car payments. Plaintiff objected, noting that the documents were newly created and had flaws. The court declined to admit the documentary evidence because it had not been provided to plaintiff prior to the opening of trial. We agree with the trial judge on these points. Defendant's proofs were inadequate and were not presented to plaintiff in a timely manner. Accordingly, we affirm this portion of the judgment.

With respect to counsel fees, defendant argues that the trial court erred in awarding $50,000 in fees to plaintiff. N.J.S.A. 2A:34-23 provides for an award of counsel fees based upon "factors set forth in the rule on counsel fees, the financial circumstances of the parties, the good or bad faith of either party." Rule 4:42-9 authorizes an award of fees and refers to R. 5:3-5(c), which permits an award of fees in a matrimonial matter and sets forth nine factors to be considered. The decision rests within the sound discretion of the trial court. Yueh v. Yueh, 329 N.J. Super. 447, 460 (App. Div. 2000); Guglielmo v. Guglielmo, 253 N.J. Super. 531, 544-45 (App. Div. 1992).

Unless an award represents an abuse of that discretion, we will ordinarily not disturb it on appeal. Chestone v. Chestone, 285 N.J. Super. 453, 468 (App. Div. 1995). The focus on a fee application is on the receiving party's need, the supporting party's ability to pay, and the good or bad faith of the parties in either instituting or defending the action. Mani v. Mani, 183 N.J. 70, 95 (2005); Williams v. Williams, 59 N.J. 229, 233 (1971); Rosenberg v. Rosenberg, 286 N.J. Super. 58, 65 (App. Div. 1995). Bad faith includes unwillingness to negotiate; intentional non-compliance with court orders; seeking relief for which one knows or should know no reasonable argument can be made; intentionally misrepresenting the facts or the law; or pursuing litigation for oppressive reasons. Borzillo v. Borzillo, 259 N.J. Super. 286, 293-94 (App. Div. 1992).

Here, defendant has a substantially greater need than plaintiff because her resources are much more limited, and she has the responsibility of maintaining the house for the benefit of the parties' children, as well as building her career. There is nothing in the record to indicate that either party was responsible for protracting this litigation through bad faith. Consequently, we find that the trial judge did abuse his discretion in awarding plaintiff $50,000 in counsel fees and, accordingly, we reverse that provision in the judgment.

V

Finally, we address plaintiff's motion to strike portions of defendant's brief and appendix in which he argues that several orders issued after the supplemental dual judgment are not relevant and that several documents included in defendant's appendix were not admitted into evidence at trial. We are not concerned about the inclusion of the post-judgment orders because they are part of the court record, albeit we have not addressed them in this opinion. The documents included in defendant's appendix that were not admitted into evidence at trial are stricken, however, and have not been considered in this opinion. The motion, therefore, is granted in part and denied in part.

VI

In summary, we reverse the trial court's award of (1) the entire business value to plaintiff; (2) $20,000 to plaintiff for alleged overpayment of support pendente lite; (3) $1,800 to plaintiff for defendant's withdrawal of monies from his PNC account; (4) $16,193 to plaintiff for defendant's use of the proceeds from the sale of the marital home to pay moving expenses and attorney's fees; and (5) $50,000 in counsel fees to plaintiff.

We reverse and remand for reconsideration (1) the imputation of $54,000 annual income to defendant; and (2) alimony and child support based upon the imputed amount. The court will need additional evidence on defendant's earning potential in order to reconsider the imputed income and shall conduct a hearing on this issue within thirty days of the date of this opinion and render a prompt decision on all of the remanded issues.

Affirmed in part; reversed in part; reversed and remanded in part.

 

Plaintiff denied taking any unreported income from the business, but the court found otherwise.

In several instances, the trial judge told defendant that his "patience becomes extremely worn," that defendant was "basically paying down her respect account with me," and that she did not "advance [her] ball down the field." He further indicated to defendant that she keeps "trying to spin it," that she was "still spinning it," that she "just can't stop spinning it," and that she "was spinning out of control with me." In another instance, when defendant was testifying with respect to a document she alleged plaintiff may have forged, the judge said, "it's also possible that a fleet of aliens are now amassing on the dark side of the moon . . . . But that's possible, but it's unlikely. Possibilities are not what I deal with in this court. I deal with probabilities."

At the same time, however, the trial judge told plaintiff that plaintiff was trying to "spin his answer[s]," that he was "getting a little frustrated with [plaintiff's] testimony," that plaintiff was "evasive. That is prevarication," and later that plaintiff was being "evasive. Again. Strike Two. The question is very simple. The answer should be similarly simple."

For the purpose of calculating child support, the judge imputed $85,391 to plaintiff based upon his reported and unreported earnings. Plaintiff has not appealed that ruling.

Plaintiff had filed a criminal complaint against defendant on this issue, which was still pending at the time of trial, leading defendant to plead the Fifth Amendment and decline to answer questions on the issue. In this appeal, however, defendant represents that she was acquitted of the criminal charges because of "plaintiff's failure to meet his burden of proof that he did not authorize the payments."

Plaintiff argues that he will repay the bank for the $1,800 it refunded to him. That, however, is a matter for the bank to pursue, if it sees fit to do so.

The judge found that defendant's objection to the sale of the business was not material to the issues presented at trial.

(continued)

(continued)

31

A-4500-03T2

June 8, 2006