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

Many years ago, I had a case where the husband listed just enough income to pay for the mortgage and utilities on the $2 million marital home. Much of the families expenses were paid for in cash, thus, no documents existed evidencing their purchase.  This included things such as groceries - his explanation for not having grocery expenses were that his wife and daughter were "always on diets."  He had no good explanation for why there was no close expense to explain the 1000 square foot closet filled with designer clothes nor any evidence of the purchase of cigarettes where both parties smoked several packs a day.  I can go on but the point was that the income and lifestyle had to be reconstructed through expenditures.  This is difficult when you have proof of family expenses and even harder when even the expenses have to be reconstructed. 

There was another related line in the case that I also found interesting. The Court noted that, "Judge Becker determined John receives $82,000 in income and, due to his tax reporting methods, does not pay taxes on that income."

That brings up two issues.  First, when a judge makes a finding that someone is not reporting all of their income and not paying taxes on it, pursuant to a case called Sheridan v. Sheridan, the judge is supposed to report the matter to the IRS.  There is no indication in this opinion whether that was done in this case. As I have previously blogged, despite the fact that a judge has this affirmative obligation, it is often honored in the breach. 

The second issue raised, and it is not clear about what exactly happened, is whether the court really took into account the fact that the husband wasn't paying taxes on his income.  Put another way, the self employed person who makes $82,000 and doesn't pay taxes has more available income and an ability to pay more support than a W-2 employee who makes $82,000 and has withholdings/pays taxes on his/her full income.  On one hand, you would expect the person not paying taxes to pay more support.  On the other, can a court actually base it's decision on the fact that a person is perhaps breaking the law. 

In any event, this case evidences some of the issues related to cases where a party is self employed. 

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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.

Defendant's claim that he was doing this to prove cohabitation as that could impact other issues was rejected.  Does this mean that you cannot use a private investigator, as is often done to prove cohabitation?  I don't think that the holding in this case can be taken that far but it should be considered.

Interestingly, the court did not find the conduct to be harassment.  The Appellate Division noted as follows:

The judge's reasons for finding that defendant's conduct did not constitute harassment lend further support to the basis for her determination that he did commit stalking. Because defendant acted "covertly" and did not want plaintiff to "find out about it[,]" the judge determined that defendant did not have a purpose to annoy or alarm plaintiff, N.J.S.A. 2C:33-4(a). The very nature of that "covert[]" and secretive conduct,
however, is consistent with the offense of stalking.

Would the result be different if this was Pre-judgment as opposed to post-judgment?  Would the result be different if the GPS device was on the ex-wife's car as opposed to her boyfriend's car?  Would this be stalking if a private investigator was hired to surveil the ex-wife as opposed to placing a GPS device?  Would the result be different if the husband hadn't done this before? 

Again, the advancement of technology creates new issues in family law, whether it is impact of social media or advanced electronics.  Stay tuned for more.

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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.

The answer is no.  In 2002, the New Jersey Appellate Division essentially changed the standard of value in divorce cases in the case of Brown v. Brown.  Prior to that time, the standard of value in divorce cases was fair market value. Using the classic definition of fair market value, essentially value was calculated based upon what the business would be sold for in an arms length transaction (not a liquidation as is apparently what Pennsylvania may be doing.)  As such, discounts such as those for lack of marketability (i.e. considering the lack of a ready market for a closely held business) and for lack of control (i.e. if a party owned less than 50% of the business) were considered.  This would have the effect of reducing value and thus, reducing the marital estate for equitable distribution purposes.

Brown changed things by eliminating such discounts based upon the notion that the business was not being sold.  In essence, the court essentially applied the standard of value used in minority oppressed shareholder actions. 

Also, unlike Pennsylvania, hypothetical taxes on sale cannot be considered to reduce value based upon the decision in the Orgler case.  However, that case also requires a court to consider these hypothetical tax consequences when it comes to the percentage distribution of the asset.  Why?  Because the court's in New Jersey are court's of equity and fairness is the goal.  Put another way, if the non-titled spouse gets cash for his/her share of a business interest, they get that equitable distribution tax free.  On the other hand, the business owner will have to pay taxes on the liquidation of the business.  Thus, if the non-titled spouse gets 50% of the value of the business in cash or other assets, they may very well be getting more than the titled owner when taxes are considered.

As to whether broker's commissions and other costs of sale are to be considered, in New Jersey, unlike Pennsylvania, the answer is generally no if they are hypothetical as per the Wadlow case.  However, if an asset will have to be sold to effectuate equitable distribution, fairness would dictate the consideration of costs of sale and taxes.

As you can see from the above, non-titled spouses on different sides of the Delaware River would experience a different equitable distribution of the same business, just because of the difference in state laws.

The Appellate Division framed the issue as follows:

The labels used in a divorce decree to describe the custodial arrangement are not determinative. O'Connor, supra, 349 N.J. Super. at 399-400; Mamolen, supra, 346 N.J. Super. at 499; see Baures, supra, 167 N.J. at 116 (referring to both "de jure and de facto" sharing of physical custody). Time spent with the child is important to the extent that the parent assumes responsibility for duties performed by a primary caretaker during that time. O'Connor, supra, 349 N.J. Super. at 385. The duties that are the hallmarks of primary caretaking include planning for and providing the child's meals, grooming,
clothing, medical care, activities, alternate caregivers, bedtime, nighttime and morning care, discipline and education. See id. at 399 (discussing and quoting Pascale v. Pascale, 140 N.J. 583, 598-99 (1995), and the cases relied upon therein).

Thus, to characterize the parties' custodial arrangements, this court has looked to the temporal division of responsibility and the nature of the duties that are shared. A true joint physical parent is more than just a babysitter for the other — that is a subordinate "rather than [a] joint, caretaking role." Barblock v. Barblock, 383 N.J. Super. 114, 125 (App. Div.), certif. denied, 187 N.J. 81 (2006). In assessing a parent's time spent with his or her child, we take account of the unique circumstances of each family. In some families, weekdays may be more significant than weekend nights, because that is when parents are involved with school, homework and medical appointments. In other families, time spent together on weekends may be critical because both parents work outside the home, have others assist during the week with after-school time and reserve family chores and projects for the weekend. In sum, consideration of the facts of the particular case is critical to
determining whether physical custody is truly shared.

Pursuant to the parties' divorce agreement, the schedule had the daughter spending 42.8% of her
nights in the father's care as well as the daytime hours on Saturdays during the weekends she spent with the mother. That said, in the 4 years post-divorce, the father had overnight parenting time of approximately 36%, 35%, 38% and 42%.  However, the trial Judge noted that with the Saturday day time during the mother's weekends, the father's total time was 45% and 48% in the last two years. Based on the frequency with which the father assumed the responsibility for his daughter's food, clothing,
morning and nighttime care, education and activities, the trial judge concluded that these parents truly shared physical custody.  The Appellate Division found that there was enough evidence in the record to support this conclusion.  The Appellate Division judges also noted that there was perhaps enough evidence to support the contrary conclusion - the for appellate review, as long as there is enough evidence in the record to support the decision, it cannot be overturned for that reason.  In short, the trial judge looked at the entire roles and activities of the parent with the child, not just the number of hours.

This case is interesting for a few reasons. First, the parties themselves designated the mother as the parent of primary residence and at the time of the divorce, recognized that it was not true shared parenting.  Further, by looking at the post-divorce conduct, they did not share parenting in terms of time spent with the child.  A cynic might think that the father's time began increasing in the last year or two once the possibility of relocation came about.  There is also law that defines the parent of primary residence as the party with whom the child spends more than 50% of the overnights.  Thus, it would appear by both the labels that the parties put on this and the actual time spent, this was not true shared parenting.  Even with child support calculations, while there is a shared parenting worksheet for parenting time between 28% and 49% of the overnights, for "true shared" parenting, i.e. 50-50 parenting, there is a different calculation used.  Based on this case, because the time is close but not quite 50-50, could a parent argue that the 50-50 support analysis be used so that they could pay less divorce.

In this case at least, the axiom that close only counts in horseshoes and hand grenades did not hold true. Rather, close was close enough to use the 50-50 standard.  Again, because this case was not reported, it is not precedential and need not be followed by other courts.  But it is certainly an interesting analysis of the law. 

The Appellate Division agreed it was error to dismiss the matter for this reason and reverse.  While sometimes a matter can be dismissed because a party is non-cooperative with discovery or some similar reason, that was not the case here.  Further, the Appellate Division held that it was wrong for the trial judge to ignore the rule that gives a litigant an absolute right to get their own expert if they disagree with a court appointed expert.  In this case, the trial court held that the rule only applied to divorce action. The Appellate Division disagreed.  Further, while the trial court said that the father was not prejudiced by the dismissal, aside from the time, money and effort already expended, from a practical perspective, if the matter was dismissed, he could not compel the mother's cooperation with his own custody evaluation.  Similarly, dismissal caused prejudice with the related child support issue that was pending given the statutory prohibition against retroactive modification of child support. 

This case is an example of what happens all too frequently when justice or the lack thereof is tied to artificial time lines that trial judges feel that they must adhere to because they are pressured from their superiors and the Administrative Office of the Courts.  In this case, it appears that the court felt it must adhere to these deadlines. Unfortunately, it was at the price of a denial of justice to the father.

I have recently heard judges push parties to get joint custody experts (as opposed to a court appointed one), with the caveat that neither party could get their own expert if they disagreed with the recommendation.  This ostensibly is against the Rules of Court and arguably is a denial of justice.  But why would that requirement be made?  Because custody evaluations are rarely prepared in less than 3 to 6 months, sometimes more. If a new evaluation is required, then the case is delayed longer than the 1 year deadlines required by "Best Practices" and then the case is in "backlog."  So in these situations, parties are stuck with having to make a Hobbsian choice of spending money for two experts and putting their kids through two evaluations, when it may be unnecessary (often custody matters resolve once the neutral expert gives a recommendation) or waiving their rights before they know exactly what they are waiting for.

This case, however, is an example that justice is more important than artificial deadlines.

In fact, a few years ago, the Supreme Court reinforced this point in the case of Mani v. Mani where they held that absent extreme situations, fault is irrelevant to alimony and equitable distribution. The exception could be in marital funds were used to fund the affair.  Given that there appears to be a prenup, this would not likely be an issue for Tiger.

There is a question as to whether, in New Jersey, a pre-nuptial agreement could be modified.  Obviously, if the benefit in the new prenup is greater, perhaps it could be possible.  However, it would have to have same formalities as an actual prenuptial agreement.  There would seemingly have to be full disclosure.  However, an interesting issue that could put  jeopardize the enforceability of an agreement is that there seemingly would be no consideration for the agreement. 

However, while New Jersey looks very carefully at post-nuptial agreements, mid marriage agreements could be enforced in limited circumstances.  In those cases, the marriage would have to be on the precipice of termination and would not stay together but for the agreement. 

As to custody and parenting issues, infidelity does not usually have an impact on these issues.  That said, if someones conduct is so dangerous, destructive, reckless, etc. that it either evidences some psychological issue or the inability to parent, then perhaps it could impact custody.  I am in no way alleging or implying that that is the case here. 

Finally, I have had cases where the infidelity lead to an STD being transmitted from the philandering spouse to the innocent spouse.  Again, I am in no way alleging or implying that that is the case here.  In a recent case that I had where this occurred, we amended our divorce pleading to add tort causes of action. 

So with each day, as the gossip continues to fly, the potential family law issues implicated multiply.  Stay tuned to see what next occurs in this sad soap opera.

Plaintiff’s position was that the benefits that the defendant received from his employment for his family’s business, including mortgage payments, a bonus, pay raises, payment of property taxes, etc., should be included in determining defendant’s child support obligations. While the plaintiff may have been correct, she failed to dispute his income when they were divorcing and alimony had been determined. As a result, there was no “change of circumstance” in the defendant’s income.

Plaintiff may have had a good faith basis to seek the re-calculation of defendant’s income, however after the judge made his ruling and absent new or additional evidence, plaintiff should not have filed a motion for reconsideration unless new proofs or information substantiating her claims could be provided. A motion for reconsideration must state "the matters or controlling decisions which counsel believes the court has overlooked or as to which it has erred." Reconsideration is within the discretion of the court.

A party should not file an application for reconsideration merely because of their dissatisfaction with the court’s decision. In New Jersey, in matrimonial actions the award of counsel fees rests within the sound discretion of the trial judge.

A motion for reconsideration is a useful tool especially when there is new information or when a judge may have missed a key fact. If filing a motion for reconsideration is something you are considering, you must carefully assess whether there is no information which would change the court’s mind or whether there was key information that the court missed the first time around. If the application is brought in bad faith, it could result in an award of counsel fees to the other party.