DOMENIC R. PALMIERE v. DEBORAH CORTES-PALMIERE

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2877-04T22877-04T2

DOMENIC R. PALMIERE,

Plaintiff-Appellant,

v.

DEBORAH CORTES-PALMIERE,

Defendant-Respondent.

________________________________________

 

Submitted February 8, 2006 - Decided July 31, 2006

Before Judges Parker and Grall.

On appeal from Superior Court of New

Jersey, Chancery Division, Atlantic

County, Family Part, FM-01-777-03C.

Jacobs and Barbone, attorneys for appellant

(Amy R. Weintrob and Erika A. Appenzeller, on the brief).

Law Offices of Arlene Gilbert Groch,

attorneys for respondent (Ms. Groch,

on the brief).

PER CURIAM

Plaintiff Domenic R. Palmiere appeals from a dual final judgment of divorce entered on April 1, 2004, and amended on November 26, 2004 and January 26, 2005. He contends that the judge erred by awarding defendant Deborah Cortes Palmiere an equal share of the marital assets, distributing the full value of his Janney Montgomery Scott Stock Account (JMS account), a portion of which he contends was not subject to equitable distribution and fixing the value of his vested stock options at the cost of exercise. Defendant argues that the amended judgment is fair, equitable and supported by the record.

Our review is limited to the issues raised on appeal. We conclude: 1) the equal division is not an abuse of discretion; 2) plaintiff failed to establish that the JMS account included separate assets and 3) the value assigned to plaintiff's stock options is erroneous. Accordingly, we vacate the provisions of the amended judgment affected by the erroneous valuation of the stock options and affirm the remainder of the judgment as last amended. See Callahan v. Callahan, 142 N.J. Super. 325 (Ch. Div. 1976).

Neither party contends that the judge's factual findings are unsupported. The parties married on June 7, 1997. It was defendant's second marriage, and there were two children born of her prior marriage. In anticipation of their marriage, plaintiff and defendant purchased a home. They made nearly equivalent contributions to the down payment. Defendant's children lived with the couple in that home. There were no children born of their marriage.

Prior to and during the marriage, plaintiff and defendant were both employed in the casino industry. In 1997 plaintiff worked as a "host manager" and earned $110,000, nearly double the amount he earned as a "pit boss" in 1996. Defendant worked as a games supervisor. In January 2000, plaintiff was promoted to the position of Vice President of Marketing and during that year his base salary was $210,000. With his bonus, he earned $268,000 in 2000. His base salary was increased to $250,000 in 2001. In 2003, he earned $356,508.89. Defendant worked in the same job throughout the marriage. Her income varied with her hours. She earned $50,349.79 in 2001 and $45,994.49 in 2002.

When the parties first married, defendant contributed to household expenses. As plaintiff's income increased, he assumed full responsibility for shelter expenses. Defendant purchased the groceries and paid for her cell phone and clothing for herself and her children. Plaintiff paid for home improvements. Generally, the parties worked different shifts, and both did housework.

Plaintiff commenced the action for divorce on February 24, 2003. When the case was tried in 2004, plaintiff was forty-three years old and defendant was forty years old. Although plaintiff was under care for stress he attributed to the divorce proceeding and defendant had undergone minor surgeries from which she had recovered, both were in good health.

The judge identified and valued the marital assets. The values that are not disputed on appeal include: the marital residence, with a value of $251,000; plaintiff's Park Place Entertainment 401K retirement savings plan, with a value of approximately $110,000 as of December 8, 2004, after deductions for pre-marital and post-complaint contributions; plaintiff's deferred compensation account, which was opened during the marriage, with a value of $115,843; defendant's 401K which was valued at $39,019 after deductions for pre-marital contributions and a loan; defendant's Toyota, valued at $17,717 and plaintiff's Mercedes, valued at $42,102.50.

Plaintiff disputes the judge's findings on the value of his stock options. On the date of the complaint, plaintiff held 7,500 options, all of which were fully vested and exercisable at a total price of $78,825. Plaintiff testified that the options had no value because the stocks were selling at a price lower than his option. The judge determined that the value was the total cost of exercising the options, $78,825.

Plaintiff also contends that the judge erred in concluding that the full value of his JMS account was subject to distribution. The JMS account had a value of $45,452.73 as of March 31, 2003 and $132,171.07 as of December 2003. According to plaintiff, the value increased because he made additional stock purchases during the post-complaint period. He explained that he used funds from several sources. One source was his checking account, which had a balance of $57,816 on the date of the complaint. The money in that checking account was from an AG Edwards account that he closed shortly before filing the complaint. A second source was a line of credit on the equity in the marital residence, which he repaid monthly from his earnings. In addition, he made purchases on margin.

Plaintiff acknowledges that he did not present statements necessary to explain the increase in value of his JMS account and acknowledges that purchases were made with funds that were in his checking account on the date of the complaint. The judge determined that the full value of the JMS account was subject to distribution.

The judge divided the assets equally. With the exception of defendant's share of his stock options, which the judge awarded by permitting defendant to retain the full value of her 401K plan, plaintiff was required to pay defendant an amount equivalent to her share.

Equitable distribution of marital assets is a matter left to the sound exercise of the trial judge's discretion. Borodinsky v. Borodinsky, 162 N.J. Super. 437, 443-44 (App. Div. 1978). A trial court's distribution of assets is affirmed so long as the result is one that the judge reasonably could reach on the basis of the evidence presented and applying controlling legal standards. Perkins v. Perkins, 159 N.J. Super. 243, 247-48 (App. Div. 1978). Stated differently, our review is limited to the question of "whether [the result] is clearly unfair or unjustly distorted by a misconception of law or findings of fact that are contrary to the evidence." Valentino v. Valentino, 309 N.J. Super. 334, 339 (App. Div. 1998) (internal quotations and citations omitted).

A judge must identify the assets subject to distribution, determine their value and consider the factors enumerated in N.J.S.A. 2A:34-23.1 in determining a fair and equitable division. Rothman v. Rothman, 65 N.J. 219, 233 (1974); see N.J.S.A. 2A:34-23.1 (requiring "specific findings of fact on the evidence relative to all issues pertaining to asset eligibility or ineligibility, asset valuation, and equitable distribution"). Plaintiff challenges specific determinations under each part of this three-step analysis.

We consider plaintiff's argument on asset eligibility first. He contends that his post-complaint contributions to the JMS account were exempt. Ordinarily the date of the complaint is the proper date for valuation of assets, but plaintiff's account includes post-complaint contributions made from marital funds. A party claiming that a marital asset is exempt from equitable distribution has the burden of proving its immunity. Painter v. Painter, 65 N.J. 196, 214 (1974); Valentino, supra, 309 N.J. Super. at 338. If the party fails to demonstrate that all or a portion of a fund is separate property, it is deemed a marital asset that is subject to equitable distribution. Landwehr v. Landwehr, 111 N.J. 491, 504 (1988).

Plaintiff argues "that due to the lack of documentation [his] testimony regarding [the JMS] account was convoluted." He acknowledges that "there was no way to track the deposits into the [JMS] account because [his] counsel did not obtain all of the relevant statements." On that basis, he contends that he "could only state that he had purchased stock from his money post-complaint and by utilizing the [home equity] credit line post-complaint."

Plaintiff's line of argument ignores the law and the evidence. With respect to the law, he overlooks his burden of proof. Ibid. His failure to produce the necessary evidence is not a basis for reversal. Judges must decide a case on the basis of the evidence presented and controlling legal principles, including the applicable burden of proof. See Storey v. Storey, 373 N.J. Super. 464, 479 (App. Div. 2004) (discussing the difficulty of a judge's position when the parties ask the court to decide an issue in a matrimonial matter but do not provide the evidence required). Plaintiff's argument does not take his testimony into account. He testified that his stock purchases during the period in question were funded, in part, from a checking account that had a balance of nearly $58,000 on the date of the complaint. Thus, he did not establish that the funds in his checking account, which were used to make post-complaint contributions to this fund, were exempt from equitable distribution. Plaintiff's request for a remand for a proper valuation of this fund based on additional evidence relevant to tracing, is, in effect, a request for a second opportunity to meet his burden of proof.

Plaintiff's complaint about the value assigned to his stock options is meritorious. The options were properly included among those subject to equitable distribution. There is a presumption, which may be rebutted by the party seeking exemption, that options awarded by an employer are given as a "result of efforts put forth 'during the marriage' by the spouses jointly, making it subject to equitable distribution." Pascale v. Pascale, 140 N.J. 583, 609 (1995); see id. at 609-11.

The difficulty in this case is with the value assigned to the options. The price at which an option may be exercised is not the value of the option. Value depends upon the difference between the price under the option and the price on the date it is exercised, minus taxes. See Callahan, supra, 142 N.J. Super. at 327-28. In the absence of evidence of value, a distribution in kind was required. See ibid. There was no expert testimony about any other measure of value. Accordingly, distribution must be accomplished by way of division of the option grants and by way of constructive trust if necessary under the terms of the option. Id. at 329.

The remaining question is whether the judge erred in dividing the assets equally. Plaintiff argues, and we agree, that a judge may not begin or end the analysis of the appropriate division of marital assets with the assumption that an equal division is proper. Rothman, supra, 65 N.J. at 232-33, 232 n.6; Wadlow v. Wadlow, 200 N.J. Super. 372, 377 (App. Div. 1985). The judge must focus on the statutory factors and other factors relevant in the particular case. N.J.S.A. 2A:34-23.1a-p. The decision is informed by a rebuttable presumption that both spouses made substantial contributions to the marriage. N.J.S.A. 2A:34-23.1.

The judge articulated factual findings relevant to each factor enumerated in N.J.S.A. 2A:34-23.1. Although the judge did not explain what led her to conclude that factors favored an equal division, the findings imply the reasons. Briefly summarized, the judge found that these parties were of similar age and health. N.J.S.A. 2A:34-23.1b. They were married for over five years when defendant filed his complaint. N.J.S.A. 2A:34-23.1c. They equally contributed to the purchase of their residence, and plaintiff contributed the funds for improvements. N.J.S.A. 2A:34-23.1d, i. During the marriage, they helped one another with household responsibilities. N.J.S.A. 2A:34-23.1i.

Plaintiff's earnings increased dramatically after the first two and one-half years of the marriage, but defendant's earning capacity remained the same. N.J.S.A. 2A:34-23.1f. At times she worked only part time, and although plaintiff assumed a greater share of the family's financial obligations when his earnings increased, he was able to accumulate significant retirement assets. N.J.S.A. 2A:34-23.1b, f, g. Defendant, who continued to purchase groceries for the household and her clothing, did not experience a dramatic increase in income and did not accumulate significant assets during the marriage. N.J.S.A. 2A:34-23.1f, g.

Despite plaintiff's superior financial position and defendant's income, which was meager in comparison to his, the judge determined that neither permanent nor limited duration alimony was appropriate. In determining whether alimony was appropriate, the judge considered the marital assets that defendant would acquire. That was appropriate. In awarding alimony a judge should consider equitable distribution. N.J.S.A. 2A:34-23b(10). "[A]limony and equitable distribution are separate yet interrelated and ultimately subject to an overriding sense of fairness . . . ." Steneken v. Steneken, 183 N.J. 290, 299-300 (2005). If the parties did not have assets to divide, the judge may well have determined that an award of limited duration alimony was appropriate on the facts of this case. Cox v. Cox, 335 N.J. Super. 465, 483 (App. Div. 2000) (noting that limited duration alimony is available to a dependent spouse who made "contributions to a relatively short-term marriage that . . . demonstrated the attributes of a 'marital partnership'").

Here, at the end of a marriage which was a partnership, the spouse who had made the more significant financial contributions was in a position to continue enjoying the marital lifestyle and accumulating additional assets. The prospects for the other spouse were not as bright. Viewed under all of the circumstances, including the denial of all alimony, we cannot conclude that the judge abused her discretion in awarding an equal division of marital assets.

Affirmed in part and reversed in part. The matter is remanded for distribution of plaintiff's stock options in kind. As a consequence of a distribution of the stock options in kind, plaintiff's obligation to pay defendant must be reduced by his share of her 401K, which, under the final amended judgment, was distributed by way of offset for the value of the stock options.

 

Defendant did not file a cross-appeal. On appeal defendant has presented a transcript of a subsequent, collateral proceeding that is not part of the record below and has presented argument in support of affirmance based on statements plaintiff made during that subsequent proceeding. Consistent with the rules governing proceedings in this court, we have not considered either the transcript or the argument. R. 2:5-4;

R. 2:5-5; R. 2:6-1.

Because our review is of the final judgment as amended following two motions for reconsideration, references to value are those ultimately determined.

(continued)

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A-2877-04T2

July 31, 2006