KATHERINE MILNE v. ROBERT GOLDENBERG

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2822-07T32822-07T3

KATHERINE MILNE,

Plaintiff-Respondent/

Cross-Appellant,

v.

ROBERT GOLDENBERG,

Defendant-Appellant/

Cross-Respondent.

_________________________________________________

 

Argued September 16, 2009 - Decided

Before Judges Cuff, Payne and Waugh.

On appeal from Superior Court of New Jersey,

Chancery Division, Family Part, Essex County, Docket No. FM-2027-06.

Andrew V. Ha argued the cause for appellant/cross-respondent (Serruto & Associates, P.C., attorneys; Roger A. Serruto, of counsel; Mr. Ha, on the brief).

Peter G. Bracuti argued the cause for

respondent/cross-appellant (Walder, Hayden & Brogan, P.A., attorneys; Robert L. Penza, of counsel and on the brief with Mr. Bracuti).

PER CURIAM

Plaintiff, Katherine Milne, and defendant, Robert Goldenberg, were granted a dual judgment of divorce on December 31, 2007. Each has appealed from various provisions of the divorce decree. Defendant argues in his appeal that the Family Part judge erred in disregarding stock options and restricted stock awards given by plaintiff's employer to her in calculating alimony. He argues additionally that the trial judge erred in determining that plaintiff should receive permanent, rather than term or rehabilitative alimony. As a final matter, defendant claims that the trial judge erred when he designated plaintiff as the parent of primary residence, rather than continuing the equal shared parenting agreement that had existed during the pendente lite period. Plaintiff argues in her cross-appeal that the trial judge erred when he made plaintiff solely responsible for a credit card debt to American Express in the amount of $25,497.61 and when he denied plaintiff's request for counsel fees.

I.

The record reflects that the parties were married on September 24, 1988, after two years of cohabitation. Two children were born during the marriage: a son who was eight years of age at the time of trial and an additional son who was almost seven when the trial commenced. The older boy has been diagnosed as suffering from Asperger's Syndrome and other conditions, but he is considered to be high functioning, and has been mainstreamed in school. The parties decided to divorce in November 2005. A divorce complaint was filed on March 3, 2006.

At the commencement of the marriage, plaintiff was employed by Johnson & Johnson as a sales representative, having been hired by that company in 1987, and defendant was employed by Citicorp. In 1991, defendant enrolled in the Benjamin N. Cardozo School of Law. After graduation, defendant worked for several prominent law firms and, during the last seven years of the marriage, was employed as an assistant and then associate general counsel at UBS Financial Services.

In the meantime, plaintiff's career at Johnson & Johnson had progressed. She was promoted to sales manager and was on the company's fast track for further promotion. However, she voluntarily took herself off the fast track so that she could work from home for the company while defendant pursued his legal career. At the time of the divorce, she was "time bound" to her position as a Business Development Manager, responsible for a major drug store client, and was not eligible for promotion for approximately five years from the date of the trial. Her future pay increases were projected to range from about three to four percent annually. The parties' lifestyle was deemed to be upper middle class.

Both plaintiff and defendant were high-earning individuals. Plaintiff's total compensation for 2006 was $173,558.19, with a base salary of $124,000. In 2005, it was $226,091, with a base salary of $119,000; in 2004, it was $200,045, with a base salary of $105,891; in 2003, it was $145,139, with a base salary of $95,900; and in 2002, it was $105,801, with a base salary of $88,200.

Plaintiff's non-base salary was comprised of cash bonuses, stock options, and restricted stock awards. The stock options could be exercised after a three-year vesting period. The restricted stock awards became plaintiff's, so long as she remained employed by Johnson & Johnson, without payment by her, after a similar three-year vesting period. A restricted stock award of 857 shares had been granted on only one occasion, on February 13, 2006. The record suggests that vested stock options in the amount of 4,000 shares, granted on February 11, 2002, had not been exercised, although defendant's counsel stated at oral argument that all options that had vested at the time the divorce complaint was filed had been exercised. The record does not indicate whether plaintiff intended to exercise options vesting in the future or whether she had the means to do so. Existing marital stock accounts were equitably distributed at the time of the divorce.

Defendant's compensation, in 2006, was $284,580. In 2005, it was $221,580. The amount earned in 2004 is not reflected in the record. In 2003, compensation was $204,574, and in 2002, it was $189,824. In a written opinion rendered following trial, the judge found that the average disparity in incomes between the parties was $109,875.75, and that defendant was, therefore, financially capable of paying alimony.

At trial, plaintiff testified that her monthly budget was $11,530. In calculating alimony, the trial judge found that plaintiff earned $134,421, inclusive of bonuses, but exclusive of restricted stock and stock options and that her average monthly income was $8,000. After an analysis of the statutory factors set forth in N.J.S.A. 2A:34-23(b), he awarded alimony in the amount of $697 per week payable in two equal payments of $1498.55 per month, commencing on August 3, 2007 and continuing thereafter until plaintiff's remarriage or defendant's death.

Additionally, after hearing the trial testimony of the parties, parent coordinator Dr. Amie B. Wolf-Mehlman, and plaintiff's friends, Mya Heinert, a board-certified pediatrician, Susan Edelman, and Maryanne Vaughn, the trial judge awarded the parties joint legal custody of the two children, but designated plaintiff as the parent of primary residence. Custody was split on a fifty-four/forty-six percent basis, with defendant having 117 weekend overnights and fifty-two midweek "dinner-type" visits with the boys. In reaching this resolution, the trial judge found that plaintiff had been the children's primary caregiver throughout their lives; that the parents were unable to reach a consensus on parenting styles and other child-related matters, thereby creating tension; and that the present shared custody arrangement was unsatisfactory and not in the children's best interests. After considering the child support guidelines, the trial judge ordered defendant to pay $319 per week or two equal monthly payments of $685.85 plus a supplemental amount of $64 above the guidelines for a total of $383 per week payable in two equal monthly payments of $823.45.

In addition to the foregoing, the trial judge equitably distributed the parties' assets and debts on an equal basis, but he excepted from distribution an American Express Card debt of $25,491.61, determining that plaintiff had not demonstrated that the charges had been incurred during the course of the marriage. Plaintiff's request for counsel fees was denied. The judge found "that Plaintiff has the ability to pay her own counsel fees, and there is no evidence that Defendant has acted in bad faith or unreasonably by seeking to continue the shared custody arrangement."

II.

On appeal, defendant first argues that the judge erred in excluding plaintiff's stock options and restricted stock awards when calculating her income for purposes of calculating alimony. In determining that such an exclusion was warranted, the trial judge relied upon Innes v. Innes, 117 N.J. 496 (1990). Innes represented the culminating decision in a progression that commenced with D'Oro v. D'Oro, 187 N.J. Super. 377 (Ch. Div. 1982), aff'd, 193 N.J. Super. 385 (App. Div. 1984). In D'Oro we affirmed a trial court's determination that a spouse's pension could not be considered income for purposes of determining alimony if the income was derived solely from an asset that had been equitably distributed at the time of divorce. D'Oro's holding was subsequently statutorily enacted in N.J.S.A. 2A:34-23(b), which, as amended in 1988, provides in relevant part:

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 that share for purposes of determining alimony.

In Innes, the Supreme Court applied N.J.S.A. 2A:34-23(b) retroactively to preclude consideration of income derived from an annuity purchased with the proceeds of an equitable distribution pension award for purposes of modifying alimony. Innes, supra, 117 N.J. at 504-13.

On appeal, defendant argues, rightly we believe, that the holding in Innes was mistakenly utilized by the trial judge in this case. As support for this argument, defendant relies on our decision in Steneken v. Steneken, 367 N.J. Super. 427 (App. Div. 2004), aff'd as modified, 183 N.J. 290 (2005). There, in discussing the possibility of double-dipping arising from the manner in which the husband's salary and the value of his closely-held business were calculated, we limited the double-dipping prohibition to pensions, and we further stated in the pension context:

In New Jersey, the bar against double counting of pensions is restricted to income from pension benefits that have been treated as an asset for equitable distribution purposes. Conversely, the rule does not bar counting as income for determining alimony that portion of the former spouse's pension attributable to post-divorce employment, and therefore not subject to division as marital property at time of divorce. Innes, supra, 117 N.J. at 504-06; Staver v. Staver, 217 N.J. Super. 541, 545 (Ch. Div. 1987). In other words, a supporting spouse's pension may be considered for purposes of alimony to the extent that post-divorce earnings enhance its value.

[367 N.J. Super. at 437-38.]

We decline to address further whether concepts relating to double-dipping are applicable in circumstances other than income derived from pensions. But we accept as wholly rational the notion that after-acquired "income" received by a supported spouse derived from her employment and not from equitably distributed assets should be considered in connection with any alimony award.

However, we note in this regard that plaintiff received a restricted stock award in only one year, and no evidence was adduced at trial to suggest the probability of a similar future award. Moreover, historically, the number of stock options granted to plaintiff varied by year, and no accurate projections were made as to what options would be granted to plaintiff in the future. Further, there was no testimony at trial as to the worth of future options, whether exercised or not. We have held in Heller-Loren v. Apuzzio:

Absent a [property settlement agreement] dictating otherwise, the law generally holds that income is generated by the exercise of an option earned and acquired post-divorce if exercised at a price below fair market value or if sold at a profit. It does not support the contention that stock options should be treated as income upon mere vesting.

[ 371 N.J. Super. 518, 522 (App. Div. 2004).]

We thus find that the present record is insufficient to permit a consideration of stock options and restricted stock grants as income to plaintiff, since there is no evidence that any post-divorce restricted grants have been made or that options have either been exercised or sold. Even if we were to hold that a value could be attributed to an unvested option or to a vested but unexercised one, there is no expert testimony in the record that would permit such a valuation. Nonetheless, we do not preclude defendant from revisiting this issue if and when post-divorce evidence warrants it.

III.

We find no merit in defendant's argument that the judge erred in awarding permanent alimony to plaintiff, and in defendant's contention that plaintiff's income was sufficient to maintain her in her former lifestyle. R. 2:11-3(e)(1)(A) and (E). Defendant's argument is premised upon the assumption that plaintiff's total taxable income, after payment of federal and state taxes, Social Security, and Medicare, was available to meet her needs. However, that taxable income included the unvested stock options that were the subject of our prior analysis. Defendant has not offered legally cognizable grounds for recognition of those options as income for purposes of an alimony calculation at this time. Further, we are satisfied that the trial judge's findings with respect to income and the need for alimony were supported by the record and that the factors relevant to an alimony award set forth in N.J.S.A. 2A:35-23(b) were properly analyzed. We thus defer to the trial judge's conclusions in this regard, finding no abuse of discretion on his part and determining, for the reasons previously stated, that the judge's sole legal error did not, in the circumstances presented, affect the result. Robertson v. Robertson, 381 N.J. Super. 199, 206 (App. Div. 2005).

We similarly reject defendant's argument that the trial judge should have continued the shared custody arrangement in effect in the pendente lite period, and that he erred in designating plaintiff as the parent of primary residence while maintaining joint legal custody without referring the matter to a child custody evaluator.

In rejecting shared custody, the trial judge stated:

Both parents are unable to reach a consensus on parenting styles and other child related matters. The court realizes that it is not necessary that they agree on all matters, a feat few married couples are able to achieve. However, it would be in the best interest of the children if the parents were able to agree on some child related matters. Here, the parties have not been able to put aside the anger and hostility they feel toward each other and make decisions in the best interest of [the boys]. Joint legal custody and joint physical custody arrangements are rare and difficult to maintain under the best of circumstances. Joint physical custody or "shared custody arrangements," as it is here called, means responsibility for minor "day-to-day decisions" and physical control by both parents over a child for significant periods of time. Beck v. Beck, 86 N.J. 480 (1981). A major factor in all custody disputes is the parent's ability to agree, communicate, and cooperate in matters related to the child. This factor is particularly important in shared custody arrangements. Likewise, it is important to all children that there is consistency and predictability in their life, but it is particularly important to [these children]. Separations from parents because of work and divorce may be particularly stressful, but constantly changing residences, changes in routine and disciplinary practices may serve to exacerbate [the older child's] symptoms. Here, even though both parties live in [the same town] and in close proximity to each other, and both parties intend to remain [there], with the children continuing in the same school with the same friends, their joint custody sharing agreement is breaking down due to the constant changes and differences in parenting regarding day to day issues. There still exists hostility, anger, and tension between the parties.

The trial judge further noted that there was "no dispute that in the beginning and throughout the children's lives [plaintiff] has been the primary care giver and decision maker, taking care of their every day needs." He noted as well the career sacrifices made by the plaintiff in furtherance of her children's interests. And as a final matter, he again emphasized the difficulty the parties experienced in attempting to effectuate the shared parenting plan during the period prior to divorce. For these reasons, the judge found it to be in the children's best interest to designate plaintiff as parent of primary residence and to adopt the visitation schedule that plaintiff had proposed.

We regard the judge's factual conclusions to have been soundly based upon the record. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974). We have no reason to believe that the judge lacked the expertise recognized among Family Part judges, Cesare v. Cesare, 154 N.J. 394, 412-13 (1998), to reach a proper resolution of this matter, nor do we perceive any reason why we should mandate that he abdicate his responsibility in this regard to a child custody evaluator, whose opinion, in any event, would have been merely advisory. Peregoy v. Peregoy, 358 N.J. Super. 179, 207 (App. Div. 2003). While expert testimony in this area on occasion may be invaluable, Kinsella v. Kinsella, 150 N.J. 276, 318-19 (1997), it is not required.

IV.

Turning to plaintiff's cross-appeal, we affirm the trial judge's determination that plaintiff failed to meet her burden of proof that the American Express credit card debt had been incurred prior to the institution of the divorce proceedings, so as to require its equitable distribution. See Clark v. Clark, 324 N.J. Super. 587, 597 (Ch. Div. 1999) ("Where a debt is challenged as non-marital, the owing party bears the burden to show that the debt is traceable to a marital asset."); Brown v. Brown, 348 N.J. Super. 466, 473 (App. Div.) (recognizing that marital liabilities must be considered when awarding equitable distribution), certif. denied, 174 N.J. 193 (2002); Pascale v. Pascale, 140 N.J. 583, 609 (1995) (generally recognizing the date on which the divorce complaint is filed as fixing the marital termination date for purposes of equitable distribution).

Here, the statement marked into evidence gives no indication of the dates upon which charges were incurred. Moreover, that subject was not addressed by plaintiff in her trial testimony. A form of order by consent is included in the record that provides, in paragraph five as follows:

The parties shall pay the monthly minimums on the Plaintiff's American Express card on a 2/3 Defendant, 1/3 Plaintiff basis pendente lite basis without prejudice to a claim for allocation at the end of the case. Parties to make direct payment to American Express for their respective obligations.

However, correspondence to the judge, dated April 18, 2007, discloses that defendant declined to agree to the terms of paragraph five without receipt of unredacted copies of plaintiff's American Express statements and cancellation of the account. Moreover, no evidence establishes the amount of the balance in April 2007, whether some or all of the then-existing charges were incurred after the filing of the divorce complaint in March 2006, or whether the charges existing at the time of the divorce trial were incurred before or after that filing.

As a final matter, plaintiff challenges the trial judge's determination not to award counsel fees in her favor. The Supreme Court has summarized the factors to be considered by the judge in this respect, stating:

In a nutshell . . . , the court must consider whether the party requesting the fees is in financial need; whether the party against whom the fees are sought has the ability to pay; the good or bad faith of either party pursuing or defending the action; the nature and extent of the services rendered; and the reasonableness of the fees.

[Mani v. Mani, 183 N.J. 70, 94-95 (2005).]

See also R. 5:3-5(c). "The application of these factors and the ultimate decision to award counsel fees rests within the sound discretion of the trial judge," Gotlib v. Gotlib, 399 N.J. Super. 295, 314-15 (App. Div. 2008) (citations and internal quotation omitted), which is disturbed on review "'only in the rarest of occasions.'" Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)). We do not find such a rare occasion to have been presented in this case.

Affirmed.

Defendant's employment commenced at Paine Webber, which was purchased by UBS in 2000.

Johnson & Johnson common stock traded at about $57 on February 13, 2009. See Johnson & Johnson, Historic Stock Lookup, http://www.investor.jnj.com/lookup.cfm?historic_Month=2

&historic_Day=13&historic_Year=2009. Thus, the restricted shares were worth about $48,849 at vesting.

The record does not permit independent verification of these figures.

We note that defendant's notice of appeal states that he is appealing "Parenting Time, Alimony and Child Support." Defendant's brief did not include a discussion regarding the child-support determination. "An issue not briefed is deemed waived." W.H. Indus. v. Fundicao Balancins, Ltda, 397 N.J. Super. 455, 459 (App. Div. 2008); Pressler, Current N.J. Court Rules, comment 4 on R. 2:6-2 (2010).

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A-2822-07T3

October 15, 2009