PAUL RUSSAK v. FINETTE RUSSAK

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.




                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-1828-19

PAUL RUSSAK,

          Plaintiff-Respondent,

v.

FINETTE RUSSAK,

          Defendant-Appellant.


                   Argued December 2, 2021 – Decided December 20, 2021

                   Before Judges Mawla and Mitterhoff.

                   On appeal from the Superior Court of New Jersey,
                   Chancery Division, Family Part, Hunterdon County,
                   Docket No. FM-10-0288-18.

                   Allen J. Scazafabo, Jr., argued the cause for appellant
                   (Riker Danzig Scherer Hyland & Perretti, LLP,
                   attorneys; Allen J. Scazafabo, Jr., of counsel and on the
                   briefs; Alyssa DeFuria, on the briefs).

                   Michael J. Weil argued the cause for respondent
                   (Snyder Sarno D'Aniello Maceri & da Costa, LLC,
                   attorneys; Michael J. Weil, of counsel and on the brief;
                   Jonathan Gonzalez, on the brief).
PER CURIAM

      Defendant Finette Russak appeals from a November 21, 2019 final

judgment of divorce entered following a sixteen-day trial. Judge Robert G.

Wilson heard testimony from defendant, plaintiff Paul Russak, two of the

parties' adult children, and three other fact witnesses. He also considered a

voluminous record, including documents, a video, and electronic recordings

admitted into evidence. He issued a lengthy decision detailing his findings,

which we now affirm.

      The parties had been married for nearly four decades when plaintiff filed

for divorce in January 2018. Plaintiff was sixty-four and defendant sixty-two

years of age when the matter was tried. Plaintiff was the sole wage earner,

operating a solo non-CPA tax preparation business. He also worked for seven

years as the director of finance for a law firm earning approximately $150,000

per year until he was laid off in 2013. Defendant was a homemaker and raised

the children with help from plaintiff. Both parties have health problems.

      During the marriage, plaintiff acquired three pensions, which went into

pay status in 2019 at approximately $1,500 per month. At trial and in her

summation, defendant waived equitable distribution from the pensions and

urged the judge to instead include the pension income in the alimony calculation.


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Plaintiff also had an IRA which by November 2014 was valued at approximately

$326,683. After the law firm laid off plaintiff, he made a series of significant

withdrawals between 2014 and 2018 to meet the family's expenses.                 He

continued to draw on the account pendente lite to meet expenses and fund the

parties' attorneys' fees. Defendant argued he dissipated the asset.

      Defendant also argued plaintiff was underemployed and could earn

$50,000 in addition to the business earnings. Plaintiff testified he searched

extensively for employment following his termination. One of the children

corroborated his efforts, noting several conversations with him where he

expressed frustration about not finding comparable employment. In 2014, after

approximately a year of job searching, plaintiff took a series of jobs as a cashier

to support the family until 2015, when he took a family leave of absence to help

defendant with her medical needs. He did not return to work after leave ended.

      During this time period, plaintiff continued operating his tax preparation

business. He testified the business operated from his home, was seasonal, and

served approximately 120 clients. It only advertised through Facebook and

owned no assets. Between 2016 and 2018, the business generated an average

yearly gross revenue of $43,024.       Neither party offered expert testimony

regarding the business's value or plaintiff's employability.


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      Each party requested an award of counsel fees.          Plaintiff incurred

approximately $160,000 in fees and requested defendant pay $60,000, and

defendant incurred about $167,000 in addition to an unknown sum with prior

counsel, and requested plaintiff pay $167,608.35.      Prior to trial, the judge

ordered the parties to exchange their "last best" settlement offers to avoid the

trial. He directed counsel to submit the sealed offers to him to consider in

deciding the counsel fee issue; a procedure neither party objected to.

      Although the parties filed joint tax returns for tax years 2013-16,

defendant testified plaintiff underreported his income for 2013-15. The trial

evidence also showed there were no receipts for business expenses plaintiff

testified to and he could not recall the charitable organizations the parties

donated to on their returns. Plaintiff did not declare gifts received from his

clients in lieu of payment for his tax preparation services. Defendant claimed

no knowledge of the underreported income. She asserted she was not permitted

to review the returns and only presented the signature page for her endorsement.

      After the trial and written summations, defendant's counsel wrote to the

judge, advising her client would not qualify for Medicaid if she reported alimony

income and instead requested the pensions be equitably distributed. Counsel

stated: "In light of this new information about [health insurance] . . . coverage


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and alimony, we also ask the [c]ourt to now consider modifying by increasing

[defendant]'s living expenses by at least $10,000 yearly to partly account for the

higher costs of health insurance . . . ." The judge also learned plaintiff had begun

collecting social security benefits, a fact defendant acknowledged.

      In his detailed findings, the judge concluded plaintiff was more credible

than defendant. The judge awarded plaintiff the pensions and denied defendant's

request for equitable distribution reasoning she did not file a formal application

to reopen the record.

      The judge rejected defendant's dissipation claim finding she did not meet

her burden of proof.      He concluded the funds were necessary to replace

plaintiff's lost earnings and meet the parties' needs, including defendant's health

insurance expenses.

      Citing plaintiff's testimony regarding his job search, the parties' child's

testimony corroborating plaintiff's effort, and the lack of evidence to the

contrary, the judge concluded defendant did not prove plaintiff could earn an

additional $50,000. Instead, the judge imputed additional earnings of $17,550

based on a thirty-seven-and-one-half hour work week, using the minimum wage

rate in Massachusetts where plaintiff resides.       The judge totaled plaintiff's




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earnings at $88,242, comprised of the business earnings, imputed income,

pension payments, and social security benefits.

      The judge found the business had no value to equitably distribute. He

noted neither party had it appraised, and given the facts in evidence, he could

not equitably distribute the business and also require plaintiff to pay alimony.

      Analyzing the statutory alimony factors, the judge rejected defendant's

demand for $4,600 per month finding it exceeded "both her reasonable . . . needs

and [plaintiff's] ability to pay and meet his needs." He awarded defendant open

durational alimony of $2,500 per month.

      The judge also ordered the sale and equal equitable distribution of the

marital residence and plaintiff's "massive assortment of collectibles and other

personal property" totaling over 300,000 items acquired during the marriage.

The judge awarded defendant most of the proceeds of a mold litigation

settlement and made other equitable distribution of assets not relevant to this

appeal.

      The judge also ordered an equitable distribution of various liabilities,

including taxes from the liquidation of the IRA, concluding defendant should

share in the tax liability because she benefitted from the IRA funds. He rejected

defendant's testimony she lacked knowledge of the underreported income and


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other tax improprieties as not credible. The judge found plaintiff's testimony

more credible "that [defendant] had full access to the returns and that she

willingly signed them and allowed them to be filed." He referred the parties to

federal and state authorities for suspected tax fraud.

      Addressing the Rule 5:3-5(c) factors, the judge characterized the parties'

financial circumstances as "rather dire." He concluded neither had the ability to

pay their own fees and each had been previously awarded fees for their conduct

during the litigation. He also noted they each incurred fees to compel discovery

and enforce court orders. While the judge found neither party acted in bad faith,

he concluded they each played a role in prolonging the litigation.

      The judge reviewed the sealed offers and concluded plaintiff's "proposal

was dramatically more reasonable." He found aside from alimony "with respect

to virtually every other issue in the case, the court made decisions close to that

which [plaintiff] was willing to settle for, or decisions even more favorable to

him than he suggested to resolve the matter. [Defendant's] settlement positions

vastly differed from the court's determinations."        The judge and awarded

plaintiff approximately $16,000 in counsel fees.

      Defendant raises the following points on appeal:

            I. THE TRIAL COURT ERRED WHEN
            AWARDING EQUITABLE DISTRIBUTION OF

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MARITAL          ASSETS,        SPECIFICALLY,
RESPONDENT'S PENSIONS, IRA AND BUSINESS,
AS IT DID NOT MAKE A PROPER FINDING OF
FACT AND CONCLUSION OF LAW APPLYING
RELEVANT CASE LAW TO THE FACTORS SET
FORTH [IN]  N.J.S.A. 2A:34-23.1.

    A.  IT WAS AN ERROR FOR THE COURT
NOT TO AWARD EQUITABLE DISTRIBUTION OF
THE RETIREMENT ASSETS, SPECIFICALLY,
RESPONDENT'S THREE PENSIONS.

     B.  IT WAS AN ERROR OF THE COURT
NOT     TO    CONSIDER    RESPONDENT'S
UNILATERAL DISSIPATION OF THE JANN[E]Y
IRA    WHEN     AWARDING     EQUITABLE
DISTRIBUTION OF THE IRA AND TAX
CONSEQUENCES.

    C.   IT WAS AN ABUSE OF DISCRETION
AND ERROR FOR THE COURT NOT TO MAKE
ANY FINDINGS OF FACT AND CONCLUSIONS OF
LAW REGARDING AN AWARD OF EQUITABLE
DISTRIBUTION    OF   THE   RESPONDENT'S
ACCOUNTING BUSINESS OR MAKE ANY
ATTEMPT TO VALUE OR DISTRIBUTE IT OR
HAVE IT VALUED POST-JUDGMENT.

II. THE COURT ERRED WHEN AWARDING
ALIMONY, AS IT DID NOT PROPERLY IMPUTE
RESPONDENT    AT   HIS  FULL  EARNING
CAPACITY.

III. THE TRIAL COURT CLEARLY ERRED AND
ABUSED ITS DISCRETION IN AWARDING
COUNSEL FEES AGAINST THE APPELLANT AS
IT DID NOT MAKE A PROPER FINDING OF FACT
AND CONCLUSION OF LAW APPLYING THE

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            FACTORS IN R[ULE] 5:3-5, AS THE COURT
            REASONED THAT APPELLANT'S SETTLEMENT
            OFFER WAS NOT IN ACCORD WITH THE
            COURT'S RULING.

            IV. THE COURT ABUSED ITS DISCRETION IN
            MAKING A FINDING THAT APPELLANT UNDER-
            REPORTED INCOME AND POTENTIALLY
            COMMITTED FRAUD.

      We defer to a trial judge's factfinding "when supported by adequate,

substantial, credible evidence." Cesare v. Cesare,  154 N.J. 394, 411-12 (1998)

(citing Rova Farms Resort, Inc. v. Invs. Ins. Co.,  65 N.J. 474, 484 (1974)). "We

do not weigh the evidence, assess the credibility of witnesses, or make

conclusions about the evidence." M.G. v. S.M.,  457 N.J. Super. 286, 293 (App.

Div. 2018) (quoting Mountain Hill, LLC v. Twp. of Middletown,  399 N.J. Super.
 486, 498 (App. Div. 2008)). "Deference is especially appropriate 'when the

evidence is largely testimonial and involves questions of credibility.'" Cesare,

 154 N.J. at 412 (quoting In re Return of Weapons to J.W.D.,  149 N.J. 108, 117

(1997)). However, "legal conclusions, and the application of those conclusions

to the facts, are subject to our plenary review." Reese v. Weis,  430 N.J. Super.
 552, 568 (App. Div. 2013) (citing Manalapan Realty, L.P. v. Twp. Comm. of

Manalapan,  140 N.J. 366, 378 (1995)).




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      The Family Part has "special jurisdiction and expertise in family matters,"

which often requires the exercise of reasoned discretion. Cesare,  154 N.J. at
 413. Family Part judges have broad discretion to allocate assets subject to

equitable distribution, Clark v. Clark,  429 N.J. Super. 61, 71 (App. Div. 2012)

(citing Steneken v. Steneken,  367 N.J. Super. 427, 435 (App. Div. 2004)), and

to make alimony determinations. Martindell v. Martindell,  21 N.J. 341, 355

(1956). Income imputation decisions are also discretionary, Storey v. Storey,

 373 N.J. Super. 464, 474 (App. Div. 2004), as are counsel fee determinations.

Barr v. Barr,  418 N.J. Super. 18, 46 (App. Div. 2011). If we conclude there is

satisfactory evidentiary support for the trial judge's findings, our "task is

complete and [we] should not disturb the result . . . ." Beck v. Beck,  86 N.J.
 480, 496 (1981) (quoting State v. Johnson,  42 N.J. 146, 162 (1964)).

      Having reviewed the arguments raised on appeal pursuant to these

principles, we affirm substantially for the reasons expressed in Judge Wilson's

thoughtful and well-written opinion. We add the following comments.

      Our review of the trial court's evidential rulings "is limited to examining

the decision for abuse of discretion." Parker v. Poole,  440 N.J. Super. 7, 16

(App. Div. 2015) (quoting Hisenaj v. Kuehner,  194 N.J. 6, 12 (2008)). We only




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reverse if the error "is of such a nature as to have been clearly capable of

producing an unjust result." Ibid. (quoting R. 2:10-2).

      The judge did not err in declining to consider defendant's informal post-

trial request for equitable distribution of the pensions. Juxtaposed with the

judge's acknowledgment after trial of plaintiff's receipt of social security funds,

which defendant did not dispute, defendant's request was accompanied by a

request to substantively modify her budgetary needs.           This request was

unsupported by the evidence in the record and amounted to a change in

defendant's testimony.    If the judge unilaterally granted it, he would have

deprived plaintiff of cross-examination and the ability to challenge defendant's

representations.    The right to cross-examine defendant was particularly

important given the judge's findings regarding her lack of credibility. We agree

a motion was required if defendant sought to reopen the evidentiary record.

      Finally, we reject defendant's argument the counsel fee award was

predicated exclusively on the settlement offers. A thorough reading of the

record shows the judge considered and applied all the relevant Rule 5:3-5(c)

factors. The settlement proposals were relevant to his assessment of Rule 5:3-

5(c)(3) and (7), which respectively require the court to consider the

reasonableness of the parties' positions during and prior to trial, and the results


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obtained. Both factors favored plaintiff. Accordingly, the judge's findings were

supported by the substantial credible evidence and were not reversible error.

      Affirmed.




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