Opinion
DOCKET NO. A-0738-13T2
04-09-2015
SANDRA RICHARDS, Plaintiff-Appellant, v. CRAIG RICHARDS, Defendant-Respondent.
Richard S. Diamond argued the cause for appellant (Diamond & Diamond, P.A., attorneys; Mr. Diamond and Lynn M. Matits, on the briefs). Stephen P. Haller argued the cause for respondent (Einhorn, Harris, Ascher, Barbarito & Frost, attorneys for respondent; Mr. Haller and Jennie L. Osborne, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fisher, Accurso and Manahan. On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Union County, Docket No. FM-20-625-11. Richard S. Diamond argued the cause for appellant (Diamond & Diamond, P.A., attorneys; Mr. Diamond and Lynn M. Matits, on the briefs). Stephen P. Haller argued the cause for respondent (Einhorn, Harris, Ascher, Barbarito & Frost, attorneys for respondent; Mr. Haller and Jennie L. Osborne, of counsel and on the brief). PER CURIAM
In appealing from a judgment of divorce entered after a bench trial, plaintiff Sandra A. Richards argues that the trial judge erred: in concluding her eighteen-year marriage to defendant Craig S. Richards was not of long duration and for that and other reasons improperly granted only limited duration alimony and in an amount she contends is inadequate; in directing a sale of the former marital home; in awarding Craig $25,000 as his share of the personal property contained within the marital home; in the manner of distributing Craig's retirement account and stock holdings, as well as the parties' joint bank accounts; and in ordering Sandra to pay $138,415.47 toward Craig's counsel fees. She also asserts that, if remanded, the matter should be assigned to a different trial judge.
In briefly summarizing the case's procedural history, we note that Sandra filed her complaint in October 2010 seeking a dissolution of the parties' June 1992 marriage. The trial began with one day of testimony in May 2012 and another in September. The judge then adjourned the trial so the parties could attempt to mediate a resolution of all disputed issues. The mediation process was partially successful and, on January 10, 2013, a consent order that addressed and resolved almost all of the child custody and parenting time issues was entered; the judge decided the remaining child issues.
Trial resumed, and the unresolved financial issues of alimony and equitable distribution were addressed on August 12, 13, and 14, 2013. Only the parties testified. On August 30, 2013, the judge entered a judgment of divorce for reasons set forth in his letter opinion.
Sandra appeals, arguing:
I. THE LOWER COURT ERRED IN DETERMINING THE AMOUNT AND DURATION OF THE ALIMONY AWARDED TO PLAINTIFF.
A. The Lower Court Erred In Denying Plaintiff's Request For Permanent Alimony.
B. The Lower Court Also Erred In Ignoring Significant and Reoccurring Components In Defendant's Income Setting In Using Instead Defendant's Base Salary Only In Determining The Support Amount And In Failing To Properly Consider The Marital Lifestyle Of The Parties[] In Its[] Award.
II. THE LOWER COURT ERRED IN DIRECTING THE SALE OF FORMER MARITAL RESIDENCE WHEN DEFENDANT PURCHASED A HOME IN CLOSE PROXIMITY TO THE MARITAL HOME SPECIFICALLY SO AS TO PERMIT THE PARTIES TO SHARE PHYSICAL CUSTODY.
III. THE LOWER COURT ERRED BY CREDITING DEFENDANT THE SUM OF $25,000, FOR HIS "SHARE" OF PERSONAL PROPERTY LEFT IN THE MARITAL RESIDENCE, DESPITE THE ABSENCE OF EVIDENCE OR TESTIMONY PRESENTED AT TIME OF TRIAL REGARDING SAME.
IV. THE LOWER COURT ERRED BY ACCEPTING DEFENDANT'S REPRESENTATIONS, AS TO HIS PRE-
MARITAL PORTION OF HIS 401K, THEREBY RESULTING IN AN INEQUITABLE DISTRIBUTION OF THE 401K IN FAVOR OF DEFENDANT.We agree the judge erred or did not adequately consider or explain a number of relevant factors and that a remand is required.
V. THE LOWER COURT ERRED IN THE DIVISION OF THE PARTIES BANK ACCOUNTS, WITHOUT APPROPRIATELY CREDITING PLAINTIFF FOR WITHDRAWALS/PAYMENTS MADE FROM THE PARTIES' JOINT ACCOUNTS BY DEFENDANT IN VIOLATION OF THE ORDERS FOR RESTRAINTS.
VI. THE LOWER COURT ERRED IN USING A PERIOD OF COVERTURE TO DETERMINE THE AMOUNT OF BEN SHARES, ESIP SHARES EARNED/MATCHED SUBJECT TO DISTRIBUTION SINCE DEFENDANT WAS AWARDED SHARES POST-COMMENCEMENT RELATING TO HIS PERFORMANCE DURING THE PARTIES' MARRIAGE.
VII. THE LOWER COURT ERRED IN DIRECTING PLAINTIFF TO PAY DEFENDANT'S COUNSEL FEE IN THE AMOUNT OF $138,415.47 FROM HER SHARE OF THE PROCEEDS OF THE FORMER MARITAL RESIDENCE.
VIII. THE DECISION BY THE LOWER COURT REFLECTS EXTREME BIAS AGAINST PLAINTIFF REQUIRING THAT THE MATTER BE HEARD BY A DIFFERENT JUDGE UPON REMAND.
I
Sandra first argues the trial judge erred in determining the type and amount of alimony awarded.
"A Family Part judge has broad discretion in setting an alimony award," Clark v. Clark, 429 N.J. Super. 61, 71 (App. Div. 2012), and appellate courts will not intervene unless the trial court "clearly abused its discretion, failed to consider all of the controlling legal principles, made mistaken findings, or reached a conclusion that could not reasonably have been reached on sufficient credible evidence present in the record after considering the proofs as a whole," J.E.V. v. K.V., 426 N.J. Super. 475, 485 (App. Div. 2012). Despite the limits of this appellate standard, we will vacate the alimony award and remand for further proceedings because the judge (a) misapprehended the application of some of the statutory factors while failing to adequately explain how the circumstances supported an award of limited duration instead of permanent alimony, and (b) overlooked or misapprehended other relevant circumstances.
A
In divorce actions, a family judge "may award one or more of the following types of alimony: permanent alimony; rehabilitative alimony; limited duration alimony or reimbursement alimony." N.J.S.A. 2A:34-23(b). In the present case, we are asked to focus on the trial judge's decision to award Sandra limited duration alimony instead of permanent alimony. Pursuant to N.J.S.A. 2A:34-23(c), if the judge after weighing the many relevant factors determines permanent alimony should not be awarded, the judge:
shall then consider whether alimony is appropriate for any or all of the following: (1) limited duration; (2) rehabilitative; (3) reimbursement. In so doing, the court shall consider and make specific findings on the evidence about [the thirteen] factors set forth [in N.J.S.A. 2A:34-23(b)]. The court shall not award limited duration alimony as a substitute for permanent alimony in those cases where permanent alimony would otherwise be awarded.This process first requires a determination, supported by specific findings, that permanent alimony is not warranted.
. . . .
In determining the length of the term [of an award of alimony for a period of limited duration], the court shall consider the length of time it would reasonably take for the recipient to improve his or her earning capacity to a level where limited duration alimony is no longer appropriate.
"[P]ermanent alimony is generally awarded in a marriage of long duration when there is economic need, in recognition of the increased earning capacity of the supporting spouse at the cost of the supported spouse's lost economic opportunities." Gonzalez-Posse v. Ricciardulli, 410 N.J. Super. 340, 353 (App. Div. 2009) (emphasis added); see also Gordon v. Rozenwald, 380 N.J. Super. 55, 66 (App. Div. 2005). In contrast, although "[l]imited duration alimony, like permanent alimony, is based primarily on the marital enterprise," it "is distinguishable from permanent alimony because the length of the marriage does not warrant permanent support." Gordon, supra, 380 N.J. Super. at 66. That is, "[t]he 'defining distinction' between permanent and limited duration alimony is the length of the marriage." J.E.V. , supra, 426 N.J. Super. at 488 (quoting Cox v. Cox, 335 N.J. Super. 465, 483 (App. Div. 2000)).
Accordingly, "[l]imited duration alimony is to be awarded in recognition of a dependent spouse's contributions to a relatively short-term marriage that nevertheless demonstrated the attributes of a 'marital partnership.'" Cox, supra, 335 N.J. Super. at 483 (emphasis added). Such an award "is not intended to facilitate the earning capacity of a dependent spouse or to make a sacrificing spouse whole, but rather to address those circumstances where an economic need for alimony is established, but the marriage was of short-term duration such that permanent alimony is not appropriate." Id. at 476 (emphasis added).
Of course, the "'length of the marriage and the proper amount or duration of alimony do not correlate in any mathematical formula.'" Gnall v. Gnall, 432 N.J. Super. 129, 152 (App. Div. 2013) (quoting Lynn v. Lynn, 91 N.J. 510, 518 (1982)), certif. granted, 217 N.J. 52 (2014). Stated differently, "it is not merely the years from the wedding to the parties' separation or commencement of divorce that dictates the applicability or inapplicability of permanent alimony." Id. at 153. Nevertheless, we have recognized that marriages of the length of that in question are understood to be long-term marriages. Thus, we have found permanent alimony to be appropriate when dissolving marriages of: twenty-two years, Cox, supra, 335 N.J. Super. at 483; fifteen years, Gnall, supra, 432 N.J. Super. at 153; twelve-and-one-half years, Robertson v. Robertson, 381 N.J. Super. 199, 202 (App. Div. 2005); twelve years, Cerminara v. Cerminara, 286 N.J. Super. 448, 461 (App. Div.), certif. denied, 144 N.J. 376 (1996); and ten years, Hughes v. Hughes, 311 N.J. Super. 15, 31-34 (App. Div. 1998). We have also reversed permanent alimony awards where the dissolved marriages lasted for only: eight years and six months, Carter v. Carter, 318 N.J. Super. 34, 48-52 (App. Div. 1999), and seven years and eight months, Heinl v. Heinl, 287 N.J. Super. 337, 346 (App. Div. 1996).
Turning to the award of limited duration alimony, we are guided by J.E.V., supra, 426 N.J. Super. at 484-91, where the wife who sought permanent alimony appealed an award of a ten-year term of limited duration alimony in the wake of an "intermediate in length" marriage of nine-and-one-half years. In light of the shorter length of the marriage and the limited period that the wife was completely economically dependent on the husband, we considered the award of limited duration alimony to be "unremarkable." Id. at 490. The matter at hand, however, is markedly different because the parties here were in a marriage nearly twice as long. Accordingly, we start with the premise that the judge fundamentally erred when he failed to recognize this marriage was of long duration.
Of course, we are mindful that "duration of the marriage" is only one of the thirteen factors a court must consider in fixing an alimony award. N.J.S.A. 2A:34-23(b)(2). Moreover, N.J.S.A. 2A:34-23(f) provides further flexibility by announcing that nothing in the divorce statute shall be construed as limiting "the court's authority to award permanent alimony, [or] limited duration alimony . . . as warranted by the circumstances of the parties and the nature of the case." Nevertheless, it is well established that all other statutory factors being equal, the length of the marriage is the chief determinant of whether to award limited duration or permanent alimony. Cox, supra, 335 N.J. Super. at 483.
Here, the trial judge awarded limited duration alimony for a period of twelve years at the monthly rate of $5,000. The judge fixed this award by imputing to Sandra an annual income of $81,470 and by utilizing Craig's 2010 base annual income of $202,642. The judge also found the parties enjoyed a joint marital lifestyle that required $13,179 per month to support.
In addition, the judge addressed the thirteen factors set forth in N.J.S.A. 2A:34-23(b). He found Sandra was earning more money than Craig when they married and noted that Craig testified Sandra "was on the fast track in her career and, at under 30 years-old, was young for a manager." The judge observed that, although Sandra worked for KPMG throughout the marriage, the parties had agreed she would work only part-time following the birth of their first child in 1996, and also noted she worked even fewer hours per week and was demoted from her managerial position to a senior associate position following the birth of their twins in 2000.
The judge found that, at the time of the trial, Sandra was almost qualified to advance above her part-time senior associate position to a full-time managerial position with KPMG, needing only to pass one more part of a three-part examination to fully qualify, but that she was not "exactly qualified" because she still had to acquire current experience in personally dealing with clients. The judge also found Sandra did not actively seek such advancement and was, instead, "voluntarily underemployed," content to work part-time at her current wage so long as Craig provided additional support through alimony.
Ultimately, the judge awarded Sandra
limited duration alimony despite the eighteen (18) year marriage. [She] worked during the entire length of the marriage less a brief hiatus. [Sandra] also has the ability to not only work full-time but also to advance her career and earnings. Due to [Sandra's testimony], the [c]ourt is convinced that permanent alimony would only allow [her] to remain voluntarily underemployed.As part of that limited discussion of the type of alimony to be awarded, the judge noted Craig had paid pendente lite support in a timely manner.
The "brief" hiatus was, according to the judge's findings, for two years following the birth of the twins in 2000. The judge's findings are not clear as to the length of the hiatus after the first child was born.
As is apparent, the trial judge's only explicitly declared reason for not awarding permanent alimony was that he believed such an award would encourage Sandra to remain voluntarily underemployed. Stated another way, the limited duration alimony award seems intended only to spur Sandra to seek full-time work and advancement in her employment. So viewed, the award was based on faulty intentions and a flawed analysis of the circumstances. In Cox, supra, 335 N.J. Super. at 482-83, we set out the "most commonly expressed rationale for permanent alimony," which is to compensate the "homemaker spouse" both for the benefit of increased earning capacity conferred upon the supporting spouse "by being responsible for homemaking and child-rearing" and for the opportunity costs of homemaking, which costs entail the homemaker spouse's lost earning capacity brought on by years of responsibility for the marital household. In line with that rationale, a "transfer of earning power" takes place, in which the efforts of the homemaker spouse increase the earning capacity of the supporting spouse, while the earning capacity of the homemaker spouse diminishes. Id. at 483 (quoting Joan M. Krauskopf, Rehabilitative Alimony: Uses and Abuses of Limited Duration Alimony, 21 Fam. L.Q. 573, 583-84 (1988)). This rationale reveals that alimony is an award intended to compensate the homemaker spouse for that transfer of earning power. Ibid. This rationale "applies to limited duration alimony as well." Ibid.
In the present case, despite the circumstance that Sandra continued to work at KPMG throughout the marriage, there undoubtedly was a "transfer of earning power" to Craig resulting from Sandra's performance in the role of the homemaker spouse. She was earning more than Craig at the beginning of their marriage and, according to Craig's testimony, if she continued on that track she would have been earning as much money as Craig, if not more, by the time of trial. She got off that career track when she assumed the role of the homemaker spouse. The judge failed to sufficiently appreciate this fact. Instead, he crafted an alimony award designed simply to compel Sandra to get back to where she would have been but for the course of conduct mutually agreed to by the marital partnership. This was inequitable. The difficulty is that the transfer of earning power began in 1996, with Sandra's withdrawal from full-time work because of the birth of the first child, and it continues. Thus, Craig's income increased steadily during a period of economic growth in this country, before the economic recession began in 2008. And, except for 2009, Craig's gross income has continued to increase markedly since 2008, to the point where he earned over $374,000 in adjusted gross income in 2011. Moreover, Craig had the benefit of increasing his earning capacity during his younger years, while Sandra is required to leave her homemaker role and return to full-time work at the age of forty-six. The judge's determination took an unrealistic view of these circumstances.
Additionally, aside from not explicitly considering the transfer of earning power in crafting the alimony award, the trial judge did not explicitly consider that the purpose of awarding alimony is based on "an economic right that arises out of the marital relationship and provides the dependent spouse with a level of support and standard of living generally commensurate with the quality of economic life that existed during the marriage." Mani v. Mani, 183 N.J. 70, 80 (2005) (internal quotations omitted).
At no point in his decision did the judge state how the limited duration alimony award, in combination with any amount of income Sandra might be expected to earn, will provide her with a level of support and standard of living close to that enjoyed during the marriage. Instead, the decision only recites that the chief purpose of the alimony award was to preclude her from remaining underemployed.
"Meaningful appellate review is inhibited unless the judge sets forth the reasons for his or her opinion. In the absence of reasons, we are left to conjecture as to what the judge may have had in mind." Salch v. Salch, 240 N.J. Super. 441, 443 (App. Div. 1990). It is not possible to ascertain from the reasoning expressed in the judge's decision how the alimony award satisfies the purpose of assuring that Sandra is capable of enjoying a lifestyle comparable to that she enjoyed during the marriage.
Along these same lines, N.J.S.A. 2A:34-23(c) provides that, in fixing the term of limited duration alimony, a court "shall consider the length of time it would reasonably take for the recipient to improve his or her earning capacity to a level where limited duration alimony is no longer appropriate." The judge awarded alimony for twelve years, but he did not state why he chose that particular amount of time. It may be that the judge tacitly determined that Sandra will likely have improved her earning capacity in twelve years to a level that she will then enjoy the marital lifestyle without the need for alimony. But we decline to draw this assumption without an explanation for how that particular period of time was likely to bring about the intended result.
Consequently, we conclude the judge mistakenly applied his discretion in these various ways and has not provided sufficient grounds for declining to award permanent alimony and opting for limited duration alimony in the wake of this long-term marriage. J.E.V., supra, 426 N.J. Super. at 485.
B
We are also troubled by the amount awarded and the apparent failure of the judge to consider — or explain his consideration of — a number of circumstances.
In this regard Sandra first contends the judge erred in using Craig's 2010 base salary in his alimony analysis and not including Craig's annual bonuses, which came in two parts: a cash component that comprised two-thirds and a restricted stock-share component comprising the remaining one-third. In 2010, for example, Craig's gross earnings totaled $317,959, of which $202,642 was his base salary and the remainder his annual bonus. In applying Craig's annual income for the purpose of determining alimony, the judge utilized only the $202,642 base salary and did not "include [Craig's] earnings with stock compensation, which totaled $317,959, because [Sandra] benefits from the stocks in equitable distribution." Contrary to the judge's reasoning, Sandra did not share in the two-thirds cash component through equitable distribution.
Other information in the record suggests the gross earnings were actually $324,315.
The trial judge may have been misled by testimony that cash bonuses were set aside in the children's bank accounts and not used by the parties to support the marital lifestyle. That testimony is highly questionable, however, given that the children's bank accounts amounted to less than $2000.
That is, in arguing the cash component was subject to equitable distribution, Craig observes that the bonus was deposited in the parties' bank accounts, which were equally divided. But see Section V, infra. If so, this merely dovetails with Sandra's argument that the cash bonus was always used to pay the parties' bills and to support the marital lifestyle. Such use of the cash bonuses would appear to make them a predictable part of Craig's annual income for purposes of fixing alimony, even if the actual amounts were uncertain until declared by Craig's employer. The problem is that the judge did not either explicitly find how the parties spent the cash bonuses or explain his reasoning in effectively excluding the cash component of Craig's annual bonus from consideration in the alimony determination.
Second, Sandra contends the judge erred in finding that Craig's base salary in 2010 was $202,642 for purposes of awarding alimony; she claims his base salary was actually $225,000. It appears Sandra may be partially correct. In fixing alimony, the judge determined that Craig's 2010 base salary was $202,642 in 2010. The record shows that this base salary was increased to $225,000 in December 2010, after the filing of the complaint a few months earlier. In that sense, Sandra incorrectly contends the judge was required to use the $225,000 figure when ascertaining Craig's actual income at the time the action was filed. But the judge could have considered the change made after the action was filed in determining the future obligation to be imposed.
We would note that the judge was not obligated to utilize 2010 figures, but could examine the course of earnings over the prior years to further consider what Craig's future earnings might be when the alimony is actually paid.
Third, Sandra argues that the judge erred in rejecting her proofs concerning the parties' marital lifestyle; the judge found Sandra "lacked any real credibility" and her case information statements were "speculative" at best and not adequately supported by other evidence. Because "[s]ubstantial weight should be given to the judge's observations of the parties' demeanor and credibility," J.E.V., supra, 426 N.J. Super. at 485, we reject Sandra's contentions in this regard.
Fourth, Sandra contends the judge was mistaken in presuming she was receiving or would apply for disability income. That is, in his decision, the judge stated that the "alimony ordered will be a taxable event to the wife and a deduction for the husband. There is no reason to order otherwise, particularly where the wife's disability income is largely tax free." Craig asserts the judge's comment is a clerical error. Although neither party appears overly concerned, the fact remains that the comment was made and may have impacted the amount of alimony awarded. The matter should be reconsidered in the proceedings to follow.
Fifth, Sandra contends that, given her "emotional frailties," the judge erred in imputing $81,470 in annual income to her because there was no proof she could earn at that level. We reject this argument because the imputation of that amount of income was supported by sufficient credible evidence in the record. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974). In his written decision, the judge stated that "[d]uring the course of the litigation it became evident that [Sandra] suffers from some mental health issues for which she takes medication; however, the illness is not one that [a]ffects the [c]ourt's decision." At trial, Sandra addressed her emotional frailties, testifying she had been diagnosed with clinical depression, took various medications, and consulted with a therapist. She also testified that her medical condition did not prevent her from caring for the children, working, or testifying at trial. From this, the judge was entitled to conclude that Sandra's emotional frailties would not impact her performance in the workplace; in other words, it is not a finding that we should second-guess.
We also note the judge observed that, during the marriage, Sandra was employed at KPMG on a part-time basis, working no more than 1000 hours per year. The record revealed that her gross income was $36,309 in 2008, $39,848 in 2009, and $31,280 in 2010, the year she filed the divorce complaint. Based on that, as well as information derived from the Bureau of Labor Statistics, the judge fairly extrapolated the imputed income figure. It is also noteworthy that the judge did not impute income at the managerial level of employment because Sandra was not "exactly qualified" for that position at that time. These findings are entitled to our deference.
To summarize we conclude that the judge's failure to award permanent alimony was not supported by the findings made, and the judge's failure to consider other factors in quantifying an appropriate amount of alimony, produced a flawed award. We remand for reconsideration and additional findings on these matters.
II
In her second point, Sandra argues the judge erred in directing a sale of the former marital home. At trial, the evidence revealed that Sandra continued to live in the marital home, which had been appraised at $730,000 and subject to a $132,097 mortgage and a $50,000 home-equity-line-of-credit.
Sandra sought retention of the marital home and, during cross-examination, she expressed her agreement with defense counsel that the children could easily move between the marital home and the nearby home Craig's girlfriend had purchased. Craig expressed only that he wanted his "fair share of the equity" in the home and he too testified that his girlfriend purchased the house near the marital home "so the boys would have the freedom of having parents that were close to each other," thereby implicitly anticipating Sandra would remain in the home subject to his being compensated for his interest in the home.
In his written decision, the judge announced he had considered the factors in N.J.S.A. 2A:34-23.1 for the equitable distribution of marital property. Without actually setting out his reasoning on how any of those factors applied in the present case, the judge concluded that the "marital home must be sold," and he ordered the parties to agree upon a realtor or, in the alternative, he would make the appointment. The judge also directed that the parties "equally share[]" the proceeds.
Despite that direction, the judge's decision also addressed the parties' debts, and he ordered that Sandra "shall seek to refinance the home and remove [Craig's] name from the mortgage and [home equity loan]." In addition, in the section of his decision that addressed the length of the alimony award, the judge stated that he "recognize[d] [Sandra's] requirement to support the former marital residence until at least the time that the children graduate from college." The judge's written decision is noteworthy in another similar regard because it includes no discussion of how the sale of the marital home will affect the joint child custody arrangement between the parties. And, as already observed, the parties both gave testimony that strongly suggested they anticipated Sandra would remain in the marital home, Craig would live in the nearby home with his girlfriend, and the children would have easy access between the two homes in accordance with the custody agreement.
A family judge is vested with broad discretion in equitably distributing marital assets. Wadlow v. Wadlow, 200 N.J. Super. 372, 377 (App. Div. 1985). We will not intervene so long as the judge "could reasonably have reached [the] result from the evidence presented, and the award is not distorted by legal or factual mistake." La Sala v. La Sala, 335 N.J. Super. 1, 6 (App. Div. 2000), certif. denied, 167 N.J. 630 (2001).
Here, the judge's intentions regarding the marital home are far from clear because of his contradictory directions. We remand so that the matter may be reconsidered and a decision regarding the home harmonized with all other aspects of the judgment.
III
In her third point, Sandra argues that the judge erred by awarding Craig $25,000 as his one-half share of the marital personal property contained in the marital home. She also contends that the judge erred in distributing two automobiles. We turn first to the property contained in the marital home.
A
At trial, when cross-examined, Sandra testified that she thought the furnishings, furniture, and contents of the marital home should be equally split. In her testimony, she also acknowledged that she was asked in discovery to provide an inventory but failed to do so. Craig testified that when he moved out of the marital home, he brought nothing with him but his clothes, leaving behind a snow blower, unspecified "power tools, everything and anything I've acquired over 20-some-odd years there . . . an attic full of things . . . a garage full of things," jewelry, the unspecified contents of a shed, and the contents of the home itself. In his last case information statement, Craig estimated the value of the "[h]ousehold furniture, furnishings and [Sandra's] jewelry" at $50,000.
In its written decision, the judge noted that Craig sought "a share of the personal property in the former marital residence, which he values as approximately $50,000 in his CIS." After stating that the home must be sold — a ruling that must now be reconsidered — the judge awarded Craig a credit of $25,000 to be deducted from Sandra's share of the proceeds derived from a sale of the home. Not only must the method of payment be reconsidered, but we conclude that the amount awarded for the contents of the marital home was purely speculative and entitled to no deference.
For future guidance, we remind the trial court that in determining an equitable-distribution issue, the three-part process must be engaged by: deciding what property is eligible for distribution; determining the value of the property; and deciding how the allocation can be most equitably made. Rothman v. Rothman, 65 N.J. 219, 232 (1974). In this case, the judge did not engage in the first two parts of the process. To be sure, the judge received little help from the parties in this regard. Nevertheless, the judge should have directed the presentation of sufficient information by which he could fulfill his fact-finding obligations.
B
In her reply brief, Sandra raises for the first time on appeal an issue involving the judge's disposition of the parties' automobiles. The facts underlying this issue were actually set out in Sandra's main brief, but that information was not incorporated into any argument in that brief. Although "[r]aising an issue for the first time in a reply brief is improper," and may lead to our decision not to consider it, Borough of Berlin v. Remington & Vernick, Eng'rs, 337 N.J. Super. 590, 596 (App. Div.), certif. denied, 168 N.J. 294 (2001), we find no prejudice, particularly because other issues compel a remand.
Craig testified that Sandra purchased a 2010 Buick Enclave in November 2010, the month after the divorce complaint was filed; she financed the vehicle and at the time of trial still owed at least $15,000. He also testified the parties purchased a new Chevrolet Corvette in 2003; it is registered in his name only. Craig's case information statement did not reveal whether the Corvette was owned debt free.
In his decision, the trial judge declared that "each party shall retain their present vehicle, with [Sandra] retaining use and possession of the Buick Enclave and [Craig] retaining use and possession of the Chevrolet Corvette." The judge also determined that each party would retain all debts in his or her own name, presumably meaning that Sandra remained exclusively obligated on the Buick car loan.
Sandra argues that the judge erred in distributing the two vehicles because he made her "solely responsible for the Buick loan" and did not afford her a credit reflecting the difference in value between the two vehicles. We agree that the decision regarding the two vehicles must be reexamined. Craig testified that the Corvette was purchased during the marriage in 2003, suggesting it was purchased with marital funds. The judge did not determine whether the Corvette was a marital asset or explain why it was equitable to award one hundred percent of its value to Craig.
IV
Sandra next argues that the judge erred in equitably distributing the value of Craig's retirement account by failing to determine the correct amount of premarital funds that could be excluded from distribution. We find no cause to intervene in the judge's decision on this point.
On March 31, 1992, defendant's retirement account with his employer contained about 389 shares of the employer's stock. At that time, the parties were building a house in contemplation of marriage but the project surpassed their budget. To meet the shortfall, on April 30, 1992, Craig executed a promissory note with his employer and borrowed $11,276.97 from his retirement account, the equivalent of about 310 shares of stock. The parties were married two months later, and the loan was repaid from marital funds over the following ten-year period.
At no point did Craig transfer or otherwise gift the premarital portion (389 shares) of his retirement account to Sandra. In his decision, the trial judge determined, based on Craig's case information statement, that the value of his retirement account was $1,130,065, of which $883,736 was eligible for equitable distribution and $246,329 was exempt as premarital. Craig testified that, over the years, the premarital portion had grown to 594 shares through stock splits and in value to $246,329 because of appreciation.
Sandra contends that because the premarital loan of $11,276.97 was repaid with marital funds, the appreciated equivalent of 310 shares of the employer's stock should have been deemed eligible for equitable distribution. She asserts that when marital funds were used to repay the loan, the 310 shares were essentially transferred from Craig's sole ownership to the marital partnership, thus becoming marital property eligible for equitable distribution. In this regard, Sandra relies on Pascale v. Pascale, 274 N.J. Super. 429, 433-35 (App. Div. 1994), aff'd in part, rev'd in part on other grounds, 140 N.J. 583 (1995).
Here, Craig did nothing that could be likened to the interspousal gift the wife made in Pascale. He merely took out a loan from his retirement account to meet a shortfall affecting construction of the marital home. He began paying back the loan in the month after he obtained it, thereby showing he had not made a gift to the marital enterprise. Accordingly, Sandra is mistaken when she asserts that Pascale supports her argument on this point.
V
Sandra next argues that the judge erred in distributing their joint bank accounts. She contends the judge erred by dividing the marital accounts without affording her an appropriate credit for marital funds that were not deposited into the accounts and for withdrawals Craig made from those accounts to pay his own expenses.
In his written decision, the judge noted that the parties had a joint checking account and three joint savings accounts that then held nominal amounts. He directed that the accounts were to be "equalized" as of the date the complaint was filed [October 6, 2010]," and the accounts then "closed." Sandra correctly points out that at or about the time the divorce complaint was filed, the parties' joint bank accounts held about $86,000, which, if divided equally as ordered in the final judgment, would give each party about $43,000. In addition, Sandra argues that Craig received a bonus in November 2010 of $39,384.15, which was deposited into one of the joint accounts. And Craig agrees this bonus, which was for work done in 2010, was eligible for equitable distribution. The record, however, does not explicitly reflect that the judge subjected that bonus to distribution when he ordered the account divided. Those funds may have been spent to cover joint and ongoing marital expenses, but the judge made no explicit findings in that regard.
Sandra additionally points out that Craig received another bonus on January 14, 2011, of $11,916, which was deposited into the same account. Sandra asserts that this bonus was also for Craig's work in 2010 and, therefore, a distributable marital asset. In response, Craig asserts the bonus was an "off-cycle bonus for a special project that he commenced in 2010 and which continued to the time of trial in August 2013," and that it was not eligible for distribution.
The judge did not address how a bonus issued in January 2011 was meant to compensate Craig for work to be done in August 2013. Nor did the judge explicitly resolve the dispute concerning the eligibility of the second bonus for equitable distribution, or clearly distribute or refuse to subject it to equitable distribution when he ordered the division of the account.
Sandra also points out that Craig withdrew large amounts from the account in 2010 and 2011 to pay his legal fees. Craig admits he made those withdrawals, but counters he only withdrew amounts he deposited after the divorce complaint was filed and any other withdrawals were used to pay joint marital expenses. The judge did not address any of these withdrawals in his written decision.
We remand for the resolution of the many questions and uncertainties surrounding these bank accounts.
VI
In her sixth point, Sandra argues that the judge erred in equitably distributing certain stock. Specifically, she argues the judge erred in determining that only those shares earned during the marriage up to the filing of her divorce complaint were eligible for distribution; that is, she argues that those shares granted before the complaint was filed, but which did not actually vest until a year or more after the complaint was filed, should have also been deemed eligible for distribution.
At trial, Craig testified he obtained shares through an employee stock ownership/investment plan (designated in the record as both an "ESOP" and an "ESIP" plan), and through a "matching" plan, where the employer would award shares against ESOP/ESIP shares the employee already possessed. The record revealed that although the shares were granted by the employer during a particular fiscal year, they vested with the employee over a three-year period, one-third in each year. The record also showed that the employee had to remain employed and the employer had to achieve certain earnings targets in order for the shares to vest; if neither condition was met, the shares would be forfeited.
In his decision, the judge ordered that the parties should "equally share any ESIP shares earned or matched during the coverture period that [Craig] is granted from his employer." Sandra asserts the judge should have distributed to her one-half of those ESOP/ESIP shares that the employer granted during the marriage but which did not vest until filing of the complaint.
Sandra relies on Pascale, where the Court determined that the wife's "stock options [which were] awarded after the marriage ha[d] terminated but [which were] obtained as a result of efforts expended during the marriage should be subject to equitable distribution." 140 N.J. at 609-10. The Court reasoned that those stock options were distributable because they reflected the wife's past efforts at her job and did not depend upon any future efforts by her. Id. at 607-11.
We agree with Sandra that the mere fact that a condition remained before the interests vested, i.e., Craig's continued employment, does not necessarily militate an exclusion of these assets from equitable distribution. The shares were otherwise a product of Craig's efforts for his employer during the coverture period. We remand for further examination of this issue.
VII
In her seventh point, Sandra argues the judge erred in ordering her to pay $138,415.47 of Craig's counsel fees. She claims Craig is in a superior financial position, she lacks the ability to pay these fees, and the judge erred in quantifying the amount awarded. Sandra disputes the finding that she acted in bad faith and claims the judge ignored Craig's bad-faith actions in this litigation.
"[T]he award of counsel fees in a matrimonial action is discretionary with the trial court and an exercise thereof will not be disturbed in an absence of a showing of abuse." Chestone v. Chestone, 322 N.J. Super. 250, 258 (App. Div. 1999). When making a counsel-fee determination, the judge possesses the discretion to rely on the circumstance that a party has not litigated in good faith and to impose a counsel-fee award for the "unnecessary litigation" for which that party is responsible. Addesa v. Addesa, 392 N.J. Super. 58, 78-79 (App. Div. 2007). We assume the judge's determination that Sandra litigated in bad faith, however, was based at least in part on her position on issues for which we remand. We, thus, vacate the fee award and leave any questions about counsel-fee awards to abide the resolution of the proceedings for which we remand. We add only the following for guidance.
Family judges, of course, have the authority to award counsel fees in a family law action pursuant to N.J.S.A. 2A:34-23, Rule 4:42-9(a)(1), and Rule 5:3-5(c). In his written decision, the judge examined each of the nine factors set out in Rule 5:3-5(c) based on the submissions and then tersely concluded that "in light of the aforementioned, the [c]ourt finds that [Sandra] shall pay [Craig's] fees in the sum of $138,415.47 from her share of the proceeds of the former marital residence." Sandra contends the judge failed to appreciate Craig's superior financial position and her own financial inability to pay his counsel fees. The judge only generally observed that Craig "earns more than [Sandra]; however, [she] will receive alimony and child support, plus additional child support." The judge also noted that the proceeds from the sale of the marital home would become available — but that is now not necessarily so.
The point is that although the judge mentioned the need and ability to pay factors, he did not clearly explain why under the then-existing circumstances it was equitable for Sandra to bear so large a portion of Craig's counsel fees. We are not convinced the award was other than punitive.
In addition, we agree the judge's findings in quantifying the amount of the award were inadequate. The judge found that Craig's counsel fees and costs amounted to $214,752.70. He ordered Sandra to pay $138,415.47, nearly sixty-five percent of Craig's total fee obligation to his attorney. The judge, however, did not explain why he chose that amount. Although he explained why he thought Sandra had litigated in bad faith, he did not explain why that bad faith was of such an extent and degree that it necessitated she pay almost two-thirds of Craig's fees. Indeed, in briefly outlining the circumstances supporting his finding of bad faith, the judge mentioned what he concluded was a mendacious certification filed by Sandra in seeking pendente lite support, a demand that Craig vacate the marital home that the judge concluded was based on false circumstances, and an alleged false assertion that Craig failed to consult her about a child's enrollment in prep school. He also asserted that Sandra "would not accept [Craig's] good faith position of shared custody unless her financial awards would remain as if [Sandra] had primary custody," which Craig hyperbolically describes in his brief as "perverse and disingenuous" and at oral argument as tantamount to selling the children. Even if we defer to the judge's similar interpretation of the positions Sandra took in attempting to negotiate a settlement, we question the extent to which they impacted the litigation.
For these reasons, we remand for reconsideration of the awarding of fees pending resolution of the other issues.
VIII
Sandra lastly argues that if we remand for further proceedings, we should direct that the matter be handled by a different trial judge. She claims the judge exhibited a "callous indifference to her emotional frailties," a "blatant prejudice" and "bias" against her, and a "disregard of any and all evidence" presented by her. She also contends that reassignment is called for because the trial judge made credibility findings against her and cannot now be expected to reexamine the matter with an open mind.
We do not agree there are grounds for the judge's disqualification. We do recognize, however, that judges may at times find it difficult when a matter is remanded to cast off their commitment to earlier findings. See N.J. Div. of Youth & Family Servs. v. A.W., 103 N.J. 591, 617 (1986); State v. Henderson, 397 N.J. Super. 398, 416-17 (App. Div. 2008), aff'd in part, modified in part, 208 N.J. 208 (2011). After careful consideration, we conclude that the interests of justice would best be served by having the remand proceedings completed by another judge. We direct the assignment judge or presiding judge of the family part to reassign the case.
For these reasons, we vacate those parts of the judgment of divorce specifically addressed herein, and we remand for further proceedings. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
The parties had both previously moved for a correction of the record on appeal, complaining of the other's inclusion of materials or comments in their written submissions that were outside the record. Those motions were referred to the merits panel for disposition. We now deny those motions.
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CLERK OF THE APPELLATE DIVISION