Barbara W. Irving v. Richard H. Irving, III

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

Barbara W. Irving,

Plaintiff-Respondent/

Cross-Appellant,

v.

Richard H. Irving, III,

Defendant-Appellant/

Cross-Respondent.

______________________________

November 21, 2016

Argued January 11, 2016 Decided

Before Judges Simonelli, Carroll, and Sumners.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-8194-90.

Dale E. Console, argued the cause for appellant/cross-respondent.

Jessica Ragno Sprague, argued the cause for respondent/cross-appellant (Weinberger Law Group, LLC, attorney; Ms. Sprague, on the brief).

The opinion of the court was delivered by

SUMNERS, JR., J.A.D.

In this post-judgment matrimonial matter, defendant Richard Irving appeals from an August 5, 2013 Family Part order denying his request to modify alimony and ordering him to pay plaintiff Barbara Irving's attorney's fees. Plaintiff cross-appeals, arguing that the trial court erred in denying her request to compel defendant to provide life insurance or a trust fund to secure her alimony. For the reasons that follow, we affirm in part and reverse in part and remand for further proceedings consistent with this opinion.

I.

The record reveals the following facts. At the time of the parties' marriage in 1965, defendant was in law school and plaintiff worked for one year as a sixth-grade teacher. They had two children. Plaintiff stopped working when she was pregnant with their first child and never worked thereafter. Defendant has worked as corporate counsel for several employers. On June 5, 1995, a judgment of divorce (JOD) was filed ending the marriage. The JOD made the divorce retroactive to March 14, 1994, based on an oral property settlement agreement (PSA) the parties placed on the record. Under the agreement, plaintiff took sole ownership of the marital home in Mountain Lakes, which was worth $450,000 at the time, and was subject to $129,000 in mortgages, which she was obligated to pay.

Defendant's 1992 income, inclusive of bonus, was $294,000, and his 1993 income, exclusive of bonus, was $201,000. Based on that income, defendant agreed to pay plaintiff alimony "on a permanent basis until either of them dies, he is disabled, she remarries or cohabits with an unrelated male in circumstances tantamount to marriage or he retires at, but not before, age 62." Beginning in May 1994, defendant paid $90,000 in annual alimony. In 1997, alimony increased an additional $9000 per year as a "cost of living increase," provided his salary increased by ten percent. The parties agreed that defendant would pay plaintiff one-third of his gross annual bonus, if he received one, but no more than $50,000. No income was imputed to plaintiff, but in the event she earned more than $20,000 per year, defendant had the right to seek a modification of alimony.

The agreement further stated that defendant's retirement, not before age sixty-two, would constitute a "change in circumstances" entitling him to seek an alimony modification. If the parties could not agree on a modified amount, the Family court would decide by considering "the entire economic circumstances of the parties, both at the time that they are making their application, and their economic circumstances today as this judgment of divorce is entered." At the time of the divorce, both parties submitted case information statements (CIS) with the "intention that the [c]ourt take those transfers [from equitable distribution] into consideration at the time it determines alimony if it's required to do so, upon [defendant's] retirement."

The parties also agreed that defendant designate plaintiff beneficiary of a $250,000 life insurance policy covering him at no cost to her "so long as it is provided to him by his employer [and future employer] under the present circumstances." Plaintiff was entitled to purchase an additional $250,000 in life insurance at her expense, through defendant's employer, and an unlimited amount through any company chosen by plaintiff, as long as she paid for it. It was further agreed that defendant could keep an individual retirement account (IRA) worth $24,397.37, the pension, and automobile.

After his divorce, defendant married Kitty in July 1995. They had two children together, and raised her son from a prior relationship. Their children were ages fifteen and seventeen, respectively, at the time of the plenary hearing. Although Kitty had been a lawyer, she did not pursue that career once she married defendant. Instead, she occasionally worked a part-time retail job and recently completed EMT training prior to the hearing.

On December 31, 2011, defendant retired at the age of sixty-eight. Two weeks later, he exercised his rights under the PSA by filing a motion to eliminate or modify his alimony. Plaintiff cross-moved for an order holding defendant in violation of litigant's rights for his failure to make the January 2012 alimony payment and for an award of counsel fees in the event the court ordered a plenary hearing.

After an unsuccessful court-ordered mediation, a four-day plenary hearing was held on February 26 and 27, and May 29 and 30, 2013.1 Defendant and plaintiff both testified. Defendant also presented the testimony of Thomas P. Makoujy, his real estate expert, and Michael Soudry, his economic expert.

Defendant testified that in 2012, despite being retired, he received a bonus of $168,204 for work he did in 2011, and paid plaintiff her $50,000 share. He also stated that his employer required him to liquidate his stock appreciation rights (SAR), which were given "as part of [his] compensation in the past" in the gross amount of $58,373, and thereby left him with net earnings of approximately $40,000 after ordinary income taxes.2 In 2012, defendant was paid $348,129.48 after being required to liquidate his supplemental executive retirement plan (SERP), which was apparently deposited into his Wells Fargo account. He additionally received $49,359.44 in income from two pensions,3 consisting of approximately $30,000 from Social Security and about $31,000 in various interest income. He concluded his gross income for 2012 was $731,985.

Defendant testified that after 2012, he expected to receive a yearly income of about $110,000 which would be comprised of $49,459.16 from pensions, $30,0464 net from Social Security, and $25,000 in interest income from his Morgan Stanley accounts.5 He argued that the pension from his former employer should not be considered because he received that asset as equitable distribution.6 Thus, he maintained that his yearly gross income was about $91,710.7

Defendant also testified with regard to his real estate holdings. He and Kitty owned three rental properties in Oregon, which they bought in 2011 and 2012, as investments, not as income producers. After paying the mortgages and the property management fees, defendant expected a net rental income of approximately $1680 per year for all three properties.

Defendant also jointly owned three timeshares with Kitty, but he could not place a value on these assets. He testified that he and Kitty shared trustee duties over three Morgan Stanley 529 accounts, which would exclusively fund their children's college expenses. She would serve as trustee for two of the accounts and he the remaining account. He claimed that the trusts, worth "less than $300,000" at the time of the hearing, were funded by himself, Kitty, and the children's grandfather. He estimated that as of January 31, 2013, his Morgan Stanley accounts, some of which were in his wife's name as well, totaled $1,330,118.90. Kitty also had assets in her sole name, a personal account at Morgan Stanley worth $79,431, and two IRAs worth $329,726. Defendant also had two joint accounts with Kitty at Wells Fargo worth $450,912.62 as of December 31, 2012, and an account with Reid and Rudiger worth $135,473.83 solely in his name. In addition, defendant had unexercised stock options from his former employer, but at the time of the trial, they were "under water" and thus had no value, some of which were set to expire in 2014 and 2015. He also testified that he owned his employer's stock worth about $750,000.

Further, defendant had an annuity policy with Allianz that was worth approximately $555,632, with a cash surrender value of $410,957. Defendant purchased life insurance for his current wife. Moreover, he had a 401(k) account worth approximately $740,597. In sum, defendant's assets were approximately $5,252,896.

Plaintiff testified that she had no savings or debts besides a small home equity loan and lawyer's fees. She stated that she lived on the net income from alimony of about $108,000 per year, plus $11,300 in Social Security that she started receiving when defendant retired. She testified that she never sought employment because she did not want her alimony to be reduced in accordance with the PSA.

Plaintiff testified that she had $12,602 in monthly expenses, which included $983 for car related expenses, a tax reserve of $2883, and $527 for life insurance premiums. She also noted a $9000 per year clothing expense. She maintained that her lifestyle was not excessive and had not changed since the divorce. She acknowledged that it never occurred to her to save any money for retirement because she believed that alimony would continue until defendant's death, and thereafter she would receive life insurance benefits. The life insurance policies that plaintiff maintained on defendant's life were set to expire in September 2013, and February 2014. Defendant no longer maintains life insurance for plaintiff's benefit.

Defendant's real estate expert valued the parties' prior marital home at $1,050,000 as of August 25, 2012. His economic expert, Soudry, testified as to plaintiff's earning potential. He did not interview plaintiff, but rather relied on information about her in calculating her earning potential both as a teacher and an events coordinator8 from 1994, the year of the divorce, through 2006, when she would have reached the retirement age of sixty-two. Soudry determined that, as a teacher, she would have earned $460,000 during those years and would have been entitled to an annual pension of $10,979 beginning in 2006. He did not consider taxes. He also found that plaintiff could have earned $495,758 in accumulated income had she been a professional event planner.

After considering the testimony and the parties' post-hearing written submissions, the trial court issued a written opinion finding that defendant failed to establish a change of circumstances and denied his application for a termination or modification of alimony. The court reviewed the parties' incomes and expenses and found defendant "has insulated significant assets unfairly and therefore his income projections are neither trustworthy not believable." Particularly, the court rejected defendant's position that only his "earned income" should be considered in determining his alimony obligation. The court also rejected defendant's position that his current wife was a joint owner of all his assets because the idea was "hypothetical." However, the court only considered defendant's interest in his and Kitty's marital home as an asset in determining alimony because she contributed toward the purchase of the marital home.

The court rejected defendant's argument that his children's trust accounts could not be considered assets for the purposes of alimony modification. The court noted that "[w]hile it is true that these are now trust funds which cannot be lawfully invaded, it is likewise true that the [d]efendant knowingly hypothecated, transferred and/or otherwise intentionally insulated those assets which should have been appropriately considered in this post judgment analysis." Moreover, the court found that defendant's proposed "phantom formula" which included the division of alimony into earnings and bonus was "unfair" and "unreasonable."

The court accepted plaintiff's financial analysis regarding the imputation of income to defendant's accounts, which asserted that defendant had an income stream of $320,000 per year based on his total assets of $4,839,196, which did not include $30,169.16 from Social Security and $31,169.13 from one of defendant's pensions. The court also accepted plaintiff's claim that defendant insulated his assets from alimony by selecting a survivorship pension benefit for Kitty which reduced the pension amount. Plaintiff projected that defendant's income would have been $400,000 if he had not elected to take the reduced pension. The court found, without any analysis, that it "does not accept the [d]efendant's version of his projected 2013 income and accepts the financial analysis projected by . . . [p]laintiff." Thus, the court found that defendant failed to establish a change of circumstances sufficient to terminate or modify his alimony obligation from 2013 forward.

Additionally, the court did not impute any income to the plaintiff reasoning that "[t]here is no reasonable likelihood [p]laintiff can ever achieve economic self-sufficiency in the future." The court further explained

The marital lifestyle was established by the parties themselves when they agreed as to the alimony and equitable distribution in 1995. Defendant's application for termination of alimony is totally unrealistic as there is no ability for [p]laintiff to support herself. While she does enjoy some extravagances as to clothing and a large home, this formed the basis of their marital lifestyle. Therefore it comes as no surprise to . . . [d]efendant that she has continued in this [manner].

With respect to plaintiff's argument that the court should compel defendant to fund her life insurance, the court disagreed and relied on the parties' PSA which provided, "[defendant] shall pay to [plaintiff] as and for alimony on a permanent basis until either of them dies[.]" The court reasoned that ordinarily life insurance was an appropriate vehicle to secure defendant's alimony obligation, but it was already contemplated by the parties in their PSA. Thus, the court found that defendant had satisfied this obligation and no insurance or trust fund was required of him.

The court also considered plaintiff's request for payment of her counsel fees in the amount of 74,092.94. The court granted plaintiff a total of $52,500 in counsel fees pursuant to the factors set forth in Rule 5:3-5(c), expressly finding that defendant had acted in bad faith and had the capacity to pay plaintiff's counsel fees while she did not.9

On August 5, 2013, the judge signed an order memorializing his decision.10 These appeals followed.

II.

We begin with a review of the applicable legal principles that guide our analysis in the modification of defendant's alimony obligation. When a couple divorces, alimony may be awarded to either party. N.J.S.A. 2A:34-23.11 "Alimony relates to support and standard of living; it involves the quality of economic life to which one spouse is entitled, which then becomes the obligation of the other." Gnall v. Gnall, 222 N.J. 414, 429 (2015) (citing Mahoney v. Mahoney, 91 N.J. 488, 501-02 (1982)). Alimony is intended to enable a supported spouse to "achiev[e] 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). The court must also strive to maintain the marital lifestyle of the payor as well. Id. at 26 (citation omitted).

Alimony is "subject to review and modification on a showing 'changed of circumstances.'" Lepis v. Lepis, 83 N.J. 139, 146 (1980) (citations omitted) (citing Chalmers v. Chalmers, 65 N.J. 186, 192 (1974)); see also N.J.S.A. 2A:34-23. An increase or decrease in supporting spouse's income is "[o]ne 'changed circumstance' that warrants modification of the alimony order[.]" Innes v. Innes, 117 N.J. 496, 504 (1990) (citing Lepis, supra, 83 N.J. at 151).

Further, even though "the supporting spouse's current income is the primary source considered in setting the amount of the [alimony] award, his or her property, capital assets, and 'capacity to earn the support awarded by diligent attention to his [or her] business' are also proper elements for consideration." Id. at 503 (quoting Bonanno v. Bonanno, 4 N.J. 268, 275 (1950)); see also Crews, supra, 164 N.J. at 27 (finding that "a supporting spouse's current earnings are not determinative."). The earnings received from investments funded by an equitable distribution award can also be considered when determining a party's need or ability to pay. Lepis, supra, 83 N.J. at 154 (citation omitted). Similarly, the supporting spouse's income earned from investments should be considered. Miller v. Miller, 160 N.J. 408, 421-22 (1999). Consequently, a "supporting spouse cannot insulate his or her assets from the alimony calculus by investing those assets in a non-income producing manner." Id. at 422.

A trial judge has broad discretion in reviewing an application to modify alimony. Storey v. Storey, 373 N.J. Super. 464, 470 (App. Div. 2004) (citing N.J.S.A. 2A:34-23). "[E]very alimony application 'rests upon its own particular footing and [we] must give due recognition to the wide discretion which our law rightly affords to the trial judges who deal with these matters.'" Rolnick v. Rolnick, 262 N.J. Super. 343, 359 (App. Div. 1993) (quoting Martindell v. Martindell, 21 N.J. 341, 355 (1956)). For us to vacate a trial court's decision to modify alimony,

[we] must conclude that the trial court clearly abused its discretion, failed to consider all of the controlling legal principles, or [we] must otherwise be well satisfied that the finding[s] [were] mistaken, or that the determination could not reasonably have been reached on sufficient credible evidence present in the record after consideration of the proofs as a whole.

[Id. at 360 (citations omitted).]

"Consequently, when [we] conclude[] there is satisfactory evidentiary support for the trial court's findings, '[our] task is complete and [we] should not disturb the result[.]'" Elrom v. Elrom, 439 N.J. Super. 424, 433 (App. Div. 2015) (quoting Beck v. Beck, 86 N.J. 480, 496 (1981)). "'Deference is appropriately accorded to factfinding; however, the trial judge's legal conclusions, and the application of those conclusions to the facts, are subject to our plenary review.'" Ibid. (quoting Reese v. Weis, 430 N.J. Super. 552, 568 (App. Div. 2013)). "[L]egal conclusions are always reviewed de novo." Id. at 433-34 (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).

In this case, the court acknowledged that under the PSA, defendant had the right to seek modification of alimony upon his retirement. A PSA resolving the parties' distribution of assets "is no less a contract than an agreement to resolve a business dispute." Quinn v. Quinn, 225 N.J. 34, 45 (2016). However, "[s]ettlement agreements in matrimonial matters, being 'essentially consensual and voluntary in character, . . . [are] entitled to considerable weight with respect to their validity and enforceability' in equity, provided they are fair and just." Dolce v. Dolce, 383 N.J. Super. 11, 20 (App. Div. 2006) (alteration and omission in original) (quoting Petersen v. Petersen, 85 N.J. 638, 642 (1981)). When a dispute arises as to the application of a marital settlement agreement, a family court may apply basic principles of equity to resolve any existing ambiguities arising from the absence of clarifying language. See Guglielmo v. Guglielmo, 253 N.J. Super. 531, 541 (App. Div. 1992).

With these principles in mind, we address defendant's challenge regarding his alimony obligation for 2012 and the period from 2013 forward, the attorney fees award, and plaintiff's contention that defendant should maintain life insurance to protect her alimony interest.

A.

2012

Defendant contends that the trial court erred in finding that his alimony for 2012 should be based upon income of $731,985 and therefore ordering him to pay the full amount of alimony for that year. Specifically, he argues that the court incorrectly included the $40,000 SAR payment and $348,129 SERP payment, both of which he was forced to liquidate as a consequence of his retirement, as income for alimony purposes. We disagree.

The SAR payment is a form of deferred compensation from stock options. Pascale v. Pascale, 140 N.J. 583, 611 (1995). Thus, the judge was correct to include it as income in the year received.

As for the SERP payment, by the plan's title, it is to provide "supplemental" funds in "retirement" to executives. The plan, therefore, is in the nature of a pension. A pension plan is deferred compensation for services rendered. Barr v. Barr, 418 N.J. Super. 18, 33 (App. Div. 2011) (citation omitted). Defendant's argument that the SERP was simply a "return of assets" lacks merit. There can be no "return" when it was funded entirely by his employer as "supplemental retirement" income without any contributions by him.

Consequently, we discern no error in the court's finding that defendant failed to show a change in circumstances warranting modification of his 2012 alimony obligation.

2013 and Forward

Defendant contends that the court erred in deciding plaintiff's alimony by failing to determine the parties' standard of living during the marriage, and thus, a remand is necessary to assess her needs. We agree.

In deciding a request for alimony modification based on changed circumstances, the trial court should take steps to consider the standard of living the parties enjoyed during the marriage. Crews, supra, 164 N.J. at 35. Here, the parties settled their financial issues at the time of the divorce with a PSA, and the court did not make a marital lifestyle finding. Their mutual submission of CIS's was done so that should defendant retire, their standard of living at the time of the divorce could be determined. Weishaus v. Weishaus, 180 N.J. 131, 144 (2004) (trial court can approve a PSA that includes alimony "without rendering marital lifestyle findings at the time of entry of judgment[,]" but it must "capture and preserve the information that is available."). Thus, we remand so that the court can make this assessment in order to decide defendant's request for modification of alimony for the year 2013 forward.

On remand, there are a number of factors that the court must consider. Plaintiff is entitled to an increase in alimony if it is proven that circumstances changed such that her ability to support herself was substantially impaired. Crews, supra, 164 N.J. at 28. "A motion to modify alimony may not be used to enable a dependent spouse to share in the post-divorce good fortune of the supporting spouse." Id. at 29.

The record does not support plaintiff's claim that this is a case of "marital momentum" in which the divorce occurs just prior to defendant's career "taking off." The parties enjoyed an upper-middle-class lifestyle during their marriage, and had been separated for several years and, divorced for one, when defendant took a job that substantially increased his income and benefits. Plaintiff also admitted that her standard of living had not changed since the divorce. Therefore, she would not have been entitled to any increase in alimony based upon defendant's substantial post-divorce increase in income.

The trial judge also addressed the impact of defendant's joint assets with Kitty and assets solely in Kitty's name. The judge found Kitty's interest in the joint assets are "hypothetical," and analogized the situation to hypothetical tax consequences of a future sale of marital assets that should not be deducted from present value, citing Orgler v. Orgler, 237 N.J. Super. 342, 356 (App. Div. 1989), or hypothetical brokerage commissions that should not be deducted from the parties' equity in absence of evidence that the property will be sold, in accord with Wadlow v. Wadlow, 200 N.J. Super. 372 (App. Div. 1985). We agree. The assets produce current income that is under defendant's control and should be considered in his ability to pay alimony.

As for assets held solely in Kitty's name, the personal account at Morgan Stanley worth $79,431 and two IRAs worth $329,726, defendant has the burden of showing that the assets were solely funded by Kitty's income without defendant's assistance. Innes, supra, 117 N.J. at 504 (recognizing that the burden is on the party seeking modification); Miller, supra, 160 N.J. at 422 (finding that a spouse may not place assets into non-income producing assets to reduce support obligations). Thus, given the lack of supporting documentation showing that these accounts were indeed funded by Kitty, we agree that the judge properly considered them as income-producing assets.

We take a contrary view with respect to the education trust funds for defendant's and Kitty's children. The record shows that the funds were the result of contributions made by defendant, Kitty, and the children's grandfather. The accounts were only for educational purposes. This was consistent with defendant's payment of his children's education with plaintiff. The evidence clearly indicates that these accounts were not established to insulate defendant's income from alimony. Thus, the trial court should not have included the accounts for alimony consideration.

We also conclude that the judge erred by not setting forth a factual and legal basis, specifically for accepting plaintiff's financial analysis of defendant's projected income for 2013 and forward, and thereby rejecting defendant's analysis. In Esposito v. Esposito, 158 N.J. Super. 285, 290 (App. Div. 1978), the trial judge, referring to a written summation submitted by counsel after the completion of a hearing on equitable distribution and alimony, merely stated: "I adopt as my fact findings . . . the values as set forth in defendant's memorandum." We commented that there was "no articulation by way of factual preference or analysis to support the carte blanche acceptance of defendant's contentions as to values[,]" which was "not an adequate finding of fact which can stand judicial scrutiny on appeal." Id. at 291; see Rule 1:7-4. On remand, the court must explain its reasons for accepting a particular party's financial analysis.

The trial court recognized Kitty's premarital contributions to the marital home and therefore considered only defendant's half-interest share. Yet, it appears that the court accepted plaintiff's calculation of defendant's total asset without deducting Kitty's share of the property. Moreover, the court erred by attributing income to defendant's share of the equity in another home. Defendant, with his own earned funds, was entitled to purchase a marital home given that plaintiff received to the parties' marital home pursuant to the divorce. Further, defendant's current home is worth substantially less than the parties marital home, and there was no evidence that it was purchased to insulate his income from alimony.

The trial court also should not have considered the income of $70,800 per year from defendant's 401(k). The account was earned entirely post-divorce, and because it was a voluntary, pre-tax savings plan, the amount that represents his capital investment should be backed out with only the interest generated considered. Although defendant voluntarily deferred a portion of his income each year into a 401(k), had defendant's alimony obligation been reconsidered during his working years, he would not have been able to shield a portion of his income from the alimony calculus by contributing to a 401(k). Child Support Guidelines, Pressler & Verniero, Current N.J. Court Rules, Appendix IX-B at www.gannlaw.com (2017) ("Voluntary payments to Deferred Compensation Plans (e.g., 401K, 414B), Keoughs, and IRA's should not be deducted from gross income"). Defendant made his alimony payment to plaintiff each year he deferred his 401(k) income. Thus, defendant's income had already been considered for alimony purposes in the years he earned it. There would be no basis to take an investment, divide its capital by defendant's life expectancy, and impute that amount of income to defendant each year. There is no reason to apply that logic to a 401(k). Thus, the court improperly attributed $70,800 per year to defendant's available income. The court should have considered only the interest earned on this account.

Further, the court accepted plaintiff's calculations of interest earned on defendant's assets without explanation. There was no testimony concerning defendant's investment strategy and whether it was reasonable or prudent.

B.

Defendant argues that the trial court erred in ordering him to pay $52,500 toward plaintiff's counsel fees, and seeks remand for reconsideration. We agree.

A court in a matrimonial action may award a party reasonable attorney's fees and costs, and in making that determination, "shall consider the factors set forth in the court rule on counsel fees, the financial circumstances of the parties, and the good or bad faith of either party." N.J.S.A. 2A:34-23. Rule 5:3-5(c) sets forth the factors the court should consider before awarding attorney's fees

(1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties both during and prior to trial; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.

The decision to award attorney fees "in a matrimonial action rests in the discretion of the trial court[,]" Addesa v. Addesa, 392 N.J. Super. 58, 78 (App. Div. 2007), and will be disturbed "only on the 'rarest occasion,' and then only because of [a] clear abuse of discretion." Strahan v. Strahan, 402 N.J. Super. 298, 317 (App. Div. 2008) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)). "An abuse of discretion arises when a decision is made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis." Jacoby v. Jacoby, 427 N.J. Super. 109, 116 (App. Div. 2012) (citation and internal quotation marks omitted).

Success in the litigation, while a factor, is not "a prerequisite for an award of counsel fees." J.E.V. v. K.V., 426 N.J. Super. 475, 492 (App. Div. 2012). "'Fees in family actions are normally awarded to permit parties with unequal financial positions to litigate (in good faith) on an equal footing.'" Id. at 493 (quoting Kelly v. Kelly, 262 N.J. Super. 303, 307 (Ch. Div. 1992)).

Further, where one party has substantial income and the other does not, "[t]hat disparity alone would suggest some entitlement . . . to a fee allowance." Lavene v. Lavene, 148 N.J. Super. 267, 277 (App. Div.), certif. denied, 75 N.J. 28 (1977). However, a disparity in incomes cannot be the sole basis for an award. See Accardi v. Accardi, 369 N.J. Super. 75, 90-91 (App. Div. 2004).

Considering these principles, we remand for further consideration. There is no dispute that defendant has significantly more income and assets that allow him a much greater ability to pay attorney's fees. And, we do not quarrel with the court's finding that defendant's impeding of discovery to gain an unfair tactical advantage was bad faith. Nevertheless, the record does not support the trial court's finding of bad faith that defendant "intentionally" failed to include his 2011 income tax return with the CIS he filed on January 5, 2012. The CIS was submitted before the 2011 tax return was filed and due.

Moreover, the court noted that defendant's claim for termination or modification of alimony had been denied, and plaintiff's claim for continued support had been granted. Following our remand, this may not be the case. Further, the court failed to note, when considering attorney's fees, that it denied plaintiff's request to order defendant to maintain life insurance or a trust to secure alimony.

III.

In her cross-appeal, plaintiff maintains that the judge erred in failing to require defendant to maintain life insurance or a trust to protect her alimony interest. We are unpersuaded.

The PSA only required defendant to maintain insurance for plaintiff's benefit so long as it is provided to him by his employer, and gave plaintiff the option to purchase additional life insurance at her own cost. Plaintiff did acquire two polices that were set to expire when defendant turned seventy-years old in 2013.

Plaintiff's reliance on Jacobitti v. Jacobitti, 135 N.J. 571 (1994), is misplaced. There, the Court held that the husband was required to create a trust from which alimony payments were to be made to the wife in the event he predeceased her because the husband was too old to obtain life insurance and the wife was totally dependent upon alimony due to her multiple sclerosis. Id. at 574-75.

In this case, plaintiff has been placed in a significantly better financial situation post-divorce. She has received over two million dollars in alimony since her divorce as well as ownership of a house valued between $850,000 and $1,000,000. There was no apparent reason she could not have planned for the termination of defendant's life insurance obligation when it was no longer available through his employer in accordance with the PSA. Hence, we agree with the trial court that defendant fulfilled his obligation and should not be required to purchase more insurance or fund a trust to protect plaintiff's alimony.

In sum, we affirm the order denying the modification of alimony for 2012, and denying the request that defendant maintain life insurance or a trust for plaintiff. We reverse the denial of modification of alimony from 2013 forward as well as the award of attorney's fees and cost, and remand for further fact finding and proceedings consistent with this opinion. We do not retain jurisdiction.

1 After the plenary hearing was scheduled, defendant filed another motion to eliminate or modify his alimony obligation effective January 1, 2012. On January 22, 2013, that motion was denied without prejudice pending the plenary hearing. The trial judge noted in his Statement of Reasons that it was "bad faith" by defendant to seek the same relief that was denied previously on March 9, 2012.

2 Defendant indicated that his SAR rights would have expired if not exercised.

3 The pensions are from his employment at retirement.

4 The gross $35,512.40 Social Security income was reduced by defendant's Medicare deductions.

5 Defendant testified that his income was $104,972.44, but based upon the income sources he mentioned, the amount was approximately $110,000.

6 "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 the share for the purposes of determining alimony." Innes v. Innes, 117 N.J. 496, 505, 515 (1990). Because the former employer's pension was awarded as equitable distribution, he is correct in his position that it should not be considered in the determination of alimony. However, it appears that the judge correctly excluded the pension from his calculations.

7 Defendant testified that this figure was $86,000 to $88,000, but it should have been $91,710 considering the amounts set forth in his testimony.

8 Plaintiff testified that she helped in organizing charity events as a volunteer.

9 The court had awarded $10,000 pendente lite, thus, a balance of $42,500 was owed when final judgment was entered.

10 Defendant's request for a stay was denied by the trial court and our court. The trial court also held defendant in violation of litigant's rights for his failure to pay alimony and counsel fees under its August 5, 2013 order.

11 Subsequent to the trial court's decision, the statute was substantially revised effective September 10, 2014. The changes, however, have no bearing on our analysis as modification of permanent alimony is "based upon the law," N.J.S.A. 2A:34-23(d), and has prospective application, and the parties' PSA contains no recitations of whether the law at the time of the divorce or then-existing law at the time modification is sought applies. See Landers v. Landers, 444 N.J. Super. 315, 320 (App. Div. 2016).