ALBERT JARVIS v. TERESA JARVIS

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-7050-03T27050-03T2

ALBERT JARVIS,

Plaintiff-Respondent,

v.

TERESA JARVIS,

Defendant-Appellant.

_______________________________

 

Argued: October 25, 2005 - Decided:

Before Judges Axelrad, Payne and Levy.

On appeal from the Superior Court of New Jersey, Chancery Division - Family Part, Warren County, FM-21-001-00.

Dale E. Console, attorney for appellant.

Dennis W. Winegar argued the cause for respondent (Winegar, Wilhelm & Glynn, attorneys; Steven J. Karch, of counsel and on the brief).

PER CURIAM

Defendant Teresa Jarvis challenges several equitable distribution rulings made by the Family Part judge following trial in the parties' divorce action. The parties had settled every issue except whether certain land and improvements were subject to equitable distribution, and if so, the value of the land and improvements and the percentage of each party's interest. The court determined that the land upon which the marital residence was built had been acquired by husband prior to any contemplation of marriage, and thus was an exempt asset. The court further determined that the improvements to the land were marital assets subject to equitable distribution, and that husband should receive 80% of their value because of the physical labor he expended to construct the buildings.

On appeal, wife argues she acquired an equitable interest in the land by her $10,000 premarital contribution towards the payoff of the mortgage encumbering the land, the court erred in valuing the land separate from the improvements and the court abused its discretion in awarding her only a 20% interest in the marital residence. We affirm in part and reverse and remand in part.

The following is a summary of the testimony presented during the nine days of trial. The parties had a longstanding relationship from 1978 to October 1984, and recommenced their relationship in March l985. Plaintiff proposed to defendant on April 25, 1985, and they were married on April 19, 1986.

Plaintiff, who had a life-long dream to live in a log cabin, began looking for land in l982, put down a $1,000 deposit on fifty-six acres of land in White Township in September l983, and closed on the purchase in May l984. Plaintiff paid $25,000 to $30,000 of the $63,000 purchase price from his personal, premarital funds and secured the balance by a mortgage, payable over six years at ten percent interest. Plaintiff took title and obtained the mortgage solely in his name. At the time of the purchase, plaintiff lived with his aunt and grandmother rent-free and had no plans to marry. His plan was to pay off the mortgage on the property and then build the log cabin.

After the parties became engaged, however, plaintiff accelerated his plans and decided to pay off the mortgage in order to start building a log cabin on the land that would serve as the parties' marital residence. To that end, plaintiff borrowed $15,000 and defendant borrowed $10,000 from their respective employee Thrift Funds and satisfied the mortgage on October l8, 1985.

After the parties' marriage, they lived in an apartment. Construction of the log cabin began in l986. With the help of his friends over the next four years during nights and weekends, husband built the home and a metal "Morton" outbuilding used for storage and his shop. He claimed his wife would visit the property only occasionally to check the status of the cabin's construction. Wife acknowledged she did not participate in the construction of the buildings but claimed to have helped with other tasks such as caulking, interior painting and wallpapering. The parties' first child was not born until l992.

Husband spent premarital money, inheritance money and money he received as a gift from a relative for blueprints, excavation, materials for construction of the cabin and shop, a septic tank and a driveway on the property, which the court determined to be approximately $80,000. The court also found that wife invested $10,000 from an inheritance into the log cabin. The parties also both borrowed other funds from their respective Thrift Funds to help pay for the cost of completing the home, which loans were paid back from salary deductions from both parties' earnings during the marriage. After construction was complete, the log cabin served as the parties' marital residence. The marriage lasted thirteen years before a complaint for divorce was filed.

The court found husband to be more credible than wife, and believed his testimony that he was not interested in getting married when he purchased the land. The court noted that defendant had not even seen the property when the deposit was given, further belying her assertion that she had been a partner with plaintiff in its purchase. Thus, the court concluded that plaintiff did not purchase the land in contemplation of marriage, but in accordance with his life-long goal of building a log cabin on rural property on which he could hunt. Accordingly, the court found the fifty-six acres of land to be immune from equitable distribution, and as wife did not demonstrate any increase in value during the marriage attributable to her efforts, husband was entitled to the full value, which as of the date of complaint was $5,000 per acre, increasing in value at the rate of 1% per month. See Scherzer v. Scherzer, 136 N.J. Super. 397, 401 (App. Div. 1975), certif. denied, 69 N.J. 391 (1976); Sculler v. Sculler, 348 N.J. Super. 374, 381 (Ch. Div. 2001).

On the other hand, the court found the log cabin and outbuilding to have been constructed in contemplation of marriage because the structures "came into existence during the marriage, and the decision to proceed with constructing [them] was a joint one that was made after the parties became engaged." Accordingly, they were joint marital assets subject to equitable distribution. The court found that husband should be awarded 80% and wife 20% of the value of these assets "because of all of the physical labor he expended to construct the cabin, labor which he expended evenings after work and on weekends over the course of four years. Because of his sacrifices, he is entitled to a greater share of these two assets."

The court accepted wife's appraiser's approach to valuing log cabins and his opinion on the value of the land and buildings. The appraiser valued the entire property at $620,000 as of the filing date, subject to 1% per month appreciation. Although he commented in testimony on the difficulty of valuing the land and improvements separately because they complemented each other, in his report he allocated half of the overall value to the land. He thus valued the marital home, which included the Morton building, at $310,000 as of December 2002. Accordingly, the court directed husband to buy out wife's 20% interest in the marital home based on a value of $310,000, with 1% per month appreciation accruing until distribution.

We are satisfied there was sufficient credible evidence in the record to support the trial court's factual findings that the fifty-six acres of land were not purchased by husband in contemplation of marriage, and wife's efforts did not increase the value of the land during the marriage, and its legal conclusion that the land was thus a passive immune asset. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). See also Cesare v. Cesare, 154 N.J. 394, 412-13 (1998) (according deference to the credibility findings and the feel of the case by the Family Part judge who has heard and observed the witnesses and possesses special expertise); Pascale v. Pascale, 113 N.J. 20, 33 (1988). Husband clearly satisfied his burden of establishing immunity from equitable distribution of the land he purchased in 1984. Pascale v. Pascale, 140 N.J. 583, 609 (1995). The court's reasons were aptly set forth in its written decision of January 9, 2004, which we have referenced and quoted in our opinion.

Wife concedes that husband's initial purchase of the land was not in contemplation of marriage, but she contends the parties' intent changed when, during their engagement, they decided to pay off the mortgage so they could commence construction of their marital residence. Wife urges that her contribution of $10,000 in premarital funds to this marital enterprise entitles her to an equitable interest in the land. She requests we remand for calculation of her percentage interest.

We are not convinced the trial court properly addressed wife's $10,000 premarital contribution to the mortgage payoff. The court summarily disposed of this issue, merely noting that wife's loan, as well as husband's $15,000 loan, was paid back from payroll deductions during the marriage and was thus "paid back with joint monies." We are further cognizant, as noted by wife, that as both of the parties' Thrift Fund loans were repaid during their marriage with marital funds, each in essence contributed half of the $25,000 total.

Although we are not satisfied that wife has demonstrated an entitlement to an equitable distribution interest in the land, we agree that she should receive some benefit from her premarital contribution. There is no basis upon which to infer from the opinion, as urged by husband, that the court factored in this premarital contribution by wife in its determination of wife's 20% interest in the marital residence. To the contrary, the foundation of the court's analysis throughout the opinion is the segregation of the land as an exempt asset and the improvements as a marital asset subject to equitable distribution. Accordingly, we find wife is entitled to the investment value of her $12,500 contribution to the marital enterprise, which can be measured by the appreciated value of the land or by other means determined appropriate by the court on remand.

We discern neither factual nor legal error in the court's conclusion to accept separate valuations of the land and the improvements that were situated on one of the acres. Wife's expert commented that it was difficult, but did not contend such an approach was contrary to established appraisal practices or that each value could not be accurately ascertained. To the contrary, the appraiser testified at length about his comparable land sale analysis in calculating the per acreage value of the land both before and after the house was constructed, as well as for purposes of determining appreciation. The court accepted this approach and the resulting valuation and appreciation figures attributable to the land and marital residence. We are satisfied that the court's separate valuation of land and improvements both facilitated equitable distribution under the facts of this case and was amply supported by expert opinion.

Nor do we discern any abuse of discretion by the court in awarding wife only 20% of the marital assets of the log cabin and outbuilding. The court engaged in the appropriate three-step process for effectuating an equitable distribution of the parties' assets. Rothman v. Rothman, 65 N.J. 219, 232 (1974). The court first decided what specific property of each spouse was eligible for distribution; then it determined the value of the asset for purposes of such distribution; and finally it determined how such allocation could most equitably be made. Ibid.; accord LaSalla v. LaSalla, 324 N.J. Super. 264, 276 (Ch. Div. 1999), rev'd on other grounds sub nom La Sala v. La Sala, 335 N.J. Super. 1 (App. Div. 2000), certif. denied, 167 N.J. 630 (2001). Additionally, the court listed and addressed the sixteen factors enumerated in N.J.S.A. 2A:34-23.1.

Our appellate review of "the division of marital assets is narrow." Valentino v. Valentino, 309 N.J. Super. 334, 339 (App. Div. l998). An appellate court "review[s] distributions to determine whether the [trial] court has abused its discretion." La Sala, supra, 335 N.J. Super. at 6. It "will affirm an equitable distribution as long as the trial court could reasonably have reached its result from the evidence presented, and the award is not distorted by legal or factual mistake." Ibid. After having heard testimony over seven days, the Family Part judge was satisfied that an uneven division of the marital residence was justified. The court concluded that husband should be compensated for the tremendous amount of time and effort he put into the physical construction of the log cabin and Morton building during the evenings and weekends over a four-year period. Based on husband's sweat equity and wife's limited involvement in the project, the court concluded the appropriate equitable distribution of these improvements would be to award husband 80% and wife 20% of the value of these

marital assets. We find no legal or factual basis to second-guess this allocation.

Affirmed in part; reversed and remanded in part.

 

The mortgage was paid off with a check for $22,916.61. Plaintiff testified he only used $9200 of defendant's loan proceeds and gave her $800 towards furniture. It is unclear what the balance of plaintiff's loan proceeds was used for, as the mortgage payoff was less than the combined loans.

The additional 5.9 acres of land purchased in l997, considered a marital asset and divided equally by the court, is not included in this appeal.

(continued)

(continued)

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A-7050-03T2

A-7050-03T2

November 9, 2005