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August 7, 2013


Submitted March 19, 2013 Decided


Before Judges Lihotz and Kennedy.


On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-0853-07.


Snyder & Sarno, LLC, attorneys for appellant (Angelo Sarno, of counsel and on the brief; Scott D. Danaher, on the brief).


Anne L. Burkett, respondent pro se.


Defendant appeals from a portion of the Family Part's post-judgment order in this matrimonial matter requiring him to provide plaintiff with, among other things, his income tax returns each year until he has paid in full his substantial arrearages in alimony and equitable distribution. Defendant argues that that portion of the motion judge's order is not based upon "good cause" and violates defendant's "legitimate expectation of privacy." We disagree and affirm.

We briefly set forth the facts, which are essentially uncontested.

Plaintiff and defendant were married in 1981, and two sons were born of the marriage in 1989 and 1993, respectively. The marriage was terminated by a dual judgment of divorce dated August 22, 2007, which incorporated the terms of a property settlement agreement (PSA) the parties agreed to on the same date. The PSA required defendant to pay to plaintiff $360,000 per year in permanent alimony, payable in monthly installments of $15,000, with a lump sum payment of $180,000 due at the end of each year. The PSA also required defendant to pay to plaintiff $250,000 in satisfaction of her claim to equitable distribution of defendant's restricted stock options, in installments as follows: $80,000 upon signing the PSA; $80,000 within one year; and $90,000 within two years.

Defendant failed to make the required payments under the PSA and plaintiff filed a motion to enforce the PSA. On March 23, 2009, the Family Part entered an order which modified the payment schedule and set an interest rate for the arrearages. The order also required the parties to mediate the outstanding financial issues.

After mediation, the parties executed a settlement agreement (SA) dated December 29, 2010, which, in pertinent part, modified alimony and child support payments, and accrued defendant's arrearages in alimony and equitable distribution to March 1, 2011, at which time defendant would pay off the sums over ten years with interest in amounts determined by an accountant. The SA also provided that if defendant failed to make any of the payments, the remaining balance would become due and plaintiff would be entitled to "entry of a judgment" in the amount of the balance.

Defendant failed to make the payments in accordance with the SA and plaintiff filed a motion to enforce the settlement agreement. She claimed that defendant owed $706,089.60 in alimony arrearages and $182,727.64 in equitable distribution arrearages, including interest. Plaintiff sought judgment for those sums, as well as an order requiring defendant to provide "proof of income" together with tax returns.

Defendant cross-moved for an order extending the time to make payments and requiring the parties to return to mediation. He also challenged the calculation of the arrearages, but did not provide an alternative figure.

In a certification, defendant stated he "went from earning $1 million per year to making less than $360,000 per year" as a result of the "economy" and other circumstances beyond his control. He explained that in 2008, he and several partners made "two significant real estate investments" that subsequently lost money and that he had given personal guarantees on the projects in excess of $7 million. He added that his employment with "Juniper Networks" ended in October 2011, and that he was interviewing for jobs in Spain, as well as in California and New Jersey. Nonetheless, defendant earned more than $480,000 in 2011 but conceded he has "nothing to show for it."

On the return date of the motions, defendant's counsel conceded that defendant earned $1,130,960 in 2011, but argued that defendant also had many outstanding liabilities. He argued that the parties should return to mediation for a payment schedule and that defendant should not be required to provide his tax returns in the future unless he "defaults."

On February 24, 2012, the Family Part judge executed an order which, in pertinent part, entered judgment against defendant for $1,077,442 for alimony and equitable distribution arrearages and interest, and set forth a payment schedule, based on "defendant's representation that he is currently unemployed, without assets and is borrowing funds" to make the payments. The order also required defendant to provide to plaintiff "proof of his income from any and all sources . . . including but not limited to tax returns. . ." for each year until his arrearages are paid in full. The judge explained that she included the latter provision in the order because "plaintiff should not have to wait longer than necessary for payments that are due to her if defendant's ability to pay his arrearage is enhanced."

This appeal followed. As noted, the only issue is whether the motion judge erred in requiring defendant to provide his tax returns each year until he pays his obligations to plaintiff under the order. Defendant argues that the judge made "no findings of fact or conclusions of law on this issue of good cause."

Income tax records are not privileged documents and their production may be required for good cause. DeGraaf v. DeGraaf, 163 N.J. Super. 578, 583 (App. Div. 1978). In Ullmann v. Hartford Fire Ins. Co., 87 N.J. Super. 409, 415 (App. Div. 1965), we stated:

It is impossible to lay down a universal definition of good cause for disclosure and inspection, or an all-inclusive and definitive catalogue of all of the circumstances to be considered by a court in determining whether there is good cause. Each case must be decided upon its own facts. However, as is said in 4 Moore's Federal Practice (2d ed), para. 34.08: "Considerations of practical convenience should play the leading role in determining what constitutes good cause * * *."

Good cause for the production of income tax returns is not shown when the movant has the information sought or can obtain it with little difficulty through other methods. Cooper v. Hallgarten & Co., 34 F.R.D. 482 (D.C.S.D.N.Y. 1964); Wilkerson v. Newark Diner, Inc., 3 Storey 578, 173 A.2d 883 (Del. Super. Ct. Del. 1961); Blanchet v. Colonial Trust Company, supra; Jacobs v. Kennedy Van Saun Mfg. & Eng. Corp., 12 F.R.D. 523 (D.C. Pa. 1952); Garrett v. Faust, 8 F.R.D. 556 (D.C.E.D. Pa. 1949).


New Jersey, in common with most jurisdictions in which the question has arisen, has permitted discovery and inspection of income tax returns for good cause. Finnegan v. Coll, 59 N.J. Super. 353, 356 (Law Div. 1960); cf. Application of Frey, 26 N.J. Misc. 193 (O. & T. 1948); Annotation, 70 A.L.R.2d 240-265 (1960).


These principles guide our decision here.

Defendant obviously has the capacity to earn a high income, and his finances are highly sophisticated, with interests in properties in several states. Yet, he has defaulted twice on two agreements he voluntarily entered into with plaintiff for the payment of alimony and equitable distribution. On each occasion, he cited economic circumstances beyond his control that led to his defaults.

Prior to the entry of the order under appeal, defendant expressly urged the court to extend the time for his payment of these obligations, citing his unemployment, lack of assets and high debts. The judge granted defendant the extension he sought but conditioned the exercise of that discretion upon defendant's providing his tax information each year so that plaintiff may promptly move to accelerate the obligation should defendant's finances improve.

We find no abuse of discretion in the judge's order. It is clear that plaintiff has no alternative way to monitor defendant's far-flung finances or to determine whether he has the resources to pay the debt he concedes he owes to her. Indeed, the judge's order was clearly warranted by defendant's own claims of impecuniousness which prompted her to agree to an extended payout in the first instance.

Defendant suggests that the judge should have explored an alternative, such as requiring him to submit his tax records to an independent third party, an accountant or a mediator, who might then determine whether defendant's finances had improved to such an extent that his payment obligations should be accelerated. However, we see no reason to remove from plaintiff the right to determine for herself whether to seek that relief.