CONSTANCE M. CELIA v. JOSEPH E. CELIA, JR

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4121-09T4

A-1220-10T4

CONSTANCE M. CELIA,

n/k/a CONSTANCE MASON,

 

Plaintiff-Appellant,

v.

JOSEPH E. CELIA, JR.,

Defendant-Respondent.

____________________________________________________________

January 18, 2013

 

Argued February 1, 2012 - Decided

Before Judges Fuentes, Graves, and J. N. Harris.

On appeal from Superior Court of New Jersey,

Chancery Division, Family Part, Bergen County,

Docket No. FM-02-2811-06.

Eric S. Solotoff argued the cause for appellant

(Fox Rothschild LLP, attorneys; Mr. Solotoff,

of counsel; Mr. Solotoff and Robert A. Epstein,

on the brief).

Tara Schillari Rich argued the cause for

respondent in A-4121-09 and Jay Rubenstein

argued the cause for respondent in A-1220-10

(Shapiro, Croland, Reiser, Apfel & Di Iorio,

LLP, attorneys; Ms. Rich, of counsel; Ms. Rich

and Mr. Rubenstein, on the brief).

PER CURIAM

In these back-to-back appeals, which we now consolidate, plaintiff Constance Celia initially appeals from certain portions of a supplemental judgment of divorce entered on November 4, 2009, and portions of a subsequent order denying her motion for reconsideration. Plaintiff claims the award of alimony to her in the amount of $425,000 per year was an abuse of discretion; the court erred in its valuation of Union City Filament Corp. (UCF), a business acquired by defendant Joseph Celia, Jr., during the marriage; the court improperly inflated the value of the parties' jewelry; and the award of counsel fees to plaintiff in the amount of $150,000 was insufficient.

In her second appeal, plaintiff challenges certain portions of a post-judgment order dated October 7, 2010, which denied her motion to enforce litigant's rights. For the reasons that follow, we affirm.

Plaintiff was born in 1949 and earned a bachelor's degree in education from Jersey City State College. Defendant was born in 1946 and attended college but did not earn a degree. The parties met while plaintiff was attending college and were married on July 23, 1972. During the early years of their marriage, they both worked with plaintiff teaching and defendant at UCF.

In 1972, UCF was owned by its three founding members: defendant's father, Anthony Avia, and Morton Foley. In 1973, after the parties were married, defendant's father died. Avia and Foley purchased his shares, and defendant was given a ten percent ownership interest in the company. In 1974, Avia died, and the company purchased his shares. Defendant became the sole owner of the company in 1975 when Foley retired, and defendant purchased his shares.

Plaintiff continued to work while the loan to purchase Foley's interest in the company was repaid. In addition, plaintiff contributed to the company by traveling with defendant on business trips and entertaining clients at local restaurants and in the parties' home. During the marriage, plaintiff was the company's health benefits coordinator, she served on the board of directors and, in 2004, she was involved in renovating part of the company's office space and cafeteria.

In the late 1970s, plaintiff stopped working to focus on starting a family. She did not return to teaching after their son, Joseph Celia, III, was born in 1982. At the time of trial, their son was emancipated, and working for UCF.

In 1983, the parties built a five-bedroom home in Upper Saddle River. Plaintiff continued to reside in the marital home when she filed for divorce in 2006, but defendant resided in an apartment in Edgewater. The marital home had a stipulated value of $1,450,000 and a home equity loan of $296,944. The parties also owned a condominium in Vero Beach, Florida, with a stipulated value of $630,000 and a mortgage of $265,358.

As the trial court noted, during the marriage the parties "enjoyed a very comfortable upper middleclass lifestyle." Defendant gave plaintiff $2500 per month for clothing and personal items, plus $1300 per week for food and other household expenses. Defendant spent about $1200 per week and, in 2005, he gave his son between $600 and $1300 per week.

The parties employed a weekly housekeeper. They leased luxury vehicles (which the company paid for) and dined out "at least three or four times each week." They also took nice vacations, including trips to Europe every second or third year.

Plaintiff was in good health, but defendant had a history of medical problems. He suffered a heart attack in 2001 and had bypass surgery in 2003. Nevertheless, defendant testified at trial he was working Monday to Friday "from 6:30 to 7:00 in the morning to 4:30 to 5:00 at night," and on Saturdays "from 7:00 till about 1:30."

Defendant testified he planned to retire at age seventy, or to at least scale back his work, and he planned to begin transferring ownership of UCF to his son within a year or two. The son began working for the company in 2004 after graduating from college. Defendant testified his son "pretty much knows the business," but "he's still learning."

The parties reported gross income on their federal income tax returns as follows:

2005: $1,116,109

2006: $1,148,196

2007: $1,151,3601

These amounts did not include any perquisites defendant received from UCF. Plaintiff's financial expert testified that when the additional amounts defendant received were included, his total income in 2005 was $1,267,099, with net income after taxes of $851,621; total income in 2006 was $1,304,947, with net income after taxes of $881,021; and his total income in 2007 was $1,317,834, with net income after taxes of $887,011.

ALIMONY AND LIFE INSURANCE

Plaintiff sought $600,000 per year in permanent alimony. On her July 31, 2008 case information statement (CIS), plaintiff claimed that during the marriage the parties had joint monthly expenses of $57,913, and her current monthly expenses were $36,940.2 She included some anticipated expenses for remodeling and repairs to the New Jersey home and the Florida condominium, and some one-time expenses rather than recurring expenses. Additionally, plaintiff's personal monthly expenses included $1500 for restaurants and $1500 for clothing.

Plaintiff also asked the trial court for a retroactive increase in her pendente lite support. Pursuant to a December 22, 2006 order, defendant was required to pay tax-free support to plaintiff in the amount of $24,500 per month. The same order required defendant to pay her medical insurance, transportation expenses, and country club dues.

The court found the expenses itemized on plaintiff's CIS were inflated and that her annual expenses were approximately $398,916. Based primarily on the testimony provided by plaintiff's financial expert, the court determined that defendant's net annual income was $815,621 in 2005, $842,789 in 2006, and $847,022 in 2007.3

The court ordered defendant to pay plaintiff permanent alimony of $425,000 per year. The court concluded that the amount was appropriate because it "virtually equalize[d]" the disposable income available to the parties, and each party could "maintain a lifestyle comparable to that which was enjoyed during the marriage." The court also noted that each party would receive more than two million dollars in equitable distribution; plaintiff would have access to the equity in the former marital home; and she would retain her inheritance in the amount of $100,000.

In rejecting plaintiff's claim for a retroactive modification of pendente lite support, the court found that plaintiff overstated her expenses, sought a savings component that did not reflect the parties' past practice, and included costs defendant was obligated to pay directly to third-party providers. Therefore, the court found that retroactive modification was not warranted.

The court ordered defendant to name plaintiff as an irrevocable beneficiary on two AXA Equitable Life Insurance policies and a UCF split dollar policy, until he no longer had an alimony obligation and he satisfied the equitable distribution payout. In its ruling, the court noted the death benefit on only one of the policies.

On April 23, 2010, the court rejected plaintiff's motion for reconsideration, in which she again requested $600,000 per year in alimony. With regard to plaintiff's motion to enforce litigant's rights, which was heard on October 7, 2010, the court acknowledged the trial record did not fully disclose the death benefits from the policies, and the benefits were insufficient to secure defendant's equitable distribution obligation. Nevertheless, the court did not modify its decision because plaintiff was the beneficiary on all existing policies and, given defendant's health issues, he could not obtain additional life insurance.

EQUITABLE DISTRIBUTION

The court ordered a 50/50 distribution of all joint marital assets, with the exception of UCF, which it distributed forty percent to plaintiff and sixty percent to defendant. Thus, the court ruled that each party would receive approximately $182,321 from the sale of the Florida condominium; approximately $169,252 from their joint bank and brokerage accounts; and approximately $211,380 from their existing retirement accounts.

The court heard conflicting testimony regarding the value of UCF, a company that manufactures filaments for various types of vacuum electron applications. Plaintiff retained Jay Fishman, a managing director of Financial Research Associates, a business valuation firm, to value the company. At defendant's request, plaintiff agreed that Fishman could serve as a joint expert. Fishman's preliminary report ("for discussion purposes only") indicated the value of UCF was between $3,000,000 and $4,750,000. However, neither party accepted the preliminary analysis, and both parties retained their own experts.

Plaintiff retained Henry Rinder, a certified public accountant, who initially valued UCF at approximately $8,000,000. Defendant's expert valued UCF at $2,501,000.

The experts conferred to narrow their differences, and they were able to agree on some, but not all of the issues. Fishman and Rinder then issued supplemental reports. Fishman valued UCF at between $4,380,000 and $4,857,000, using a 6.5% growth rate. Rinder valued UCF at $7,847,000 using an 8.6% long-term average growth rate, and at $5,840,000, if a 6.5% long-term average growth rate was used.

In order to properly value UCF for equitable distribution purposes, the court had to resolve the following issues, which the experts could not reconcile:

1. The appropriate normalization adjustment for defendant's compensation.

2. The appropriate normalization adjustment for cash perquisites for the company.

3. The appropriate normalization adjustment for personal use of corporate automobiles.

4. Whether a normalization adjustment was necessary for unreported inventories.

5. The appropriate tax rate.

6. Whether a normalization adjustment was necessary for capital expenditures and depreciation.

7. The company's estimated long-term growth rate.

 

The court made detailed findings regarding each of these disputed issues, and initially determined the fair value of UCF to be $4,877,132. However, in response to plaintiff's motion for reconsideration, the court corrected an error in its calculation that increased the company's value to $5,732,572.4 Therefore, the court ordered defendant to pay plaintiff forty percent, or $2,293,028, less credits due to defendant in the amount of $750,031.55. The court summarized the parties' credits in the following chart, which did not include their Florida condominium, bank accounts, brokerage accounts, and retirement accounts:

 

 

 

Item & Distribution

Defendant

Plaintiff

40% of UCF

$2,293,028.00

Upper Saddle River

$576,528.05

Dissipation of Marital Assets

$54,000.00

Jewelry

$139,950.00

Club Membership Bonds

$20,950.00

Wine Collection

$12,603.50

Life Insurance cash values

 

$39,420.31

Hackensack Golf Club Fees

$500.00

Auto Repairs

$444.44

2007 & 2008 IRA Fundings

$10,000.00

TOTAL

$750,031.55

$2,397,393.755

NET PAYABLE TO PLAINTIFF

 

$1,647,362.20

 

The court ordered that the sum of $1,647,362.20 was to be paid to plaintiff as follows:

a. $500,000 within 120 days of June 25, 2009;

b. The balance of $1,147,326.00 shall be paid over a 7-year term in equal monthly installments with interest at the Wall Street composite prime rate of 3.25% plus 2%;

c. Defendant shall pay his 50% of the net proceeds from the sale of the Vero Beach condominium to Plaintiff in reduction of equitable distribution sums owed or Defendant shall receive a credit in an agreed upon or Court ordered buyout amount;

d. Defendant shall secure the equitable distribution payment through a lien upon his stock in UCF which shall be held in escrow until payment is made in full.

e. Defendant may prepay the equitable distribution debt at any time without prepayment penalty.

 

VALUATION OF JEWELRY

In its initial decision on June 25, 2009, the trial court noted plaintiff's expert, Vincent deSanto, performed a "liquidation appraisal" and valued the parties' jewelry at $113,350; with plaintiff's jewelry valued at $110,900; and defendant's jewelry valued at $2450. On the other hand, defendant's expert, J.N. Stallings, appraised the jewelry using replacement cost and valued it at $337,500; with plaintiff's jewelry valued at $308,700; and defendant's jewelry valued at $28,800.

The court found that deSanto's appraisal of plaintiff's jewelry was suspiciously low because it included a recently purchased ring that cost $90,000. Accordingly, the court concluded the appraisal prepared by Stallings was more credible than deSanto's appraisal. Based on Stallings's appraisal, the court ordered a fifty/fifty split of the jewelry. The court allowed the parties to retain the jewelry in their possession, and it gave defendant a credit of $139,950. ($308,700 - $28,800 = $279,900 2 = $139,950).

In denying plaintiff's motion for reconsideration, the court further explained that it rejected the liquidation appraisal performed by deSanto because plaintiff intended to retain the jewelry. In addition, the court noted that when defendant offered to pay plaintiff fifty percent of the value of her expert's appraisal, she was unwilling to sell the jewelry.

COUNSEL FEES

Plaintiff initially contends that her $150,000 counsel fees award was insufficient. The court made the following findings regarding the parties' fees:

Plaintiff has paid legal fees of $93,109.17 against a total billing, inclusive of interest, of $401,141.08 leaving a balance of $308,031.91 in legal fees and costs. She has paid $77,602.25 against Smolin, Lupin's bill of $341,124.00 for forensic accounting services, leaving a balance due of $263,521.75 and she has paid $33,016.16 against one-half of FRA, the joint expert's bill of $70,901.16, leaving a balance due of $37,885.00

Defendant has paid legal fees of $139,456.43 against a billing of $340,176.56, leaving $200,720.13 owing. He has paid $72,500.00 against Amper Politziner's bill of $162,971.16 for forensic accounting services, leaving a balance due of $90,471.16 and he has paid $46,333.91 against one-half of FRA, the joint expert's bill of $70,901.16, leaving a balance due of $24,567.25.

 

Therefore, as a result of the counsel fee award to plaintiff, the parties' outstanding obligations were comparable, with plaintiff owing $459,439 ($609,439 - $150,000), and defendant owing $465,758 ($315,758 + $150,000).

In her motion for reconsideration, plaintiff sought an increase in the fee award. However, the court explained that it rejected plaintiff's request for additional counsel fees because it had considered all of the "factors bearing upon the fairness of an award of counsel fees."

PLAINTIFF'S MOTION TO ENFORCE LITIGANT'S RIGHTS

On August 23, 2010, plaintiff filed a motion to enforce the terms of the supplemental judgment of divorce and the April 23, 2010 order entered on her motion for reconsideration. In a cross-motion filed on September 15, 2010, defendant requested enforcement of paragraph two of the supplemental judgment of divorce which required the parties to sign a listing agreement for the sale of their Florida condominium "within 45 days of June 25, 2009."

Following oral argument on October 7, 2010, the court rendered an oral decision. It found defendant was "a little slow on the uptake," but it did not find that defendant acted in bad faith. Accordingly, the court determined defendant was not in violation of litigant's rights and denied plaintiff's request for an award of counsel fees.

Plaintiff presents the following arguments with regard to her appeal from the supplemental judgment of divorce and the order entered on her motion for reconsideration:

POINT I

 

THE TRIAL COURT'S VALUATION OF UCF WAS AGAINST THE WEIGHT OF THE EVIDENCE.

 

A. USING REASONABLE COMPENSATION FOR TWO (2) PEOPLE WAS AN ABUSE OF DISCRETION AND ARTIFICIALLY REDUCED THE VALUE OF THE BUSINESS TO PLAINTIFF'S DETRIMENT.

 

B. IT WAS ERROR FOR THE COURT TO IGNORE AND/OR NOT CONSIDER THE FULL IMPACT OF ADDITIONAL INCOME, INVENTORY, AND CERTAIN NON-OPERATING ASSETS, WHICH ARTIFICIALLY REDUCED THE VALUE OF THE BUSINESS TO PLAINTIFF'S DETRIMENT.

 

i. ADDITIONAL INCOME CASH PERQUISITES.

 

ii. CERTAIN NON-OPERATING ASSETS/AUTOMOBILES.

 

iii. INVENTORY.

 

POINT II

 

THE AWARD OF ALIMONY TO THE PLAINTIFF WAS AN ABUSE OF DISCRETION.

 

A. THE COURT DISREGARDED THE UNCONTROVERTED MARITAL LIFESTYLE IN FIXING ALIMONY.

 

B. THE COURT IGNORED PLAINTIFF'S NEED TO SAVE GIVEN DEFENDANT'S AGE, MEDICAL HISTORY AND PROXIMITY TO RETIREMENT.

 

C. THE TRIAL COURT MADE IMPROPER VALUE JUDGMENTS AS TO PLAINTIFF'S BUDGET/MARITAL LIFESTYLE, WHICH WERE AGAINST THE WEIGHT OF THE EVIDENCE.

 

D. THE TRIAL COURT IMPROPERLY DISREGARDED DEFENDANT'S 2008 INCOME IN DETERMINING HIS ABILITY TO PAY.

 

E. THE TRIAL COURT IMPROPERLY COUNTED THE PRINCIPAL PAYMENTS OF EQUITABLE DISTRIBUTION TO PLAINTIFF, I.E., THE USE OF HER EQUITABLE DISTRIBUTION, TO OFFSET HER BUDGET.

 

F. IT WAS ERROR FOR THE COURT TO NOT RETROACTIVELY MODIFY THE PENDENTE LITE ORDER TO DECEMBER 22, 2006 PURSUANT TO MALLAMO.

 

POINT III

 

THE TRIAL COURT USED THE WRONG STANDARD OF VALUE WHEN VALUING THE JEWELRY, THEREBY INFLATING ITS VALUE.

 

 

 

 

POINT IV

 

THE AWARD OF COUNSEL FEES TO PLAINTIFF WAS INSUFFICIENT BASED UPON THE TOTALITY OF THE CIRCUMSTANCES.

 

A. EQUITY OF AWARD.

 

B. DEFENDANT'S MISCONDUCT.

 

Plaintiff presents the following arguments on her appeal from the post-judgment enforcement order dated October 7, 2010:

POINT I

 

IT WAS BOTH LEGAL ERROR AND AGAINST THE WEIGHT OF THE EVIDENCE FOR THE TRIAL COURT TO REFUSE TO FIND DEFENDANT IN VIOLATION OF LITIGANT'S RIGHTS AND TO FAIL TO ENFORCE PRIOR JUDGMENTS AND ORDERS.

 

A. THE TRIAL COURT IMPROPERLY IGNORED UNCONTROVERTED EVIDENCE AS TO DEFENDANT'S ABILITY TO PAY THE AMOUNTS ORDERED IN EQUITABLE DISTRIBUTION AND COUNSEL FEES.

 

B. THE TRIAL COURT DISREGARDED DEFENDANT'S FAILURES TO DENY THAT, PRIOR TO PLAINTIFF FILING HER MOTION, HE FAILED TO DIVIDE THE RETIREMENT ASSETS; FAILED TO PLACE STOCK IN ESCROW; FAILED TO TIMELY MAKE PAYMENTS ON THE FLORIDA CONDOMINIUM; AND FAILED TO ESTABLISH A TRANSITION PLAN FOR CONTROL OF UCF.

 

i. DEFENDANT'S FAILURE TO DIVIDE RETIREMENT ASSETS.

 

ii. DEFENDANT'S FAILURE TO PLACE STOCK IN ESCROW.

 

iii. DEFENDANT'S FAILURE TO TIMELY MAKE PAYMENTS ON THE FLORIDA CONDOMINIUM.

 

iv. DEFENDANT'S FAILURE TO ESTABLISH A TRANSITION PLAN FOR CONTROL OF UCF.

 

C. THE COURT INEQUITABLY DISREGARDED THE TEMPORARY CHARGING LIEN HELD AGAINST PLAINTIFF BY HER FORMER LEGAL COUNSEL SIMPLY BECAUSE SUCH COUNSEL ALSO HAD A JUDGMENT FOR SAME AGAINST DEFENDANT.

 

POINT II

 

IT WAS ERROR FOR THE COURT TO MODIFY THE ORDERED DEATH BENEFIT ON DEFENDANT'S LIFE INSURANCE POLICY REQUIRED TO SECURE HIS ALIMONY OBLIGATION.

 

POINT III

 

IT WAS ERROR FOR THE COURT TO ORDER A DIVISION OF THE RETIREMENT ASSETS AS OF JULY 31, 2009 RATHER THAN AS OF THE DATE OF DISTRIBUTION ON OCTOBER 26, 2010.

 

POINT IV

 

IN LIGHT OF DEFENDANT'S NUMEROUS VIOLATIONS, IT WAS ERROR FOR THE COURT TO DENY PLAINTIFF'S REQUEST FOR COUNSEL FEES FOR HAVING TO FILE HER ENFORCEMENT MOTION AND DEFEND AGAINST DEFENDANT'S CROSS-MOTION.

 

POINT V

 

THIS MATTER SHOULD BE REMANDED TO ANOTHER JUDGE BECAUSE OF THE TRIAL JUDGE'S INABILITY TO IMPARTIALLY ADJUDICATE THIS MATTER.

 

Based on our review of the record and the applicable law, we are satisfied that plaintiff's arguments are without sufficient merit to warrant extended discussion in a written opinion, Rule 2:11-3(e)(1)(A) and (E). We add only the following comments.

The purpose of alimony 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). When reviewing an alimony award, we consider whether the trial court's findings are supported by sufficient credible evidence in the record; whether the trial court failed to consider controlling legal principles; and whether the trial court abused its discretion. Heinl v. Heinl, 287 N.J. Super. 337, 345 (App. Div. 1996).

Similarly, when reviewing equitable distribution decisions, our role is "to determine whether the court has abused its discretion." La Sala v. La Sala, 335 N.J. Super. 1, 6 (App. Div. 2000), certif. denied, 167 N.J.630 (2001). We must decide "whether the result could reasonably have been reached by the trial judge on the evidence, or whether it is clearly unfair or unjustly distorted by a misconception of law or findings of fact that are contrary to the evidence." Perkins v. Perkins, 159 N.J. Super. 243, 247 (App. Div. 1978); see also Borodinsky v. Borodinsky, 162 N.J. Super. 437, 443-44 (App. Div. 1998) ("Where the issue on appeal concerns which assets are available for distribution or the valuation of those assets, it is apparent that the standard of review is whether the trial judge's findings are supported by adequate credible evidence in the record.").

Trial courts also have discretion to award counsel fees and costs. N.J.S.A. 2A:34-23; R. 4:42-9(a)(1); R. 5:3-5(c); Williams v. Williams, 59 N.J. 229, 233 (1971); Guglielmo v. Guglielmo, 253 N.J. Super. 531, 544-45 (App. Div. 1992). Absent an abuse of discretion, we will not interfere. Von Pein v. Von Pein, 268 N.J. Super. 7, 20 (App. Div. 1993).

Additionally, pursuant to Rule 1:10-3, a court "may make an allowance for counsel fees to be paid by any party to the action to a party accorded relief under this rule." The rule "recognizes that as a matter of fundamental fairness, a party who willfully fails to comply with an order or judgment entitling his adversary to litigant's rights is properly chargeable with his adversary's enforcement expenses." Pressler & Verniero, Current N.J. Court Rules, comment 4.4.5 on R. 1:10-3 (2013).

We have examined the record in light of these principles, and we are satisfied the trial court's findings and conclusions are supported by substantial credible evidence in the record. Accordingly, we affirm the supplemental judgment of divorce and the orders entered on April 23, 2010, and October 7, 2010, substantially for the reasons stated by Judge Bonnie Mizdol in her written decisions on June 25, 2009, and April 19, 2010, and her oral decision on October 7, 2010.

Affirmed.

1 The 2008 tax returns were presented on plaintiff's motion for reconsideration and reflect gross income of $1,492,802.

2 On his October 16, 2006 CIS, defendant claimed $47,352 in monthly expenses, including payments made to plaintiff.

3 The court reduced the amount plaintiff's expert calculated because it found defendant did not receive any unaccounted for cash perquisites from UCF.

4 In a written decision attached to the April 23, 2010 order entered on plaintiff's motion for reconsideration, the court stated it erred in calculating the value of UCF by "failing to mathematically adjust the capitalization rate based upon [the court's] acceptance of the Rinder long-term growth and tax rates."

5 We calculate that plaintiff's credits are actually $2,397,392.75, but defendant does not complain.