Opinion
DOCKET NO. A-3900-14T1
12-08-2016
TUHIN PANDYA, Plaintiff-Appellant, v. ROOPAL SHAH, Defendant-Respondent.
Clark Legal Services, attorneys for appellant (Paul A. Clark, on the brief). Shane & White, LLC, attorneys for respondent (Kenneth A. White, of counsel; Katelyn M. Brack, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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. Before Judges Yannotti, Fasciale and Gilson. On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-1499-12. Clark Legal Services, attorneys for appellant (Paul A. Clark, on the brief). Shane & White, LLC, attorneys for respondent (Kenneth A. White, of counsel; Katelyn M. Brack, on the brief). PER CURIAM
Plaintiff Tuhin Pandya appeals from two orders entered by the Family Part in this action: an order dated March 25, 2015, which determined that proceeds defendant Roopal Shah received in settlement of a claim is not subject to equitable distribution; and an order dated April 17, 2015, which recalculated plaintiff's child support obligation. We affirm.
I.
This appeal arises from the following facts. The parties were married in September 2010, and one child was born of the marriage. In January 2012, plaintiff filed a complaint for divorce. The marriage was dissolved by a final judgment of divorce dated January 14, 2013, which incorporated the parties' marital settlement agreement (MSA).
Among other things, the MSA provided for the equitable distribution of the marital property. It provided that defendant would have exclusive ownership of the parties' marital residence, which was a rental unit in Edison. The parties retained ownership of any stocks, bonds, mutual funds, pension plans, profit sharing, retirement funds, IRA and 401k accounts that they held in their own names.
In addition, the parties each retained ownership of the motor vehicles that they possessed, as well as bank and credit union accounts maintained in their own names. Except as otherwise provided in the MSA, each party would remain responsible for debts or liabilities incurred in their own names.
The MSA confirmed that personal property, which was not addressed in the agreement, had been distributed, and each party retained full ownership and control over any and all items of personal property currently in their possession. The MSA further provided that the parties would return to each other certain items of jewelry, and required defendant to pay plaintiff $15,000 "[i]n exchange for other good and valuable consideration addressed" in the agreement.
In the MSA, the parties waived any right to past, present, or future alimony. They agreed to be responsible for their own medical insurance costs and unreimbursed medical expenses. The parties were required to maintain life insurance naming their minor child as a beneficiary. The MSA also addressed custody and parenting time, and required plaintiff to pay child support of $180 per week, effective January 15, 2013.
The MSA stated that the parties had fully informed each other concerning the nature and extent of their assets and liabilities, and that the parties had the opportunity to obtain independent legal advice regarding the negotiation and execution of the agreement. The MSA further provided that:
[e]xcept as expressly set forth in the [a]greement, or as may arise out of the making of this [a]greement, each of the parties hereby releases the other of and from any and all claims and demands for damages of any and
every nature which either of the parties ever had, now has or may hereafter have against each other, arising out of or in connection with any matter or thing up to the date of this [a]greement.
In September 2014, defendant filed a motion seeking an upward modification of plaintiff's child support obligation and other relief. The court entered an order dated October 28, 2014, which modified plaintiff's child support obligation, and required plaintiff to pay child support in the amount of $304 per week. In December 2014, plaintiff filed a motion for reconsideration, seeking a recalculation of his child support obligation.
In support of that motion, plaintiff submitted a certification in which he asserted that defendant had engaged in a sexual and romantic relationship with M.F., the owner of KP&H, a plumbing and heating company. According to plaintiff, defendant told him before their marriage that she was a working partner in KP&H and was entitled to receive a percentage of its profits. Plaintiff claimed that defendant said KP&H and M.F. had agreed that when M.F. retired, he would hand over the business to defendant.
We use initials for M.F. and the company in order to protect M.F.'s privacy.
Plaintiff asserted that in 2010, defendant reported an annual income of $195,000. He claimed that she continued to receive cash from M.F. even though she was not working for KP&H. Plaintiff said defendant had stopped working for KP&H when she became pregnant, but she had been earning $11,000 per month before she stopped working. In addition, plaintiff said that he learned in August 2014 that defendant had received a large settlement.
Plaintiff attached a copy of an agreement dated July 23, 2013, which stated that defendant would be paid $400,000 in settlement of claims she had against KP&H and M.F. Defendant had received $266,666.67, and $133,333.33 was paid to her attorneys. Plaintiff asserted that during the divorce proceedings, defendant never mentioned she had a pending suit or settlement agreement with KP&H. He sought an order vacating the parties' MSA.
Defendant opposed the motion, and filed a cross-motion seeking a further increase in child support. Defendant also sought the award of counsel fees on the ground that plaintiff's motion was frivolous.
The court entered an order dated January 9, 2015, which reserved a decision on plaintiff's motion for reconsideration of the October 2014 order increasing his child support obligation, and his motion to vacate the MSA. The court also denied, without prejudice, defendant's motion for the award of frivolous litigation sanctions, as well as her motion for an increase in child support. The court scheduled a hearing to determine whether defendant's 2013 settlement should be included in her income for purposes of calculating child support, and whether any portion of the settlement recovery should be subject to equitable distribution.
Thereafter, defendant filed a motion for summary judgment, arguing that a plenary hearing was not required. Defendant maintained that the proceeds of her settlement with KP&H and M.F. were not subject to equitable distribution. Plaintiff opposed the motion.
On March 25, 2015, the court heard oral argument and entered an order granting defendant's motion. In an accompanying statement of reasons, the court found that defendant's settlement proceeds were not subject to equitable distribution. The court vacated the earlier order denying defendant's motion for an upward modification of child support, and scheduled a plenary hearing to determine whether any portion of defendant's settlement should be included in her gross income for purposes of calculating child support.
The hearing took place on April 15, 2015, and defendant testified. Thereafter, the court placed its decision on the record. The court found that defendant had deposited the settlement proceeds into a savings account, and she received annual interest income on those monies. The court determined that the annual interest income from the settlement proceeds should be included in defendant's gross income for purposes of computing child support. The court recalculated plaintiff's child support obligation, in light of the evidence presented at the hearing, and concluded that plaintiff's obligation was $343 per week. The court also denied the parties' applications for attorneys' fees and costs. Plaintiff's appeal followed.
While the appeal was pending, plaintiff filed a motion to supplement the record with what plaintiff claimed was newly-discovered evidence that allegedly shows defendant concealed certain assets. Defendant opposed the motion and filed a cross-motion pursuant to Rule 1:4-8, seeking attorney's fees and costs incurred to respond to what defendant claims is a frivolous motion. We have decided to deny both motions. Defendant had not met the standard for supplementing the record, and we are not convinced that plaintiff should be sanctioned for filing the motion. --------
On appeal, plaintiff argues that the trial court erred by: (1) ruling that plaintiff waived any claim to the $400,000 settlement for wrongs allegedly committed during the marriage; (2) calculating child support by failing to permit plaintiff to present evidence that defendant had substantial hidden investment assets; (3) refusing to count the settlement proceeds as income available for child support; (4) denying attorneys' fees without considering the required factors, including defendant's alleged bad faith and attempts to conceal her assets; and (5) ruling that plaintiff's exhibits were inadmissible at the April 15, 2015 hearing.
II.
Plaintiff argues that the trial court erred when it ruled that in the MSA he had waived any claim to defendant's settlement with KP&H and M.F. We disagree.
The following facts inform our decision on this issue. Defendant worked at KP&H for eight months in 2000 and from January 2003 through October 2011. Defendant claims that in 2006, M.F. began to make harassing sexual advances toward her, and in 2008, defendant began a sexual relationship with M.F. Defendant allegedly believed her continued employment at KP&H, and the significant increases in income she had received, were contingent upon her acquiescence to M.F.'s sexual advances. The relationship continued until August 2010.
In September 2010, defendant married plaintiff. She became pregnant early in 2011, and stopped working at KP&H in October 2011. Defendant asserted that during her marriage, she did not have an inappropriate relationship with M.F. She also asserted that, during the marriage, she did not believe she had a claim against KP&H or M.F., and she did not take any steps to pursue such a claim.
In March 2013, after her divorce from plaintiff, defendant sought to return to work at KP&H, but the company refused to re-hire her. Defendant asserts that she learned at this time that another woman was suing KP&H for harassment. Defendant then sought the advice of an attorney to explore potential claims of employment discrimination. She executed a retainer agreement in May 2013.
The settlement agreement with KP&H and M.F. was reached less than two months later. As stated previously, KP&H and M.F. agreed to pay defendant $400,000 to settle her claims. Of that amount, defendant received $266,666.67, and her attorneys received $133,333,33.
The court found that, based on the evidence presented, defendant was not aware of and did not pursue her claims against KP&H and M.F. until after the divorce. Therefore, the proceeds of the settlement were not subject to equitable distribution. Moreover, if the claims arose prior to the date of the MSA, plaintiff had released defendant from asserting the right to equitable distribution of the monies defendant received to settle the claims.
We note that in New Jersey, there is a strong public policy "favoring the use of consensual agreements to resolve marital controversies." Konzelman v. Konzelman, 158 N.J. 185, 193 (1999). Such matrimonial agreements have consistently been treated as traditional contracts. Petersen v. Petersen, 85 N.J. 638, 642 (1981); Harrington v. Harrington, 281 N.J. Super. 39, 46 (App. Div.), certif. denied, 142 N.J. 455 (1995). Furthermore, "fair and definitive arrangements arrived at by mutual consent should not be unnecessarily or lightly disturbed." Weishaus v. Weishaus, 180 N.J. 131, 143 (2004) (quoting Konzelman, supra, 158 N.J. at 193-94).
Here, the trial court did not err by enforcing the mutual releases in the MSA, which was part of the agreement that the parties reached with the assistance of their respective attorneys. Moreover, during the divorce litigation, the parties had engaged in discovery on various issues involving M.F. Plaintiff had the opportunity to question M.F. about his relationship with defendant, and to obtain discovery on any claims that defendant may have had against KP&H or M.F. In addition, there is no evidence that defendant knew before she entered into the MSA that she had a claim against KP&H or M.F.
Plaintiff argues, however, that Landwehr v. Landwehr, 111 N.J. 491 (1988), requires equitable distribution of the proceeds of defendant's settlement. In that case, one of the parties had sustained personal injuries and thereafter settled his claims. Id. at 494. Later, the other spouse filed a complaint for divorce, and argued that the personal injury settlement was subject to equitable distribution. Ibid.
The Court held that the portion of the settlement that was intended to compensate the injured spouse for his lost earnings and medical expenses was subject to distribution. Id. at 493. However, the remainder of the settlement, which was intended as compensation for the injured spouse's pain, suffering and disability, and the loss of consortium suffered by the uninjured spouse was not distributable. Ibid.
Plaintiff's reliance upon Landwehr is misplaced. As noted, in that case, the spouse was injured, asserted his claim, and settled the matter during the marriage. In this case, defendant did not assert her claims and receive the settlement monies until after the marriage was dissolved. Moreover, as the evidence shows, during the marriage, defendant was not aware that she had a claim against KP&H and M.F., and did not consult an attorney until after the parties divorced. Thus, Landwehr does not support plaintiff's claim for equitable distribution of defendant's settlement proceeds.
III.
Next, plaintiff argues that the trial court erred in calculating his child support obligation. He claims that defendant transferred thousands of dollars to India during their marriage and those monies should have been included in defendant's income in determining the parties' respective child support obligations. Plaintiff argues that the court erred by failing to compel defendant to provide discovery. He further argues that the court erred by refusing to include defendant's settlement proceeds as income for purposes of computing child support.
Here, the trial court conducted a plenary hearing on defendant's motion for recalculation of plaintiff's child support obligation. The court utilized $120,640 as plaintiff's annual income, and $60,000 as defendant's annual income. In computing defendant's income, the court utilized the after-tax income interest generated from the KP&H/M.F. settlement. The court noted that defendant was the parent of primary custody for the parties' one child, and plaintiff exercised fifty-two overnights during the year. Defendant also paid $904.17 per month in work-related child care. The court determined that plaintiff's child support obligation was $343 per week.
Plaintiff's contention that the trial court erred in its computation of child support is without sufficient merit to warrant extended discussion. R. 2:11-3(e)(1)(E). We note, however, that the trial court's findings of fact should not be disturbed if supported by substantial credible evidence. Cesare v. Cesare, 154 N.J. 394, 412-13 (1998). Furthermore, we accord special deference to the findings of the Family Part because of that court's "special expertise in the field of domestic relations." Ibid.
In this case, the trial court used the annual income of the parties as reported on their respective 2014 tax returns as the basis for recalculating plaintiff's child support obligation. Plaintiff failed to provide any credible evidence indicating that the adjusted gross income of $60,300 which defendant reported was inaccurate.
Furthermore, the court did not err by refusing to permit plaintiff to engage in discovery concerning transfers of assets that defendant allegedly made during the marriage. In the MSA, the parties acknowledged that they had made full disclosure of their respective assets, and they were "satisfied" with those disclosures. In addition, in the MSA, the parties voluntarily waived the right to seek further discovery regarding any issues that had arisen between them.
Plaintiff claims that additional income should be imputed to defendant, but the court accepted defendant's testimony that her annual income was $60,300, as reported on her tax return. Plaintiff did not submit sufficient evidence to warrant a different conclusion or further discovery on that issue.
Plaintiff further argues that the court erred by not considering the monies that defendant received in the settlement of her claims against KP&H and M.F. as income. As noted, the court only included the interest earned on the settlement proceeds, which had been deposited into a bank account. The settlement proceeds are not income for purposes of calculating child support because they are not recurring income. Child Support Guidelines, Pressler and Verniero, Current N.J. Court Rules (2017), App. IX-B to R. 5:6A at www.gannlaw.com (2016); Heller-Loren v. Apuzzio, 371 N.J. Super. 518, 531-32 (App. Div. 2004).
Accordingly, we reject plaintiff's contention that the court erred in recalculating his child support obligation.
IV.
Plaintiff also contends that the trial court erred by denying his application for attorney's fees. Subject to the requirements of Rule 4:42-9, the court may, in its discretion, award attorney's fees and costs in a Family Part matter. R. 5:3-5(c). The court must consider certain factors, which include the parties' financial circumstances, their ability to pay their own fees, and the results obtained. Ibid. A court's decision granting or denying the award of attorney's fees and costs will not be reversed unless shown to be an abuse of discretion. Eaton v. Grau, 368 N.J. Super. 215, 225 (App. Div. 2004).
Here, the court denied both parties' motions for counsel fees and costs. The court noted that defendant had received a large settlement, which she had deposited in a bank. The court also noted that plaintiff presently earns twice as much as defendant. The court observed that there had been an issue as to whether defendant's settlement proceeds were subject to equitable distribution, and whether those monies should be considered as income for purposes of child support. The court rejected plaintiff's contention that the settlement proceeds were subject to equitable distribution, and also rejected his claim that defendant had not fully disclosed her income.
The court found that under the circumstances, the parties should be required to pay their own counsel fees and costs. We conclude that the denial of plaintiff's motion for attorney's fees and costs was not a mistaken exercise of discretion.
V.
Plaintiff argues that the court erred by refusing to admit certain exhibits that he presented at the April 15, 2015 hearing. We disagree.
At the hearing, plaintiff sought to admit certain e-mail messages between defendant and the attorney who represented her in asserting her claims against KP&H and M.F. The court asked plaintiff how he had obtained the e-mails, and plaintiff replied that he received them from an anonymous source. The court refused to admit the e-mails into evidence.
A trial court's evidentiary ruling is reviewed for abuse of discretion, provided it is not inconsistent with the applicable law. Hisenaj v. Kuehner, 194 N.J. 6, 12 (2008). Here, the court correctly found that the e-mail messages between defendant and her attorney were privileged attorney-client communications. The court also correctly determined that the e-mails were not relevant since the purpose of the hearing was to determine whether the interest earned on the proceeds from defendant's settlement should be considered in calculating child support, and the e-mails were not probative of that issue.
We have considered plaintiff's other contentions and conclude that they are without sufficient merit to warrant discussion in this opinion. R. 2:11-3(e)(1)(E).
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION