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

Yesterday, I blogged on the proposed alimony reform legislation in New Jersey.  At the end of that post, I posited the following questions.  Is this really a radical change, or in many respects, does it simply codify what is often done in practice anyway? Will it really take away advocacy when circumstances so require?

Aside from removing the term "permanent alimony" and perhaps sickening reaction in causes in some people, does the proposed legislation really do more than codify the case law or what was done in practice, in many respects.  Remember, is "permanent alimony" really permanent now anyway?  Can't people seek to retire already and isn't retirement a change of circumstances?  Don't people already negotiate, when appropriate, limited duration alimony when people are divorcing close to retirement age, as opposed to buying a second litigation to occur a few years later? 

The following are some other random thoughts, in no particular order and of no particular importance. 

1)  Is "indefinite alimony" a nicer term for "permanent alimony"

2)  While certainly possible and appropriate in many circumstances under existing law for marriages of less than 20 years, permanent alimony was infrequently given in marriages less than 20 years after the limited duration alimony statute was enacted. In fact, I heard someone on a panel at the State Bar Convention last year state that 20 years was sort of a magic number ensuring permanent alimony.

3)   The concept of imputing income to someone that is unemployed or underemployed essentially  already exists in the case law and child support guidelines, and thus, really is not new.

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There are many cases that say that the settlement of litigation ranks high in the public policy of this state,  As such, there are many cases that say that an agreement can be enforced, even if it is not reduced to a writing, if the major terms have been agreed to.  As my client learned in Brawer v. Brawer, the unexpressed intention not to be bound is irrelevant.  There is no place in the law for second thoughts where the parties have expressed their agreement.  In fact, in a case called Bistricer, the judge said:

… the proposition that a case is not settled until the last “i” is dotted and the last “t” is crossed on a written settlement agreement carries the germ of much mischief. A party could, in bad faith, waste the time of the court and the other litigant in protracted settlement negotiations, and then, after a “framework” has been established, wiggle out of that framework by creating a flood of new issues and questions.

Just as you can't wiggle out of a settlement, similarly, you cannot appeal a settlement.  This issue reared its head in the case of Courboin v. Courboin, an unreported (non-precedential) opinion decided on February 21, 2013.  In this case, after two days of trial, the parties settled and put their settlement on the record. The husband testified that he agreed to be bound.  As part of that settlement, the home was to be sold.

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Several years ago, I posted a blog entitled "Some Times You Just Have to Try a Case."  In that post, I discussed that there are some times where a litigant simply refuses to settle making a trial inevitable.  Are there times, however, when a trial might be less costly, quicker and preferable to long, drawn out, and perhaps insufferable negotations.  I have dubbed these mind numbing, perhaps bad faith negotiations, where sometimes you take one step forward and two steps back and sometimes, no issue is ever resolved, and sometimes, you make an offer about alimony and the response is about equitable distribution - death by a thousand paper cuts.  Whether intentional or not, you wonder whether a trial would have just been bettter.

I ponder that after recently concluding a case that, while having one little twist, which we got past several months ago, then endured numerous mediation sessions, numerous Intensive Settlement Conferences at the Courthouse and even more than one scheduled uncontested hearing where even the final changes had final changes, plus new changes.  In fact, I have recently had several cases where it took an inordinate amount of mediation sessions to resolve simple cases.  In one reasonably simple case, the parties went to mediation 6 or 7 times, before attorneys attended and even then, it did not settle despite the outcome being obvious.  In another, after 9 mediation sessions (7 with lawyers present), the case remains unsettled though only small dollars in the big picture remain in dispute. 

In your garden variety case, the inordinately drawn out process only serves to either wear a party out and forces the righteous client to give up to either move on or stop the bleeding of legal fees.  Otherwise, they incur a large legal bill just to get to the place they should have been had the other side acted reasonably (presuming for the second that they have negotiated fairly and reasonably.)

While I understand the desire to avoid trial at all costs for all of the usual reasons - finality, having control of your own destiny as opposed to putting the decision in the hands of a stranger, etc.- if the process comes to a place where all things considered, you cannot do worse if you go to trial, maybe a party should consider pulling the plug on these expensive snails pace and/or bad faith drawn out negotiations,  Perhaps the threat, if it is a real threat and you actually start doing what is necessary to prepare for trial, will stop the nonsense and get the other side to end the case once and for all. 

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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.

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Every month, I get an email with entitled Case Update from the ABA Family Law section which contains blurbs from interesting decisions throughout the country.  This week, I got the December 2012 update and had to take two steps back when I read the following blurb:

Trial court may, in an initial custody determination, consider a parent's sexual conduct as it relates to that parent's character, without a showing that the conduct has been detrimental to the child; court may also consider fact that parent does not regularly attend church.

Wow!!!  Mind you, the case is from Alabama, not New Jersey.  In New Jersey, I doubt very much that conduct which is not detrimental to the child would be considered, whether it is gambling (and I actually had a case where a father, a bookie in his spare time, took his kids when he was meeting his bookie), use of pornography, affairs, an affinity for S&M, etc. 

That said, the blurb appealed to my "prurient interests" and hooked me in so I had to read the case.  I figured that there must be some crazy conduct going on.  I figured. at the very least, I may have a good story to tell.

Wrong!  The parties were divorced in 2007 but the ancillary issues, including custody were bifurcated.  The custody hearing took place in 2010.  What was the crazy sexual conduct that impacted the custody determination, you then ask.  The mother was living with her fiance',  The relationship, by the way, did not become sexual until 2009.  By the way, part of the reason for the delay in addressing custody was that the issue was put on the back burner in the divorce decree until the conclusion of criminal proceedings against the father for the alleged sexual abuse of the mother's child from a prior relationship.

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If I were to tell you that the victim of domestic violence was put out of the marital home and the abuser was granted temporary custody of the kids, you would say I was crazy.  The Appellate Division would agree and in reported (precedential) decision released on October 19, 2012 in the case of J.D. v. M.A.D.(ironically), reversed such a holding by a Camden County trial court. 

In this case, the defendant's discovery of the victim's infidelity lead to an act of domestic violence.  The victim, however, wanted to remain in and work on the marriage.  The defendant wanted "space" and somehow convinced the victim to leave the home and sign a document giving him primary custody of the children.  The parties later reconciled and the victim returned to the house.  However, unable to control his anger over her affair, a number of additional acts of domestic violence occur ed, culminating with the entry of a TRO against the defendant.  At the Final Restraining Order hearing, the judge then entertained argument "as to who should have possession of the marital home and as to who should have
temporary custody of the children."  The trial judge decided that it should be the defendant, finding that the anger only occur ed when the parties were together and as such because the defendant had been the primary caretaker, he was awarded temporary custody and the victim was excluded from the marital home. 

The victim appealed and the Appellate Division reversed, holding:

The trial court's findings, set forth in the beginning of this opinion regarding the events over the course of the seven months following defendant's discovery of his wife's extramarital affair, are supported by substantial credible evidence in the record and we do not disturb them. The facts as found, however, do not overcome the presumption embodied in N.J.S.A. 2C:25-29b(11), governing the court's award of temporary custody
in a proceeding under the Prevention of Domestic Violence Act (PDVA), N.J.S.A. 2C:25-17 to -35, "that the best interests of the child are served by an award of custody to the non-abusive parent." Moreover, these facts cannot support an order granting exclusive possession of the marital home to the party the court has found to have perpetrated the abuse.

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An issue that has vexed us in the past is whether the rules enacted by the Supreme Court regarding parent coordinators were to be applied to all parent coordinators appointed by the Court.  In 2006, the New Jersey Supreme Court implemented a pilot program in four vicinages (Bergen, Morris/Sussex, Union and Middlesex) for parenting coordinators.  The link above provides the Supreme Court mandated guidelines and procedures which have also been discussed on this blog previously.

The problem arose when a parenting coordinator was appointed outside of one of those vicinages.  To my chagrin, I have heard judges state and lawyers argue that since their vicinage was outside of the pilot program, they did not have to follow the guidelines.  This was often in the context of a court improperly vesting a parent coordinator with authority which approached or could be argued to be an abdication of the judicial role. 

Finally, we have an answer to this question in the reported (precedential) case of Milne v. Goldenberg decided on September 12, 2012.  The case seems like a never ending, "war of the roses" type custody battle and also has some interesting discussion regarding the role of a Guardian ad Litem and procedures related thereto.  That said, the parent coordinate issue was addressed because the court appointed an attorney who was not on the court approved, pilot program parenting coordinator list. 

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Melissa Brown, an attorney in Charleston, South Carolina, is a fellow of the American Academy of Matrimonial Lawyers and one of the preeminent family lawyers in South Carolina.  I had the occasion, last week, to read her excellent article on her blog entitled "How to Find the Right Divorce Attorney for You."  Melissa has graciously allowed us to re-post her post.  Her article is as follows: 

When your marriage is falling apart and a divorce is imminent, it is critical to find a skilled, experienced, competent family law attorney to represent your interests. With a little bit of legwork and some patience, you can find a highly experienced divorce attorney who is the “right fit” for you. The following three simple steps outline a basic approach to put your case in the hands of the right attorney.

Step 1: Ask Your Friends for Attorney Referrals
Begin by asking your divorced friends, family members, and trusted coworkers for their thoughts about the attorneys who represented them – and the attorney who represented their ex-spouse.

Do not simply ask “Did you like your attorney?” Dig a little deeper. Be specific. Ask questions such as:

• After your experience what is the most important quality to have in a divorce attorney?

• What did you like the most/least about your attorney?

• Did you feel the attorney listened to you?

• Did you feel your attorney advocated for you?

• What was your opinion about the opposing attorney? (Surprisingly, it is not uncommon for one to have high regard for the opposing side’s attorney. Asking detailed questions about the opposing counsel’s performance can be enlightening.)

• Did your legal fees reflect the value and quality of the legal services that you received?

Pay attention to others’ responses. Take note of which attorneys’ work was valued and appreciated by their clients and which attorneys were a disappointment. Make a list of the attorneys whose work was appreciated and respected because these are the attorneys with whom you need to meet, interview and consider retaining.

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For whatever reason, it is not unusual for a Marital Settlement Agreement and/or Custody Agreement to have a mediation clause in it which requires parties to go to mediation before bringing an issue to the Court by way or motion.  For some issues, like enforcement, one questions the obligation to go to mediation.  Either someone violated the agreement or they didn't.  Other issues require a more swift decision and mediation could only slow the resolution down, especially for the party who might benefit from the delay.  And while we see these clauses all of the time, I have also seen many judges ignore the clause and adjudicate the dispute. 

This, however, is not what happened in the Decilveo n/k/a Woolf v. Decilveo case decided today by the Appellate Division in an unreported (non-precedential) opinion.  In this case, the parties divorce agreement stated:

In the event that any differences arise out of the interpretation, construction or
operation of this Agreement, the parties further specifically agree as follows:

(a) They shall first attempt in good faith to resolve such differences amicably and directly with each other, retaining the right to seek advice of counsel;

(b) If they are unable to resolve any dispute between themselves or with the assistance of counsel, or through mediation, either side may submit same to a Court of competent jurisdiction for resolution.

Arguably, this provision does not appear to specifically apply to enforcement or modification, two major parts of this litigation but the trial judge interpreted the agreement broadly, forcing the parties to mediation to address their numerous disputes. 

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It is not unusual to use a three or five year average of someones income when calculating alimony and/or child support if their income fluctuates.  Why does income fluctuate?  Sometimes people earn commissions based upon sales which vary from year to year.  Sometimes the economy or other reasons dictate how much of a bonus they get.  Some times deferred compensation, when it vests and/or is cashed in, yields more in some years than in others.  There are many reasons why income can fluctuate.  As such, both the case law and child support guidelines advise that we should use an average when calculating support.

That said, is this always fair?  What do you do in cases where it is clear that the prior income wont be repeated?  That was the issue in the case of Harwelik v. Harwelik, an unreported Appellate Division opinion decided on December 19, 2011.  In this case, the husband's average income was about $300,000.  However, this included both short term bonuses that he was able to defer and long term bonuses that had a 3 year vesting period.  In July 2006, when the husband's employer, Verizon, sold most of its international assets, his title was downgraded from director to manager. As a result of the change, he was no longer eligible to receive long-term bonuses, although the bonuses previously
granted would still vest and be fully payable. In addition, as a manager, plaintiff could no longer defer the short-term bonuses he received after 2006.  When excluding this deferred compensation from the average income, it was substantially less.  That said, the trial court used the $300,000 average.

In a confusing opinion, the Appellate Division affirmed the use of an average but reversed the use of the $300,000 number because it included the deferred compensation that the husband no longer had, through no fault of his own.

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I have recently had a case where the other attorney would tell us one thing on the phone and another to the Court or in Court papers.  When called on this about face in court, the attorney made a weak denial before saying that it does not matter what he said and that it only matters what his client believes.  In this situation, the assertion was curious, if not comical, because at issue was the interpretation of a court order.

That said, was opposing counsel right?  I think that, in most cases, the answer is no.  More importantly, there is a sufficient body of law that what a lawyer says could possibly bind a client.  Of equal significance, if counsel relies on the representation of opposing counsel, only for opposing counsel to backtrack or lie about making the representation, the case will no doubt get more contentious, if not more expensive.  In addition, thereafter, perhaps all communications will have to be in writing so that there can be no backtracking, etc. Moreover, this type of conduct raises ethical concerns regarding duties of candor to the court and duties of fairness to the opposing party, to name a few.

Some situations where an attorney can bind a client are as follows.  If an attorney has authority to settle and makes a proposal or accepts an offer on behalf of a client, it may be possible to enforce that agreement.  If an attorney takes a position in court, the client may very well be stuck with that position. 

I have had situations where attorneys have made factual misrepresentations to a judge on the record at a motion or conference with the client sitting right next to them.  In these situations, I have ordered the transcript for use at trial.  During cross examination, I have asked the other party, if they were present, if they heard what was said, and if they concede it was incorrect.  I then ask them to confirm that they were sitting there yet they never corrected the misrepresentation that they knew was wrong.  In several trials, I have seen judges cite this to justify the finding that the party lacked credibility.

Family law cases are hard enough and emotionally charged enough that what we don't need is sharp and dishonest practices by the lawyers.  While bad for the system in general, this conduct also risks hurting their client's case.

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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 is resident 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.

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For more than a decade, we have known that biological parents have certain constitutional protections that help them defend against grandparents or other third parties seeking visitation with their children.  In fact, in New Jersey, because a fit parent has a fundamental constitutional right to autonomy in child-rearing decisions, a grandparent who seeks a visitation order must show that visitation is necessary
to avoid harm to the child.

Some times, however, someone other than the biological parents have custody of children.  Often these people assume the role of "psychological parent."  A psychological parent is essentially a person whom a child considers to be his or her parent, even though that individual may not be biologically related to the child. Does a psychological parent have the same constitutional protections as a biological parent when dealing with a request by a grandparent for visitation?  Yesterday, in the case of Tortorice v. Vanartsdalen, a reported (precedential) decision released by the Appellate Division, the answer to that question was no.

In this case, the litigation involved the maternal grandparent, who had custody and claimed to be the psychological grandparent and the paternal grandparents who sought greater visitation.  In this case, the maternal grandmother argued for the premise there is parity created between legal parent and psychological parent which provides the psychological parent with the constitutional protections
enjoyed by a legal parent as to third parties.  In so arguing, she was relying on a case involving the lesbian partner of a biological parent who was given parity.  The Court distinguished the relationship be finding that the partner was invited to the realm of family privacy such that that parent's right to autonomy is reduced by their own act.  This was not the case here, though interestingly, the court found that the psychological parent would now be in parity with the natural parents of the child (typically, because of constitutional considerations, natural parents have protections as to other parties as it relates to custody of children.)  In this case, the harm standard is not appropriate but rather, the best interest of the child standard must be used.

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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.

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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.

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We have previously blogged on the "rule of thumb", a dirty little secret used by judges and lawyers in New Jersey to come up with a "ball park" as to what alimony should be.  This "rule of thumb" does not take into account all of the statutory factors.  Rather, the formula simply subtracts the lower income (real or imputed) from the and multiplies the difference by a percentage.  I have been told that that percentage is 30% or one-third in the northern part of the state and 25% in the southern part.  Of course, judges really cannot use this formula and must make findings considering the law and all of the statutory factors which are:

(1) The actual need and ability of the parties to pay;
(2) The duration of the marriage or civil union;
(3) The age, physical and emotional health of the parties;
(4) The standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living;
(5) The earning capacities, educational levels, vocational skills, and employability
of the parties;
(6) The length of absence from the job market of the party seeking maintenance;
(7) The parental responsibilities for the children;
(8) The time and expense necessary to acquire sufficient education or training to
enable the party seeking maintenance to find appropriate employment, the availability of the training and employment, and the opportunity for future acquisitions of capital assets and income;
(9) The history of the financial or nonfinancial contributions to the marriage or
civil union by each party including contributions to the care and education of
the children and interruption of personal careers or educational opportunities;
(10) The equitable distribution of property ordered and any payouts on equitable
distribution, directly or indirectly, out of current income, to the extent this consideration is reasonable, just and fair;
(11) The income available to either party through investment of any assets held by
that party;
(12) The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a non-taxable payment; and
(13) Any other factors which the court may deem relevant.

While these factors are supposed to be consider and the "rule of thumb" is not, we hear judge's recommending settlements using this rule of thumb all of the time.

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I had a case recently where we had a conference call with the judge during which time, a discrete issue holding up resolution of a larger issue was discussed.  The judge made a suggestion which I took down verbatim and drafted language which I thought would resolve the issue. The problem, the judge's suggestion was contrary to what the other litigant wanted.  So what appeared to happen is that his lawyer either did not accurately report what was said or "spun" it in a way to not accurately reflect what the judge said.

In another matter, resolution of financial issues were discussed in chambers with the judge.  As I was reporting to my client what the judge said, we heard the other lawyer, who was speaking way to loud given as close as he was, spinning a entirely different client because the truth was not something the client would have wanted to hear.

Aside from running up counsel fees, seeking clarification from the judge (or hoping that she/he will change her/his mind), what purpose does this serve?  Is saving face with a client better than being honest, if not brutally honest, about their prospects?

I have heard many clients say that they went to initial consultations with attorneys who promised the world to get the case, only to then fail to deliver.  Of course they failed to deliver if they were promising that which is contrary to the law, overreaching or unreasonable under the circumstances. 

While clients have a right to seek what they want, they need to hear what they can realistically expect so that they are not surprised if they don't get the result that they have hoped for.  There are parties that want to push the envelope, either because an issue is novel, or because they really want something but are willing to give up something else, and sometimes for un-pure reasons.  However, if they are fully informed of their chances, or what the judge is saying, or both, they will not be able to say,"you never told me." Moreover, it is better for a party to learn the truth as early as possible so that they can decide whether they really want to fight a losing fight or preserve their financial and emotional resources.

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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.

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As reported in the online version of the New Jersey Law Journal, in a story by David Gialanella,, state Senator Loretta Weinberg of Bergen County introduced  legislation that would lower the burden of proof for grandparents and siblings seeking visitation.

In the year 2000, grandparent visitation became much more difficult to obtain as a result of the United States Supreme Court case of Troxel v. Granville which held that Washington's "breathtakingly broad" grandparent visitation statute to be unconstitutional.  At issue was the constituonal right to parental autonomy vs. grandparents vistitation.  That case set off a wave a litigation nation wide attacking state's grandparent visitation statutes.  New Jersey was not immune to this and in 2003, the New Jersey Supreme Court decided the case of Moriarty v. Bradt (a case in which I drafted the Petition for Certification.)  In Moriarty, the court held that grandparents may be awarded visitation over parental objections if a "potential for harm" standard can be shown by a preponderance of the evidence.  SInce that case, it has been much more difficult for grandparents to get visitation because it is very difficult to show harm, and just alleging generic harm was not enough.  We have blogged about this in the past.  In the cases I have had since that time, in order to successfully obtain grandparent visitation, you almost had to show that the grandparent took on a parental role for some period of time and/or was a constant presence in the child(rens) lives. 

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Very often, we deal with cases where one or both parties' incomes are variable, because they are tied to commissions, etc,. or heavily tied to a bonus which can vary.  In fact, for many people who work on Wall Street, their salary (oftentimes in the $120,000 to $150,000 per year range), makes up a small percentage of their annual income with the rest coming as bonus at the end of the year or in the first quarter of the next year.  Moreover, it is not uncommon for the bonuses to vary widely from year to year based upon company performance, etc.

This often makes cases difficult to settle, especially during the uncertain if not unstable economic times of the last several years. Typically, the law provides that when someones income is variable, that a 3 or 5 year average should be considered for support purposes.  In these times, is that fair.  Take the person working at a hedge fund who was earning seven figures for several years, but for the last few years, if they still had a job, only earned their $120,000 per year salary.  Ask that person if taking an average of 3 or 5 years for support purposes is fair.  Moreover, from a cash flow perspective, even when an average is used, the payor can be really strained to pay support if their actual income is lower than the average used.  As time goes by after the divorce, in theory, this should be balanced by the years when they earn in excess of the average.  In the years closest to a divorce, after all assets were distributed and perhaps the liquid assets were used to pay for the divorce, to pay equitable distribution, to buy a new home, etc., there may be no fund to serve as the buffer in one of these under average years. 

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Mark Ashton, a partner in our Exton (Chester County, PA) office and former editor of our Pennsylvania Family Law Blog, wrote a very in depth and interesting post entitled "Qualified Personal Residence Trusts:  Are These Homes Subject to Claims in Equitable Distribution", on that blog.

Mark discusses how an estate planning tool called a Qualified Personal Residence Trust (QPRT) can be used to get appreciating residential property out of a person’s estate, and possibly, to avoid increase in value claims in equitable distribution in Pennsylvania.  The post does an excellent job explaining how this works.

In Pennsylvania, the passive increase in value on separate property (premarital, inherited, etc.) is subject to equitable distribution.  Mark talks about the possibility of using a QPRT to avoid these claims because the recipient never has a possessory interest in the trust assets.

These same concerns do not exist in New Jersey because passive appreciation on separate assets is not subject to equitable distribution as long as the asset is not put in joint names or otherwise commingled (active appreciation or increase in value due to the efforts of either or both of the spouses would be subject to equitable distribution). 

Other issues regarding the use of trusts and their impact on divorce have been previously reported on this blog.  In fact, the issue of trust income and whether a trust can be compelled to distribute income where the trust documents do not allow it, is before the New Jersey Supreme Court in Tannen v. Tannen.  Stay tuned for an update when that case is decided.

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Last year, we published a post entitled He Who Hesitates (To Sell Former Marital Home) May Have Lost.  However, the Supreme Court disagreed in Sachau v. Sachau decided May 11, 2011.

In Sachau, the marital home was supposed to be sold on a triggering event, the emancipation of the youngest child, which in this case was in 1984.  The house wasn't sold then but in 1990, the wife began making inconsistent payments at inconsistent intervals to the husband through 2004 totalling almost $80000.  When the husband became unable to support himself, he filed a motion to compel the sale of the house in 2006.

Without getting into the legal steps it took to get to a hearing, the trial judge ultimately concluded that there was no agreement between the parties in respect of the valuation date and that the 1984 value of the home was $120,000 and that was the valued to be used.  As such, the husband's share was filed at  $144,915.62 (which included interest) and the wife's share was $417,472.64. The judge further determined that the wife would be credited for payments made. Moreover, the judge noted that the equities were in parity and that “the passage of time ha[d] not caused a change in position to the
detriment of [Barbara].” The husband appealed, and as noted in our prior post, the Appellate Division affirmed.

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Different forms of social media, Facebook in particular, have become the divorce lawyer's best friend as a source of damning evidence.  In fact, we have blogged about this before.  The New York Post today had a story that must serve as a primer on what not to do what when you are seeking permanent alimony alleging disability. 

In this case out of Staten Island, the wife sought permanent alimony alleging that she could not work, rarely left home and rarely socialized because of injuries from a 1996 car accident.  Notwithstanding that tale of woe, she was belly-dancing for hours a day  and then spending several more hours a day blogging about it. And if blogging was not enough, when she was asked by a Facebook friend why she was not posting pictures from her performances, the wife responded, "Gotta be careful what goes online, pookies. The ex would love to fry me with that."

He did. And so did the Court.  Instead of getting the $850 per month in permanent alimony she sought, she received an award of only $400 a month for two years. She also got only 40% from the proceeds of the sale of the marital home and her husband was granted a substantial award of  legal fees for her "dilatory tactics."

What is the lesson from this?  Those who post evidence of their fraud upon their spouse and the Court have no one to blame but themselves when they are exposed. 

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I have recently blogged about the need for courts to award counsel fees when a party successfully enforces an agreement or an Order.  As noted, all too often, court's do not award counsel fees, or when then do, the award is not the entire amount of fees incurred.  This potentially empowers to wrong doer because there is no ramifications to their non-compliance.

That issue arose in the unreported (non-precedential) opinion in the case of Bello v. Bello decided on April 1, 2011.  After the parties' divorce, the wife was forced to file 5 post-judgment enforcement applications.  She was successful and was awarded fees for each.  However, at the fifth motion, she was only awarded $1000 because the trial judge "stated that "I don't want to cut off support for the [wife] in favor of counsel fees."  The wife unsuccessfully sought reconsideration contending that the amount was too low given the husband's lavish lifestyle and significant assets.  She then appealed.

The Appellate Division reversed and remanded the matter back to the trial court to determine the proper amount holding:

After carefully considering the entire record, we conclude that the judge's reasoning for limiting counsel fees to $1000 contradicted his finding that the husband had a substantial income and several assets. The husband lives in a home worth $1,000,000 with a tennis court and swimming pool, drives a 2007 Mercedes sedan, owns two other cars, pays $1500 per month for his mortgage, is the sole proprietor of Mendham Eyecare business, earns more than $200,0001 a year, and refused to pay his child support and alimony obligations. In addition to finding that the husband had "plenty of resources to pay his obligations," the judge found that a review of the husband's case information statement demonstrated "at least $14,000 of excess [money available]."

We therefore reverse because the judge's finding that the husband cannot afford a fee greater than $1000 is "manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence."

Perhaps this decision will be a deterrent and ensure future compliance. 

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As a matrimonial lawyer, I often get the question "how old does a child have to be to decide who they get to live with?"  There is a perception out there that there is a magic age where a child is empowered to decide which parent they get to live with.  This simply is not the case. 

Rather, a child's preference is only one factor a court must consider when deciding custody.  Why is the child's preference not absolutely determinative?  Because it is not always reliable and may not be in their best interests.  Maybe the child is too young or too immature for their preference to be relied upon alone.  Maybe one parent is improperly influencing or pressuring a child to express a preference that is not their true preference.  Maybe the child feels bad for and/or feels the need to take care of the parent because of some physical or mental infirmity of the parent or a feeling that the parent is the victim of the other parent.  Perhaps the child has been promised something by the other parent or is trying to play one parent against the other.  Perhaps the child (maybe a teen) feels that the other parent will give them more freedom. 

This issue becomes even more difficult after an initial custody determination is made or agreed to and then a child expresses a preference to live with the other parent.  That was the issue in the unreported (non-precedential) decision in the case of Traynor n/k/a Dallara v. Traynor decided on March 29, 2011.  In this case, the father appealed the denial of his motion to change the custody of his 11 year old daughter who allegedly decided that she wanted to live with him.

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Last week, the news reported the decision in the custody case involving Miami Heat guard, Dwyane Wade's, children, after one of the longest custody trials ever in Cook County.  Apparently, a large part of Mr. Wade's decision to seek sole custody of his children was allegations regarding his wife's alienating behavior.  In the decision issued by Judge Renee G. Goldfarb, the Judge held:

This court finds that (Siohvaughn Wade) has embarked on an unstoppable and relentless pattern of conduct for over two years to alienate the children from their father, and lacks either the ability or the willingness to facilitate, let alone encourage, a close and continuing relationship between them.

We have previously blogged many times on issues regarding parental alienation.  Though I do not believe that it has yet occur ed, we discussed the movement to have "Parental Alienation Syndrome" included as a diagnoses in the new edition of the DSM. We have also discussed programs that deal with parental alienation as well as different cases addressing whether there can be tort liability for parental alienation.

What the Wade case shows is that when a parent embarks upon a course of conduct to alienate children from the other parent, and shows little desire, if not an utter inability to foster and encourage a relationship between the children and the other parent, that parent risks losing custody.  Parents divorce each other.  They don't divorce the children.  We cannot ignore the danger of harm to the children when a parent seeks to prevent or destroy the children's relationship with the other parent.  The research is clear that children need both parents in their life.  However, when a parent seeks to destroy the children's relationship with the other parent, they risk having their own time with the children limited in order to mitigate and/or prevent the opportunity for further damage being caused.

The results of parental alienation can be tragic.  It is encouraging to see a court take it seriously and spend sufficient time exploring the issue.

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One of the hardest questions to answer for a client is why a Court doesn't enforce their own Orders.  The next hardest questions to answer are if they found the other side in violation of litigant's rights, (1) why weren't there any real consequences for the violation of the order and (2) why didn't I get counsel fees.  The Court Rules suggest that a litigant is entitled to counsel fees if they are required to come to court to enforce an Order.  In addition, the court rules in the family part also include numerous provisions, including the imposition of monetary sanctions and counsel fees, for violation of a parenting time (visitation) Order. 

As such, it was interesting to see the unreported decision in the case of Friedman v. Friedman decided on March 7, 2011 wherein an awarded of sanctions for violating a parenting time order was affirmed by the Appellate Division.  In this case, the father asserted that the mother violated the parties' parenting schedule when she "signed both children out of school and drove them to [Virginia]." As a result, the father sought sanctions against the mother "for making unilateral changes" to the parenting schedule "and for failing to cooperate with the recommendations of the Parenting coordinator."  The trial judge found that  the mother violated the parties' parenting schedule and the recommendations of the parent coordinator by extending "the children's time with her, in Virginia."  As a result, the mother was ordered ordered to pay the father $500.00 as a sanction plus reimburse him for his costs to file and serve the motion.  The decision was based upon the court's finding that the mother had a history of failing to cooperate with the plaintiff.  In addition, the mother's request to relieve the current parent coordinator was denied.

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Being a divorced parent and attempting to relocate to another state can be a difficult proposition.  N.J.S.A. 9:2-2 provides that children cannot be removed from the state without the consent of both parents unless the court otherwise orders. The statute’s intent is to preserve the rights of the noncustodial parent and to ensure that children are able to maintain their familial relationship.  Although the statute is stated simply enough, the process of relocating without the consent of the noncustodial parent can be extremely trying as evidenced in a recent published New Jersey Supreme Court decision, Morgan v. Morgan (n/k/a Leary).

In Morgan, the Court reviewed a decision denying a divorced mother’s request to move with her children to another state after the children’s father objected to the relocation.  These parties were married for 13 years and had two children when they divorced in 2005.   The final judgment of divorce incorporated the couple’s Property Settlement Agreement (PSA), which provided for joint legal custody of the children and which indicated that mom would be the party of primary residence. Under the PSA, dad would have the children alternate weekends, every Tuesday evening, every Thursday night until Friday morning, and for two weeks of vacation.

In late 2005, in anticipation of an application by mom to move with the children to Massachusetts, dad filed a motion seeking a re-determination of custody based on “a substantial change in circumstances.” He contended that he should be designated the parent of primary residence because he saw the children more than the PSA provided and was very involved in their school and recreational activities. Mom opposed this motion and filed a cross-motion seeking permission to move with their children to Massachusetts or, alternatively, a plenary hearing. In support of her request to relocate, mom pointed to the fact that Massachusetts is her home state; her entire family resides there; she was by then engaged to a Massachusetts resident; that her marriage would enable her to forego employment and become a “stay-at-home” mother; and that the PSA was not based on her promise to remain in New Jersey.  As a result of these filings, a plenary hearing was held with both sides presenting fact and expert witnesses.

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Very often, we are confronted with situations where on spouse is self employed and the business pays certain personal expenses on behalf of one or both of the parties.  Often times, these expenses are wholly appropriate and would withstand IRS scrutiny.  Other times, there are excess perks or other personal expenses paid through the business that have no business purpose.  The practical effect is that these expenses are deducted as business expenses, and essentially taken as tax free income.  For purposes of the determination of the proper income to use for support purposes, as well as for business valuation calculations, these expenses are added back to income. While obviously inappropriate, some times we even encounter unreported income which also has to be added back for support and valuation purposes.

A bigger question/debate is once added back, should taxes being considered?  Put another way, if the person was not paying taxes on this aspect of his/her income. should the income be reduced by taxes or should it be grossed up.  As an example, a person whose W-2 income is $300,000 per year, has far less spending power then someone who earns $300,000 but only pays taxes on $200,000 because of appropriately deducting an expense that is part personal and part business and/or inappropriately taking excess business deductions for personal expenses paid through the business.  To exemplify this point, I have often asked the forensic accountant at a deposition or trial, "What would a taxpaying W-2 wage earner have to earn to have the same spending power (net after tax income), as this person?" 

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Last year, in the Fawzy decision, the New Jersey Supreme Court put procedures in place approving parents' ability to arbitrate child custody opinion.  This specifics of this decision was the subject of a prior blog at the time of the decision.  One of the procedural safeguards required by Fawzy was a verbatim record of the proceedings so that there could be meaningful review of the decision by a court.  Yesterday, the Supreme Court revisited this issue in the case of Johnson v. Johnson.  In May of this year, I previously blogged about this case though at that time, we all thought that the bigger issue for the court's consideration was whether Fawzy could be retroactively applied.

In Johnson, there was no verbatim record as was required by Fawzy, for the simply reason that the parties had agreed that there was not going to be a verbatim record.  They did, however, agree that the arbitrator would provide detailed findings of fact.  In fact, the arbitrator did provide extremely detailed findings both in the initial opinion and upon a motion for reconsideration.  After Fawzy was decided, an appeal ensued and the arbitration award was set aside for no verbatim record. 

The Supreme Court in Johnson started by reminding us of what Fawzy requires with regard to an agreement to arbitrate:

must be in writing or recorded in accordance with the requirements of N.J.S.A. 2A:23B-1.
In addition, it must state in clear and unmistakable language: (1) that the parties
understand their entitlement to a judicial adjudication of their dispute and are
willing to waive that right; (2) that the parties are aware of the limited circumstances under which a challenge to the arbitration award may be advanced and agree
to those limitations; (3) that the parties have had sufficient time to consider the
implications of their decision to arbitrate; and (4) that the parties have entered into
the arbitration agreement freely and voluntarily, after due consideration of the
consequences of doing so.

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Earlier today I posted ablog entry on the unreported Appellate Division decision in Holden v, Holden decided on October 28, 2010.  In that piece, I discussed how the court based support on the father's gross income because of his history of not paying taxes.  The case was interesting for other reasons, as well. 

In this case, the parties net income exceeded the maximum net incomes under the Child Support Guidelines.  The trial court entered a somewhat arbitrary award with regard to past and prospective child support which did not take into account the children's actual needs.  This, in part, was brought on by the fact that the parties did not present all of the relevant information regarding the children's needs (each had custody of one child).  The father appealed on this ground.

In reversing, the Appellate Division agreed with the father, restating the law as follows:

It is undisputed that where family income exceeds the maximum amount under the guidelines, the court has discretion to calculate child support using the maximum support under the guidelines and "combin[e] that preliminary figure with a
supplemental award subject to the provisions of N.J.S.A. 2A:34-23a . . . ." Pascale v. Pascale, 140 N.J. 583, 595 (l995).

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It goes without saying that it takes two people to agree to get married, making vows "til death do us part."  Those vows, spoken with all sincerity, good intention, and probably with a hopeful belief that the words will be literally followed, somehow fall by the wayside when one party decides to divorce. And while it takes two to get married, it only takes one party to get divorced, especially in the era of "no-fault" divorce. 

Many if not most people feel a certain sadness if not devastation over a divorce.  However, it is often a mutual decision, or at least one that both parties ultimately accept.  It is quite another thing when one party simply does not or cannot accept the divorce.  It is quite a somber experience telling a client that there is nothing that they can do if the other spouse does not want to remain married.  While we often suggest that that person suggest marriage counseling to their spouse, it cannot be compelled.

As I have blogged before, some people in this situation may try to delay the process, essentially delaying the inevitable.  This often drives up the cost of the process.  One wonder weather it also prolongs if not worsens their emotional suffering. While I am not suggesting that people give up on their marriage, when the end is inevitable and they can do nothing to stop it, perhaps it is best to try to move the process along in an orderly way so that they can get on with their life and, if necessary, start the healing.

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I recently heard a person say that their spouse believed his alimony and child support would be based solely on his salary.  I am sure he would like that but that statement is wishful thinking at best.  If he was correct, several hundred thousand dollars each year would be his alone and not considered for support.  Aside from potentially being unfair, it is not the law.

In fact, in New Jersey, the definition of income from support purposes includes all sources of income.  In fact, the Child Support Guidelines includes, but is not limited to 23 possibilities for income, as follows:

a. compensation for services, including wages, fees, tips, and commissions;
b. the operation of a business minus ordinary and necessary operating expenses (see IRS Schedule C);
c. gains derived from dealings in property;
d. interest and dividends (see IRS Schedule B);
e. rents (minus ordinary and necessary expenses - see IRS Schedule E);
f. bonuses and royalties;
g. alimony and separate maintenance payments received from the current or past  relationships;
h. annuities or an interest in a trust;
i. life insurance and endowment contracts;
j. distributions from government and private retirement plans including Social Security, Veteran's Administration, Railroad Retirement Board, deferred compensation, Keoughs and IRA's;
k. personal injury awards or other civil lawsuits;
l. interest in a decedent's estate or a trust;
m. disability grants or payments (including Social Security disability);
n. profit sharing plans;
o. worker's compensation;
p. unemployment compensation benefits;
q. overtime, part-time and severance pay;
r. net gambling winnings;
s. the sale of investments (net capital gain) or earnings from investments;
t. income tax credits or rebates (excluding the federal and state Earned Income Credit and the N.J. homestead rebate);
u. unreported cash payments (if identifiable);
v. the value of in-kind benefits; and
w. imputed income

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Picture this scenario.  Parties are married - perhaps even happily - for 14  years.  They have three kids - 12, 10 and 6.  Wife has been a stay at home parent for the last 12 years. Husband is the Type A, master of the universe, over achiever type.  He works in New York City, leaving the house at 6 am and coming home at 7 p.m. The wife took the children to most of their medical and dental appointments, most of the play dates, most of the activities, attended most of the school events, etc.  Maybe the husband went to some, maybe he didn't.  Maybe the husband played his golf or tennis on the weekends - maybe he was part of the suburban shuttle taking the kids to the vast myriad of activities and sports kids are involved in - or both.  In very much of a traditional marriage, the wife was responsible for the kids and the house and the husband was responsible for making the money.  This is not meant to be a social commentary - just a description about how the parties divided the labor and defined their roles in the marriage. 

Fast forward - now the parties are getting a divorce.  A discussion of custody and parenting time has to be had.  One would be surprised about how many times I have seen the husband in these matters demanding 50-50 shared parenting with the kids, almost as if the historical status quo never happened. All too often, this demand is coupled with an attack on the wife's mental health and/or parenting abilities.  This of course leads to the obvious question - if she was so crazy/unstable/incompetent, etc. why did you leave the children in her care for the last X years?

This is not to say that shared parenting is presumptively not reasonable or in the children's best interests. But what is the genesis of the request.  Is it power, control, the desire to pay less child support, the desire to hurt the spouse for having the audacity to divorce them?  Is it a sincere belief that this is what is best for the children, whether it is or not?  Is it a combination of a realization of the time lost with the children in the past coupled with a fear of losing them completely?  Is it revisionist history and/or an exaggerated or grandiose belief regarding the person's actual involvement in the historical parenting of the children?  It is probably an amalgam of many of these things. 

The first question to ask is can the parent actually exercise the time that he is seeking?  If not, the resolution is easy.  Often in the cases, I have seen the parties go through stressful and expensive custody evaluations, with the obvious result - i.e. that the mother is recommended to be the primary custodial parent.  Custody then settles rapidly after that - with the father able to save face and say "I tried." 

That said, I have seen many parents become more involved parents after the divorce.  Maybe this was done for all of the wrong reasons.  Funny thing is that despite the reason, if their relationship with the children strengthens and their involvement increases, that may not be a bad thing either.

This blog is not meant to perpetuate stereotypes or dissuade good faith custody disputes. In fact, I have represented many fathers and have been successful in obtaining custody or shared parenting of some type for them.  On the other hand, before putting your children through a custody evaluation (or several if both parties get their own experts) and spending tens of thousands of dollars on the process, people should think long and hard about what they really want and what is really best for the children. 

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Though you don't see them much anymore, some times Marital Settlement Agreement contained escalator clauses which, in effect, provided for automatic increases in alimony or child support.  Some times they were a fixed percentage per year. Other times they were tied to the cost of living/Consumer Price Index. 

In the unreported (non-precedential) case of Burroughs v. Burroughs released on August 9, 2010, the effects of a 5% annual increase on alimony escalator clause was at issue.  In this case, the agreed upon alimony was $200 per week and based upon the husband's income of $60,000 at the time (1994).  The husband had comparable income until the year 2000 when he could no longer find same and went to work at Home Depot earning about half of what he made in the past.  In 2006, the alimony was increased to $337 per week, not due to a change of circumstances, but rather, by implementation of the escalator clause.  As an example why not to use such an escalator clause this reflects a 68.5% increase in support in about 10 years.

The husband's income continued at the less than time of the divorce levels until about 2007, when he established a business with a friend to try to increase his income from what he was earning at Home Depot.  This was not a success.  He ultimately filed a motion to terminate or reduce his alimony.  The motion was denied.

The Appellate Division reversed holding that the husband had made a showing of a change of circumstances by virtue of his Social Security statement showing far lower wages post-2000 than his alimony was based upon.  The effect of the escalator clause was also impacted on the showing of a change of circumstances (though this is curious because it certainly is a foreseeable event.)

The matter was remanded for discovery and a plenary hearing.

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Earlier today, I blogged about a NY Times article published yesterday about proposed New York legislation to adopt no fault divorce. That articles also noted that there was legislation proposed to set up a standard formula that judges would need to use to determine alimony (known in New York as maintenance).  The article noted that judges would still have discretion to modify those awards, but that the genesis of the proposed legislation is to prevent "widely inconsistent awards." 

While New Jersey child support guidelines to use where the parties' combined, net after tax income is $187,200 or less, we haves no such guidelines regarding alimony.  Further, I have heard of no proposal to implement them.  There is however, a dirty little secret called a "rule of thumb" that is often used to get a ballpark of what alimony should/could be.   Simply put, you subtract the lower income (or what that person could earn) from the higher income and take one-third of the difference. 

The rule of thumb is very simplistic and does not take into account any special factors other than income or earning capacity. It does not take into account actual taxes paid, lifestyle, sacrifices made, equitable distribution received or any of the other statutory factors.  Moreover, judges cannot use this to calculate alimony if the issue is tried before a judge. 

Do we want something like this in New Jersey?  While it may certainly make things easy and prevent wide deviations you may get from courtroom to courtroom and/or county to county, one size rarely fits all.  Rather, the statutory factors, if fully presented to the Court, and adequately considered Adan implemented by the judge, should result in a fair and reasonable award.  The rule of thumb is a useful sanity check, but no formula will be able to capture all scenarios.

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In today's New York Post there was an article about a Long Island woman getting jail time for her repeated interference with her ex-husband's time with the parties' children.

The article describes how the woman tried to keep the father and his daughters apart for weeks at a time and that she even falsely alleged that he groped one of his daughters.  The story goes on to say how the mother went on expletive filled tirades about the father in front of the children.  Further, she often scheduled last minute trips and events meant to frustrate parenting time.  The father was forced to either consent to not disappoint the girls and when he did not, she would berate him.  The judges stated that she. "... is a vengeful roadblock, the barbed wire standing in the way of her two daughters and their desperate dad."

All of the above acts are very typical acts of parental alienation.  In the past we have blogged about programs dealing with parental alienation and the fact that there is some consideration to adding parental alienation as a diagnosis to the next DSM.  Parental alienation syndrome is a very polarizing term because the person who coined the phrase, Dr. Richard Gardner, was self-published and the scientific bases to his conclusions were questioned.   His proposed remedies to alienation were also severe and there were a few notorious cases where his recommendations were followed by tragic results.  On the other hand, there is more and more research about parental alienation and its insidious effects.  The alleged conduct of the mother above contains some classic alienating behavior.

But what is the remedy.  We have recently blogged that the NJ Appellate Division rejected tort damages for emotional distress as a remedy. in most cases.  There are criminal statutes to prevent interference with custody orders but, anecdotally, they rarely seem to be used.  Similarly, there are court rules allowing for sanctions for interference with parenting time.  However, all too often, this becomes a he said/she said situation and court's rarely hold hearings to get to the bottom of this much less impose sanctions.  In fact, often this kind of conduct results in the appointment of a parent coordinator, often adding another level of costs even though the Appellate Division, the the recent reported case Parish v. Parish (which was my case) has made clear that parent coordinators should not be dealing with enforcement issues. 

While jail is a drastic remedy and probably not appropriate in all cases, it is refreshing to see that a judge got tough with repeated custodial interference.  Perhaps this will serve as a deterrent to others, but probably not because many people who do this feel justified and/or believe that they are protecting their children.  We can only hope. 

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On May 21, 2010, the Appellate Division issued a reported (precedential) opinion in Colca v. Anson involving different aspects of child support and college support.  This case reinforces several principles regarding child support and payment of college expenses that we already knew (which makes it somewhat surprising that it was reported) but nevertheless is a good reminder of certain basic principles. 

The first of these principles is that child support belongs to the child and thus cannot be waived by a parent or for that matter, by a court.  This comes up in two contexts in this case.  First, in a 2005 Order, for whatever reason, the trial court denied the father's request for child support for the parties' daughter who was in college.  In another motion in 2008, the father sought child support again.  Thinking that the matter had previously been decided by the court and that there were no changes of circumstances, the mother did not even file a Case Information Statement. 

The trial court disagreed with the mother's position that the prior Order was forever binding and required a showing of changed circumstances, pointing out that the duty to support a child continues until emancipation.

In addition, the Appellate Division affirmed the trial court's decision that the child's inheritance could not be considered with regard to support.  While perhaps correct as to child support, there are not enough facts given in this opinion about how much was really in dispute. That said, the Child Support Guidelines suggest an adjustment to child support may be required if a child has an extraordinarily high income.  Also, in the famous NJ case on college expenses, Newburgh v. Arrigo, which we have blogged on many times before, a child's assets are a factor to be considered.  Since the college was at issue in this case, one wonders why the inheritance was not considered here.

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On May 13, 2010, the Appellate Division issued yet another unreported decision in the matter of Walsh v. Walsh.  This is yet another interesting decision in a matter that has been appealed several times.  In one of the prior opinions, the trial court employed an 11 year average of the husband's income for support purposes given the historic variability of his income.

In the present appeal, at issue was a modification of alimony.  In this instance, while the court found that the husband's 2008 income was $58,000, the court essentially imputed twice as much to the husband.  The Appellate Division, however, did not disturb this finding.  They did, however, reverse the decision for several interesting reasons and remanded the matter for a new hearing.

In the trial judge's decision, he found that with the reduced alimony that he ordered, that each party would have a similar monthly shortfall in their budget.  The husband argued and the Appellate Division agreed that there was no basis for this decision.  In fact, the court made no specific findings as to the husband's needs.  In failing to do so, the Appellate Division held that: "As a result, the court did not sufficiently address the central issue in any alimony modification case, the supporting spouse's ability to pay."

The case also highlights the fact that the same standards apply to an initial determination of alimony and a modification.  In fact, the Court held that:

As a final observation, we note that the trial court recognized in its bench opinion that the $2,000 award  "is probably more than [it] would find if this were an initial hearing." Because the same standards apply to an initial alimony proceeding as to a modification proceeding, the court needs to explain its decision in that respect as well.

In the day and age of financial crisis and reduced incomes for many, this case cogently reminds us of the standards to apply and the notion that once a court decides to review an alimony award, while consideration of the marital lifestyle is clearly important, the review is a fresh review based upon all of the alimony factors.  Strict adherence to the prior award is not the standard.

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We have blogged frequently regarding prenuptial agreements.  There is also an advice piece on our firm's web site entitled "Considering a Prenuptial Agreement - Should My Children Have One?"  We have also recently been involved in drafting and/or negotiating a number of prenups lately.  This has reminded me that one-size does not fit all when it comes to prenuptial agreements.

A lot depends on the stages in life that that the parties are in and what they are seeking to protect.  For instance, if there are two young people starting out in life, the agreement should probably be very different then one where the parties are older, and this is a second (or third, fourth or fifth) marriage for them. 

If both parties are young, and there is a desire to preserve premarital assets, family businesses, etc. that seems to be perfectly appropriate.  Whether alimony should be addressed in such a prenup is questionable.  However, I have seen cases where the alimony provisions in such agreements are punitive.  Moreover, for young people, it may not be fair to insulate from distribution earnings during the marriage, but if that if is going to be done, then perhaps there should be a fair fund in lieu of equitable distribution. 

For people who are both older in second marriages, perhaps the desire is to preserve the assets that each has for their children from their prior marriage.  The issue of alimony, or the waiver thereof, may depend on the ages, disparities in assets, etc.

For people where there is a large age difference, consideration must be given to being fair to the less financially advantaged spouse (usually the younger one), while perhaps protecting the estate for prior children, or protecting someone from someone inclined to "marry for the money."

The permutations are endless as are the options.  As I said, one size does not fit all. 

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Suburban school districts were some of the most hard it by Governor Christie's new budget specifically, and New Jersey's budget crisis overall.  Many districts were already bracing for the bad news for several months, and had proposed school district budgets containing a lot of belt tightening.  However, the cuts were much worse than expected causing many school districts to asses how to meet the shortfall.  Some suggestions were lay offs, others were to cut services and some districts are considering both.

How does this apply to New Jersey family law you ask?  Some school districts are considering eliminating or charging for transportation.  This would be a new and/or unanticipated expenses.  Some districts are also considering eliminating or charging for sports and other extracurricular activities.

While the child support guidelines take into account some extra curricular activities of nominal costs, i.e. girl scouts. town sports, low cost school enrichment activities, they certainly do not consider school transportation and school sports.  Similarly, most support Orders and divorce agreements would not consider this either because it is not usually an issue.  If parties cannot agree on a fair and appropriate sharing of these expenses, or for that matter, how to get the children to school if the school isn't providing the transportation, then the courts could be burdened with applications to decide this issue.  It would seemingly be unfair to saddle the custodial parent with the entire financial and/or transportation responsibility under these unusual circumstances.

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In February 2009, I posted a blog entry entitled "The Madoff Mess Hits the DIvorce Court."  In this case, in June 2006, the parties agreed to evenly split the $5.4 million in an account they had with Madoff Securities. As a result, the husband gave the wife $2.7 million in cash, and retained the account. As a result of the Madoff Ponzi scheme that has essentially rendered the account worthless, the husband filed suit seeking the $2.7 million that he paid the wife. The husband (a prominent attorney with a large NY law firm) alleged that because the account turned out to be valueless, the spirit of the agreement was broken. The wife's position was that the husband withdrew probably $3 million to pay the wife, so the asset did exist at the time of the settlement agreement. In December 2009, I blogged on the decision  which was in the wife's favor, essentially because the husband could have redeemed the account for the agreed upon value from the time of the divorce up to the Madoff collapse. 

Based upon this blog entry, I was interviewed about this case by Mark S. Gottlieb, CPA for a podcast on his website.  Mark is a forensic accountant and business valuation expert with offices in Great Neck, New York, Stamford, Connecticut and Roseland, New Jersey.

To listen to the podcast, click here.

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As we recently learned from the Fawzy case that we blogged on, parties have a right to private ordering and self determination of how they want to resolve their cases.  In Fawzy, the NJ Supreme Court held that people could arbitrate custody matters as long as certain procedural measures were taken.

Can people decide to submit an issue to an expert for a binding determination?  On March 10, 2010, in an unreported (non-precedential) decision issued by the Appellate Division in the case of Cully v. Cully, the question was answered affirmatively.

In this case, post-judgment litigation occur ed over the correct interpretation of a Property Settlement Agreement, more specifically, the correct form of a QDRO (the mechanism to divide an ERISA controlled retirement asset).  The judge suggested that the parties could elect to have a QDRO expert
review both parties' QDROs and decide which QDRO is acceptable. The parties would split the expert's fee, and the loser would reimburse the other party for counsel's fees. The parties adopted the judge's suggestion and agreed to be bound by the expert's determination.

With certain modifications, the expert suggested adoption of the husband's form of QDRO and it was ultimately entered as an Order of the Court.  The wife appealed arguing that the court should have held a hearing on the parties intent since the language in their Property Settlement Agreement was not entirely clear.

The Appellate Division affirmed the decision finding that the since the wife's attorney advocated for and agreed to a binding determination by the expert, the wife could not then object when the decision did not go in her favor.  In fact, the Appellate Division specifically stated:

Our judicial process's integrity would be damaged if defendant received a second bite at the apple because she is disappointed that the process, which her counsel agreed to and advocated for, resulted in a decision unfavorable to her.  Both the doctrines of invited error and judicial estoppel bar this court from considering defendant's claims regarding the trial court's decision to accept Ms. DeFuccio's determination in this esoteric area of family law.

There are several lesson here.  (1) When you agree to submit a matter for a binding determination, you are stuck with that decision. (2) When you are dealing with the division of pensions, and there is any possibility for different interpretations/ways to divide it, it may make sense to hire the QDRO expert before the settlement so that the correct language is in the PSA; (3) in a similar vein, if possible, have the QDRO signed the same day that the divorce is entered.  Here, it appears as perhaps imprecise drafting was the problem.  Moreover, if the issue ultimately required a determination of intent, the decision to allow an expert, or anyone for that matter, to make a binding determination without first determining what the intent was, is a curious one.

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In September of 2008, I posted a blog entry on The Value of Real Estate - Problems in this Ever Changing Market.  In that post, given the decline in the real estate market, it was posited that retaining the marital home may not be the best financial strategy.  Unfortunately, little has changed in the real estate market since that time to change conclusions of that post.

That said, in many cases, the marital home remains the single largest asset to divide in divorce.  Moreover, with the continuing troubles in the economy, it may represent the only way for either or both of the parties to wind up with liquid funds after the divorce.  Now if the home is going to be sold, or one party is going to buy out the other, then there usually is little dispute other than logistics of sales price, how soon to reduce the price, how to handle repairs until sale, etc. 

The problem arises if one party wants to defer distribution to allow the child(ren) to finish high school, etc.  There is a question of fairness to the other spouse whose equitable distribution is tied up as may be their ability to buy a house of their own both (1) because they don't have the money for a down payment until they get their share of the house or (2) they are still on the mortgage of the marital home.  Further, due to the decline in the real estate market, parties are now also agreeing to defer the distribution for some period of time in hopes that the market will rebound, as opposed to selling now.

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On February 3, 2010, the Appellate Division issued a reported (precedential) opinion in the case of Parish v. Parish.  This case is near and dear to me because I represent Mr. Parish and we made new law. 

In this post-judgment litigation we filed a motion seeking enforcement of the parties' divorce agreement because the ex-wife interfered with his parenting time with the children and to fix a parenting schedule for the next several months. The schedule was supposed to be arrived at with the assistance of a parenting coordinator but the issuance of a domestic violence temporary restraining order against Mr. Parish's ex-wife delayed that process. After the restraining order was dismissed, the parties went to the parent coordinator who made recommendations prior to the return date of the motion. Mr. Parish agreed with them - he ex-wife would not state if she agreed or not, waiting to see what the court would do.

The trial court denied Mr. Parish's motion as moot, ordered the parties back to the parent coordinator to deal with the issues in the motion and required that the parties attend settlement conferences before filing any future motions, even enforcement motions.

We appealed arguing that (1) the trial court unconstitutionally impaired Mr. Parish's access to the Court and (2) the court improperly abdicated its responsibility to a parent coordinator who cannot, by Supreme Court directive, address enforcement issues in any event.

The Appellate Division agreed in a 2-1 decision. In doing so, they crafted new requirements before a family part litigant's access to the Court can be restricted.

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Whether an asset is exempt is a common issue that arises in divorce case.  The general rule is that an asset acquired prior to the marriage which is not commingled is exempt from equitable distribution.  In addition, an asset that is received via inheritance and/or third party gift is also exempt as long as it is not commingled.  Commingling is essentially putting an asset into joint names or depositing it into a joint account.  Changing something from someones own name into joint names is deemed as making a gift to the marriage.

Also, the law is clear that the person who seeks to have an asset deemed exempt has the burden of proving that the asset is exempt.

Because an engagement ring is a premarital gift, albeit a conditional gift, from one spouse to to the other, it is exempt from equitable distribution.  If the ring is replaced and/or enhanced during the marriage, while the original stone, if it exists, remains exempt, the new ring is not exempt.  In fact, any gifts between spouses during the marriage are not exempt and are subject to equitable distribution on divorce.  As such, some times we are required to have jewelry, furs, and other expensive presents appraised to determine their value for equitable distribution purposes.  Sometimes this task is made a little easier because parties have appraisals for insurance purposes which is why we often ask for the homeowners insurance policy riders.

The premarital portion of retirement assets, i.e. IRAs, 401ks, pensions, are typically exempt. For defined contributions plans (ie. the accounts with cash balances), the trouble may be finding or obtaining the documents to establish the premarital values.  That said, even though the premarital values are often commingled with contributions made during the marriage, the premarital portions are typically exempt.  Contrast that with a regular premarital bank account where deposits are made during the marriage using marital income.  Many would argue that this account has lost it's exempt status.  Is that fair?  What is the real difference?  Perhaps the difference is that though money will usually go in and out of a bank account, there usually is not the same type of two way activity as to retirement accounts.

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In February, I wrote a blog entitled Madoff Mess Hits Divorce Court..  In this case, in June 2006, the parties agreed to evenly split the $5.4 million in an account they had with Madoff Securities. As a result, the husband gave the wife $2.7 million in cash, and retained the account. As a result of the Madoff Ponzi scheme that has essentially rendered the account worthless, the husband has filed suit seeking the $2.7 million that he paid the wife. The husband (a prominent attorney with a large NY law firm) alleged that because the account turned out to be valueless, the spirit of the agreement was broken.  The wife's position was the husband withdrew probably $3 million to pay the wife, so the asset did exist at the time of the settlement agreement.

The decision was reported last week and the husband lost.  Acting New York State Supreme Court acting Justice Saralee Evans decided that the husband is stuck with his decision to keep the account instead of withdrawing his money before the December 2008 collapse of Bernard L. Madoff Investment Securities LLC.  The Justice noted that while the husband claimed the Madoff account held no assets, he did not allege it had no value.  Key to the decision was that in 2006 and "the several years after that plaintiff maintained this investment," the account "could have been redeemed for cash, presumably significantly in excess of its 2004 value." In addition, the Justice held that "An investor's ability to redeem an account for value, was the assumption on which the parties relied in dividing their property and in doing so they made no mistake."

The public policy of the finality of settlements was upheld.  Whether is is ultimately fair since the asset may not have really existed is another story.  It is different than retaining a stock account and then the market goes up or down because in that instance, there really was an asset as opposed to a fictional asset.  It is also different than holding on to a home whose value has decreased, as I have blogged on before.  

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New Jersey is one of the few states in the country that still requires divorced parents to pay for their children's higher educations.  The term "divorced parents" is highlighted because married parents do not have the same obligation to pay for their children's college education if they choose not to do so.  This distinction has lead some to argue that New Jersey's laws are unconstitutional.  That is the topic for another day.

That said, the answer to the questions posed in the title of this post is maybe.  That is, parents of divorced children may not only have to contribute to their children's college educations, but graduate school as well.

That was one of the topics of an unreported (non-precedential) case decided by the Appellate Division on December 10, 2009.  Specifically, in the case of Mulcahey v. Melici, the Appellate Division affirmed the trial court's decision not to emancipate the parties' child who had graduated from college, require the payment of child support to continue and requiring the payment of graduate school expenses.

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Alimony terminates at remarriage, doesn't it?  At least that is what we have learned.  In fact, there is even a statute, N.J.S.A. 2A:34-25, that says permanent or limited duration alimony terminates upon death or remarriage of the recipient.  This is not the case for reimbursement or rehabilitative alimony, per the statute, absent an agreement to the contrary or good cause. 

Fast forward to November 17, 2009, the date of the release of the unreported (non-precedential) Appellate Division opinion in the case of Kelly v. Arato.

In this case, the parties were married in 1985 and divorced in 2004.  Their agreement called for $100 per month of alimony and $3100 per month in child support.  The wife remarried 6 months after the divorce and the husband immediately stopped paying alimony.  Four years later, when the husband's attorney wrote to address college for the children, the wife raised the issue of the non-payment of alimony.  After cross motion, the trial judge denied the husband's motion to terminate alimony as well as the wife's motion for payment of alimony arrears.  Both parties appealed.

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We have blogged many times about cases dealing with motions for reductions of child support and alimony.  Obviously, that has been a hot topic given the economic downturn that our country has experienced over the last year or so.  Another interesting unreported (non-precedential) case was released on November 2, 2009.

That case was Miele v. Miele.  In this case, the parties divorced in 2005.  In their Agreement, the husband's support was based upon anticipated gross income of $165,000 per year.  The reason for this was because he involuntarily changed employment in 2005.   In 2004 he earned more than $331,000.  Because of these circumstances, the parties agreement required them to exchange W-2 and 1099 forms for 2006, 2007 2008.

The husband's post divorce income did not approach even the $165,000 level.  As a result, he made a motion to reduce his alimony in 2007 which was denied.   He filed another motion in 2008 which also was denied.  This time, he appealed. 

The Appellate Division reversed.  The Appellate Court found that the parties agreement recognized that there was an involuntary reduction in income and that the $165,000 number was a projection of future income that did not come to fruition.  Given that the husband had shown two, if not three straight years of income that was substantially below the anticipated gross income, he was entitled to, at the very least, entitled to a hearing. 

This case is instructive because I would anticipate that many current divorces will be faced with a similar situation of someone who lost their job and their new income is speculative.  The parties should attempt to include protections in the agreement that take into account that the income could go back to historical levels, as well as what should happen if it does not. 

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