NJ Family Legal Blog : New Jersey Divorce and Family Lawyer & Attorney : Fox Rothschild Law Firm : Alimony, Child Support, Child Custody, Prenuptial Agreements, Essex, Morris, Mercer, Atlantic

As noted recently, the proposed alimony reform  bill is calling for automatic termination of alimony when someone gets to the age of retirement as determined by Social Security.  Is this fair if that person keeps working full time?

Several years ago, I had a case where the husband sold his business, but signed an agreement to remain with the company for up to three years (and he had a contract that said he would be paid for 3 years - even if they let him go sooner.)  He was probably close to 60 at the time of the sale.  He and his wife had agreed that once either the contract was over or they let him go, that they were going to retire and move to the shore house.  Half way into the contract, the wife filed for divorce and sought permanent alimony, up to the day of trial.  The case ultimately settled just prior to trial when the trial judge learned that the wife admitted at her deposition that the family plan, was in fact, that the husband would retire as noted above.  The judge made it pretty clear that permanent alimony was not going to happen here.  Unfortunately, it took more than a year of litigation to get to that point. 

Also, if one or both of the parties are going to be getting Social Security soon, that factor should at least be considered, though it may or may not make a difference.  If a pension is going to be divided that is going to be providing monthly benefits to each party in short order, that too may be something to be considered.

In short, fairness seems to dictate that these things and retirement at least be discussed and some common sense be applied when settling grey divorces after long term marriages.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric practices in Fox Rothschild's Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

So what do you do?  Do you make a motion to compel only to anger the judge who is already over burdened?  Do you just take a deposition and force the issue on a record? When you do make the motion, the other side will file a knee jerk cross motion concocting things that your client didn't provide.  I have a case now where there have been three orders compelling the discovery, some of which has been due for more than a year.  Each time we go to court to get the things we have been waiting for for months, the other side makes demands for more and more things - as if there is some equivalency with the demands that have been outstanding for a year vs. theirs that have been outstanding for a few days (typically made knowing that you will be returning to court so better to say that you need information from the other side too.  The discovery dance in action again.

To avoid the dance, I often serve subpoenas early in a case to get bank, brokerage, credit card, employment/income/benefit/deferred compensation information directly from the source.  While the up front cost may be greater, the ultimate cost in curtailing some of the discovery dance is usually less.  But you can't always get everything directly, especially when you want to get the records of the other party's business. 

But if you have to make the motion, make sure you clearly set forth what you asked for, when you asked for it, and what was and wasn't produced.  If you (or your expert) really need something, don't settle for no.  If the other side wont produce it, ask the court to make adverse inference and preclude the other side from offering contrary evidence. 

Bottom line, if you are forced to dance, be the better dancer.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric practices in Fox Rothschild's Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.
 

 In this case Mr. Chafin, a United States citizen and member of the military, had married Ms. Chafin, a United Kingdom citizen, in Germany, where they later had a daughter, E. C. When Mr. Chafin was deployed to Afghanistan, Ms. Chafin took E. C. to Scotland. Mr. Chafin was later transferred to Huntsville, Alabama, and Ms. Chafin eventually traveled there with E. C. Soon after Ms. Chafin’s arrival, Mr. Chafin filed for divorce and child custody in Alabama. Ms. Chafin was subsequently deported, but E. C. remained in Alabama with Mr. Chafin.

Later, Ms. Chafin filed a petition under the Convention in which she sought the return of E. C. to Scotland. The United States District Court concluded that E. C.’s country of habitual residence was Scotland (as that is where she had lived when Mr. Chafin was in Afghanistan) and granted the petition for return. Ms. Chafin immediately departed for Scotland with E. C. Ms. Chafin then initiated custody proceedings in Scotland and was granted interim custody and a preliminary injunction prohibiting Mr. Chafin from removing E. C. from Scotland. Mr. Chafin appealed the District Court’s order, but the Eleventh Circuit dismissed the appeal as moot, on the ground that once a child has been returned to a foreign country, a U. S. court becomes powerless to grant relief. Mr. Chafin was then ordered to reimburse Ms. Chafin for court costs, attorney’s fees, and travel expenses. Essentially, Mr Chafin was being denied his right to appeal a court’s order.

The Supreme Court held that the return of a child to a foreign country pursuant to a Convention return order does not render an appeal of that order moot. The Justices realized that because the Chafins continue to vigorously contest the question of where their daughter will be raised, this dispute is very much alive. Mr. Chafin sought typical appellate and his claim for his daughter’s return cannot be dismissed as so implausible that it is insufficient to preserve jurisdiction, and his prospects of success are therefore not pertinent to the mootness inquiry. Finally, the Court noted the Convention’s mandate of prompt return and ensuring that each case will receive the individualized treatment necessary for appropriate consideration of the child’s best interests.

These cases demonstrate the ways in which a parent can look to the courts, even outside of our borders, when a child has been taken. As we line in a society in which international marriage and travel becomes more and more common, these situations similarly become more common. Facts, such as in this case, when a child is removed when a member of the military is deployed for extended periods of time, are being litigated throughout the country and the law can expected to evolve.

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Jennifer Weisberg Millner is a partner at Fox Rothschild, and a member of the firm’s Family Law Group. She is resident in the Princeton Office though she practices throughout the state.  

It is always a good idea to keep termination records, communications with a former employer, evidence of any severance package, any doctors’ reports and notes if the applicant is alleging a reduction in income because of illness, as well as documentation regarding assets, debts, and expenses.

• Has the party seeking modification proven that his/her changed circumstances are permanent - The lack of permanence of a supporting spouse’s circumstances standing alone can be a sufficient basis upon which to deny an application to modify support. The New Jersey Supreme Court has held that a spouse’s temporary unemployment was insufficient to justify a child support modification.

To aid the Court in this analysis, the supporting spouse should gather any documentation that would prove that a change is more than temporary, for example, articles or other sources regarding a permanent downturn to the individual’s chosen profession.

• Whether the change was involuntary or voluntary - If the applicant fails to establish that he or she is involuntarily underemployed, the trial judge may impute prior earnings, which are evident of capacity to earn. The applicant should be aware that if he or she quits his or her job or accepts lower paying employment, that party will not be permitted to avoid his or her obligation to pay support regardless of a finding of any good or bad faith in the employment change. Similar principles apply where, although the initial change in employment may be involuntary, the party nevertheless decides not to remedy the situation.

An example of what the Court may be looking for is records kept by the application of a job search. This will enable the Court to form a reasonable basis to conclude that the party undertook steps to remedy his or her situation.

• Whether the applicant has provided evidence that he or she has made efforts to mitigate any perceived losses – It is not enough that a supporting spouse demonstrate a reduction in income; the obligor must also demonstrate how he or she has attempted to improve the diminishing circumstances. In other words, a supporting spouse has an obligation to find employment that will not produce a diminished earning capacity to the detriment of the payee spouse.

Some examples of what the Court may be looking for are: evidence as to the names of persons contacted that would aid in the mitigation of losses; the frequency of such calls; other jobs applied for; potential certification degrees to advance marketability to make up for any lost income, etc.

Obviously, the facts of a specific case will require that an applicant produce evidence that is tailored to the relief they are requesting. However, the above is just a glimpse in to the threshold analysis - a check-list so to speak - that a Court likely will undertake before a supporting spouse ever steps foot in to the Courthouse. Keeping impeccable records is therefore of the utmost importance in the months that precede such an application to modify support. Without the necessary evidence, your application may fail as a threshold matter.

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Eliana T. Baer is a frequent contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild's Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

At the time the PSA was negotiated and signed, Jonathan was approximately six and a half years old. He was having some difficulties in school; and there was some concern that he might have attention deficit disorder. In the years following the divorce, he was diagnosed with the following disorders: (1) attention-deficit/hyperactivity disorder; (2) obsessive-compulsive disorder; (3) Asperger's disorder (a form of autism); and (4) bipolar disorder. As a consequence of his various disorders, Jonathan took multiple medications and was treated by several mental health professionals on a regular basis. As his disorders developed and progressed, Jonathan's conduct, both at school and at home, became progressively more problematic. In 2007, he was transferred from public school to a non-residential special needs school.

The wife’s increased responsibilities with respect to Jonathan had prevented her from obtaining any significant employment. It appeared from the record that the parties contemplated that the wife would continue to perform parental duties, but would also begin to obtain at least some per diem work as an attorney.

The wife filed a post-judgment motion seeking the following relief: (1) the continuation of alimony until Jonathan graduates from high school; (2) an increase of the alimony to $800 per week; (3) the production of updated financial information; (4) an increase in child support if the court denied relief with respect to the alimony; (5) the establishment of a fund for Jonathan's care after he reaches age eighteen; and (6) counsel fees. The husband opposed the motion, arguing that the wife was bound by the PSA, which they had both agreed was fair and equitable at the time they executed it, and that she had not sufficiently demonstrated an inability to work part-time.

On May 4, 2007, he entered an order denying all of the requested relief, except for the request that the husband supply his current financial information. The wife appealed.

The Appellate Division reversed, finding the wife had made a prima facie case for (1) an increase in the amount of the limited duration alimony based upon “changed circumstances”; and (2) an extension of the length of the term based upon “unusual circumstances,” both pursuant to N.J.S.A. 2A:34-23(c), and ordered a plenary hearing.

Specifically, the Appellate Division believed that the wife made a sufficient prima facie showing that Jonathan's current mental-health condition was not anticipated at the time of the divorce. Although it appeared that, at the time the PSA was being negotiated, there was some manifestation of behavioral problems at school, which were attributed to the possibility of attention-deficit disorder, his later diagnoses of Asperger's disorder and bipolar disorder presented significantly more serious disorders with potentially greater impact on Jonathan's life, as well as the wife’s as his parent of primary residence.

While the Appellate Division further agreed that the wife’s proofs with respect to her efforts to find employment were slim, at best, it was noted that there was sufficient support in the record, primarily in the wife’s certification, to warrant further judicial inquiry into her assertion that her parenting duties related to Jonathan's behavioral issues precluded either the anticipated employment as a per diem workers' compensation attorney or some other form of employment.

On remand, the court rendered a comprehensive written decision that stated that Jonathan's needs were "great" and that the wife's "love and commitment to him were impressive" but concluded that she had nonetheless failed to established that she was entitled to an extension or increase in alimony:

Clearly, there has been a significant change that was not anticipated at the time of the divorce. . . . However, reviewing the evidence and testimony submitted by both parties, this Court concludes that the defendant has failed to demonstrate [that] "unusual circumstances" have impaired her ability to support herself, and does not provide sufficient evidence to support her request. Specifically, she fails to show the impact of child care responsibilities on her earning capacity.

The court therefore denied the wife's request for an increase and extension of alimony. The wife then appealed again (App. Div. 2011), and this time, the appellate division affirmed the decision of the trial court.

Because alimony orders are always subject to modification based upon changed circumstances, it is important, when entering in to an agreement, to know what can happen down the line. This is just one possibility, among many, that both spouses need to consider.

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Eliana T. Baer is a frequent contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild's Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

New Jersey Court have recognized various events that satisfactorily demonstrate a prima facie showing of “changed circumstances,” including, but not limited to:

(1) an increase in the cost of living, Martindell v. Martindell, 21 N.J. 341, 353 (1956);

(2) increase or decrease in the supporting spouse's income, Martindell, supra, 21 N.J. at 355; Traudt v. Traudt, 116 N.J. Eq. 75, (E & A 1934); Acheson v. Acheson, 24 N.J. Misc., 133 (Ch. Div. 1946);

(3) illness, disability or infirmity arising after the original judgment, e.g., Kirshbaum v. Kirshbaum, 129 N.J. Eq. 429 (E & A 1941); Limpert v. Limpert, 119 N.J.Super. 438 (App. Div. 1972); see Ostrow v. Ostrow, 59 N.J.Super. 299, 305-306 (App. Div. 1960); and

(4) subsequent employment by the dependent spouse, Ramhorst v. Ramhorst, 138 N.J. Eq. 523 (E & A 1946); Kavanagh v. Kavanagh, 134 N.J. Eq. 358 (E & A 1944), see also Lavene v. Lavene, 162 N.J.Super. 187, 203 (Ch. Div.1 978).

[Lepis, supra, 83 N.J. at 151]

While many cases cite this prima facie standard to either deny or grant an initial motion and schedule a hearing, it has become almost an elusive concept to both lawyers and judges, alike. In fact, hardly any New Jersey cases actually define the term. Prima facie is defined in Black’s Law Dictionary as follows: “At first sight; on the first appearance; on the face of it; so far as can be judged from the first disclosure; presumably; a fact presumed to be true unless disproved by some evidence to the contrary.” In Re: Napp Technologies, Inc. Litigation Application Of Holt & Ross, Inc. To Quash Subpoena 338 N.J. Super. 176 (Law Div. 2000). The concept has never been clearly defined in a case under Lepis, however. This may be the reason that the case law is so widely divergent as to what type of factual scenario would constitute a prima facie change in circumstances.

Once the trial judge determines that prima facie threshold has been met (step one), appropriate discovery of the other party’s financial condition is justified and, eventually, a plenary hearing may be necessary if material facts are clearly shown to be in dispute (step two). The scheduling of a plenary hearing requires that the supporting spouse clearly demonstrate the existence of a genuine issue as to material fact.

During the plenary hearing, the Courts are to weigh several factors dependent on the nature of each case. These factors include whether the change in circumstance is temporary or permanent; whether the change was voluntary; whether it was motivated by bad faith or a desire to avoid payment; and whether the change in circumstance renders the payor former spouse unable to pay. Courts cannot fairly undertake this balancing of equities when they lack sufficient evidence in the record to do so.

Despite that clear mandate, it is amazing how many judges will deny an application outright, preventing a case from moving past step one, and make findings as to voluntariness, permanency, bad faith and ability to pay without sufficient evidence to do so – i.e. without the necessary discovery and testimony of the parties.

Below are some cases where the trial judges did just that, but the Appellate Division put the brakes on and held those trial judges to the two-step Lepis procedure.

First, recently, in Skoblar v. Skoblar, 2012 WL 996653 (App. Div. 2012), the trial judge, without a plenary hearing, found that the defendant-obligor had not adequately shown changed circumstances under Lepis necessary to obtain relief. In denying the defendant’s application, the judge stated: “There is not enough evidence for the Plaintiff to determine that there is a prima facie case with what The Plaintiff have before the Plaintiff.” Ibid. This despite the fact that the defendant’s motion had appended to it a certification, CIS, tax returns and an analysis of his business income prepared by a certified public accountant. Ibid.

The Appellate Division disagreed with the trial court and remanded the matter for a plenary hearing. In doing so, the Court stated:

Although the matter is not free from doubt, we are persuaded that defendant has advanced a prima facie showing of changed circumstances here to trigger a plenary hearing. His certification asserts no reduction in hours worked at his law practice or diversion of his time to other endeavors and does not appear in bad faith…

We cannot conclusively determine from the record whether defendant is voluntarily underemployed by virtue of his diminution in income from his law practice. We also note that if the figures recited in defendant’s CIS and certification are accepted as true, they suggest “changed circumstances have substantially impaired [his] ability to support himself.”

The Court concluded “[g]iven the nature of this record, any dispute as to defendant’s changed circumstances are best determined in a plenary hearing. In such a proceeding, the judge will have a chance to assess the credibility of defendant’s assertions, as tested through the rigors of cross examination.” On those findings, the Appellate Division reversed and remanded the case for a full hearing in which the facts and equities could be developed an evaluated. The Court further ordered that prior to the plenary hearing, the parties were to exchange updated CIS forms, including tax returns and any necessary discovery counsel wished to pursue.

Similarly, the Appellate Division in Smoley v. Smoley, 2008 WL 2310065, reversed and remanded a case for a plenary hearing on a finding that the supporting spouse had presented a prima facie case that the parties’ financial situations had changed since the time of the divorce. The plaintiff-obligor in Smoley was ordered at the time of the parties’ 2004 divorce to pay $6,583.35 per month in spousal support on the basis of his then-earnings of $300,000 per year and his former wife’s imputed earnings of $30,000 per year. In 2007, the plaintiff-obligor filed a motion to terminate alimony based upon his changed circumstances. In support of his motion, he provided the Court with a certification and tax information which reflected a reduction in his earnings from $300,000 at the time of the divorce, to $130,000, which he attributed to a decline in his company’s earnings, as well as to his declining health. His former wife opposed the motion, arguing that his claim of a reduction in income was manufactured and that the reported business earnings are specious or exaggerated. She also maintained that despite the plaintiff-obligor’s claim of financial hardship, he still maintained a high lifestyle. She also disputed the plaintiff-obligor’s assertion that his deteriorating health rendered him unable to work in the same capacity as at the time of the divorce.

In reversing and remanding the case for a plenary hearing, the Appellate Division found as follows:
The motion judge held that Paul had not presented a prima facie case of changed circumstances under Lepis and that a plenary hearing was not warranted. We disagree. Paul has demonstrated a substantial decrease in income from the time of the property settlement agreement as well as letters from physicians, albeit uncertified, which indicate Paul should reduce his work hours in APS. On the other hand, Frances disputes all of these factual assertions. Moreover, we are unable to ascertain whether Frances’ financial condition has changed since she did not supply a case information statement.

While the above examples are of unreported and non-precedential decisions, it is interesting to see the Appellate Division’s response to cases where trial judges simply deny motions outright, without a second glance and an opportunity to develop evidence during a plenary hearing. Of course, success on these types of applications will depend on the merits of each case. However, simply because a trial judge sees these applications as a matter of course, does not mean that an analysis of the individual facts of each supporting spouse should not be fully examined.   Considering the Appellate Division's reactions to these types of cases, appealing these types of decisions by the trial court might be the best way to obtain the relief you are seeking.

In this case, not unusually, the parties agreed to sell the marital home and equally divide the net proceeds after certain marital debt was satisfied.  The house was listed for $899,000 but the agreement provided that the listing price could be reduced at the advice of the broker.  The husband was going to remain in the house pending the sale.  The agreement also provided that he was allowed to refinance the house into his own name, taking out $85,000 to pay off the aforementioned marital debt and give the wife a $25,000 advance against her share of the equitable distribution of the house. The agreement further provided that: 

In the event the marital home is not sold within one year of the date of [plaintiff] vacating the marital home, [defendant] shall provide [plaintiff] with a second $25,000.00 advance payment of her share of the net proceeds from the sale of the marital home, which shall be deducted from her equitable share of the net proceeds from the sale.

This is where the problems begin!  After a year, the house was not sold and the second $25,000 "advance" was not paid.  on top of that, the house was now off of the market.  When the husband didn't pay, the wife filed an enforcement motion.  The husband's defense seemed to be in good faith, as follows:

Defendant explained he had obtained an appraisal of the home indicating that, as of January 18, 2010, the appraised value of the home was $755,000. After subtracting out the current mortgage balance of $575,000, outstanding student loans of $136,523, estimated real estate commission and closing fees of $37,750, and the first $25,000 advance payment to plaintiff, defendant asserted that there was no longer any equity in the home. Since there was no current equity in the home, defendant argued he had no obligation to pay plaintiff any further advance on her share of the net proceeds from the future sale of the home.

Plaintiff opposed the motion, asserting that the MSA was clear and required defendant to pay her $25,000
on January 6, 2011.  She lost in the trial court because the trial judge found that the second payment was not guaranteed.  The Appellate Division reversed finding:

Thus, contrary to the trial judge's interpretation, there was only one pre-condition
to plaintiff receiving the second $25,000 advance payment - - defendant's failure to sell the home within the one-year period. Once he failed to do so, he was required to make the $25,000 payment to plaintiff.

Rather, the Appellate Division looked right to the language of the agreement which noted that equitable distribution of the asset would only be determined when the net proceeds were determined which could only happen when a sale occurred, whenever that was.  In fact, the court found that the "current equity" was not even mentioned in the MSA and thus, irrelevant to the inquiry. 

So, in addition to the ruling of the Appellate Division, two possible take aways here are that the husband thought he was getting a good deal being able to live in the home until the market rebounded or the parties "real agreement" was not fleshed out with precision and detail the MSA.  If the parties' real intent was as espoused by the husband, one reasonable conclusion given that the house was listed for $899,000 at the time of the divorce but appraised for far less, only the wife got a guaranteed $50,000 equitable distribution from this asset and the husband perhaps got nothing. 

Is this fair?  Who knows?  That said, there probably wouldn't have been this post judgment litigation and appeal if the parties' true intent, assuming that it was other than as set forth in the MSA, was spelled out.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric practices in Fox Rothschild's Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com. 

In reaching its decision, the Appellate Division stated:

... Nevertheless, defendant's conduct transcends mere "economic impact," as she not only betrayed the sanctity of the marital vows of trust, but also kicked their economic security in the teeth by secretly draining cash from the pharmacy. Defendant conceived and carried out a long-term scheme to embezzle the cash receipts from Grayrock,
which deprived plaintiff of the immediate fruits of his daily labors and impinged on the viability of the joint business asset and the family's future security. We determine her actions smack of criminality and demonstrate a willful and serious violation of societal norms.

The court noted that it was, "...  free to consider whether extraordinary, flagrant, economic misconduct during the marriage may rise to the level of egregious fault resulting in divorce and warranting denial of an otherwise valid claim for alimony." The court noted that excessive spending, waste of marital assets, or other acts of bad judgment was not "egregious fault." 

However, when marital misconduct, even though economically based, evinces significant, willful wrongdoing, designed to fraudulently and purposefully deprive
one's spouse of the economic benefits of the marital partnership, the acts transcend fault affecting the economic status quo, and in fact "violate[] societal norms," id. at 73,
and equate to "egregious fault." In analyzing such instances, trial courts must consider the totality of the facts and circumstances presented and determine whether the conduct
warrants severing all economic bonds between the parties by precluding an alimony award.

In this case, the Appellate Division found fatal the trial court's failure to consider  whether defendant's economic improprieties were so outrageous as to warrant additional relief as directed by Mani

Thus, despite many people espousing that the issue of marital fault is dead, this case serves notice that it is not.  While this case dealt with economic misconduct, clearly this seems to open the door to all misconduct which is willful, fraudulent, extraordinary and violative of societal norm.  Seemingly, the garden variety affair would not be enough?  But what about multiple affairs with people known by their spouse?  What about elaborate ruses to continue an affair where once caught?  It shall be interesting to see whether this law develops further.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric practices in Fox Rothschild's Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

In a long term marriage, personal assets are usually divided equally.  Businesses, including medical practices are a different story. Why? One argument may be that the spouse working in the business created the value of the business through his/her talent and hard work. Because of this unequal division of labor, perhaps there should be an unequal division of value. Other considerations may need to be made regarding the tax consequences of dividing the value of a business. Often times accounting experts are helpful in not only determining the value of a business (based upon different forensic valuation methods) but also cash flow and the consideration of perks that are paid by the business.   Every circumstance must be considered independently and in light of all the factors involved.

The matter of Steneken v. Steneken, 367 N.J. Super. 427 (App. Div. 2004), the Appellate Court addressed a situation of “double-dipping” regarding the husband’s support obligation and the equitable distribution of a closely held business. The Court in that matter considered whether it was impermissible “double counting” to use the actual income of a closely held corporation for alimony purposes, but a lower, “normalized” income amount when valuing the corporation for equitable distribution purposes. It held that in determining the income for a closely held corporation for purposes of awarding alimony, there is no requirement that a court use the same method of calculating income that is used to determine the value of the corporation for equitable distribution purposes. The interplay between an alimony award and equitable distribution is subject to an overarching concept of fairness.

Take for example the business of a single medical practitioner. If a court were to award the doctor’s spouse half the value of the medical practice plus an award of alimony based upon the same value used for the business - that could be considered double dipping. The court would have to take into account many considerations, including but not limited to the length of marriage, income from the business, income of the parties, age of the parties, ability of each party to work and contribute to their own support, contributions from each spouse to the business, and a multitude of others.  Each case must be assessed on its merits and the specific facts it presents.  

Dividing a closely held business or a medical practice can present its challenges. It is important to get the right professionals involved early on so that an appropriate legal strategy can be developed and implemented.

Mediation by its very nature requires a level of trust between the litigants that each will come to the table with the intention of negotiating and dealing in good faith. Sometimes that simply does not exist. In those cases, arbitration may be an excellent alternative to the court system. In some counties, arbitration is widely used. In others, not so much.

Arbitration is a good option for litigants who are unable to sit down in mediation and need a decision for contested disputes. There are many excellent arbitrators who specialize in family law, including many retired judges who are more than capable of rendering a sound decision. Arbitration is much like a trial in that there can be a hearing and each party can present witnesses if appropriate. The parties enter into an agreement in which they set the ground rules, and arbitration can include the right to appeal a decision. In the vast majority of cases, a decision is made by the arbitrator very soon after the hearing, letting the litigants go on with their lives.

Our reality is that there may need to be more use of some of these mechanisms in order to assist break up the log jam that exists in the Family Court.
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Jennifer Weisberg Millner is a contributor to the New Jersey Family Legal Blog and a member of Fox Rothschild's Family Law Practice Group. Jennifer practices throughout New Jersey in all areas of family law and family law litigation and is resident in the firm’s Princeton office. You can reach Jennifer at (609) 895-6712, or jmillner@foxrothschild.com.

Bank records, documents, including emails and letters which memorialize the character of the payment can all be important when determining the nature of such a payment. Cancelled checks can also be critical, as the writer of the check may have written something in the “memo”section of the check. For instance, the words, “Anniversary gift to John and Jane” would seem to dispose of the issue.

Indirect payments can also be important. For example, sometimes a sibling will pay a debt by a credit card, or incur a debt for the couple. So if the couple has regular payments to a third party credit card, that can certainly indicate a loan as opposed to a gift.

In the absence of some type of proof that a payment was to be loan, it can be very difficult to establish that a payment was not a gift. Even if a payment is to be considered a gift, that does not always mean that it will be distributed equally, For instance, if the Wife’s dad gives the parties $100,000 towards a down payment of a home six months before the marital break up, there is certainly a healthy argument that the Wife should get more of the equity. These are hot button issues in divorce cases and they are very fact sensitive. It is important to discuss the circumstances with a lawyer so that a litigant understands the likely disposition.
 

About 10 years later, in September of 2010, the husband filed a motion to, among other things, compel the sale of the martial home and to transfer to him one-half of the sale proceeds. He asserted that the transfer of title was not intended to relinquish his interest in the property, but rather, to avoid his creditors. He also argued that he had not read the PSA completely and the provision regarding the trust for the parties daughter was a mistake. In addition, he argued that the wife had waived the interest of the parties’ daughter as provided in the PSA.

In her opposition to the husband’s motion, the wife argued that the husband defaulted on the loan, she refinanced the mortgage to prevent foreclosure, and the husband transferred to property to be relieved of his debt. She also denied waiving the interest of the parties daughter.

After conducting an interview of the parties’ daughter to determine whether the daughter made “an affirmative, voluntary waiver of her interest,” the trial judge rendered his decision and found that the daughter had not waived her interest in the property. He further concluded that the husband had relinquished his interest in the property. The husband’s appeal followed.

On October 4, 2011, the Appellate Division rendered its decision and affirmed the decision of the trial court. In doing so, the Appellate Division was bound by the fact that "findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." The Court found that the trial court’s decision was in fact supported by substantial, credible evidence and specifically, that the Court had justly found that

[the husband] relinquished all of his right, title, and interest in and to the [property] by virtue of his execution and delivery of a Bargain and Sale, with Covenants Against Grantors' Acts on May 2, 2000. The deed stated a consideration of [$50,000]; [the husband] was exonerated from liability on the note and mortgage that was in foreclosure due to his failure to make the mortgage payments; and [the husband] was not liable on the new note for which [the wife] bore exclusive liability.

The Court thus agreed with the trial court’s finding that any potential interest the husband had in the property was conveyed to the wife when he executed the deed in 2000. At that point, he lost his ability to compel the sale of the home.

It seems that in this case, the Court was really considering which document controlled when it came to the husband’s interest in the martial home – the PSA or the deed. True, there was no order or other agreement specifically modifying the PSA. However, the Court found that the deed was sufficient evidence that the parties had intended to modify the PSA and that the husband no longer had an interest in the marital home as a result. And of course, another important lesson here is that “I didn’t read it” is not a defense. So read all documents carefully, and be vigilant about spotting any “mistakes.” You will not be able to go back and change those provisions later absent extraordinary circumstances.

That brings us to the facts in Ferraro, where the parties settlement agreement established the creation of two accounts with Merrill Lynch, designated in the agreement "to meet the post[-]secondary school educational needs of the children - both accounts are in the amount of $125,000."  Dad named himself as custodian of the accounts.  During post-judgment motion practice, Dad sought to modify his support obligation and, in response, Mom sought for Dad to turn over the accounts to her out of concern that he would liquidate same for his own use.  Interestingly, Dad responded at the time that he would use the accounts for the children's college expenses "as agreed" and that he would not turn over to Mom any unused portion.  Mom's application was denied at that time.

Almost 2 years later following more post-Judgment motion practice, the parties entered into a Consent Order, one term of which required Dad to pay Mom $500,000 to absolve him from any further child support or child-related expenses (including, but not limited to, health insurance, unreimbursed medical bills and college costs).  One year later in February 2010, Mom filed a motion seeking Dad to pay the money previously contained in the college accounts, since, as Mom feared, Dad had removed the funds for his own use.  Dad argued that the Consent Order disposed of any issues as to the accounts, even though they were not expressly mentioned in the Consent Order. 

Following oral argument, the trial court found that the account monies were irrevocable payments to the children and, since there was no specific agreement regarding whether the accounts were encompassed by the Consent Order, Dad's actions were deemed improper.  Notably, the trial court stated, "These are the rights of the children.  The mother could not even waive it if she chose to, legally.  So the money has to be reinstalled into the children's accounts." 

The Appellate Division agreed that the accounts at issue were covered by UTMA and, thus, irrevocable gifts for the children that were separate, apart, and in addition to Dad's child support obligation.  As a result, neither parent had the right to divest the children of such funds, no matter what interpretation of the settlement agreement was argued before the court.  Interestingly, the matter was remanded because the trial court failed to determine whether the Consent Order and the underlying $500,000 payment made by Dad to Mom included a resolution of any issues involving money contained in the accounts.

The Court was also  concerned that an action as significant as a name change would,be concluded by a default judgment. While under the law, there is a strong presumption that a name change requested by the custody parent is in the children's best interests, the presumption can be rebutted.  the Court noted that a child who has used the non-custodial surname for a period of time, is known to all by that surname, expresses comfort with the continuation of that surname, and maintains frequent contact with the non-custodial parent might be ill-served by the presumption that the assumption of the custodial surname would be in his or her best interests.

The court noted that:

There is no liability under this tort theory "for observing [a plaintiff] or even taking his [or her] photograph while he [or she] is walking on a public highway, since he [or she] is not then in seclusion, and his [or her] appearance is public and open to the public eye." Restatement (Second) of Torts §652B comment c (1977). "A person traveling in an automobile on public thoroughfares has no reasonable expectation of privacy in his [or her] movements from one place to another." United States v. Knotts, 460 U.S. 276, 281, 103 S. Ct. 1081, 1085, 75 L. Ed. 2d 55, 62 (1983).

The result may have been different if the husband could have proven that he was tracked to a private or secluded location that was out of public view and in which he had a legitimate expectation of privacy but the husband could not prove that that had occurred.  In an unusual piece of writing for an appellate opinion, the court provided a hypothetical to illustrate the point. as follows:

The fact that such an eventuality could have occurred is not sufficient to establish a cause of action for the tort of invasion of privacy.

A simple illustration is helpful to our analysis. Suppose Mrs. Villanova placed the device in her husband's vehicle at 2:00 p.m. while the vehicle was parked in the driveway of the family home; then, at 2:30 p.m., plaintiff drove on public streets to a local convenience store, purchased a newspaper, and returned home in a matter of minutes; and then, at 3:00 p.m., either Mrs. Villanova had a change of heart and removed the device without her husband ever knowing about it, or, alternatively, he discovered the device and removed it himself. We do not think a tort of invasion of privacy would have been committed. Although the events here intermittently covered
about forty days, what happened was legally no different.

Now, should people going through a divorce take this as a green light to start placing GPS devices in their spouse's vehicle.  Perhaps not.  There have been some that have argued and some judges have found that that conduct would amount to domestic violence - perhaps harassment or stalking.  Of course, that begs the question of how the alleged victim could demonstrate the requisite fear or be alarmed, if the did not know of the placement of the GPS and similarly, how it would be stalking if the person did not know that the GPS was recording their movements.  

I have no doubt that there will be more to come on this.

In Chalow n/k/a Spence v. Chalow, the judge found that defendant had "underreport[ed] . . . income on the tax returns that is not permitted such as, bartering, exchanging services for personal benefits that are not deduct[i]ble, deducting items that are club memberships or other entertainment expenses that are not deduct[i]ble . . . all of which could be considered intentional unreporting [sic] of income." Therefore, pursuant to Sheridan, the judge decided to send a copy of his decision "to both the New Jersey and Federal Taxing Authorities for their consideration."

In Onyiuke v. Onyiuke, during discovery and later a hearing regarding a relocation issue, counsel for defendant and the court learned that plaintiff had falsely taken a credit on his 2007 through
2009 federal income tax returns for daycare expenses of the parties' daughter. .  In fact, Plaintiff's tax returns showed specific false amounts of fees allegedly paid to a day care center though neither child had ever attended that facility.  During the hearing, the trial judge stated that he would report plaintiff's false income tax filings to the Internal Revenue Service in accordance with
Sheridan.

So alas, Sheridan is not myth or legend, it is real. Note, however, many people address these issues in binding arbitration, with the belief that the arbitrator does not have the same duty to report that a judge has. Litigant's who are willing to go to court knowing that they have these potential issues, do so at their peril.

In Vidal, the parties were divorced in 2005, when their child was two years old. Their settlement agreement provided for joint legal custody of their son, with the father having parenting time from Saturday at 9:00 AM until Tuesday at 8:00 AM, and the mother had parenting time from Tuesday at 8:00 AM until Saturday at 9:00 AM. At the time of the divorce, the father was off from work on Saturdays, Sundays, Mondays and alternating Tuesdays; the mother’s days off were Wednesdays and Thursdays. Thus, the parenting schedule at the time allowed each party to maximize time with the child.

When the child was entering third grade, the mother brought a motion seeking, among other things, to modify the father’s parenting time to alternate Saturdays at 9:00 AM until Sunday at 5:00 PM as well as a non-overnight visit during the week. The mother alleged that the father’s visitation was disruptive for their son to go back and forth between residences, which were an hour apart. In addition, the father’s work schedule changed, such that he now worked on Mondays and could no longer spend the day with the child and the child did not like spending time with his stepmother. Also, because the schedule afforded the mother with no weekend time, she stated that the child was missing out on important social activities and resented not being able to spend time with his friends. The father disputed all of the mother’s allegations, claiming that he was more than accommodating in allowing the child to attend special events. He also made the pint that because he now worked from Monday through Friday, 2:30 PM to 11:30 PM, he would not be able to enjoy additional weeknight parenting time in lieu of Saturdays.

In court, the mother’s attorney requested that the parties be ordered to attend mediation to resolve their parenting differences, and in the event that failed, requested that the court hold a plenary hearing on the issue. It was also requested that the child be interviewed as to his preferences. The father’s counsel argued that the mother had not submitted evidence sufficient to establish a change of parenting time, and there was no professional speaking on the child’s behalf stating that he did not want to spend the scheduled time with his father. He also opposed an interview of the child by the judge.

The motion judge denied the mother’s application for a change in parenting time, reasoning that there had not been a showing of a substantial change of circumstances affecting the welfare of the child such that it is appropriate to review custody. While the motion judge acknowledged that there had been substantial changes to the family since the time of the divorce, the court did not find that the changes were affecting the welfare of the child, who was on honor roll and attending school regularly, without any instances of tardiness. He reasoned, therefore, that traveling back and forth did not affect the child substantially so as to warrant a change in the visitation schedule. The mother appealed.

The Appellate Division began by stating the applicable law in New Jersey with regard to the modification of a visitation schedule – namely, the party requesting the modification must make a showing that circumstances have changed such that the agreement is no longer in the best interests of the child. This issue involves a two-step inquiry:

The party seeking a modification must first make a prima facie….showing that a genuine issue of fact exists bearing upon a critical question such as the best interests of the child[ ]…Once a prima facie showing is made, [the party] is entitled to a plenary hearing to resolve the disputed facts. Indeed, when a genuine and substantial issue concerning parenting time exists, the court is required to refer the case to mediation….

The Appellate Division recognized that while the parties’ son was doing well in school and has not manifested any overt detriment as a result of the parenting time schedule, there were certain undisputed facts that would require the parties to attend mediation or the court to order a plenary hearing in accordance with the factors set forth in the statute (N.J.S.A. 9-2:4(c)). The reason for the was most obviously because the child had grown older and the parties’ employment responsibilities had changed. There was also no evidence of the child’s preference because the trial court did not interview the child. The Appellate Division further appeared uncomfortable with the trial court’s “wait and see” approach with regard to any consequential harm to the child as a result of the changes. As a result, the Court reversed the trial court’s decision and remanded the matter back to the trial court for further proceedings consistent with the Appellate Division’s opinion.

 Finally, what are the costs going forward to maintain the house? When I have a client who is considering retaining the marital home, I take out the Case Information Statement ( that pesky financial form with budget information) and go through Schedule A with a fine tooth comb with my client. How much are the utilities really expected to be? What is the cost of cutting the lawn if you had previously relied on your spouse to do it for you? How old is the dishwasher, the washer and dryer and will they need to be replaced soon? Did you have a “handy man” type spouse who will not now be available for all those little repairs? What type of maintenance has been put off that is going to be an issue within the next few years and will the client have the funds to pay?

At the end of the day, I make sure that my clients carefully consider all of these issues before making the decision to keep the house. Kids are unbelievably resilient , far more so than we give them credit for. And, I do think that they will ultimately be happier in a home in which the parent is not stressed by financial issues related to keeping it.

EDITOR'S NOTE:  As far back as September 2008, before the economy really declined, but in the midst of the decline of the real estate market from the highs in the mid 2000s, I blogged about whether it made sense to keep a marital home in a declining real estate market.  It was beginning to make little sense then, and even less sense now, to offset/trade a depreciating asset such as real estate against cash or cash equivalents (or for that matter, any asset that was not depreciating). In February 2010, I blogged about the different options in distributing the marital home given the then (and still) current issues facing real estate.  As there is talk that the real estate market will continue to worsen, serious consideration is required regarding what to do with the marital home.  Eric S. Solotoff

The court granted Mom’s request, but modified the time from 4 weeks to 2 weeks, also providing Dad with two weeks of such “extended vacation” in New Jersey.  The child’s age in this case – 15 years old – was of great import to the court in its decision, as well as the child’s capacity to reason.  The court found that, under every possible legal analysis in removal applications (including the Baures factors, factors for a change of custody analysis under N.J.S.A. 9:2-4, and N.J.S.A. 9:2-2), the child’s expressed preference was relevant to the court’s decision.   The court noted that none of the laws or cases cited prevent a child’s temporary removal from the jurisdiction for “legitimate purposes, particularly under court order.” 

As a result, the court found that its crafted resolution provided the child with a sensible, “reasonable opportunity” to experience life in both states under the care of each party prior to trial, rather than base any expressed preference on nothing more than speculation.  Since the child was 15, the court determined that he could inform the court of his preference during an “in camera” (in chambers) interview with the trial judge pursuant to Rule 5:8-6 of New Jersey’s Rules of Court.   The court also found its decision appropriate because it would not interfere with the child’s present schooling; Mom had no history of violating court orders or otherwise demonstrating a flight risk; and, by its resolution, Dad was provided with an “equitable opportunity” for the child to take an “extended vacation” in New Jersey as well during the pre-trial phase. 

Thus, the court’s decision was clearly fact-specific.  Had the situation involved a younger child, for instance, the court might have ruled differently.

Another result of these limited living options is that spouses are often hyper-vigilant to anything that goes on in the home.  One party (if not both) is often recording the other party without his or her knowledge and, in an effort to obtain what is believed to be usable "evidence" in the divorce proceedings, will incite arguments, welcome conflict, and the like.  Every argument appears heightened and can be abusive, often leading to the domestic violence complaint and temporary restraining order that the alleged victim hopes will become a final order to keep the other party out of the home for good.  Whether a court finds, however, that the argument that resulted in the restraining order was heightened merely because of the divorce or was an actual act of domestic violence requiring immediate protection is a steep hill for the victim to climb.  The result could be a dismissal of the domestic violence complaint, thereby allowing the accused spouse to actually move back into the marital residence!  In one matter in which we were involved, the temporary restraining order was dismissed after a final hearing and, within a few hours, the other spouse was at the front door of the home to get back in. 

Another option is to mutually agree to withdraw the domestic violence complaint and enter into an Order by consent, incorporating "civil" restraints that are enforceable by a motion in your divorce proceeding.  A common restraint as part of such orders is that the defendant spouse in the domestic violence complaint will agree to stay out of the home.  However, that spouse will often refuse to agree to stay out of the home, knowing the potential financial and custodial impacts his departure may cause for the overall outcome of the divorce proceeding.

At that point, can you leave the home?  Of course.  Can you leave with the children?  Usually not without a set parenting schedule upon your departure or some form of Order allowing you to do so.  While you might have always been the primary caretaker, that usually does not necessarily entitle you to simply vacate the home with the children and dictate parenting time as you see fit.  From the other parent's perspective, he might believe that you are simply looking to get a "leg up" in the litigation, just as he might have felt you were trying to do when you filed that domestic violence complaint during the divorce proceeding. 

To that end, many cases commence with one party having already left the home for a variety of reasons.  If the spouse who vacated the home was financially supporting the household, and the other spouse remains in the marital home with the children, he might find it financially difficult to support two households during the divorce proceedings stemming from a pendente lite (during the proceeding) support obligation.  It is all too common for that supporting spouse to all of a sudden show up at the door as the divorce starts, seeking to move back in.  Whether his lawyer advised him to move back home because of the financial burden that is soon to befall upon him, or that he is hurting his own custody claim if he is not in the same residence with the children 24-7 during the divorce, oftentimes he has the ability to move back in to the chagrin of the other spouse. 

Where does that leave us?  It is for that reason why getting along or simply managing to co-exist in the marital residence (whether for the sake of the children or otherwise) is critical to moving a divorce matter forward in what one hopes will be a reasonable manner.

To that end, the following facts were adduced at trial in support of the husband’s contentions: the former wife had increased her earnings of approximately $13,900 at the time of the divorce in 1998 to earning approximately $30,000 working part-time; she was receiving $900 per month of pension income from one of her former husband’s defined benefit funds; she admitted to $1,400 per month, attributable to Mr. Argenzio, which she alleged it would have cost her to rent an apartment in Ramsey. The former husband also established that his former spouse lived in two locations with Mr. Argenzio, a home in Ramsey, which is assessed at $472,800, and a condominium in Hollywood, Florida, purchased for $460,000, which has no mortgage, which they jointly owned. In addition, the husband showed that they have several jointly-titled bank accounts, that alimony checks were deposited on occasion in Mr. Argenzio's account, and they had at least one joint brokerage account. The husband also pointed out that the wife took a vacation in Italy in 2004; a cruise to Hawaii in April 2005; a vacation in the Caribbean in Spring 2006; a vacation in Napa, California; a trip to Aruba in 2007; and a vacation in New England in 2008.

In granting the husband’s application, the trial judge stated as follows:

…the key really is the marital standard. And I thought about granting a plenary hearing. And I had to look to see whether I felt that the defendant had made a strong enough case so that with some of the disputes of fact that are clearly in the record, are they sufficient to require a plenary hearing. And I think the answer is no.

There was, you know, with the amount of money that she's making herself, plus the pension, plus the other bank accounts, plus the credit from Mr. Argenzio, those things together I think certainly show that she is able to live at the marital standard without the alimony. So even though it was not an easy decision to come to, I did review the record on both sides and I am going to grant the application of Mr. Proctor to terminate his alimony obligation.

The Appellate Division agreed, ostensibly for the same reasons as expressed by the trial court. The Appellate Division seemingly found most compelling the fact that the wife and her paramour had developed a “marriage type” relationship, along with the economic dependence that typically accompanies it. Moreover, the Court found that the former wife’s marital lifestyle could be satisfied without the alimony - thereby obviating the need for payments from the former husband. By way of commentary on the issue, the court remarked that the trial judge was actually charitable to the wife in indicating that her present standard of living “satisfied” the prior lifestyle when the former appears to have surpassed the latter with the two residences that she now uses. The Appellate Division therefore affirmed the decision of the trial court terminating the former husband’s alimony obligations.

Years later, John P developed depression, and then lung cancer, and eventually left his place of employment. He passed away when John M was nineteen and attending college. John M then found out that his father had terminated the life insurance policy several years prior when he left his employment. The decedent’s executor probated the will, and John M filed an action against the estate seeking payment of $250,000 based on his father’s obligation to maintain the life insurance policy.

The trial judge in the Probate Part found that John P had breached his obligation to maintain the life insurance policy and entered judgement against the estate in the amount of $250,000. The estate appealed. First, the estate tried to argue that the matter should have been heard in the Family Part, as it is only a Family Part judge that has the authority yo enforce the obligation arising from a matrimonial action. The Appellate court rejected this argument.

The estate next argued that since the judgment of divorce provided that the life insurance was to be though his place of employment, there was no obligation to maintain life insurance after he left his job when he became ill. The trial court disagreed, finding that the words,  “through his place of employment” were merely descriptive of the policy. The court noted that children are third party beneficiaries of marital settlement agreements and further that parents have an obligation to provide security of continued support for children. The Appellate Division agreed.

Finally, since John M was over the age of eighteen at the time of his father’s death, the estate tried to argue that there was no longer an obligation to carry the insurance. The court found this argument without merit as John M was a full time college student, living with and dependent on his mother, at the time of his father’s death.

This case offers some important reminders for those in the process of negotiating a settlement agreement, or who are asking for support during a trial. In addition to simply making a request to have the payor maintain life insurance, make sure it is clear that the obligation exists regardless of whether there is employment related insurance or not. Moreover, make sure that any settlement agreement clearly states that in the event of a death, any unfulfilled obligations become obligations of the estate of the obligor. These simple tips can help avoid litigation later on.

The plaintiffs in this case, T.J.S., the biological father, and A.L.S., his wife were infertile as A.L.S. was unable to carry a child to term. As a result, the husband and wife resorted to reproductive technology to assist them in having a child. They opted to have a child with the help of a surrogate. This involved arranging for the in vitro fertilization (IVF) of an ovum furnished by an anonymous donor using the sperm of T.J.S. The result was two human embryos which were implanted into a surrogate, A.F., who was to carry the child to term. The embryos were biologically related to the donor of the ovum and to T.J.S., but not to the wife or the surrogate.

Before the birth, the husband and wife sought to be declared the child’s father and mother under the Parentage Act, and requested a “pre-birth order” that required their names to be listed on the child’s birth certificate as the child’s parents. The husband and wife specifically rejected adoption because it would extend the process, during which time the child’s legal status would be in limbo. The trial court ordered that the birth certificate that was to be placed on file for the child was to reflect T.J.S. as the father and A.L.S. as the mother, on the condition that that the surrogate, A.F., surrender her rights to the child 72 hours after giving birth. The child, T.D.S., was born on July 7, 2009. Three days later, the surrogate relinquished all parental rights to the child.

Shortly after the child’s birth, the State Registrar learned about the order of the trial court and filed a motion in the trial court to vacate the listing of A.L.S. as the mother on the child’s birth certificate. The trial court granted that motion.

The husband and wife appealed. They argued that because the Parentage Act, presumptively conferred paternity upon a husband where the child was born to the wife during marriage, or automatically under the law, where the wife is artificially inseminated using the sperm of a donor, it should be read in a gender neutral fashion so as to apply to the infertile wife as well. They further argued that if the statute is not construed as such, it would be unconstitutional on its face because infertile married men and women are treated differently under the law.

The Appellate Division began by examining the history of the statute. While noting that the presumption, that a man is the father of a child born to his wife, extends to a husband who consents to his wife being inseminated with donor sperm under the supervision of a licensed physician, the Court noted that the same presumption is specifically not extended to a wife whose husband, while married, fathers a child with another woman. However, this mother-child relationship can be established with relative ease through adoption. Thus, the Appellate Division concluded, that the plain language of the Act, only provides for a declaration of maternity as to the biologically or gestationally-related female and requires adoption to render A.L.S. the mother of T.D.S.

Because the Court concluded that Parentage Act could not be interpreted in a gender neutral manner, the Appellate Division turned to the question of whether a gender-based classification for infertile married women and infertile married men was unconstitutional. After expounding upon New Jersey’s equal-protection jurisprudence, the Appellate Division concluded that the gender-based classification was not unconstitutional because it was only applied to married husbands as the purpose was to address scenarios where there is a strong likelihood that the man is the biological father of a child. Indeed, the legislature’s intent behind the enactment of the statute was to establish paternity “to facilitate the flow of benefits from the father to the child" – i.e. to ensure that the man would not be able to evade his financial obligations to a child born during the marriage. Moreover, the Court reasoned that the language of the statute makes clear that A.L.S. cannot be the presumptive legal mother of the child born to the surrogate simply because she is not the biological mother of the child. Rather, the child is biologically related to T.J.S. and the anonymous ovum donor. A presumption of motherhood under these circumstances would therefore be contrary to the Legislature’s intent behind the enactment of the statute.

In so concluding the Court re-examined the seminal New Jersey case of In re Baby M, 109 N.J. 396 (1988). There, the Supreme Court specifically declined to extend the statute’s applicability to the circumstance at hand:

The Parentage Act's silence . . . with respect to surrogacy, rather than supporting, defeats any contention that surrogacy should receive treatment parallel to the sperm donor artificial insemination situation. In the latter case the statute expressly transfers parental rights from the biological father, i.e., the sperm donor, to the mother's husband. . . . Our Legislature could not possibly have intended any other arrangement to have the consequence of transferring parental rights without legislative authorization when it had concluded that legislation was necessary to accomplish that result in the sperm donor artificial insemination context.

Finding the reasoning of the Supreme Court to be sound, the Appellate Division thus found that because the statute already withstood judicial scrutiny in the face of an equal protection challenge, and because the lack of Legislature response to the issues raised by the Supreme Court’s decision in In re Baby M, the plaintiffs’ argument that the Parentage Act should be re-drafted to address their specific situation was rejected. The Court further reasoned:

…paternity attaches to the infertile husband because of the sperm donor's lack of temporal, physical, and emotional investment in the child's creation. This stands in sharp contrast to the surrogate mother whose parental rights are deemed worthy of protection and thus stand in the way of the infertile wife's claim to automatic motherhood.

While the Appellate Division did not “deny the intrinsic societal worth, emotional
appeal, and compelling logic of granting A.L.S. parenthood to the child, T.D.S., provided the gestational carrier's rights are protected during the statutory seventy-two hour ‘window’ period,” it noted that the fact remains that “the means chosen by the Legislature to create that status in this instance remains adoption, rather than by operation of the Parentage Act.” The Court further remained satisfied that the that the complained of disparate treatment is not grounded in societal notions of parenthood, but rather in the innate reproductive and biological differences between men and women, necessitating in the case of an infertile wife, the introduction of a birth mother whom the law cloaks with superior protection. Thus, given the State's valid interest in identifying the father more easily when the child is born during the marriage for child support purposes, and its equally sound interest in requiring more than a shared intent before legally changing the parental relationship between parent and child, the Court concluded that the distinctions drawn by the Legislature in the Parentage Act are constitutional.
 

The Appellate Court found that dismissal was improper and the husband had the right to try to pursue both the issues of mutual mistake (i.e. there never really was an account) and that the wife was unjustly enriched.  In coming to its decision, the majority of the court held:

The dissent states: “[a]t the time of the agreement, Steven had an account in his name with [Madoff].” Untrue. Steven never had an account in  his name with Madoff; on Madoff's own admission there were no accounts within which trades were made on behalf of investors.

The dissent then states, “Steven liquidated part of the account to fund his payments to Laura.”  Untrue. In Madoff's Ponzi scheme what appeared to Steven and Laura to be a partial liquidation of an account was simply a payment to Steven that came from funds deposited by a more recent “investor” in what the “investor” believed was his own account.

The dissent further observes, “[Steven] did not liquidate the rest of the Madoff account ... and he continued to invest in it.” Untrue. There was no account which could be liquidated, as became apparent when Madoff received $7 billion worth of “liquidation” calls from investors in 2008. Nor was Steven “investing” in an account; his further contributions went directly to pay other “investors” in the scheme.

Clearly, this case is far from over.  We will update you when the next move is reported from the courts.

Divorcing couples will often use an arbitrator in lieu of the Courts because it tends to be quicker and more efficient. Arbitration also provides the parties with the freedom to choose the person who will be deciding their case; can eliminate the necessity of multiple court appearances; and can address sensitive issues, such as unreported income – which couples would not want to make public.

Once a couple decides to use an arbitrator, the arbitrator acts similarly to a judge, deciding the issues of the case. The arbitrator will conduct a hearing (or trial) to decide the key issues and issue a decision. Once the arbitrator issues a decision the couple will go back to Court where a judge will enter the arbitrator’s decision and enter an Order divorcing the couple.

Arbitration can be expensive as you must pay the arbitrator, who is either an attorney or retired judge for his or her time. If arbitration is a consideration for you, its important that you factor in the cost of this process. Just as with anything, there are pros and cons to utilizing an arbitrator. 

Law enforcement officers have a reputation of protecting one another, no doubt a result of working a dangerous job where they depend on one another for their safety. This type of camaraderie can no doubt foster a public perception that law enforcement officers would be biased during the course of an investigation of one of their own.

The model policy not only addresses remedial steps, but also preventative steps that law enforcement agencies can take to detect and prevent domestic violence, including: background investigations for new employees that would screen out candidates with histories of domestic violence or sexual assault; psychological examinations of all candidates for law enforcement positions and regular annual training on domestic violence issues and the impact of domestic violence within police departments; and supervisors would be trained on how to recognize early warning signs of domestic violence behavior such as excessive or increased use of force on the job, deteriorating work performance, or alcohol/drug abuse.

The new model policy also details incident response protocols, reporting and documentation protocols and recommends that any allegations of domestic violence offenses by high-ranking law enforcement officers - police chiefs or police directors -- be referred to prosecutor’s offices for oversight. While these responses are helpful to law enforcement officers, the new model policy is important if an attorney is involved in the representation of a party where one of the parties is a law enforcement officer. The integrity of a police report at trial or a hearing will be measured by the testimony of the police officer and the protocols that were taken during the investigation. If protocols were followed, under this new policy the police report could be given greater weight and bolster the testimony. If protocols were not followed, the police report and testimony could be found less credible.

When filing an application to recalculate or terminate a support obligation, it is the burden of the party requesting the change to first prove to the court that the circumstances have changed significantly from the time of the original support obligation Order, that a review is necessary and fair. If the party requesting the change can show changed circumstances, the court can review the support obligations. For child support, the same standard would apply as that which was used originally. The income of the parties (including if alimony is paid), age of the children, and amount of overnight parenting time with the non-custodial parent, are the most common considerations. In cases where applicable, judges will look at other items such as social security or disability benefits, rental income, child care expenses, extraordinary medical expenses, etc.  There is case law, however, that says passage of time can constitute a change of circumstances for child support purposes. 

As for a modification of alimony or spousal support, the court must again consider the circumstances considered at the time of divorce- the age and health of the parties, the length of the marriage, the income of the parties, the assets received by way of equitable distribution, the dependent spouse's needs, the other spouse's ability to pay, and the ability of the dependent spouse to contribute to their own needs. A court is only obligated to follow a settlement agreement to the extent that it is fair.

In an application brought by the payor or supporting spouse for a downward modification or termination of alimony, an issue central to the court's evaluation is the supporting spouse's ability to pay. In order to reach that issue, it is the burden of the supporting spouse to provide the court with sufficient credible evidence as in: an updated Case Information Statement (i.e. detailed financial statement form), pay stubs, tax returns, W-2's, resume, job search, and anything else that can verify the change in their income and its effect on their ability to pay at the current rate.

Finally, the Appellate Division has given some guidance in the recently published matter of Gonzalez-Posse v. Ricciardulli, A-6446-06T3, decided November 9, 2009. In this matter, after 10 years of marriage and 3 children, wife filed for divorce. Both parties were natives of Argentina who were residing in the U.S. on a work visa obtained by the husband, who at the time was working for a large law firm in New York. At the time of the divorce, he was employed by Direct TV Latin America. The last year for his visa arose and Direct TV filed the paperwork to extend the visa. However, in the midst of the divorce's finalization, husband was laid off by Direct TV and they rescinded the application for the extension on his visa. He was given the choice to return to Argentina on his own or be deported.

In the Property Settlement Agreement executed by the parties, support was calculated based upon husband's then income of $150,000 and wife's then income of approximately $21,000. Alimony was agreed upon for a 5 year limited period of time.

Upon his return to Argentina, husband obtained employment in a law firm. With the exchange rate, his income converted to approximately $26,000 U.S. dollars per year. He filed an application to recalculate his child support obligation and terminate his alimony obligation. His ex-wife opposed his application. The trial judge reduced the child support obligation. As for alimony, the judge reduced the weekly sum to be paid but converted the limited duration of 5 years to an obligation of 17 years. Both parties appealed from that Order.

On appeal, the Court found that the recalculation of husband's child support was correct. As for the lower court's ruling on husband's alimony obligation, the Court reversed and remanded to the trial court finding that it was error to extend the term of the alimony obligation and stating that the lower court failed to consider the inconsistencies in wife's income and her ability to contribute to her own financial support.

These applications are very fact sensitive and require attention to detail and a presentation of all the facts to the court so that the judge is not left with any question as to the validity of a paying spouse's change in circumstances.