LINDA STRAUSS v. BABAK SAADATMAND

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

A-2610-13T1

LINDA STRAUSS,

Plaintiff-Respondent,

v.

BABAK SAADATMAND,

Defendant-Appellant.

______________________________________

October 3, 2014

Argued September 16, 2014 Decided

Before Judges Yannotti, Fasciale and Hoffman.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-622-11.

Christine C. Fitzgerald argued the cause for appellant (Lesnevich & Marzano-Lesnevich, LLC, attorneys; Madeline Marzano-Lesnevich, of counsel; Ms. Fitzgerald, on the brief).

Linda Strauss, respondent, argued the cause pro se.

PER CURIAM

In A-4661-12, defendant appeals from the Final Judgment of Divorce (the "FJOD") dated February 21, 2013, the Amended Final Judgment of Divorce (the "AFJOD") dated February 26, 2013, and an order dated May 23, 2013, denying his motion for reconsideration of the judgments. In A-2610-13, defendant appeals from an order dated November 4, 2013, awarding plaintiff post-judgment counsel fees.

We address both appeals in this opinion. For the reasons that follow, in A-4661-12, we affirm; and in A-2610-13, we affirm the November 4, 2013 order, as modified.

I.

Plaintiff is an attorney and defendant is an emergency room physician. The parties were married in September 2006, and one child was born of the marriage. Prior to the marriage, the parties entered into a pre-nuptial agreement (the "PNA").

The PNA stated that, upon dissolution of the marriage, the parties' "Separate Property" would not be subject to distribution pursuant to the N.J.S.A. 2A:34-23, as amended from time to time, or other similar laws, "but shall remain the separate property of the owner, free and clear of all claims and rights, whatsoever by the other property." The term "Separate Property" was defined in part in the PNA as

[A]ll property now owned or hereafter acquired during the marriage by either party in their respective sole names; the property now owned by each of the parties is detailed in Schedules A and B; all distributions from any trust established for the benefit of a party, in whole or in part; all gifts and inheritances; all real and personal property hereafter acquired by either party in their respective names or trusts for their benefit by way of gift, inheritance or other gratuitous transfer from a third party or otherwise acquired from their respective parents; interests in any present or future entities whether corporate, partnership, limited partnership, limited liability company, family limited partnership, trusts, joint venture or derived from the Separate Property or any business interests of the Strauss family, . . . including appreciations and gains on capital assets, replacements, income from proceeds from such real and personal property whether due to market conditions or the services, skills or efforts of either party. . . .

In addition, the term "Marital Property" was defined in the PNA as

[R]eal and personal property hereafter acquired during the marriage in the joint names of the Parties; real and personal property purchased in advance of the marriage date to furnish . . . and for use at that premise; and real and personal property purchased using assets in the joint names of the Parties, whether by gift or otherwise.

The PNA stated that, in the event of dissolution of the marriage, "Marital Property" would be divided by "the proportion of each party's contribution to the marital estate."

On September 7, 2010, plaintiff filed a complaint for divorce in the Family Part, which stated that plaintiff had been a bona fide resident of New Jersey for one year prior to the filing of the action. The complaint noted, however, that there was an ongoing matrimonial action in the Supreme Court of the State of New York.

The complaint indicated that the New York court had entered an order providing that, based on the parties' PNA, New Jersey would be the forum for decisions regarding equitable distribution, spousal support and counsel fees. In the complaint, plaintiff sought an order equitably distributing the parties' property, real and personal, which was acquired during the marriage or in anticipation thereof, as well as an award of attorney's fees and costs.

The court afforded the parties an opportunity for discovery and, thereafter, conducted a trial on eleven separate dates, after which the court filed a written opinion dated February 21, 2013, addressing the disputed claims. In the opinion, the court initially noted that the parties had stipulated that: (1) the PNA was valid and enforceable; (2) the parties had each waived any award of post-judgment spousal support and any interest in the retirement benefit "packages" of the other party; and (3) defendant had agreed to return all of the monies he had withdrawn from a Uniform Transfers to Minors Account (UMTA) that was maintained for the parties' child.

Based on the evidence presented during the trial, the court found that the PNA did not address the wages earned by the parties during the marriage from their respective employments, and therefore, this income would be subject to equitable distribution in accordance with N.J.S.A. 2A:34-23. The court considered the criteria for equitable distribution in N.J.S.A. 2A:34-23.1, and concluded that defendant's wage income should be divided equally.

The court also found that certain real estate in Skokie, Illinois (the "Skokie Property") that defendant had acquired prior to the marriage, was his "Separate Property" under the terms of the PNA. The court determined, however, that defendant had diverted $90,000 of his wage income to pay the principal on a Home Equity Line of Credit loan (the "HELOC" loan), which was a lien on the property. Defendant also had deposited $113,623 of his income in his pre-marital accounts with Charles Schwab and DWS Scudder.

The court ruled that plaintiff was entitled to one-half of the $90,000 diverted to pay the loan, as well as one-half of the $113,623 of income deposited in the accounts. The court determined, however, that defendant was entitled to reimbursement for the pendente lite health and automobile insurance premiums he paid on plaintiff's behalf.

In addition, the court determined that plaintiff would retain title to one of the parties' vehicles, while defendant would retain title to the other. The court also found that the amounts defendant owed plaintiff would be offset by $6500, which represented the differential in the "purchase value" of the vehicles. The court directed that the marital residence be sold, with the proceeds of the sale divided equally between the parties, after defendant was reimbursed for the monies he paid to pay-down the principal on the mortgage after October 2008.

The court also determined the other marital personal property, such as furniture, rugs, paintings and the like, would be divided equally by means of a lottery. The court required defendant to pay plaintiff one-half of the monies he had withdrawn from the parties' joint bank accounts, as well as one-half of the value of certain personal property. In addition, the court awarded plaintiff attorney's fees and costs in the amount of $100,000.

The court memorialized its decision in the FJOD dated February 21, 2013, which was modified in part by the AJOD dated February 24, 2013. On March 18, 2013, defendant filed a motion for reconsideration of the trial court's judgments.

After entertaining oral argument on the motion, the court entered an order dated May 23, 2013, denying the motion. The court also denied defendant's application to stay the judgments pending appeal. In addition, the court entered a monetary judgment for the amount awarded to plaintiff, and ordered that an arrest warrant would issue if defendant failed to pay that amount by June 15, 2013.

On June 7, 2013, defendant filed a notice of appeal from the FJOD, the AFJOD and the order denying his motion for reconsideration. Thereafter, defendant filed another motion in the trial court in which he sought the court's recusal and reconsideration of the judgments. Plaintiff filed a cross-motion seeking, among other relief, enforcement of the prior orders and an award of additional counsel fees.

On August 13, 2013, the court heard argument on these applications and placed its decision on the record. The court denied defendant's motion, and granted plaintiff's cross-motion in part, enforcing various provisions of the judgments.

The court memorialized its decision in an order dated August 13, 2013, which provided, among other things, that plaintiff's counsel shall submit a certification in support of the application for attorney's fees and costs, with copies of his billing statements, to the court by August 19, 2013. The order required defendant to file any opposition to the application by August 26, 2013.

On August 19, 2013, plaintiff's counsel submitted his certification to the court. By letter dated August 26, 2013, defendant requested an extension of time in which to respond to this certification. In his letter, defendant stated that he had been out of town on work. The court refused to extend the time to respond.

On November 4, 2013, the court filed a written opinion concluding that plaintiff should be awarded post-judgment attorney's fees and costs in the amount of $40,500. The court's decision was memorialized in an order dated November 4, 2013. On December 17, 2013, defendant filed a notice of appeal from that order.

II.

We turn first to defendant's appeal from the trial court's final judgment.

A. Equitable Distribution of Defendant's Wage Income.

Defendant argues that the trial court erred by ruling that the wage income that defendant earned during the marriage was subject to equitable distribution. Defendant contends that the income he earned during the marriage was "Separate Property" under the PNA. Defendant asserts that the record shows that the parties each maintained separate accounts, in which they deposited their respective wage earnings. He says the wage income only became part of the marital estate when the parties transferred monies from their separate accounts to a joint account, from which marital expenses were paid. We are not persuaded by these arguments.

As we noted previously, the PNA defined the parties' "Separate Property" as real or personal property "now owned or hereafter acquired during the marriage by either party in their respective sole names. . . ." The PNA also defined "Marital Property" as "real and personal property hereafter acquired during the marriage" in the parties' joint names.

As the trial court correctly found, the PNA does not expressly include the parties' respective wage earnings as "Separate Property" or "Marital Property." Indeed, the PNA does not provide that such income will be considered "real" or "personal property." Moreover, the PNA states the following

The parties acknowledge that [defendant] has assets including interests in certain checking accounts, savings and IRA accounts, mutual funds, investment funds and as beneficiary of certain IRA and annuity accounts, and other of his parent[s']. [Defendant] may inherit certain assets, interests and real and personal property from his parents. All of the above and those interests and valuations listed on Schedule B are to be considered [defendant's] Separate Property. It is the intention of this agreement to memorialize the Parties' understanding that these present assets and future potential assets resulting from the grow of the various inheritances and businesses, including any distributions, dividends, property, or whatever form those assets may take and the increase in appreciations in quantity or value are to be considered the Separate Property of [defendant]. By executing this Agreement, [plaintiff] acknowledges the disclosure of these present and potential assets and waives any and all claims and rights to or interests in [defendant's] Separate Property.

The PNA thus notes that, at the time the parties entered into that agreement, defendant had certain checking, savings and IRA accounts. The PNA indicates that the monies in such accounts, and any increase in the value of these assets, would be considered "Separate Property."

The PNA does not state, however, that any monies earned by defendant during the marriage, which are deposited in those accounts, would also be considered "Separate Property." We are therefore convinced that the PNA does not govern the equitable distribution of the parties' wage income.

In addition, defendant argues that the matter should be remanded to the trial court for further proceedings on the intent of the parties regarding the relevant language of the PNA. Again, we disagree.

"When interpreting a contract, the court's goal is to ascertain the intention of the parties to the contract as revealed by the language used, taken as an entirety; and in the quest for intention, the situation of the parties, the attendant circumstances, and the objects they were thereby striving to attain." Driscoll Constr. Co., Inc. v. State, Dept. of Transp., 371 N.J. Super. 304, 313 (App. Div. 2004) (internal citations and quotation marks omitted). The interpretation of the meaning of the contract may be determined by the court, as a matter of law, unless there is ambiguity in its terms. Id. at 313-14 (citing Bosshard v. Hackensack Univ. Med. Ctr., 345 N.J. Super. 78, 92 (App. Div. 2001)).

Here, the trial court correctly determined that the relevant provisions of the PNA are clear and unambiguous. The PNA clearly defines the property that will be considered to be "Separate Property." The PNA does not state that income the parties earn during the marriage will be treated as "Separate Property."

Even so, the court allowed the parties to testify concerning the circumstances surrounding the execution of the PNA, and the objects the parties intended to achieve. Defendant testified concerning the parties' differing financial situations and their respective assets. He also discussed the drafts of the agreement, and changes made to the drafts, which he claimed showed the parties intended that their wage income would be treated as "Separate Property" under the PNA.

The court concluded, however, that the plain language of the PNA governed and the agreement did not apply to the parties' respective wage income. We are convinced that the record supports the court's determination and a remand for the taking of further testimony concerning the parties' intent is not warranted.

B. Distribution of the Marital Property.

Next, defendant argues that the trial court erred by failing to distribute the "Marital Property" in accordance with the PNA's provision requiring division on the basis of the proportions of their respective contributions to the marital estate. We note, however, that defendants wage income was not covered by the agreement.

Thus, distribution of that income, which resulted in the court's order requiring defendant to pay plaintiff $45,000 from the diversion of $90,000 to pay the HELOC loan, and $56,811.50 from the deposits made to defendant's pre-marital accounts with Charles Schwab and DWS Scudder, was subject to distribution pursuant to N.J.S.A. 2A:34-23. Other property considered "Marital Property" under the PNA was subject to distribution in accordance with that agreement.

We are convinced that the trial court did not err by dividing all of the marital property on a fifty-fifty basis. Here, the court considered the criteria in N.J.S.A. 2A:34-23.1 and made detailed findings of fact. The court's analysis supports the division of the wage income on a fifty-fifty basis. Moreover, the fifty-fifty split was generally in accord with the proportional contributions the parties made to the marital estate, thereby justifying the equal division of "Marital Property" pursuant to the PNA.

Defendant argues, however, that the court's distribution of the "Marital Property" pursuant to the PNA was flawed for several reasons. He contends plaintiff's earnings were no more than $150,000, and therefore any distribution to plaintiff should be limited to that amount. He also contends that the evidence does not indicate that the parties contributed equally to the marital estate. Neither argument has merit.

We note that the PNA does not provide that a party's share of "Marital Property" would be limited to the amount of that party's contribution to the marital estate. Moreover, the trial court's finding that the parties contributed equally to the marital estate is binding on appeal because it is supported by substantial, credible evidence in the record. Cesare v. Cesare, 154 N.J. 394, 411-12 (1998) (citing Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974)).

As the trial court noted in its opinion, plaintiff's annual gross income was $150,000. Plaintiff testified that she devoted all of her earnings to the marital estate, and the court accepted that testimony. The marriage lasted about two years. Therefore, plaintiff's contributions to the marriage were not limited to her gross income for one year.

Moreover, the court noted that defendant's annual gross income was $350,000. The court stated that defendant had submitted evidence showing he contributed $175,969.78 to the parties' joint account. Defendant claims that he contributed about $236,000 to the marital account, but it appears that the court did not accept his testimony on that point.

In any event, there is sufficient evidence in the record to support the court's determination that plaintiff's contributions to the marital estate was at least equivalent to the $175,969.78 defendant deposited in the parties' joint account. We therefore conclude that there is sufficient credible evidence in the record to support the court's determination that the parties' marital property should be divided on a fifty-fifty basis.

C. Application of N.J.S.A. 2A:34-23.1.

Defendant maintains that the court incorrectly applied the criteria in N.J.S.A. 2A:34-23.1. He contends the court erroneously determined that plaintiff contributed all of her earnings to the marital expenses. He asserts that the court did not properly address the economic circumstances of the parties at the time of the division of the property.

We are convinced that these arguments are without sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). We are convinced the court properly considered the relevant criteria under N.J.S.A. 2A:34-23.1, and the record supports the court's determination that the wage income subject to distribution under N.J.S.A. 2A:34-23 should be divided on a fifty-fifty basis.

D. Dissipation of Defendant's Income to Pay HELOC Loan.

Defendant further contends that the court erred by ordering him to pay plaintiff one-half of the amount of the HELOC loan pertaining to the Skokie Property. He argues that plaintiff is not entitled to any of the monies used to pay the loan. He also argues that there is no evidence that the value of the property increased as a result of his payment of the HELOC loan.

We find no merit in these arguments. Here, the trial court found that defendant diverted his wage earnings to pay the principal on the HELOC loan. The record shows that defendant took $90,000 of his income and applied it to a loan that was a charge upon the Skokie Property, which he had acquired in his own name before the marriage. By paying off the loan, defendant clearly provided himself with a monetary benefit. Since the loan was no longer a charge on the property, the value of the property to defendant increased.

Defendant also argues that the court erroneously failed to treat plaintiff's wage income in the same manner as it treated his. He contends that, while the court treated all of his income as divisible marital income, the court "essentially ignored" the income that plaintiff earned during the marriage. Again, we disagree. The court did not ignore the income that plaintiff earned during the marriage. The court found that all of plaintiff's earnings were applied to the marital enterprise. Furthermore, no evidence was presented at trial indicating that plaintiff diverted any of her earnings to her own personal accounts or assets.

E. Other Equitable Distribution Rulings.

Defendant argues that the trial court's other equitable distribution rulings were not supported by the record. He maintains the monies he used to pay the HELOC loan should not have been subject to distribution because the loan proceeds were used for marital expenses. He also contends that a portion of the monies deposited in the Charles Schwab account was withdrawn from the parties' joint account.

In addition, defendant contends that the court erred by finding that he withdrew certain monies from the parties' joint account to pay a separate personal debt. He maintains that the court miscalculated the amount of the credit he is due for the pendente lite health and auto insurance premiums. He says the total credit should be $37,987.49, rather than the $13,979.14 found by the court. Defendant also contends that the court erred in its valuation of the parties' vehicles.

We are convinced that these arguments are without sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). Suffice it to say, there is sufficient credible evidence in the record to support the court's findings on these issues.

F. Award of Counsel Fees.

Defendant maintains that the court abused its discretion by awarding plaintiff $100,000 in counsel fees. Defendant argues that the court failed to properly assess the financial circumstances of the parties. He contends that the court erred by stating that his resignation from a higher paying job shortly before separation, and his refusal to earn additional monies "moonlighting" was evidence of bad faith. He also argues that the court failed to specifically relate any of plaintiff's legal fees to any bad faith on his part.

Attorneys' fees may be awarded in an action in the Family Part. R. 4:42-9(a)(1). When considering an application for such fees, the court should consider the following

(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 parties; (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).]

"[T]he award of counsel fees and costs in a matrimonial action rests in the discretion of the court." Williams v. Williams, 59 N.J. 229, 233 (1971) (citing Handelman v. Handelman, 48 N.J. Super. 184, 191-95 (App. Div. 1954)).

We reject defendant's contention that the court failed to properly assess the respective financial circumstances of the parties. We note that the record supports the court's findings regarding defendant's income. We also note that the court's passing comment that defendant's current salary is indicative of bad faith was not critical to its analysis. The court found that both parties have the ability to fund their own counsel fees and the costs of their experts.

Furthermore, the court detailed the extent to which defendant demonstrated bad faith in the New Jersey administrative and New York court proceedings. The court reasonably considered that factor, along with others, in determining that defendant should pay $100,000 of the fees incurred by plaintiff. We are convinced that the court's decision was not an abuse of discretion.

We have considered defendant's other contentions regarding the trial court's decisions on equitable distribution and counsel fees and find them to be of insufficient merit to warrant discussion in this opinion. R. 2:11-3(e)(1)(E).

Accordingly, we affirm the FJOD, the AFJOD, and the court's order denying defendant's motion for reconsideration.

III.

We turn to defendant's appeal from the trial court's order of November 4, 2013. Defendant contends that the court erred by awarding plaintiff counsel fees in the amount of $40,500.

First, defendant argues that the trial court prohibited him from opposing plaintiff's counsel-fees certification because he did not receive that certification until one week after it was filed, which he claims was the same date his opposition was due. Defendant states that he did not receive the certification earlier because he was "out of town on business." He also states that he required additional time to respond in view of what he calls the "sheer volume" of the certification. These arguments are without merit.

"It is peculiarly within the sound discretion of the trial court" to resolve extension requests, "and an appellate court should not interfere unless it appears an injustice has been done." Allegro v. Afton Village Corp., 9 N.J. 156, 161 (1952) (internal citations omitted). Here, defendant has not shown that the court abused its discretion by denying his request for additional time in which to respond to the certification of plaintiff's counsel.

As we have explained, the record shows that on August 13, 2013, the court ordered plaintiff's counsel to file the certification by August 19, 2013, and defendant was ordered to respond by August 26, 2013. Defendant never indicated that he was going to be out of town on business in the period after the certification was to be provided. Moreover, defendant could have arranged to have the certification provided to him. In addition, defendant did not seek additional time to respond until the day his response was due.

Next, defendant contends that, in his certification, plaintiff's counsel failed to specifically address the two factors under RPC 1.5(a), specifically, the time and labor required, the novelty or difficulty of the questions involved, and the skill required to perform the legal service properly; and the time limitations imposed by the client or by the circumstances. RPC 1.5(a)(1), (5).

These arguments are meritless. Here, the trial court was well aware of the issues involved and the time and labor required to perform the legal services properly. Moreover, there is no indication that counsel was limited in the time he could devote to the matter by plaintiff or the circumstances.

Defendant also argues that the court erred in its analysis of the Rule 5:3-5(c) factors. Again, we disagree. As indicated in the decision issued with the November 4, 2013 order, the court thoroughly addressed each factor.

The court noted that since the entry of the final judgment, defendant had "embarked on a course of conduct that demonstrates his continued recalcitrance and bad faith in connection with each and every aspect of this litigation." The court pointed out that in the decision rendered after the trial, the court had detailed actions that showed defendant's bad faith.

The court added that, since the entry of the judgment, defendant had disregarded the court's orders as well as the orders of the New York court. The court pointed out that plaintiff had been left with no choice but to file various enforcement applications, thereby incurring significant additional fees.

Defendant argues that he presented evidence showing compliance, attempted compliance, or excusable confusion with respect to various provisions of the judgment. However, there is more than sufficient evidence in the record to support the court's finding that defendant had acted in complete disregard of its orders and the orders of the New York court.

In addition, defendant contends the New Jersey court could not award legal fees incurred in New York. However, the New York court's order expressly gave the New Jersey court exclusive jurisdiction for counsel-fee awards.

Defendant also contends that the court erred by awarding plaintiff $40,500. We agree, in part. In his certification, plaintiff's attorney stated that plaintiff had incurred $31,641.98 in legal fees and costs to compel defendant to comply with the orders of the New Jersey and New York courts. He asked the court to order defendant to "remit an additional $30,000 in counsel fees" to plaintiff.

In its opinion, the court stated that the certification indicated that plaintiff incurred $31,200 in counsel fees in connection with the New Jersey proceedings alone. The court said plaintiff had incurred an additional $9,300 in connection with the New York litigation.

There is, however, no support in the record for the finding that plaintiff incurred an additional $9,300 for the New York proceedings. In our view, the court should have awarded plaintiff no more than the $30,000 she was seeking. We therefore modify the order to award plaintiff attorney's fees and costs in the amount of $30,000. As so modified, the court's order of November 4, 2013 is affirmed.

Affirmed in A-4661-12; affirmed as modified in A-2610-13.