Opinion
DOCKET NO. A-3417-12T4
09-23-2015
CHIANN-RU LIOU, Plaintiff-Respondent, v. MICHAEL PUKAO MA, Defendant-Appellant.
Goldstein, Bachman & Newman, attorneys for appellant (Howard A. Bachman, of counsel and on the brief; Sebastian Ferrantell, on the briefs). Edward Testino, attorney for respondent.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Messano and Ostrer. On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-1875-08. Goldstein, Bachman & Newman, attorneys for appellant (Howard A. Bachman, of counsel and on the brief; Sebastian Ferrantell, on the briefs). Edward Testino, attorney for respondent. The opinion of the court was delivered by OSTRER, J.A.D.
Defendant Michael Ma appeals from an amended final judgment of divorce (AJOD) entered February 8, 2013. Defendant raises issues pertaining to alimony, equitable distribution, and counsel fees. Having considered defendant's arguments in light of the record and applicable principles of law, we affirm.
I.
Plaintiff, Chiann Ru-Liou filed her complaint for divorce in June 2008. The parties were married in July 1994 in Taipei, Taiwan. When the AJOD was entered, plaintiff was forty-nine years old, and defendant was fifty-six-and-a-half years old. The parties have two sons, born in 1995 and 1997.
Both parties have advanced degrees — plaintiff a M.B.A. in accounting, and defendant M.S. degrees in engineering and computer science. Plaintiff worked as an accountant; defendant as a computer consultant. Defendant worked through an S corporation, M & C Consulting Services, Inc. (M&C), which the parties jointly owned during the marriage, but which defendant solely owned when it filed its 2010 return.
The parties initially lived in a home defendant purchased before the marriage in Middlesex. Plaintiff sold her own pre-marital home and commingled the proceeds with marital assets. The parties rented out the Middlesex house after they purchased a home in Manalapan, where they resided for the balance of their marriage. They sold the Manalapan house a month before trial began. Defendant moved back to the Middlesex house. Plaintiff bought a condominium in Manalapan.
Few issues were resolved before a protracted trial. The parties agreed to equalize the coverture portion of their retirement accounts, and to equally divide selected assets. The judge awarded plaintiff permanent alimony of $35,000 a year, commencing June 28, 2012. The court also granted plaintiff an adjustment of pendente lite support, pursuant to Mallamo v. Mallamo, 280 N.J. Super. 8 (App. Div. 1995), increasing defendant's share from sixty to seventy percent.
The court released its written decision on June 28, 2012. The same day, the court entered a simple judgment of divorce, which the court anticipated would be superseded by an amended judgment prepared by plaintiff's counsel. Disputes regarding settlement of the AJOD delayed its entry.
As part of equitable distribution, the judge awarded plaintiff fifty percent of the paydown during the marriage of the mortgage on defendant's pre-marital property in Middlesex, but rejected her claim to a share of the property's appreciation during the marriage. The court also awarded plaintiff fifty percent of the $17,007 balance in defendant's consulting firm's bank account, as of June 8, 2008. The court's opinion is silent on whether the firm was a distributable marital asset. The court ordered an equal division of the net proceeds of the sale of the Manalapan property. Various other marital accounts were to be split evenly. The court declined to grant a credit to defendant for certain withdrawals by plaintiff, rejecting his claim of dissipation.
Plaintiff's complaint was signed June 6 and filed June 13, 2008.
The court granted plaintiff primary residential custody of the two teenage boys, with every-other-weekend parenting time to defendant. The court held the issue of college expenses was not ripe. Each party was to maintain life insurance with equal death benefits. Weekly child support was ordered in the amount of $260, pursuant to the guidelines, and based on a finding that defendant's annual gross income was $164,994, and plaintiff's was $73,008. Although the parties' net income exceeded the maximum amount subject to the guidelines, the court declined to order any additional support.
Finding that defendant should bear fifty percent of plaintiff's counsel fees and costs, the court awarded plaintiff $60,000.
On appeal, defendant contends any award of alimony was unjustified. Even if alimony were appropriate, he argues the amount awarded was excessive. He does not question the alimony's duration. Defendant also challenges the adjustment of pendente lite support.
Regarding equitable distribution, defendant challenges only three aspects of the AJOD: the credit to plaintiff of half the mortgage reduction of the pre-marital property; the denial of a credit to him for plaintiff's allegedly dissipative withdrawals; and equal division of the business account. Defendant also challenges the counsel fee award.
II.
"The scope of appellate review of a trial court's fact-finding function is limited. The general rule is that findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). Such deference is "especially appropriate when the evidence is largely testimonial and involves questions of credibility." In re Return of Weapons to J.W.D., 149 N.J. 108, 117 (1997). Moreover, "[b]ecause of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding." Cesare, supra, 154 N.J. at 413. However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
We have considered defendant's arguments in light of the record and applicable principles of law, and find none of them persuasive. We affirm substantially for the reasons expressed by Judge Lisa Thornton in her cogent written opinion of June 28, 2012, as supplemented by her February 8, 2013 opinion. R. 2:11-3(e)(1)(A). The judge's findings are supported by adequate, substantial credible evidence in the record. Cesare, supra, 154 N.J. 411-12. Nevertheless, we add the following comments.
A.
A decision to award alimony, and what form or amount would be appropriate lies within the family court's broad discretion. Jacobitti v. Jacobitti, 135 N.J. 571, 575 (1994). We will not overturn an alimony award absent a clear abuse of discretion, a failure to correctly apply the governing legal principles, or findings of fact that were clearly mistaken or lacking support in the record as a whole. Heinl v. Heinl, 287 N.J. Super. 337, 345 (App. Div. 1996).
Defendant challenges the court's alimony award. Given the parties' significant disparity in income and relative financial needs and the length of their marriage, defendant's argument that the court should have denied alimony entirely lacks sufficient merit to warrant discussion in a written opinion. As for his challenge to the amount, he contends the court overstated his income, understated plaintiff's, and overstated her financial needs. However, the court's findings are adequately supported by the record.
The court found that defendant's income consisted of three components: his W-2 wages as a M&C employee; his shareholder's share of M&C's income, reflected on his K-1; and M&C's annual payment toward his SEP or Simplified Employee Pension. According to 2009 tax returns in evidence, these three components were $101,360; $37,935; and $25,000; for a total of $164,295. The corporation also accounted for $5,523 of defendant's automobile expenses. The W-2 earnings, and K-1 distribution, plus other miscellaneous amounts, constituted defendant's adjusted gross income of $140,342. In 2010, his W-2 earnings rose to $113,338. Defendant had not yet received his K-1 and estimated his shareholder's share of income would be around $20,000 to $25,000, and a SEP payment of $25,000.
We note that defendant failed to provide in his appendix key financial documents that were admitted into evidence in trial, such as tax returns, W-2 forms, and case information statements. We obtained some of these documents from the trial court, but the court's file was incomplete. Defendant was obliged to include in his appendix "such other parts of the record . . . as are essential to the proper consideration of the issues." R. 2:6-1(a). We are not "obliged to attempt review of an issue when the relevant portions of the record are not included." Cmty. Hosp. v. Blume Goldfaden, 381 N.J. Super. 119, 127 (App. Div. 2005). --------
Considering a personal federal tax payment of $30,000, the judge concluded that defendant's net income in 2009 was around $130,000 - which included the $25,000 SEP. The court projected that defendant would need to spend $12,000 to $15,000 for health insurance, leaving defendant with a net income after health insurance payments of $115,000 to $118,000. Based on our review of the record, we discern no error. Moreover, we find no merit to defendant's argument that the court failed to consider defendant's status as an independent contractor, which he argues compelled him to incur his own payroll taxes, and deprived him of fringe benefits. M&C paid the employer portion of his payroll taxes. The court also considered projected health insurance costs in calculating defendant's income at between $115,000 to $118,000.
In support of his argument that the court understated plaintiff's income, defendant asserts that plaintiff admitted her 2010 net income was $63,589, although the court concluded the number was $54,000. First, defendant's counsel, not plaintiff, stated the $63,589 figure. Second, the figure did not account for plaintiff's health and dental insurance costs. The court's $54,000 figure was based on its calculation of plaintiff's disposable income after deducting medical and dental insurance and expenses. We discern no error.
Defendant claims the court overstated plaintiff's needs. Plaintiff testified that she paid twenty percent of the $402,000 purchase price of her new home in Manalapan — roughly $80,000 — and borrowed the balance. As a result, she had monthly mortgage payments of $1653, along with her escrow of $712, totaling $2365. Defendant argues plaintiff could have significantly reduced her mortgage debt, and her monthly budget, by utilizing more of the proceeds from the sale of the marital home. We perceive no abuse of discretion in the court's decision to include in plaintiff's budget her mortgage payment. As defendant's pre-marital home was unencumbered by a mortgage, he was able to save the bulk of his share of the proceeds. Plaintiff was able to preserve, for savings or spending elsewhere, $120,000 of her $200,000 proceeds.
Defendant also challenges the court's adjustment of pendente lite payments. The parties stipulated that pendente lite expenses totaled $108,071, and defendant paid sixty percent, or $64,756. The court adjusted defendant's share to seventy percent, pursuant to Mallamo, supra, 280 N.J. Super. at 11-13. We recognize that the court's explanation of the adjustment was limited; the court noting simply that a seventy-thirty split more closely approximated the ratio of the parties' incomes. However, we shall not disturb the court's determination, as it appears equitable under the circumstances. The pendente lite period extended over four years; the marital home was sold in September 2010, and plaintiff purchased her own residence, incurring a significant recurring shortfall. However, alimony did not commence until June 2012. In sum, we affirm the court's alimony determinations.
B.
We consider next defendant's challenge to the court's equitable distribution of marital assets. The distribution of marital assets is not a routine or mechanical exercise; it requires sensitivity to the equities of the case. See Rothman v. Rothman, 65 N.J. 219, 232 n.6 (1974); Devane v. Devane, 280 N.J. Super. 488, 493 (App. Div. 1995); Stout v. Stout, 155 N.J. 196, 205 (App. Div. 1977). "In going about this task, the court must decide what specific property each spouse is eligible to receive by way of distribution; the value of such property for purposes of distribution; and how such allocation can most equitably be made after analysis of the factors set forth in N.J.S.A. 2A:34-23.1." Sauro v. Sauro, 425 N.J. Super. 555, 572-73 (App. Div. 2012), certif. denied, 213 N.J. 389 (2013). Our review is limited to determining whether the court abused its broad discretion, or reached a result "bottomed on a misconception of law or findings of fact that are contrary to the evidence." Id. at 573 (internal quotation marks and citation omitted).
Defendant argues that the court erred in awarding plaintiff half the paydown of the mortgage on his pre-marital asset. The parties reduced the mortgage principal when they lived together in the house, pooling their income and sharing expenses of the house, including the mortgage. After they moved to Manalapan, defendant rented the house, and plaintiff assisted in management of the property. The parties also made a lump sum payment to satisfy the mortgage, utilizing joint assets. Defendant argues that the court erred in crediting to plaintiff half the amortization during the rental period. We disagree.
Our courts view marriage as a partnership, and recognize the contributions of each party. Rothman, supra, 65 N.J. at 229. Under some circumstances, the appreciation of a pre-owned asset during the marriage will be subject to distribution if it is an actively managed asset, whose increase, at least in part, arises from the non-owning spouse's efforts. Valentino v. Valentino, 309 N.J. Super. 334, 338 (App. Div. 1998). The Family Part has recognized that a non-owning spouse may be eligible for a share of the mortgage paydown during the marriage on an otherwise exempt, premarital property. Id. at 340 (citing Griffith v. Griffith, 185 N.J. Super. 382, 383-85 (Ch. Div. 1982)).
We are unpersuaded by defendant's argument that plaintiff should not share in the paydown during the rental period. Defendant does not cite proof in the record of the amount of the rent collected; whether it was less the total carrying costs of the property, thereby requiring a joint contribution; or whether the rental income was commingled with marital assets, resulting in the use of joint assets for mortgage payments. See Pascale v. Pascale, 140 N.J. 583, 609 (1995) (stating the burden of establishing that an asset is exempt from equitable distribution rests with the party who seeks to exclude it). In any event, plaintiff provided accounting services during the rental period. The court also took note that the proceeds of plaintiff's premarital property were commingled with marital assets, while defendant retained his pre-marital property. We perceive no abuse of discretion, particularly in view of the court's decision to deny plaintiff any share in the property's appreciation in value during the marriage.
Defendant's challenge to the division of the M&C account as of the date of the complaint fares no better. Defendant argues that the distribution resulted in double-counting, because the distributed income of the corporation was considered income to defendant. We disagree. Until the 2008 return, plaintiff was a fifty percent owner of M&C, and received half of the passed-through earnings. Thereafter, defendant became the sole shareholder and the sole recipient of M&C income. We shall not address whether the corporation itself should have been deemed a distributable asset because the issue was not raised. However, we discern no error in the court's discretionary determination to award plaintiff the income on hand as of the date of the complaint.
Defendant also contends the court erred in rejecting his claim of dissipation of assets. We are unpersuaded.
To determine whether a spouse has dissipated assets, courts consider various factors, including:
(1) the proximity of the expenditure to the parties' separation, (2) whether the expenditure was typical of expenditures made by the parties prior to the breakdown of the marriage, (3) whether the expenditure benefitted the "joint" marital enterprise or was for the benefit of one spouse to the exclusion of the other, and (4) the need for, and amount of, the expenditure.The party alleging dissipation should bear the burden of proof on the issue. See Monte v. Monte, 212 N.J. Super. 557, 567-68 (App. Div. 1986) (discussing the burden of proof in a case involving division of debt wife alleged husband incurred as a consequence of intentional dissipation); cf. Pascale, supra, 140 N.J. at 609 (allocating burden on party who seeks to exclude assets from distribution).
[Kothari v. Kothari, 255 N.J. Super. 500, 507 (App. Div. 1992) (internal quotation marks and citation omitted).]
In this case, the court held that defendant failed to present documentation that the alleged transfers were dissipative. Defendant contends the court overlooked plaintiff's admissions. However, plaintiff's admissions did not establish dissipation. She testified that she transferred $15,000 in June 2007, but she claimed the money belonged to her mother. Plaintiff also admitted she withdrew $10,000 from the parties' joint account in August 2007, but testified that she restored $7000 to the account, and put the remainder in the boys' account. The court was free to credit plaintiff's testimony.
C.
Finally, we affirm the court's award of half plaintiff's counsel fees of $120,000. Assuming defendant incurred fees of a similar amount, the court's decision resulted in defendant bearing seventy-five percent of the total fees. Although that exceeds the parties' income ratio, the parties' ability to pay is just one factor. See R. 5:3-5(c). The court noted that plaintiff generally prevailed; and defendant took unreasonable positions, such as his opposition to any alimony, and his insistence upon sole custody of the children, notwithstanding that plaintiff was the primary caretaker during the marriage. "We will disturb a trial court's determination on counsel fees only on the rarest occasion and then only because of a clear abuse of discretion." Strahan v. Strahan, 402 N.J. Super. 298, 317 (App. Div. 2008) (internal quotation marks and citation omitted). We discern no abuse of discretion here and are satisfied that Judge Thornton provided adequate reasons for her determination.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION