Posted on May 16, 2009 by Sandra C. Fava

VIOLATIONS OF A JUDGMENT OF DIVORCE AND COUNSEL FEES

A question often asked by clients when negotiating the terms of a settlement agreement or when in receipt of a Judgment of Divorce (“JOD”) is what happens if my spouse doesn’t comply with these terms?  If you’ve been through litigation related to a divorce or post-divorce situation you may feel frustrated that an Order signed by a judge is nothing more than a piece of paper and can all too often be difficult to enforce.  Since the family courts are courts of equity, more often that not, judges tend to give second and third chances when a litigant does not comply before more severe punishments are imposed.  Judges may often fear that if they do not give litigants an opportunity to correct the error of their ways, they are not acting equitable or could be subject to criticism and reversal from the Appellate Division.

In the unpublished decision of Cordier, Jr. v. Day-Cordier, decided April 7, 2009, Docket No. A-4004-07T3, the Court addressed the issue of counsel fees and other requirements imposed on a party who failed to comply with the terms of a JOD.

 

These parties were divorced in February 2007.  Part of the judgment of divorce required that in return for $100,000 from plaintiff, defendant relinquished her interest in the former marital home; plaintiff would refinance the mortgage to remove defendant’s name and associated responsibility; defendant warranted that other than the mortgage, she had not caused any other liens, etc. to be lodged against the former marital home but if any were found to exist, she would satisfy them from the $100,000 she received from plaintiff; and plaintiff was to pay $425/week as term alimony for 4 years.

 

In November 2007, plaintiff filed a motion to enforce litigant’s rights. Defendant, despite two postponements, never filed any response thereto.  Plaintiff’s motion was stimulated because a lien in the amount of $16,221.62 had been placed on the former marital home because of defendant’s credit card debt and the IRS had imposed a lien of $4,684.90 due to defendant’s unpaid tax obligations.  Plaintiff also sought to suspend his alimony obligation until the debts were paid; an accounting of how defendant spent the $100,000 received from the settlement; counsel fees for defending the foreclosure action; and counsel fees for the motion itself.

 

In a January 2008 Order, the court suspended plaintiff’s alimony obligation until defendant provided a written list of all her creditors and payments made on those debts as well as proof of employment. Defendant also had to provide a full accounting of how she spent the $100,000 she received from the settlement; proof that she had satisfied all liens against the home and any other debts; and counsel fees of $1,527.12.

 

In February 2008, defendant filed a motion for reconsideration seeking to vacate the terms of the January 2008 Order. In support of her application defendant provided proof that she satisfied the credit card debt in December 2007 and the IRS debt in January 2008. She alleged that she did not respond to plaintiff’s motion to enforce litigant’s rights because he had agreed to withdraw the application if she paid the debts in full. He failed to do so without defendant’s knowledge.

 

In response to defendant’s application for reconsideration, plaintiff filed a cross motion requiring defendant to pay the counsel fees award; provide the previously ordered accounting; and supply a statement listing all her creditors and debts. The court entered an Order on March 7, 2008. Despite finding that defendant had substantially complied with the January 2008 Order, the court still required defendant to supply an accounting of canceled checks paid to her creditors as well as an accounting of the $100,000 she received from the settlement. The court modified the prior Order in that defendant was relieved from her obligation to account for those debts that are entirely unrelated to plaintiff.

 

The appeal stemmed from that Order. Defendant contended in her appeal that the March 2008 Order was onerous, intrusive and unjustified. The Appellate Division agreed. In light of defendant’s proofs showing that she had indeed notified plaintiff that she satisfied the two debts, and that plaintiff nonetheless failed to withdraw his motion, the court should have desisted from ordering the intrusive accounting. Once defendant satisfied the debts and plaintiff failed to demonstrate that there were any other creditors lurking, the judge’s refusal to reconsider the November 2007 Order was an abuse of discretion.

 

Also, because the trial judge found that defendant had satisfied the outstanding debt prior to the entry of the January 2008 Order, the judge erred when she refused to vacate the alimony suspension. Plaintiff should be ordered to reimburse defendant for those three weeks of suspended alimony payments. However, since defendant did not satisfy those debts until after plaintiff filed his motion to enforce litigant’s rights, the part of the Order requiring defendant to pay plaintiff’s counsel fees remains undisturbed except that the time associated with the argument of the motion on January 11, 2008 should be vacated.

 

The Appellate Division found that the trial judge was correct in requiring defendant to be responsible for reimbursing plaintiff any counsel fees incurred in connection with the defense of the foreclosure action on the marital home. However, further proceedings must be held to determine the financial circumstances of the parties and their ability to pay.
 

EDITOR'S NOTE:  One of hardest things to explain to client's is why court's do not aggressively enforce their orders.  Having practiced in another state, I note that this is not the case every where.  As a young attorney in Colorado after having practiced for a short time in NJ, I was shocked when a father was convicted of contempt of court and jailed for 6 months for not paying child support.  I have spoke to attorneys in other states who also are surprised with how lax enforcement by our court's can be. 

On another note, in many cases, you write multiple letters to try to get compliance with an Order and when that doesn't work, you file your enforcement motion.  Only after the motion is filed is the error corrected.  To often, the Court will find that the issue is moot and not award counsel fees.  Aside from being contrary to the Court Rules regarding counsel fees for enforcement applications, and perhaps the Settlement Agreement which has a counsel fee clause if someone needs to enforce an agreement, this is simply unfair.  In reality, the motion is not moot and it was the motion itself that forced compliance.  Counsel fees really should be awarded in those situations otherwise the non-compliant party can simply delay and force the other to file a motion to get what they are entitled to.  The Court in the case Sandra blogged about got it right in this regard.    ERIC S. SOLOTOFF
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Posted on April 2, 2009 by Apple Sulit-Peralejo

IF I WIN, DO I GET COUNSEL FEES?

In New Jersey, a family court judge has authority to award counsel fees to one of the litigants pursuant to Rule 4:42-9(a)(1);  Rule 5:3-5(c); and the New Jersey Supreme Court decision of Williams v. Williams, 59 NJ 229, 233 (1971).  Additionally, a court is guided by the "the factors set forth in the court rule on counsel fees, the financial circumstances of the parties, and the good or bad faith of either party".  Often, litigants mistakenly assume that the litigation will ultimately be funded by the other party based upon their belief that the other party acted in bad faith.  Robert Campbell, a litigant in the March 31, 2009 unreported Appellate Division decision of Sheinbaum v. Campbell, learned (the hard way) that a counsel fee request does not rise and fall with a litigant's belief that the other party acted in bad faith. 

The underlying facts of  Sheinbaum v. Campbell indicates a long tortured emotional history between the parents of a child with special needs.  The parties resided in Massachusetts.  Less than a year after the parties were married, they separated.  At the time of their separation, plaintiff was pregnant.  The child was born five months after the separation.  Four months after the child was born, the parties divorced but the divorce did not address custody of the child.  Thereafter, plaintiff and the child moved to New Jersey.    In New Jersey, plaintiff filed a Complaint seeking custody, child support and an order limiting defendant's parenting time, a trial court litigation spanning three years.  During the three years of litigation, numerous orders were entered concerning parenting time and child support.  When the initial parenting time order was entered, defendant's parenting time was supervised.  During the litigation, defendant's parenting time became unsupervised, increased and eventually, defendant had limited overnight parenting time. 

Although the Appellate Division decision focused on issues related to counsel fees and experts fees, clearly defendant was of the belief that plaintiff intended to limit his parenting time unjustifiably and that plaintiff was not acting reasonably with respect to the health and welfare of the child. Plaintiff contended that she believed that based upon the child's medical disabilities, additional parenting time was not in the child's best interest. Also very important is that the parents did not agree with the child's medical treatment. Defendant not only alleged that the child was receiving too much therapy in the custody litigation but Defendant also raised the issue with the state agency who approved the child's therapy regiments in an administrative action against Plaintiff. After a seventeen day trial, the Court awarded Plaintiff sole custody, child support and $68,000 in counsel fees. The Court also entered an Order requiring Defendant to pay 100% of the Court appointed child coordinator. Defendant then filed a Motion for Reconsideration asking that the trial Court reconsider the award of counsel fees based upon his assertion that the Plaintiff acted in bad faith in limiting his parenting time and that the trial Court reconsider the order requiring him to pay 100% of the court coordinator fees noting that during the litigation, the Court previously entered an order requiring Plaintiff to pa 40% of those fees. In reply, Plaintiff filed a crossmotion to enforce litigant's rights. The trial court denied the application and awarded Plaintiff another $1,500 in counsel fees and required Defendant to make monthly installments towards the $68,000 counsel fee award. Furthermore, the trial Court ordered that Defendant would have to pay a $100 a day fee in the event that he did not pay the counsel fee installment payments. Defendant then filed his appeal with the Appellate Division.
 

The Appellate Division  rendered a 35 page decision containing a comprehensive analysis of the facts of the case as well as the Court Rules and decisions governing counsel fee awards and the factors contained in the Court Rules specifically applicable to the Sheinbaum v. Campbell case.  The Appellate Division noted that Defendant's primary contention was that the trial court abused its discretion in imposing counsel fees because he prevailed in his position on overnight parenting time with the child.  Implicit in the Defendant's argument was that he prevailed because Plaintiff acted in bad faith in denying him overnight parenting time especially because experts agreed that additional overnight parenting time would not be harmful to the child.  The Appellate Division noted "that the 'result obtained' is only one factor the court considers in determining a counsel fee award, and results do not necessarily trump or outweigh the other factors under the rule."  In discussing Defendant's contention that Plaintiff acted unreasonably in objecting to overnight parenting time, the Appellate Court  found that "even if plaintiff was mistaken in believing that overnight stays were not in the child's best interest, the proper inquiry was not into her beliefs per se, but the good faith in which she held them".  In other words, while Plaintiff strenuously objected to overnight parenting time believing that it would be contrary to the stability of the parties' child in light of the child's health conditions, a belief that was rejected by the experts involved, Plaintiff held her beliefs in good faith and that her actions were not malicious.  The Court also commented that the trial court's counsel fee analysis also took into consideration Defendant's actions which were found to be just short of bad faith.  For example, although all of the experts involved in the case recommended that the child continue with a therapy regiment, Defendant continually made therapy a point of contention asserting that Plaintiff had not kept him fully apprised of the child's treatment.  However, during the trial, approximately 80 emails showed that Plaintiff kept Defendant informed about the child's therapy and even notified him of the child's evaluations during which Defendant was present.

The Decision also completes an analysis of the financial factors involved in an award of counsel fees noting that the trial Court correctly based the award based partly on need and also on plaintiff's good faith and defendant's borderline bad faith which underscores the balancing of all factors contained in the Court Rules in determining an award of counsel fees.  Notably, the Appellate Division also accepted the trial court's use of the New Jersey Child Support Guidelines in apportioning the counsel fees incurred by both parties.  The trial court had combined the total counsel fees incurred by both parties and attributed responsibility based upon the parties proportionate incomes.  The Appellate Division found that the calculation was appropriate since the trial court also completed an analysis of the other factors applicable in awarding counsel fees.

While the trial court's award of counsel fees was affirmed, the requirement that Defendant pay the award in 24 monthly installments subject to a late sanction of $100 per day was reversed because (1) there was no evidence presented that Defendant had the ability to make the payments within 24 months; (2) Defendant was not in any violation of the Court's counsel fee Order as he immediately filed a Motion for Reconsideration after the Court awarded $68,000 in counsel fees; and (3) the trial Court failed to explain how it arrived to a $100 per day sanction making the sanction a punishment and arbitrary.  The Appellate Division directed that the issues be returned to the trial court for consideration of an appropriate payment plan for payment of the counsel fee award.

Finally, the Appellate Division affirmed the trial court's $1,500 counsel fee award resulting from the Motion for Reconsideration and Plaintiff's Motion to enforce litigant's rights noting that the Court awarded the fees but because the Plaintiff's application was necessitated by defendant's failure to abide by the Court's Order and because the award was not excessive citing precedent decisional law.

With respect to the coordinator fees, the Appellate Division rejected the Defendant's contention that Plaintiff should have to contribute towards the fees since the trial court initially rendered a ruling that Plaintiff pay 40% of the fees.  The Appellate Division noted that the initial order was subject to allocation and that the court may modify, change and amend its prior order to final judgment.  

The Steinbaum v. Campbell decision shows that presentation of a counsel fee application must be much more comprehensive that relying upon a party's assertion that the other party acted in bad faith.  Winning the case or winning an issue in the case does not translate into an automatic  finding that the other party acted inappropriately nor an automatic award of counsel fees.  Moreover, the counsel fee analysis is multi-faceted and is subject to a balancing of the facts and the factors contained in the Court Rules. 
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