LISA LOMBARDI v. ANTHONY A. LOMBARDI

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

LISA LOMBARDI,

Plaintiff-Appellant/

Cross-Respondent,

v.

ANTHONY A. LOMBARDI,

Defendant-Respondent/

Cross-Appellant.

___________________________________________

September 12, 2016

 

Argued March 1, 2016 Decided

Before Judges Espinosa, Rothstadt, and Currier.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Mercer County, Docket No. FM-11-113-11.

Mark H. Sobel argued the cause for appellant/cross-respondent (Greenbaum, Rowe, Smith, & Davis LLP, attorneys; Mr. Sobel, of counsel and on the brief; Lisa B. DiPasqua, on the briefs).

Brian G. Paul argued the cause for respondent/cross-appellant (Szaferman, Lakind, Blumstein & Blader, P.C., and Stark & Stark, attorneys; Mr. Paul, of counsel and on the briefs).

The opinion of the court was delivered by

ROTHSTADT, J.A.D.

This appeal requires us to address the calculation of alimony where the parties relied on only a fraction of their household income to pay their monthly expenses and regularly saved the balance during the course of their marriage. It is well-established that the accumulation of reasonable savings should be included in alimony to protect the supported spouse against the loss of alimony. See Jacobitti v. Jacobitti, 135 N.J. 571, 582 (1994); Martindell v. Martindell, 21 N.J. 341, 354 (1956); Davis v. Davis, 184 N.J. Super. 430, 437 (App. Div. 1982). In this case, we consider whether the parties' history of regular savings as part of their marital lifestyle requires the inclusion of savings as a component of alimony even when the need to protect the supported spouse does not exist.

The Family Part found that the monthly savings were part of the marital lifestyle, but excluded the amount from its calculation of alimony because savings were not necessary to ensure future payment of alimony. We disagree with the court's decision and hold that regular savings must be considered in a determination of alimony, even when there is no need to create savings to protect the future payment of alimony.

Both plaintiff Lisa Lombardi and defendant Anthony A. Lombardi appeal from portions of their final judgment of divorce (FJOD), entered after a twenty-eight day trial. Plaintiff challenges the court's alimony award based upon its rejection of the savings element despite it being undisputed that during the course of the marriage the parties "established [a] practice of savings" that was "the largest component of [their] marital lifestyle." As to child support, she claims the court's "allocation . . . of the children's expenses [does] not allow [them] to share in their father's economic good fortune." Plaintiff also challenges the court's equitable distribution of two accounts, and its denial of her request for counsel fees and costs. Defendant avers that the FJOD should be affirmed in all respects, but argues that, "in the event any portion of [it] is reversed and remanded," the court's failure to provide him with a credit for "the active appreciation" of the funds in one of the two accounts disputed by plaintiff warrants reversal.

We have considered the parties' arguments in light of the record and our review of the applicable legal principles. We vacate and remand for reconsideration of the determinations as to alimony, child support, the equitable distribution of the two subject accounts, and counsel fees and costs.

I.

The parties began dating in college, and married in May 1990, three years after their graduation. Three children were born of the marriage, now ages twenty, eighteen, and fifteen. Plaintiff filed a complaint for divorce on August 2, 2010, and the court entered the FJOD on March 7, 2014.

At the time of the FJOD's entry, the parties were forty-eight-years-old and healthy, and defendant was employed full-time. Plaintiff, who holds a bachelor's degree in marketing, previously worked as the vice president of desktop publishing at Bear Stearns, reaching a salary of $80,000 per year, when the parties agreed that she would leave the workforce to become a full-time homemaker after the birth of their first child. As the children grew older, plaintiff obtained a certification as a fitness instructor and now teaches classes part-time at local fitness clubs for a gross income of approximately $10,000 per year. She is the children's parent of primary residence and continues to reside in the marital home.

Defendant has a bachelor's degree in finance, a master's degree in business administration, and is a chartered financial analyst. During the course of the marriage, he worked for a number of investment firms as an analyst or portfolio manager. He accepted a position with his current employer in 2004, at a base salary of $250,000 with a $1,125,000 guaranteed bonus for two years, and is now a vice president, senior portfolio manager. He was paid total compensation ranging from $1,087,000 to $2,275,000 during the five years immediately preceding the filing of the divorce complaint.

Despite defendant's substantial earnings, the parties routinely saved the better part of his salary. The portion of his earnings used for the family's expenses allowed them to enjoy a comfortable, but not extravagant, standard of living. The decision to not "live a very lavish lifestyle" was the result of the parties' shared desire to budget most of their income during the marriage. According to plaintiff, after watching her parents struggle financially as a result of unreimbursed health care expenses, she wanted to ensure that she had enough saved for her and defendant's care as they grew older so that they could still pay for their children's college education and "live comfortably" after retirement without the need to "worry" about finances or "change [the family's] lifestyle." According to defendant, although he was still working, they saved so that he could retire at forty-five, when the family would have accumulated $5 million in assets, a sum sufficient to generate enough annual income to meet the family's needs at their current lifestyle.

The parties spent $22,900 per month in order to maintain their lifestyle, exclusive of savings and gifts to the children. Plaintiff estimated that the parties saved approximately $67,000 per month. Consistent with their lifestyle choice, they did not often buy extravagant clothing or dine at expensive restaurants. Defendant drove a BMW and then a Camaro, while plaintiff drove a Buick Enclave. The family usually spent vacations locally, in New York's Catskill Mountains or in Cape May, and sometimes took ski vacations during the children's winter break. They never hired domestic help or sent the children to daycare.

In addition to their savings, which totaled approximately $4.18 million at the time of the FJOD,1 the parties owned the marital home. They established and funded college savings accounts for all three children, and avoided debt for the most part at the time of the divorce complaint, they had a mortgage on the marital home, a lease on one car, and a loan on another.

The parties eventually settled issues of custody and parenting time, agreed that plaintiff would be entitled to an award of permanent alimony, although they disputed the amount, and to an equal division of the marital estate by equitable distribution, except as to one joint account and another account opened by defendant in his own name. They also did not resolve their claims for counsel fees and costs. These remaining issues were addressed during the parties' twenty-eight day trial that began in December 2011 and concluded in 2014 when the court placed its oral decision on the record over the course of four days.

The court entered the FJOD and the parties filed their respective appeals from certain provisions thereof.

II.

Our review of the Family Part's determination in dissolution matters is limited. We accord deference to decisions of the Family Part based on its expertise in matrimonial matters. See Cesare v. Cesare, 154 N.J. 394, 412 (1998). We will not disturb its decisions if they are supported by substantial credible evidence and are consistent with applicable law. Ibid.; see also Gnall v. Gnall, 222 N.J. 414, 428 (2015). This standard applies equally to its decisions regarding alimony, see J.E.V. v. K.V., 426 N.J. Super. 475, 485 (App. Div. 2012), child support, see J.B. v. W.B., 215 N.J. 305, 325-26 (2013), equitable distribution, see La Sala v. La Sala, 335 N.J. Super. 1, 6 (App. Div. 2000), certif. denied, 167 N.J. 630 (2001), and counsel fees. See Williams v. Williams, 59 N.J. 229, 233 (1971); Barr v. Barr, 418 N.J. Super. 18, 46 (App. Div. 2011). However, we owe no special deference to the court's legal conclusions. See D.W. v. R.W., 212 N.J. 232, 245-46 (2012).

III.

A.

We begin our review by addressing the trial court's alimony award. According to plaintiff, she required $16,291 per month to support herself and the three children at a standard of living comparable to that enjoyed during the marriage, exclusive of savings. She sought an additional $30,000 per month for savings.2 Plaintiff requested an award of child support in the amount of $5000 per month and a requirement that defendant be solely responsible for paying certain expenses for the children, such as extracurricular activities, tutoring, summer camps, cars, and auto insurance.

After considering the evidence, the court established a permanent award of monthly alimony in the amount of $7600, without including an amount for savings, even though it found it was a component of the marital lifestyle. It determined that plaintiff required alimony to meet her needs at the marital standard of living, which the court characterized as a "modest middle-class lifestyle," and found that the parties did not dispute the monthly amount needed to meet plaintiff and the children's expenses. The court concluded that plaintiff's proposed budget, without savings, for herself and the children was largely reasonable and consistent with the evidence, and approved a monthly budget of $14,516, excluding savings. After deducting the $5000 it was awarding in child support, the $3610 monthly after-tax income it estimated could be generated by investment of plaintiff's equitable distribution share, and the $583 after-tax monthly earnings from her part-time work, the court found plaintiff would require another $5323 to meet her budget. Accounting for taxes, the court concluded that the gross award of $7600 per month would cover the shortfall. The court then determined that defendant earned a sufficient amount to cover plaintiff's budget, including the requested savings component, and his own expenses.

In reaching its decision, the court observed that each party would have the benefit of half of the roughly $5.5 million marital estate after equitable distribution, providing a significant opportunity for investment and saving for unanticipated expenses, although defendant's considerable income and earning potential conferred on him a greater opportunity than plaintiff. Moreover, the children's college expenses were already provided for in amply-funded custodial accounts, and defendant was responsible for maintaining the children's medical, dental, and vision coverage and paying all uncovered costs over $250 per child per year. Finally, the parties had no debt, and plaintiff, the parent of primary residence, would retain the marital residence unencumbered by a mortgage.3

As for the savings issue, the court observed that the parties' "earning[s] exceeded consumption by approximately $87,000 per month on average." It noted that those savings could be understood as a "component of lifestyle" in the sense that the parties had habitually saved the better part of their income during the marriage, whether, as defendant claimed, to provide for an early retirement or, as plaintiff testified, to enhance the couple's economic security more broadly, and lived a generally frugal lifestyle as a result. Nonetheless, the court concluded that including savings as a component of an alimony award was only warranted to the extent it was necessary to ensure a dependent spouse's economic security in the face of a later modification or cessation of support, which were not issues here. However, it identified factors it found allowed plaintiff to accumulate savings through means other than increased alimony, though not to the extent the parties saved during the marriage. It cited to, among other factors, some "overlap" in the alimony and child support budgets, plaintiff's right to claim the children as exemptions for tax purposes, and "her ability to work and retain earnings to use for saving . . . because of the maturation of the children . . . such that she would have more time to spend working if she chose to do so." The court stated

Furthermore, from a budget standpoint the plaintiff will have no obligation for any college expense, no obligation for any unreimbursed medical or health expense, all extracurricular activities are covered by the above-guideline . . . award, and if she chose to work more that she would be protected against any claim that her alimony should be reduced or that she has lesser need.

[(Emphasis added).]

Also, the court noted that defendant had been ordered to maintain a life insurance policy to secure his obligation to plaintiff and the children in case of his death, and determined defendant's substantial assets and income therefrom made it unlikely he would obtain a modification of his support obligation in the future.

The court concluded by summarizing its reasons for not including a savings component in its alimony calculation

The [c]ourt finds that a permissible savings component which it elected not to do or not to include was because there are potentials for [plaintiff] to accumulate, earn, and otherwise be protected from a reduction by virtue of, one, reasons having to do with the current budget and the room in the budget to still save, the ability to work more without worry about a reduction in alimony, the investment opportunity that might enhance the return on the over $2 million that she will receive, the life insurance to protect against the death of the defendant, and the likelihood of a continued appreciation and increase in assets and earnings that . . . would protect her against any arbitrary . . . reduction in alimony based upon early retirement or otherwise.

B.

Plaintiff argues the court erred in excluding a savings component from the alimony award because, among other reasons, the award permitted defendant to continue to enjoy the marital standard of living but deprived plaintiff of the same opportunity. She argues her position is supported by the fact that, although the case information statement form required by our courts did not initially include savings as a budget category, that category has since been added, reflecting the courts' view that savings is a fundamental element of the family lifestyle that must be accounted for in a support award. We agree.

Alimony is authorized by N.J.S.A. 2A:34-23 and is governed by the factors enumerated in N.J.S.A. 2A:34-23(b).4 It exists to "permit [one spouse] to share in the economic rewards occasioned by [the other's] income level (as opposed merely to the assets accumulated), reached as a result of their combined labors, inside and outside the home." Gugliotta v. Gugliotta, 160 N.J. Super. 160, 164 (Ch. Div.), aff'd, 164 N.J. Super. 139 (App. Div. 1978); see also Konzelman v. Konzelman, 158 N.J. 185, 195 (1999). "[A]limony is neither a punishment for the payor nor a reward for the payee. . . . It is a right arising out of the marriage relationship to continue to live according to the economic standard established during the marriage . . . ." Aronson v. Aronson, 245 N.J. Super. 354, 364 (App. Div. 1991). "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, supra, 222 N.J. at 429.

A proper alimony award "assist[s] the supported spouse in achieving a lifestyle that is reasonably comparable to the one enjoyed while living with the supporting spouse during the marriage." Tannen v. Tannen, 416 N.J. Super. 248, 260 (App. Div. 2010) (quoting Steneken v. Steneken, 183 N.J. 290, 299 (2005)), aff'd o.b., 208 N.J. 409 (2011). "[A] judge awarding alimony must methodically consider all evidence to assure the award is 'fit, reasonable and just' to both parties, N.J.S.A. 2A:34-23, and properly balances each party's needs, the finite marital resources, and the parties' desires to commence their separate futures, N.J.S.A. 2A:34-23(c)." Gnall v. Gnall, 432 N.J. Super. 129, 149 (App. Div. 2013), rev'd on other grounds, 222 N.J. 414 (2015).

The goal of alimony is to assist the supported spouse in achieving a lifestyle "reasonably comparable" to the one enjoyed during the marriage. Steneken, supra, 183 N.J. at 299; see also Crews v. Crews, 164 N.J. 11, 17 (2000); Cox v. Cox, 335 N.J. Super. 465, 473 (App. Div. 2000). "The importance of establishing the standard of living experienced during the marriage cannot be overstated." Crews, supra, 164 N.J. at 16. It is the "touchstone for the initial alimony award." Ibid.

In determining the marital lifestyle, the trial court looks at various elements including "the marital residence, vacation home, cars owned or leased, typical travel and vacations each year, schools, special lessons, and camps for [the] children, entertainment (such as theater, concerts, dining out), household help, and other personal services." Weishaus v. Weishaus, 360 N.J. Super. 281, 290-91 (App. Div. 2003), rev'd in part on other grounds, 180 N.J. 131 (2004). The ultimate determination must be based not only on the amounts expended, but also what is equitable. Glass v. Glass, 366 N.J. Super. 357, 372 (App. Div.), certif. denied, 180 N.J. 354 (2004).

"[A]n appropriate rate of savings . . . can, and in the appropriate case should, be considered as a living expense when considering an award of . . . maintenance." Id. at 378 (second alteration in original) (quoting In re Marriage of Weibel, 965 P.2d 126, 129-30 (Colo. App. 1998)). Thus, the court can take into account the marital standard of living and allow the supported spouse to save for the future. See id. at 379; see also Capodanno v. Capodanno, 58 N.J. 113, 120 (1971). This is particularly true when the supporting spouse can afford any amount paid to the supported spouse. Glass, supra, 366 N.J. Super. at 379.

A spouse's need for savings has long been recognized as a component of alimony, see Martindell, supra, 21 N.J. at 354, that allows for the accumulation of "reasonable savings to protect [the supported spouse] against the day when alimony payments may cease because of [the death of the supporting spouse] or change in circumstances." Davis, supra, 184 N.J. Super. at 437 (quoting Khalaf v. Khalaf, 58 N.J. 63, 70 (1971)). Savings have been used for such security in lieu of directing the supporting spouse to keep a life insurance policy or establish a trust. See Jacobitti, supra, 135 N.J. at 582 (upholding an order to create a trust in lieu of life insurance to ensure "continuing alimony payments for the life of the dependent spouse"); Davis, supra, 184 N.J. Super. at 436-40 (upholding an order directing the supporting spouse to obtain and designate the dependent spouse as the beneficiary of a life insurance policy). In short, savings has been a relevant and appropriate factor to be considered in the establishment of a reasonable and equitable alimony award because the amount of support awarded is subject to review and modification upon a showing of a change of circumstances, which could result in the supported spouse being incapable of supporting himself or herself. See Davis, supra, 184 N.J. Super. at 437.

However, the protection of income being derived through alimony is not the only reason why a supported spouse requires savings, especially where regular savings have been part of the established marital lifestyle. "[A]n appropriate rate of savings to meet needs in the event of a disaster, to make future major acquisitions such as automobiles and appliances, and for retirement can, and in the appropriate case should, be considered as a living expense when considering an award of . . . [alimony]." Weibel, supra, 965 P. 2d at 129-30; see also Glass, supra, 366 N.J. Super. at 378.

The most "appropriate case" in which to include a savings component is where the parties' lifestyle included regular savings. Because it is the manner in which the parties use their income that is determinative when establishing a marital lifestyle, see Weishaus, supra, 180 N.J. at 145, there is no demonstrable difference between one family's habitual use of its income to fund savings and another family's use of its income to regularly purchase luxury cars or enjoy extravagant vacations. The use of family income for either purpose over the course of a long-term marriage requires the court to consider how the money is spent in determining the parties' lifestyle, regardless of whether it was saved or spent on expensive purchases. The fact that the payment of the support ultimately is protected by life insurance or other financial tools, does not make the consideration of the savings component any less appropriate.

The Supreme Court has recognized the need to consider regular savings in determining a marital lifestyle by including a line item for monthly savings in Schedule C of the case information statement parties must file in family matters.5 See R. 5:5-2; see also Family Part Case Information Statement, Pressler & Verniero, Current N.J. Court Rules, Appendix V(D) to R. 5:5-2 (2016). While the original case information statement form did not include a line item for savings, it was changed two years after implementation to add or subtract certain budget items so that the form would "more closely track [a family's] actual expenses." Report of the Supreme Court Committee on Family Division Practice, 118 N.J.L.J. 117, 130-31 (July 24, 1986). The Supreme Court's Committee on Family Division Practice recommended a "savings and investments" item, reasoning that "[a]lthough such a line might be viewed as subject to abuse, [it] would still appear appropriate because in many households savings and investments represent a fundamental portion of an ongoing budget." Id. at 131. The Court adopted that recommendation and, as stated in Rule 5:5-2(e), the revised form is required in all actions involving alimony, and copies must be preserved by the parties as evidence of the marital standard of living at the time the award was made. R. 5:5-2(e)(3).

We reject defendant's assertion that the court correctly addressed the savings component through equitable distribution of the parties' accounts. The argument runs afoul of the rule that "equitable distribution determinations are intended to be in addition to, and not as substitutes for, alimony awards," which are awarded to provide for the maintenance of the marital lifestyle post-dissolution. Steneken, supra, 183 N.J. at 299. Moreover, it is not equitable to require plaintiff to rely solely on the assets she received through equitable distribution to support the standard of living while defendant is not confronted with the same burden. As expressed under the alimony statute's current version, the court must recognize that "neither party ha[s] a greater entitlement to that standard of living than the other." N.J.S.A. 2A:34-23(b)(4).

We therefore hold that the Family Part must in its assessment of a marital lifestyle give due consideration to evidence of regular savings adhered to by the parties during the marriage, even if there is no concern about protecting an alimony award from future modification or cessation upon the death of the supporting spouse.6 We recognize that the majority of other jurisdictions have not extended their courts' consideration of the savings component of an alimony award to the extent we do today, see Glass, supra, 366 N.J. Super. at 377-78 (surveying cases awarding retirement savings as part of alimony award), but we believe the result is equitable, see id. at 372, and consistent with our statute.

Having said that, we caution that a court is equally obligated to consider the marital lifestyle and the financial situation of the parties post-divorce as set forth in the statute, and "[n]o factor sh[ould] be elevated in importance over any other factor unless the court finds otherwise, in which case the court sh[ould] make specific written findings of fact and conclusions of law in that regard." N.J.S.A. 2A:34-23(b).

We recognize that the court attempted to identify areas through which plaintiff might be able to save money at some level, but the court's suggestions did not amount to a consideration of savings as part of the parties' standard of living, especially where there was no dispute that the parties saved the lion's share of the family's income or that defendant had the ability to continue to fund such savings. We are therefore constrained to vacate the alimony award and remand for further consideration by the Family Part consistent with our holding today, with the understanding that we intimate no suggestion as to the outcome of that reconsideration by the court.

IV.

A.

Turning to child support, the court found that an award supplementing the basic guideline amount would be appropriate, but noted that, notwithstanding testimony from plaintiff as to some of the children's reasonable needs in excess of that amount, she had failed to present specific evidence supporting a greater award. The court described the evidence as "some testimony about the potential need for orthodont[ia] expenses for the children, clothing expenses of the teenage girls as they grow, flexibility in the entertainment budget, that [one child] may be driving in two years and there may be a need for a vehicle and insurance." The court found plaintiff failed to present a separate budget of the children's "reasonable needs in excess of the guideline amount," but nevertheless determined that, "even without . . . break[down] of the reasonable needs," it could "fill in the gap by adding to expenses partially covered and by recognizing and reflecting lifestyle opportunities."

The court agreed with plaintiff that a $5000 child support award was appropriate, stating

So the court is satisfied that the request for a $5,000 child support amount which represents doubling almost of the guideline amount is reasonable, is not excessive, is reflective or can be of lifestyle opportunities, is reflective of the standard of living of both parents who really don't have extravagant expenses, but nonetheless allows for non-essential items that are a reasonable and in the children's best interest.

It doesn't produce a windfall to the child nor does it infringe on the legitimate right of either parent to determine an appropriate lifestyle of the child.

So the [c]ourt will be ordering that the cost of all extracurricular activities [for] the children that they are currently engaged in, any additional activities they subsequently engage in, and any expansion of existing activities shall be paid from the child support ordered of $5,000 per month.

The court concluded the award could also pay for the children's vehicles, insurance, and other lifestyle opportunities. The court also ordered plaintiff to pay for the first $250 in unreimbursed medical expenses for each child per year, with defendant to be responsible for all expenses in excess of that amount, and ordered defendant to pay all college-related expenses not paid for by the children's college savings accounts.

B.

Our vacating the alimony award necessitates that the child support award also be reconsidered if the Family Part concludes on remand that the amount of alimony awarded should be changed. As the child support guidelines specifically instruct: "If child support and alimony . . . are being determined simultaneously (for the same family), the court should set the alimony . . . first and include that amount in the recipient's gross income . . . before applying the child support guidelines . . . ." Considerations in Use of Child Support Guidelines, Pressler & Verniero, Current N.J. Court Rules, Appendix IX-B to R. 5:6A [hereinafter Appendix IX-B] (emphasis omitted).

Plaintiff argues there are additional reasons why the child support should be altered. She contends that, absent an independent requirement that defendant pay for the expenses she sought, the child support award is insufficient to allow the children to enjoy the marital standard of living and adequately share in the benefits of their father's success. She also asserts the court failed to consider any of the required statutory factors and ignored her extensive testimony as to the children's activities and associated expenses, including their daughters' dance lessons, cheerleading, and summer camp, and their son's need for a car. Finally, she argues that the children's reasonable needs will only increase as they grow older, and that defendant can easily afford to provide for them without any impact on his own standard of living.

Parents share a responsibility to support their children, Pascale v. Pascale, 140 N.J. 583, 591 (1995), not only to the extent of the children's basic needs, but also to permit them to share in the benefit of their parents' financial success. Isaacson v. Isaacson, 348 N.J. Super. 560, 579-80 (App. Div.), certif. denied, 174 N.J. 364 (2002). Ordinarily, that responsibility is allocated between divorcing parents through the application of our child support guidelines (the guidelines). Caplan v. Caplan, 182 N.J. 250, 264 (2005).

A support award made pursuant to the guidelines represents "the marginal amount spent on children . . . for housing, food, clothing, transportation, entertainment, unreimbursed health care up to and including $250 per child per year, and miscellaneous items." Considerations in the Use of Child Support Guidelines, Pressler & Verniero, Current N.J. Court Rules, Appendix IX-A, 8 to R. 5:6A [hereinafter Appendix IX-A] (emphasis omitted). The basic support obligation contemplated by the guidelines includes the cost of children's participation in recreational and social activities, hobbies, and lessons. Ibid. Child-care expenses, "including [the cost of] day camp in lieu of child care," is to be added into the calculation of support under the guidelines. Id. 9(a). Other "predictable and recurring expenses for children that may not be incurred by average or intact families" can also be added to the basic support obligation but "must be approved by the court." Id. 9(d)(emphasis added). Examples of such expenses include "summer camps, music or art lessons, sports clinics, study abroad, and the provision of transportation for a child who drives." Walton v. Visgil, 248 N.J. Super. 642, 650 (App. Div. 1991). Extraordinary expenses that are not predictable and recurring, however, "should be shared by the parents in proportion to their relative incomes (i.e., the sharing of these expenses should be addressed in the general language of the order or judgment)." Appendix IX-A, supra, 9(d).

Income for child support purposes includes income from employment, investment, and alimony. See Appendix IX-B, supra. When a parent's income exceeds the maximum amount listed in the guidelines (currently $187,200), the court must apply the guidelines up to $187,200, and then determine whether any supplementary award is appropriate. See Connell v. Connell, 313 N.J. Super. 426, 431 (App. Div. 1998); Appendix IX-A, supra, 20. In cases where the court decides to supplement the guidelines award, it must consider the factors listed in N.J.S.A. 2A:34-23(a), Caplan, supra, 182 N.J. at 271, and provide "clearly delineated and specific findings addressing the statutory factors." Loro v. Colliano, 354 N.J. Super. 212, 220 (App. Div.), certif. denied, 174 N.J. 544 (2002).

The factors to be considered are

(1) Needs of the child;

(2) Standard of living and economic circumstances of each parent;

(3) All sources of income and assets of each parent;

(4) Earning ability of each parent, including educational background, training, employment skills, work experience, custodial responsibility for children including the cost of providing child care and the length of time and cost of each parent to obtain training or experience for appropriate employment;

(5) Need and capacity of the child for education, including higher education;

(6) Age and health of the child and each parent;

(7) Income, assets and earning ability of the child;

(8) Responsibility of the parents for the court-ordered support of others;

(9) Reasonable debts and liabilities of each child and parent; and

(10) Any other factors the court may deem relevant.

[N.J.S.A. 2A:34-23(a).]

"[T]he custodial parent bears the burden of demonstrating the reasonableness of [any extraordinary] expenses." Strahan v. Strahan, 402 N.J. Super. 298, 310-11 (App. Div. 2008) (quoting Accardi v. Accardi, 369 N.J. Super. 75, 88 (App. Div. 2004)). Thus, the parent must provide information about the expenses he or she deems necessary to "allow the children to share in the other parent's financial gain." Walton, supra, 248 N.J. Super. at 650. "A mere listing of the purported expenses, without more, is insufficient." Accardi, supra, 369 N.J. Super. at 87.

Ultimately, the goal is for the court to make an award that meets the children's reasonable needs in light of the family's standard of living during the marriage and the children's best interests. Isaacson, supra, 348 N.J. Super. at 580-82. In conducting the requisite fact-sensitive analysis, the judge must ultimately determine the best interest of the child. Pascale, supra, 140 N.J. at 594. A judge may not simply accept the custodial parent's claims concerning the child's needs "without any determination of what was essential or non-essential or any judgment regarding the accuracy and appropriateness of those needs." Strahan, supra, 402 N.J. Super. at 310.

Though plaintiff complains that the child support did not account for many of the children's needs and activities, many were the type of expenses contemplated as part of the basic guidelines award, at least up to the maximum income level. Also, the court correctly observed that plaintiff failed to provide proof of the legitimacy and reasonableness of the expenses she claimed should either be added to the support award or paid by defendant directly.

We agree with the trial court that plaintiff's proofs were inadequate and that certain expenses she claimed were defendant's responsibility were properly subsumed in the child support award. We find, however, that our ability to review the court's determination is hampered by the court's actions as well.

Nonetheless, we conclude the establishment of child support was flawed because the trial court did not identify the basis for its determination that an award of twice the guidelines amount was sufficient to cover the children's expenses. The court failed to follow the methodology for determining a high-income family's child support obligation, and did not provide specific findings that would enable us to understand the basis for its determination of the child's needs.

Therefore, on remand, the court must reconsider its child support award by incorporating any change in alimony and then carefully following the proper methodology for determining child support in high-income cases, and explain the reasons for its decision in detail. To the extent the court determines the proofs are inadequate to make a determination that satisfies the best interest of the children, it is free to exercise its discretion to allow additional evidence in the interest of justice. See, e.g., State v. Wolf, 44 N.J. 176, 191 (1965) (observing that a trial court has the discretion to allow additional testimony in a civil or criminal case); In re Dale, 134 N.J. Eq. 502, 504 (E. & A. 1944) (observing in a probate case that, while additional testimony generally should not be taken after the conclusion of a trial, the court has the discretion to allow it).

V.

A.

We turn to the parties' challenges to the Family Part's equitable distribution of their joint Merrill Lynch account and an account held by defendant individually. The issues raised by the parties at trial related to two events: defendant opening the separate individual account in 2009, into which he began to deposit both pre-complaint and post-complaint income; and the parties agreeing to deposit their income into the joint account into which defendant had deposited his earnings throughout the marriage and from which they paid the family's expenses, either saving or investing the remainder to be used to pay the family's day-to-day expenses during the litigation.

In December 2010, the parties entered into a pendente lite consent order regarding the payment of plaintiff's and the children's expenses. The order required both parties to deposit "all of [their] current and future income from all sources into the parties' joint Merrill Lynch account" to cover the family's pendente lite shelter, transportation, and household expenses. The parties further agreed they would use no other assets for these purposes and would otherwise be restrained from dissipating any assets during the litigation. However, defendant did not comply with the order, and instead continued to deposit his earnings into his individual account. He did, however, make two deposits into the joint account during the course of the litigation one in the amount of $19,299, one-third of which constituted a marital asset, and the other in the amount of $469,239, all of which represented non-marital funds defendant earned after the complaint was filed. Nevertheless, by mid-trial, the joint account that had a balance of $1,171,487 when plaintiff filed her complaint had diminished to $295,579, after payments were made from that account for family expenses, the parties' litigation expenses, and the satisfaction of the mortgage on the marital home. At the same time, the marital portion of defendant's individual account totaled approximately $4.2 million, including approximately $3 million that defendant transferred from the joint account prior to plaintiff filing the divorce complaint.

In addressing the equitable distribution of the accounts, the court declined to give defendant any credit for the deposit of non-marital funds into the joint account because they had appropriately been used to pay the family's pendente lite expenses, and concluded that the balance remaining in that account should be distributed equally between the parties. The court also declined to grant defendant any credit for active appreciation of the value of the individual account, due to his noncompliance with the consent order, but distributed the full value attributable to defendant's deposit of marital funds into the account prior to the divorce complaint. The result was an award to plaintiff of approximately 41.5% of the value of the individual account.

B.

Plaintiff argues the court erred in its equitable distribution of both the joint account and defendant's individual account. She asserts that the court failed to adequately consider the depletion of her appropriate share of the marital estate resulting from defendant's failure to deposit his earnings into the joint account to pay for the family's pendente lite expenses and thus preserve the value of the estate during the course of the litigation. She contends the court's consequent distribution to her of only half the diminished value of the joint account and less than half the value of defendant's individual account was insufficient to make her whole or adequately penalize defendant's noncompliance with the 2010 consent order. The court then compounded that error, plaintiff argues, by failing to distribute in equal shares the full value of defendant's individual account. While the portion of that account attributable to deposits of defendant's post-divorce income might otherwise be immune from distribution, she asserts, it represented funds that should have been deposited into the joint account pursuant to the consent order. Because the absence of those funds in the joint account depleted her share of equitable distribution, she contends that to be made whole she should have been awarded either (1) half the value of the joint account as of the divorce complaint and only her share of the marital assets in the individual account, or (2) her share of the diminished joint account but half of the full value of the individual account.

Plaintiff does not suggest the court incorrectly identified the marital portion of defendant's individual account, nor does she dispute that the remainder, to the extent it was earned through defendant's sole efforts after their separation, would not ordinarily be subject to equitable distribution. See Reinbold v. Reinbold, 311 N.J. Super. 460, 469-70 (App. Div. 1998). However, she insists that the otherwise immune portion should have been subject to distribution only insofar as it represented funds she believes defendant should have deposited into the joint account to cover the family's expenses during the trial.

According to defendant, the court's distribution of the accounts, "when viewed in conjunction with [its] decision on counsel fees and the handling of pendente lite expenses," was "appropriate" and "valid." He also argues, in his defensive cross-appeal, that the court should have granted him a credit in equitable distribution for the active appreciation of the funds in his individual account between the date of the divorce complaint and the date of distribution, regardless of his failure to deposit funds into the joint account.

At the outset, we limit our review to the court's equitable distribution of the joint account because neither party challenges the court's distribution of the individual account, other than plaintiff's contention that defendant's post-complaint earnings became marital property when he failed to deposit those funds into the joint account pendente lite pursuant to the consent order. We reject that argument. Those funds were not marital property, see N.J.S.A. 2A:34-23(h), and, like any other pendente lite order, the consent order was without prejudice to final allocation and distribution after a trial. See Mallamo v. Mallamo, 280 N.J. Super. 8, 12 (App. Div. 1995).

Equitable distribution is limited to "the property . . . which was legally and beneficially acquired by [the parties] or either of them during the marriage." N.J.S.A. 2A:34-23(h); see also Barr, supra, 418 N.J. Super. at 33. Generally, only property acquired up to and including the date of the complaint is included in the marital estate. See Painter v. Painter, 65 N.J. 196, 218 (1974).

We recently summarized the purpose of equitable distribution and the methods to be followed by a court in performing that function. We stated

"[T]he goal of equitable distribution . . . is to effect a fair and just division of marital [property]." [Steneken, supra, 183 N.J. at 299]. To fashion an equitable distribution award, the trial judge must identify the marital assets, determine the value of each asset, and then decide "how such allocation can most equitably be made." Rothman v. Rothman, 65 N.J. 219, 232 (1974). In addition, the judge must consider, but is not limited to, the sixteen statutory factors set forth in N.J.S.A. 2A:34-23.1. Fashioning an equitable distribution of marital assets and debts requires more than simply "mechanical division"; it requires a "weighing of the many considerations and circumstances . . . presented in each case." Stout v. Stout, 155 N.J. Super. 196, 205 (App. Div. 1977).

[Elrom v. Elrom, 439 N.J. Super. 424, 444 (App. Div. 2015) (first, second, third, and fifth alterations in original).]

Absent extraordinary circumstances, assets should generally be valued at the time of the complaint, "depending on the "nature of the asset and any compelling equitable considerations." Bednar v. Bednar, 193 N.J. Super. 330, 332 (App. Div. 1984). For example, "[p]assive assets, the value of which fluctuate after the filing of the complaint by virtue of market forces, should be valued as of the date of trial or distribution, not the date of the filing of the divorce complaint." Platt v. Platt, 384 N.J. Super. 418, 427 (App. Div. 2006). Under those circumstances, the parties may share in any change in value. Scavone v. Scavone, 243 N.J. Super. 134, 137-38 (App. Div. 1990). To the extent that any increase in an asset's value realized after the marriage has ended derives from the post-marital efforts of one spouse, the increase is not subject to distribution. Addesa v. Addesa, 392 N.J. Super. 58, 77 (App. Div. 2007). Thus, active assets, those whose values fluctuate according to the efforts or contributions of the owner, must ordinarily be distributed as of the date of the divorce complaint, lest one spouse inequitably share in the benefits of the other's post-marital efforts. Valentino v. Valentino, 309 N.J. Super. 334, 338 (App. Div. 1998).

Applying these principles, the trial court should have equitably distributed the joint account using its value as of the date of the complaint and imputing to that value any passive increase that occurred up until the date of trial. Other than the marital portion of the $19,299 deposited by defendant, no funds added to that account from either party's post-complaint income were marital assets. Those deposits were only to facilitate the payment of the expenses without invading the marital asset, absent consent of all parties and the court. It was up to the court to identify the marital asset as of the date of the complaint, add any passive earnings through trial, equitably distribute the asset, and charge one or both parties for their share of the pendente lite expenses, counsel fees, and costs. So, if the court determined that defendant was to pay for the monthly household expenses as provided in the consent order, then those expenses should have been charged to defendant's funds in the account. If the court believed that the parties should pay their own counsel fees and litigation costs or share them equally or on some other basis, it should have made the requisite findings to explain its decision and charged each parties share accordingly. Instead, without explanation, the trial court simply divided in two the balance on deposit as of the trial date. This was not an equitable distribution of the parties' asset.

We are, therefore, constrained to remand this matter to the trial court for reconsideration of its equitable distribution of the joint account in accordance with our instructions.

Turning to defendant's argument regarding the enhancement of the individual account's value, the trial court found defendant was solely responsible for the increase. The court also found, however, that had defendant complied with the consent order he would not have had the same amount of funds in the account and therefore would not have realized the earnings he claims were exempt from distribution, and denied defendant a credit for the enhancement attributable to his sole efforts. We disagree with the result.

The court should have allowed a credit for earnings due to defendant's sole management of the account rather than convert that credit into a penalty. The non-marital funds in defendant's individual account were available to satisfy any shortfall created by his failure to deposit all of his income into the joint account. To the extent defendant's portion of the joint account was insufficient to pay his share of the expenses and litigation costs for himself, plaintiff, or both, that amount could have been deducted from his individual account as if he had complied with the consent order's deposit requirement all along. By doing so, plaintiff would have received her full share of the joint account plus passive earnings, regardless of the amount defendant received in the individual account.

Plaintiff's argument to the contrary is again based upon the notion that money which was to be deposited pendente lite into the joint account was converted into marital assets. Again, this was not the case.

We must therefore also remand for reconsideration the extent to which any appreciation in the value of the non-marital funds in the individual account from the filing of the complaint to the trial date was attributable to defendant's sole efforts. The court must then determine whether defendant should be granted any credit in equitable distribution for that appreciation.

VI.

A.

Finally, we consider the court's denial of plaintiff's application for counsel fees and costs. At the conclusion of the trial, both parties requested an award of fees and costs plaintiff for an unspecified contribution to the fees already paid from the joint account, and defendant for an equalization credit for the difference between the parties' expenditures. In its consideration of that application, the court observed at the outset that, over the course of the litigation, defendant incurred a total of $565,269 in fees and costs and plaintiff a total of $887,992, and that, while plaintiff's attorneys billed at somewhat higher rates, neither party challenged the reasonableness of the other's fees in that respect. All of those expenditures had already been paid from the parties' joint account, along with the pendente lite expenses.

The court considered that defendant had the superior earning capacity and clearly had the ability to contribute to plaintiff's fees, while the converse was not true. Yet the parties shared considerable assets in equitable distribution, leaving plaintiff with ample resources to meet her needs even without any contribution from defendant for fees that, in any event, had already been paid.

Moreover, the court noted, both parties had achieved some success in the litigation. The court had granted plaintiff an above-guideline child support award but agreed with defendant and rejected her request for a savings component to alimony, and had approved a parenting time result that combined both parties' proposals with limited modification. The court recounted, however, that plaintiff's "unreasonable" demand for a savings component to her alimony award, though not motivated by bad faith, nonetheless was the "most significant financial issue compelling a trial on alimony issues," consuming a considerable portion of trial time devoted to expert testimony.

The court further found that defendant had similarly taken a seemingly unmodifiable and unreasonable position as to shared custody, contrary to his children's wishes, and as to parenting time before the trial. While defendant conceded the custody issue just prior to trial and later adjusted his parenting plan to one more in line with plaintiff's, the dispute nonetheless necessitated the retention of experts and occasioned an "inordinate amount" of testimony regarding each party's parenting judgment. Defendant's violation of the consent order, moreover, had forced plaintiff to file applications in aid of litigants' rights during the interim between the trial and the decision, but she had already been granted a fee award where appropriate on that account.

All things considered, the court believed the crucial issue under these circumstances was whether either party had prevailed in such a way or had so caused the other party an unnecessary expenditure of fees as to demand an award or credit as a matter of equity. It concluded that neither party deserved such relief, reasoning that both had taken unreasonable positions as to issues on which they did not substantially prevail but that unnecessarily prolonged the litigation and caused the expenditure of considerable fees.

B.

Plaintiff acknowledges that the court made findings as to the factors it must consider in awarding fees, but faults the court for concentrating most of its determination on a single factor the results obtained in the litigation. She argues the weight of all the factors leaned heavily in favor of her being awarded fees, particularly in light of the disparity in the parties' income and the fees unnecessarily expended due to the unreasonable positions defendant took at trial and his noncompliance with court orders.

We conclude from our review of the record that the court considered all of the factors applicable to a fee award in a matrimonial action. See N.J.S.A. 2A:34-23; R. 5:3-5(c).7 However, after considering the positions advanced by the parties during the litigation, the trial court found plaintiff's pursuit of her claim for a savings component to her alimony award to be "unreasonable" in deciding to deny her request that defendant contribute to her counsel fees beyond the shared payment made from the joint account.

In light of our holding today, agreeing that plaintiff raised a legitimate issue as to alimony, it is clear that the trial court's reliance on plaintiff's alimony claim in denying her fee application cannot be sustained. We remand the matter to the trial court for reconsideration of its denial of plaintiff's request for counsel fees without reference to her position regarding savings and alimony.

VII.

In sum, the trial court's awards of alimony, equitable distribution, child support, counsel fees and costs are vacated and remanded for further proceedings consistent with our decision. We do not retain jurisdiction.

1 The parties also held another joint account and retirement accounts that they agreed should be divided equally.

2 Plaintiff's forensic accounting expert testified that the parties had habitually saved an average of $67,000 per month during the final years of the marriage. He estimated that, even at the $30,000 per month plaintiff was requesting as a savings component of alimony, she would be able to save $228,000 per year after taxes, while defendant would be able to save $705,000. At that rate, in fifteen years, when the parties would both be sixty-one-years-old, plaintiff and defendant would have accumulated approximately $3,960,000 and $12,043,000, respectively, assuming a three percent rate of return on investment compounded monthly.

3 Defendant paid off the mortgage in full from a joint account during the litigation. According to plaintiff, he did so without her knowledge or consent.

4 Several significant aspects of the statute were amended effective after the entry of the FJOD. L. 2014, c. 42, 1 (effective Sept. 10, 2014). None of the amendments, however, impacts the trial court's decision or ours in this case.

5 While deciding an unrelated issue in an earlier case, we also signaled our recognition of a trial court's need to properly consider the savings component. See Tannen, supra, 416 N.J. Super. at 277 (finding judge's consideration of lifestyle inadequate because he did not consider savings component, among other factors, as part of parties' lifestyle).

6 Our holding is limited to the establishment of alimony. We do not decide in this opinion the extent to which the savings component should be considered upon a change in circumstances, such as the payor spouse's retirement.

7 The factors set forth in Rule 5:3-5(c) include

(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.

[R. 5:3-5(c).]