LINDA BRIGHT v. JAMES BRIGHT

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5714-07T35714-07T3

LINDA BRIGHT,

Plaintiff-Respondent,

v.

JAMES BRIGHT,

Defendant-Appellant.

________________________________________________________________

 

Argued March 31, 2009 - Decided

Before Judges Graves, Grall and Espinosa.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-1919-07.

Patrick T. Collins argued the cause for appellant (Franzblau Dratch, attorneys; Mr. Collins, on the brief).

Francine Del Vescovo argued the cause for respondent (Lomberg & Del Vescovo, LLC, attorneys; Ms. Del Vescovo and Janet S. Del Gaizo, on the brief).

PER CURIAM

Defendant James Bright appeals from those portions of the judgment of divorce that address equitable distribution of a vacation property and award alimony to his former wife, Linda. We affirm.

The parties were married on March 12, 1983 and resided in Hasbrouck Heights. At the time of their trial, James was fifty-three and Linda was forty-nine. Their two children were sixteen and twenty.

James was employed as a sheet metal worker, earning an average annual income of $104,000. Linda worked as a legal secretary until November 2006, earning $60,000 in her last full year of employment.

In the latter half of 2006, Linda started exhibiting manic and depressive behavior. She began to drink excessively and, in November 2006, she was charged with and pleaded guilty to driving while intoxicated. Her driver's license was suspended until August 2008. Linda began receiving temporary disability benefits in November 2006 and has remained unemployed since then. In early 2007, she was diagnosed with bipolar disorder and major depressive disorder.

On January 26, 2007, Linda filed a domestic violence complaint against James and obtained a temporary restraining order "TRO" that gave her sole possession of the marital residence. Linda filed a complaint for divorce on February 27, 2007. The TRO was resolved by a consent order on March 5, 2007, that allowed Linda to continue in possession of the marital residence but did not require James to pay any pendente lite support.

Her attorney represented that Linda's mental illness caused her to be hospitalized three times during the litigation. Linda testified that she was last released from the hospital on June 5, 2007.

In October 2007, Linda applied for disability benefits. The Social Security Administration ("SSA") determined that she was permanently disabled as of December 1, 2006, and awarded her monthly payments of $1750, retroactive to May 2007. The SSA approved Linda's sister as her payment representative because Linda was unable to handle the funds herself.

On February 20, 2008, after nearly one year of litigation, the judge handling this case appointed a guardian ad litem for Linda. The court found that she could not make appropriate decisions for herself, a conclusion supported by reports from Linda's treating psychiatrists.

During the marriage, the parties acquired a property in Damascus, Pennsylvania ("vacation property"). The parties stipulated that they jointly paid $28,500 to purchase the land and $185,000 for the construction of a residence on it. These investments were largely funded by a home equity loan on the marital residence. In January 2007, the frame of the residence was completed. The last joint payment was made on February 5, 2007, nine days after Linda obtained the TRO and three weeks before she filed the complaint for divorce. The funds for this $30,000 payment came from the liquidation of a joint account. The remaining $27,000 from that account was applied to satisfy the mortgage and make two payments for the home equity loan on the marital residence. After litigation began, Linda made no further payments toward the vacation property. James separately paid $116,000 between May and September 2007 to complete the house.

While the litigation was pending, the parties liquidated certain assets and distributed some of the proceeds. Linda received $111,000 from these distributions and James received $136,000.

Despite a substantial shortfall between her disability payments of $1750 per month and her monthly overhead, Linda rejected her attorney's advice to apply for pendente lite support. She testified that she did so because she felt guilty about filing for the divorce and its financial consequences and that this guilt had been fueled by James blaming her for the divorce. With only her disability benefits and equitable distribution available, Linda paid all her own living expenses, the home equity loan of $2145 per month, real estate taxes and homeowner's insurance on the marital residence, monthly maintenance for the parties' Florida timeshare, $5300 for a new roof and gutter replacement, monthly payments on a joint credit card, and her son's student loan interest. Linda claimed a total of $48,968 in such expenses that were paid out of the funds she had received in equitable distribution.

At the outset of the trial, the court advised the parties that the valuation date for the vacation property would be the date of distribution. Both parties were allowed to submit updated appraisals. Linda submitted an appraisal that valued the vacation property at $380,000 as of April 18, 2008. James chose not to submit an updated appraisal. He argued that the property should be valued as of the date of the complaint. His appraisal of the property as of January 26, 2007, when the building was only framed, was $205,000, which was less than what the parties had invested in the property. At the time of trial, the building was completed. James's motion to exclude Linda's expert real estate appraisal was denied.

Although Linda sought alimony in her complaint, she did not seek pendente lite support until her trial brief requested such relief retroactive to the filing of the complaint. Linda filed an updated case information statement ("CIS"), dated April 18, 2008. James's CIS, dated May 24, 2007, was never updated and did not include marital lifestyle expenses.

The trial was conducted on eight non-consecutive days from April 22 through June 4, 2008. On May 7, the parties resolved a number of issues by stipulation, including child custody and the distribution of various assets. The final judgment of divorce, dated June 26, 2008, granted Linda permanent alimony in the amount of $577 per week, or $30,004 annually, retroactive to February 27, 2007, the date the complaint was filed.

James raises the following issues on appeal:

POINT I

THE AWARD OF RETROACTIVE PENDENTE LITE SUPPORT AND THE ASSESSING OF DEFENDANT WITH ARREARS BASED UPON IT WAS ERROR.

POINT II

DEFENDANT'S INVESTMENT IN THE PENNSYLVANIA PROPERTY RENDERED THE ASSET OF ACTIVE CHARACTER, WITH THE RESULT THAT THE PROPERTY SHOULD HAVE BEEN VALUED AS OF THE COMPLAINT FILING DATE.

POINT III

THE [TRIAL] COURT'S ALIMONY DETERMINATION WAS UNSUPPORTED BY THE RECORD OR ITS FINDINGS.

POINT IV

THE LOWER COURT ABUSED ITS DISCRETION IN PERMITTING ADMISSION OF AN EXPERT'S REPORT SERVED THE DAY PRIOR TO TRIAL.

The issues raised on appeal recall the principle that "alimony and equitable distribution are separate yet interrelated and ultimately subject to an overriding sense of fairness." Steneken v. Steneken, 183 N.J. 290, 299 (2005); see also Claffey v. Claffey, 360 N.J. Super. 240, 263 (App. Div. 2003). After reviewing the record and the arguments advanced, we conclude that the trial court's decision reflected an application of the statutory criteria to the alimony and equitable distribution issues that was supported by the evidence and designed to resolve the issues between these parties with that "sense of fairness."

I.

In addition to challenging the alimony award as unsupported by the evidence, James contends that the trial court exceeded its authority by granting alimony retroactive to the date of the complaint because Linda did not request pendente lite support prior to the trial. There is, however, no authority for such a limitation of the trial court's discretion.

N.J.S.A. 2A:34-23 governs alimony awards, stating in part that "after judgment of divorce . . . the court may make such order as to the alimony or maintenance of the parties . . . as the circumstances of the parties and the nature of the case shall render fit, reasonable and just." The overriding purpose of the statute is to give trial courts broad discretion to fashion remedies on a case-by-case basis that achieve justice and fulfill the litigants' needs, including pendente lite relief. Randazzo v. Randazzo, 184 N.J. 101, 111-12 (2005). In reviewing an alimony award, a family court's factual findings should be accorded deference because of its specialized expertise, and its findings must be affirmed on appeal if supported by substantial, credible evidence based on a review of the record. Genovese v. Genovese, 392 N.J. Super. 215, 222 (App. Div. 2007).

The trial court reviewed each of the criteria listed in N.J.S.A. 2A:34-23b and described the evidence it deemed relevant to its evaluation. The trial court noted that the parties enjoyed a comfortable lifestyle based upon their incomes while married. James's CIS reflected a net worth of $1,360,908. Linda identified the marital lifestyle expenses as $10,410 per month and her current expenses at $76,248 per year. The court gave particular attention to N.J.S.A. 2A:34-23b(13), in addressing Linda's request for retroactive alimony. The trial court noted that Linda received no periodic support payments from James and that she had only her disability payments to support herself. Although her disability payment was only $1750 per month, she paid $2145 per month toward the home equity loan on the marital residence and additional sums for personal expenses and joint obligations. The resulting shortfall was not sustainable without resorting to her share of equitable distribution proceeds.

During the sixteen months that the litigation was pending, Linda's mental illness had rendered her totally disabled and caused her to be hospitalized three times. Her sister was designated to receive her disability benefits because Linda was unable to handle her financial affairs. A guardian ad litem was appointed because she was unable to make appropriate decisions in her matrimonial litigation. It was within this context that the trial court reviewed her request for pendente lite support to be awarded retroactive to the filing of the complaint.

The purpose of pendente lite support is to preserve the status quo, maintaining the parties in the positions they were in prior to the litigation. Mallamo v. Mallamo, 280 N.J. Super. 8, 11-12 (App. Div. 1995); Rose v. Csapo, 359 N.J. Super. 53, 58 (Ch. Div. 2002). "Maintenance of the status quo involves payment of the marital bills and expenses necessary to maintain the dependent spouse at the standard of living enjoyed during the course of the marriage." Rose, supra, 359 N.J. Super. at 60.

James asks this court to impose a rule of law akin to N.J.S.A. 2A:17-56.23a, the statutory provision that limits the court's authority to retroactively modify child support to the period while a motion for modification is pending. However, even that statutory restriction does not strip a trial court of the discretion to modify child support awards after a trial.

In Mallamo, supra, the trial court orally modified child support during the trial, retroactive to the first day of trial, without a motion for modification being made. Observing that the trial was the first opportunity the judge had to have a "reasonably complete picture of the financial status of the parties," based upon an evaluation of the evidence and the credibility of the parties, this court concluded that the reexamination of the pendente lite child support award after a full trial, even in the absence of a motion for modification, was not prohibited by N.J.S.A. 2A:17-56.23a. Mallamo, supra, 280 N.J. Super. at 16-17.

There is no corresponding statutory prohibition against the retroactive modification of pendente lite spousal support. Such awards are typically decided without a plenary hearing and are subject to modification both during litigation and at the time final judgment is entered. Mallamo, supra, 280 N.J. Super. at 12. Revisiting the adequacy of pendente lite spousal support is particularly appropriate following a trial.

A trial judge, who hears all of the testimony at trial, is in a much better position to determine the parties' financial needs during the pendency of the action than a motion judge who rules upon a pendente lite support application. The trial judge, who is equipped with all the evidence produced at trial, should be permitted to correct an obviously unjust pretrial support award, reimbursing the party entitled to increased support from what could otherwise be insurmountable debt, and perhaps destitution.

[Jacobitti v. Jacobitti, 263 N.J. Super. 608, 617 (App. Div. 1993), aff'd, 135 N.J. 571 (1994).]

In the absence of a statutory prohibition, the scope of the trial court's discretion to make an award is limited only by the requirement that the order be "fit, reasonable and just." N.J.S.A. 2A:34-23. We note further that, even if not legally incompetent, a litigant's psychiatric history may present circumstances that call upon the chancery court's "historic flexibility . . . to devise practical means of rendering justice in the face of problems created by a litigant intentionally or unintentionally." Julius v. Julius, 320 N.J. Super. 297, 310 (App. Div.), certif. denied, 161 N.J. 332 (1999).

The trial court attributed plaintiff's failure to move for pendente lite spousal support to her depression and bipolar disorder, a condition that did not allow her to make appropriate decisions, causing another judge to appoint a guardian ad litem for her. The court explained that if a motion had been filed, "it clearly should have been granted." An award of pendente lite support would have been designed to include "payment of the marital bills and expenses necessary to maintain the dependent spouse at the standard of living enjoyed during the course of the marriage." Rose, supra, 359 N.J. Super. at 60. The consequence of her failure to make the motion was that she was "forced to utilize her share of equitable distribution funds to pay normal living expenses," the very result that warranted retroactive modification in Brazzel v. Brazzel, 345 N.J. Super. 19 (App. Div. 2001).

The trial court's findings are supported by substantial, credible evidence in the record. We conclude that the award of permanent alimony, including the award retroactive to the filing of the complaint, was an appropriate exercise of the court's discretion.

II.

James contends that the trial court erred in finding that the vacation property was a passive asset and assigning the vacation property its value at trial. It is undisputed that James paid $116,000, from funds he had received in equitable distribution, to complete the Pennsylvania vacation home after the complaint was filed. He contends that these payments rendered the property an active asset that must be valued as of the date of the complaint. The trial court rejected this argument, stating that the payment of funds to the contractor did not convert what was a passive joint asset into an active asset, and concluding that the asset should be valued as of the date of distribution.

A trial court's equitable distribution of marital property is reviewed for abuse of discretion, and its decision will be affirmed "as long as the trial court could reasonably have reached its result from the evidence presented, and the award is not distorted by legal or factual mistake." La Sala v. La Sala, 335 N.J. Super. 1, 6 (App. Div. 2000), certif. denied, 167 N.J. 630 (2001); accord, Genovese, supra, 392 N.J. Super. at 223.

A passive asset may be valued as of the date it is distributed, with any increase in value shared equitably between the parties, because its fluctuations in value result solely from market forces. Addesa v. Addesa, 392 N.J. Super. 58, 77 (App. Div. 2007); Valentino v. Valentino, 309 N.J. Super. 334, 338 (App. Div. 1998). In contrast, an active asset increases in value directly because of one or both parties' contributions and efforts, Valentino, supra, 309 N.J. Super. at 338, and its added value normally accrues only to those whose efforts are responsible for it. Addesa, supra, 392 N.J. Super. at 77.

Since the vacation home was only framed at the time the complaint was filed but was completed at the time of trial, it is evident that its increase in value was not solely dependent upon market factors. Therefore, we disagree with the trial court's conclusion that the vacation property was a passive asset. However, we also reject James's argument that the increase in value was due exclusively to his financial contribution after the complaint.

"The consequences of value fluctuations for purposes of equitable distribution should not . . . turn wholly on whether an asset is properly classified as an active or passive asset." Goldman v. Goldman, 275 N.J. Super. 452, 457 (App. Div.), certif. denied, 139 N.J. 185 (1994). Indeed, as the Goldman trial court noted, in some circumstances, a mechanical application of a valuation date based upon an asset's status as passive or active would frustrate "the legislative mandate to distribute marital assets equitably." Goldman v. Goldman, 248 N.J. Super. 10, 16 (Ch. Div. 1991), aff'd in part, 275 N.J. Super. 452, 457 (App. Div.), certif. denied, 139 N.J. 185 (1994). For a "proper distribution of the asset," the court must determine "the driving force behind" the fluctuation in the value of a marital asset between the date the divorce complaint was filed and the date of distribution. Addesa, supra, 392 N.J. Super. at 76-77; see also Scavone v. Scavone, 243 N.J. Super. 134, 136-37 (App. Div. 1990).

The facts here do not show that James's payments post-complaint constituted the "driving force" to the exclusion of Linda's contributions. James's investment of $116,000 could not have resulted in an asset worth $380,000 if the parties had not jointly invested $213,500 for the land and construction beforehand. The increase in value after the complaint was filed represented the fruition of the efforts of both parties during the marriage as well as James's contributions thereafter. Cf. Pascale v. Pascale, 140 N.J. 583, 610 (1995) (spouse entitled to share in stock options based upon efforts expended during the marriage although not awarded until after complaint filed).

An active joint asset should be valued at the time of distribution unless "the increment is the result of active management of one with no participation by the other, then valuation of the asset is determined as of the date of the complaint." Scavone v. Scavone, 230 N.J. Super. 482, 493 (Ch. Div. 1988) (emphasis added), aff'd , 243 N.J. Super 134 (App. Div. 1990). See also Mol v. Mol, 147 N.J. Super. 5, 7 (App. Div. 1977) (plaintiff not entitled to share in enhancement of value of house "which was due solely to inflation or other economic factors and to which she did not contribute in any way") (emphasis added).

James's argument that the vacation property must be valued as of the date of complaint therefore rests upon a premise that effectively negates all of Linda's contributions. It would, however, be unfair to conclude that Linda had "no participation" in the improvement of the property in light of her participation in joint payments, including one payment made after she obtained a TRO against James, just three weeks before the complaint was filed. In addition, her payment of the home equity loan on the marital residence reduced the joint debt that was assumed to finance the construction.

Mindful that the goal of equitable distribution is to achieve equity rather than to affix an active or passive label on the asset, we note that there are additional facts here that militate against negating Linda's contribution to the Pennsylvania property's increase in value. First, throughout the year in which James made the payments, his ability to do so was enhanced by the facts that he was providing no support to Linda and was also relieved of certain joint obligations because she was using her equitable distribution to pay those obligations. Second, James's testimony indicates that the last joint payment made, during the weeks between the TRO and the filing of the divorce complaint, was made in contemplation of divorce and the distribution of the parties' assets:

Q. And . . . what was your reasoning and why you advanced approximately $116,000 to get the place closed in and finished up?

A. Well, first of all it [was] wintertime, and I wanted to get it closed in so there would be no winter damage and no vandalism. And second of all, we talked about me getting the Pennsylvania house and she getting the the Hasbrouck Heights house.

. . . .

Q. Now that hundred and that whatever you contributed, that was your wife had gotten an equal amount of money from the sale of other assets and the liquidation of other assets, correct?

A. The first payment in late January that I gave [the builder] was the from the high interest checking account which I took thirty, and I paid the the balance of $27,000 went to paying off mortgages for Linda's house. So that was the only thing that wasn't divided number-wise equal. But then after that everything I contributed to Bob the Builder was something that was sold on our behalf and she had 50 percent of it, and I got 50 percent of it, and my 50 percent went to Bob the Builder.

[(Emphasis added.)]

Therefore, the last joint payment can be fairly characterized as participation by Linda in funding the vacation property after the marriage had effectively ended.

The trial court's decision reflected a consideration of the applicable criteria set forth in N.J.S.A. 2A:34-23.1. In particular, the court reviewed "[t]he contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property." N.J.S.A. 2A:34-23.1i. See Genovese, supra, 392 N.J. Super. at 226. The court noted the costs of construction of the vacation property and the extent to which joint or individual funds were used to pay those costs. Of the $328,775 in costs, 65% was paid by marital funds and 35% was paid by James separately. The court concluded that 65% of the $380,000 present value, or $247,000, was subject to equitable distribution. That amount was divided equally between the parties. As a result, Linda and James each received a share valued at $123,500. James also received 35% of the current value, or $133,000, representing his independent contributions, for a total of $256,500.

The "overriding purpose" of the equitable distribution statute, N.J.S.A. 2A:34-23, is "to give a matrimonial judge broad discretion and authority to fashion sagacious remedies on a case by case basis, which will achieve justice and fulfill the needs of the litigants." Pelow v. Pelow, 300 N.J. Super. 634, 646 (Ch. Div. 1996); see also Randazzo, supra, 184 N.J. at 113. The trial court's analysis regarding the vacation property reflected an identification of that portion subject to equitable distribution, a determination of its value and an allocation of the property that was supported by the evidence in the record and consistent with the factors in N.J.S.A. 2A:34-23.1. See Rothman v. Rothman, 65 N.J. 219, 232 (1974).

The remaining issue concerns the admission of Linda's real estate expert's appraisal. This evidentiary ruling is entitled to our deference in the absence of an abuse of discretion. Spinks v. Twp. of Clinton, 402 N.J. Super. 454, 459 (App. Div. 2008). We conclude that this issue lacks sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

 

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July 9, 2009