We made too many wrong mistakes.

–Yogi Berra

What happens when you make a mistake? You correct it and move on.

What happens when you make a mistake in your divorce settlement agreement? Can you correct it and move on? Well, maybe not.

There is a mechanism provided by Court rule that allows you to correct a settlement agreement that is incorporated in to a Final Judgment of Divorce, but only under certain circumstances.

There are times where a mistake is one that the parties just have to live with depending on certain factors. Other times, a mistake will merit the Court’s attention and correction.

The operative rule for this event is New Jersey Court Rule 4:50-1, which provides that a party can gain “relief” from a judgment or order under the following circumstances.

(a) mistake, inadvertence, surprise, or excusable neglect;

(b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial;

(c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;

(d) the judgment or order is void;

(e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or

(f) any other reason justifying relief from the operation of the judgment or order.

While the terms of the Rule are fairly clear that a mistake or other circumstance can be corrected by a court, it is not always so easy to gain relief. For one, there is a timing component to the rule. For parts (a), (b) and (c), the request for relief must be made within one year after the judgement or order. All other bases for relief (parts (d), (e) and (f)) must be made “within a reasonable time.”

Then there is always the possibility that relief may be denied improperly by the trial court. In that event, a party may find themselves in the Appellate Division, the trial court’s reviewing court, to address the issues.

This was recently illustrated in a recent Appellate Division decision, Goethals v. Goethals. In that case, the divorce agreement provided for equitable distribution of 13,293 shares of stock paid to the husband as part of his compensation as an executive of Ross Stores.

Thereafter, during a meeting with a forensic accountant, it was discovered that there was a stock split before the parties’ agreement was signed and there were actually 26,586 shares subject to equitable distribution. This would have entitled the wife to an additional $350,695.26 above what the wife was set to receive under the settlement agreement.

When the forensic accountant advised the husband of this, he indicated “it must have been a mistake.”

Given this clear acknowledgement from the husband that the stocks appeared to have been inadvertently omitted, the wife attempted to settle the issue with her former husband. When those efforts proved unsuccessful the parties ended up in court and the wife asked the court to address the mistake and correct it.

Despite the husband’s statements that there must have been a mistake when he first learned of the issue, he opposed the wife’s request that the court correct, stating that “there was absolutely no mistake or fraud.” After all, both parties were represented by counsel, both had forensic accountant, and both parties signed an agreement stating that “both parties were satisfied with the full disclosure of each of the accounts as provided herein and both have reviewed all account statements and other documentation necessary relative to the balances distributed and amounts not even subject to equitable distribution.”

The husband further stated that the issue of the stock was already resolved with his payment of $244,687.59 in full satisfaction of the stock issue.

The trial court denied the wife’s application, stating that she was too late. Despite filing her application within one year following the discovery of the mistake, the trial court said it was not soon enough. A request for redress on the grounds of mistake requires a filing within one year of the judgment; not within a year of her discovery.

The wife, dissatisfied with the result she obtained in court, asked the judge to reconsider the denial of her application. In so requesting, she cited to the “catch-all” provision of the Rule, subpart (f). That subpart, she stated, was not time-barred and must be brought only “within a reasonable time”; it was not bound by the one-year time constraint.

That request was also denied by the trial court. The wife appealed.

The Appellate Division reviewed the trial court’s decisions and found that the trial court was wrong. Rule 4:50-1, “is designed to reconcile the strong interests in finality of judgments and judicial efficiency with the equitable notion that courts should have authority to avoid an unjust result in any given case.”

As a result, the trial court should have granted relief under subpart (f) which is specifically designed to avoid results that are unjust, oppressive or inequitable. This catch-all provision has been used many times to reform settlement agreement where there is any showing of inequity or unfairness. Furthermore, even if the motion was brought alleging fraud or mistake (subparts that require a filing within the one year timeframe) subpart (f) could be invoked and an application brought within a reasonable time.

In reversing the trial court’s decision, the Appellate Division noted that there was no dispute between the parties that there was an undisclosed stock split, doubling the number of Ross stocks. This occurred between the filing of the divorce complaint, but before the settlement agreement was signed. As a result, whether or not there was fraud or mistake was irrelevant; all that mattered in this case was that the undervaluing of the wife’s share of stocks was “unjust, oppressive or inequitable.”

In sending the case back to the trial court for further proceedings, the Appellate Division issued a specific mandate to the trial court to correct the number of Ross stocks, which could be determined after discovery and a plenary hearing where the court would hear testimony and make a determination as to which party was more credible on the issue.

Correcting a settlement agreement is not always an easy feat. However, when a large sum of money is at stake, like in the Goethals case, it is certainly beneficial to explore your options and obtain an opinion from a lawyer as to the remedies available to you.


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

For many divorce attorneys, the busy season starts after the first of the year. For the last several years, I have posted on the phenomenon of the New Year’s Resolution Divorce. For whatever reason, this post has struck a chord and has been both well received and cited by other bloggers. As such, given that the new year is near, I thought I would share that piece again, updated slightly for the new year.

Over the years, I have noted that the number of new clients spikes a few times of the year, but most significantly right after the new year. Before writing this article for the first time, out of curiosity, I typed “New Years Resolution Divorce” into Google and got 540,000 results in .29 seconds. There are even more results when you do the same search now. While not all of the search results are on point, many were extremely interesting. It turns out that my intuition about this topic was right and that there are several reasons for it.

One article on Salon.com put divorce up there with weight loss on New Years resolution lists. Also cited in this article was that affairs are often discovered around the holidays. Another article linked above attributed it to “new year, new life”. Another article claimed that the holidays create a lot of pressures at the end of the year that combine to put stress on people in unhappy or weak relationships. Family, financial woes, etc. associated with the holidays add to the stress. Turning over a new leaf to start over and improve ones life was another reason given. This seems to be a logical explanation for a clearly difficult and perhaps heart wrenching decision.

In my experience, people with children often want to wait until after the holidays for the sake of the children. There is also the hope, perhaps overly optimistic, that the divorce will be completed by the beginning of the next school year. These people tend to be in the “improving ones life” camp.

So as divorce lawyers, we hope to avoid or at least resolve in advance the holiday visitation disputes that inevitably crop up, then relax and enjoy the holiday as we await the busy season to begin.

In the last several years, the phenomena started early for us and many other attorneys. We were contacted by more people in December in the last few years than in any years in recent memory. In some recent years, the calls started in November at a pace more robust than in prior years.  Note however, that due to Covid 19, many people’s resolutions have come early this year. Moreover, we have heard of more people telling their spouse it “is over” before the holidays in the past few years. I suspect that in some, it was the discovery/disclosure of a new significant other or perhaps pressure being exerted by that person that was the cause. In other cases, the person just didn’t want to wait until the new year to advise their spouse.

Last year I said:

Those who divorce in 2020 may still enjoy a booming economy and not the  slowing economy that many predicted for 2019 and some still predict for 2020.  Bad economies historically mean more divorces, either because of the stress it creates or because one or both parties is being opportunistic.  On the other hand, someone who might be a support recipient might be opportunistic on the other end of the spectrum – getting out while incomes and asset values are high.

When I wrote that in late 2019, of course, I hadn’t heard about COVID. which has impacted people financially and in other ways (the phrase familiarity breeds contempt comes to mind.)

Whatever the reason, we await those who see 2021 as a chance for happiness or a fresh start. Happy New Year?!?!

Eric S. Solotoff, Partner, Fox Rothschild LLPEric 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 Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

Victims of abuse have many reasons for not reporting prior acts of domestic violence – either to friends, family, co-workers, etc. or the police.  Logically, the failure to report does not negate the fact that the abuse happened.  One would think that judges hearing domestic violence, more so than most people, would not that given the domestic violence training that they receive, as well as their training in the law.

Yet this is exactly what happened in the trial court as noted in the unreported (non-precedential) Appellate Division decision in the matter of I.E.A. v. M.A., released on December 16, 2020.  In this case, the Appellate Division reversed the denial of an FRO (Final Restraining Order), because among other reasons, the trial judge found significant that prior abuse was not previously reported or that she thought that the defendant was joking was certain incidents started (before escalating.)  While I will not get into the weeds regarding the facts of the case, the Appellate Division gave us all some solid reminders regarding these issues.  As to the disclosure issue, the Appellate Division noted:

We are not aware of any precedent requiring the victim of domestic violence to have disclosed the abuse to another in order to establish a predicate act of domestic violence under the Act. Nor do we agree that a failure to disclose before seeking judicial relief casts doubt on the credibility of a claim of abuse. There are a number of reasons why a victim of domestic violence might be
reluctant to disclose the abuser’s behavior. Some of those reasons may well be applicable here. For example, cultural and religious norms may strongly discourage the disclosure of marital affairs. The record suggests the parties’ close ties to the Sudanese Muslim community and culture may have influenced plaintiff not to disclose defendant’s abuse. In addition, where the party alleging
abuse is a new arrival to the country and dependent on the abuser for support and shelter, disclosure may be a difficult and risky proposition.

As to the fact that the trial court gave less weight/credibility to the plaintiff because she initially thought defendant was joking before an incident escalated, the Appellate Division wisely held:

We also disagree with the proposition that plaintiff’s testimony was undermined because on two occasions she thought defendant was joking when he initiated what she alleged turned into abusive behavior. The complaint does not allege defendant engaged in an uninterrupted campaign of physical abuse. It is not uncommon for a couple to have periods of relatively amicable relations between incidents of domestic violence. A domestic abuser’s calm demeanor may suddenly turn violent. Plaintiff’s testimony suggested that she and defendant sometimes engaged in playful physical interactions, stating that one incident of domestic abuse started when she tapped defendant on his behind. A victim of domestic violence need not prove that she was in constant fear to
establish the predicate acts necessary for issuance of an FRO.

Also, without making proper fact findings, or for that matter, there being any credible evidence in the record to support that plaintiff’s complaint was filed for immigration purposes, the trial court implied that that was the case in denying the FRO.  A concerned Appellate Division panel held:

We are also troubled by the trial court’s reference to the timing of the filing of the complaint with relation to plaintiff’s immigration status. Although the court made no specific findings, it is difficult to avoid the implication in the court’s opinion that plaintiff may have filed a meritless complaint in order to remain in the country. The record, however, contains no evidence establishing
the impact, if any, the filing of a domestic violence complaint has on the status of someone, like plaintiff, who has overstayed her visa. Without a more developed record on the subject, it was error for the court to imply that plaintiff’s FRO application was unfounded and motivated by immigration concerns.

Courts need to be careful in breathing things to why a party did or did not report prior acts of violence or in their motivation for filing the domestic violence complaint, particularly if their is evidence of actual abuse in the record.

Eric S. Solotoff, Partner, Fox Rothschild LLPEric 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 Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

Prior to the walk down the aisle for the happiest day of their lives – to that point – many hopeless romantics decide (or are required by their parents) to get a prenuptial agreement which set forth many of their rights and responsibilities in the event of death or divorce.  Typically, a prenuptial agreement has provisions wherein one or both parties knowingly waive rights that they would otherwise have upon death or divorce if there was no prenup.  Put another way, a person may get no or less alimony, may get less equitable distribution, may not share in family businesses or trusts and/or the trust income wont factor into an alimony calculation, etc.   We have blogged many times about what prenuptial agreements do, and who should get them and why, so this post wont really get further into that.

Rather, I am sure that most people, after they have gone through the trouble of entering into the prenup (at least the party with something /more to protect), believe that at the time of the divorce, it will go smooth and easy, at least with regard to the issues covered by the prenup.  And yet, that is seldom the case.  There are two major reasons for that?  The person on the short end of the prenup, almost reflexively moves to set aside the prenuptial agreement.  More importantly, instead of dealing with this threshold issue as soon as it is raised, many judges will kick the can down the road and deal with it during a final adjudication of the case, or at least many months or years down the road forcing the parties to engage in potentially wasteful discovery, mediation, etc..

In many cases, the difference in the outcome of the case can be tremendous based upon whether the prenuptial agreement is enforced or not.  Worse yet, parties are forced to spend money on legal and expert fees, doing discovery and evaluating businesses and/or other property that is not subject to equitable distribution if he agreement is enforced.

In a typical case where a prenup is involved, the parties initial pleadings seek to enforce the prenup on one side and to set it aside on the other.  Now the standard to set aside a prenuptial agreement is difficult.  statute provides that a premarital agreement is enforceable unless the party seeking to set aside the agreement proves by clear and convincing evidence that:

  1. the party execute the agreement involuntarily; or
  2. the agreement was unconscionable at the time enforcement was sought (though for pre-Amendment prenups, the court must look at unconscionability at the time of enforcement too); or
  3. that party, before execution of the agreement:

(1) was not provided full and fair disclosure of the earnings, property and financial obligations of the other party;

(2) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or the financial obligations of the other party beyond the disclosure provided;

(3) did not have, or reasonably could have had, an adequate knowledge of the property or financial obligations of the other party; or

(4) did not consult with independent legal counsel and did not voluntarily and expressly waive, in writing, the opportunity to consult with independent legal counsel.

        4. the issue of unconscionability of a premarital agreement shall be determined by the court as a matter of law.

Moreover, an agreement is unconscionable, if the agreement would:  (1) leave the spouse without the means of reasonable support; (2) would make the spouse a public charge; or (3) would provide a standard of living far below that which was enjoyed before the marriage.

Very rarely do you see the initial pleading to set aside a prenup plead the issue with any particularity.  In fact, most of the the time, you see the request to set the agreement aside as part of the “Whereas” clause with the other prayers for relief (alimony, child support, equitable distribution, resumption of maiden name, fees, etc.)  In fact, under New Jersey law, if you are alleging fraud, it must be plead with particularity.

Often, at the first Case Management Conference or otherwise when this is raised to the court, I hear “I need discovery to determine if there was full disclosure, or determine if there is fraud” though I don’t really believe that that is the standard.  How can a party on one hand plead to set aside an agreement, and on the other hand, say that they require discovery to decide if they can prove that the agreement should be set aside?  But it happens all of the time and judges allow it even though the agreements often include waivers on getting valuations or business appraisals, waivers of getting further discovery, waivers of getting proofs regarding the values included in the balance sheet provided with the agreement.

When there are businesses involved, this gets worse because parties have to spend tens if not hundreds of thousands of dollars evaluating a business for nothing.  Not only that, they have to evaluate it at two dates – the date of the marriage and the date of Complaint, to determine the increase in value that may not even be subject to distribution if the agreement is upheld.

Now, I am not saying that there shouldn’t be discovery regarding the enforceability of the agreement.  If the court is going to have a plenary hearing to determine the validity of the agreement, there probably must be some discovery as to the issues pertinent to the agreement – though not a hail mary, fishing expedition – to mix metaphors – trying a find any little thing that might justify calling the agreement into doubt to force the party relying on the agreement to pay more.

Aside from the cost of discovery, often you will see pendente lite support motions made and entertained when the agreement specifically provides a waiver of both pendente lite support and alimony.  In those cases, if the pendente lite support exceeds what is payable under the agreement, the case never settles because why would the person receiving the support that they may not be entitled to want to give it up?  While the judge will typically say that the the support is “without prejudice” and the payor will be entitled to a credit if the agreement is enforce, good luck with actually getting that credit – especially if the credit exceeds the ultimate payout to the other side.

In my opinion, when the issue is joined, the court should immediately address it at a case management conference and either order discovery and a plenary hearing, or require the party objecting to file a motion to set the agreement aside, pleading the reasons with particularity.  Once the judge hears that motion, she/he could decide whether discovery and to what extent discovery is proper.  Otherwise, the process can become one where the parties can spend tens or hundreds of thousands of dollars over non-issues, as well as wasting the parties’ and the court’s time.

Eric S. Solotoff, Partner, Fox Rothschild LLPEric 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 Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.


More than 11 years ago, I wrote a post on this blog entitled The Abuse and Misuse of the Domestic Violence Statute. From the statistics, we can see that this is still one of the most read items we have published, because the problem remains 11 + years later.  I concluded that post by stating:

At the end of the day, the domestic violence statute is an important and necessary tool to protect victims of domestic violence.  That said, it should be real victims and not maliciously motivated litigants seeking to get a leg up in their divorce or custody proceedings.

We still see improper requests for temporary restraining orders (TRO) all of the time.  Because they are so easy to get, we see them used as leverage for the divorce case, custody case and/or some other improper purpse all of the time.  What’s worse, is that once an improvidently granted final restraining order (FRO) is granted, it is very difficult to get them reversed on appeal or vacated in post judgment motion practice.

However, in the interesting case of A.J. C. v. G.A.C.,  an unreported (non-precedential) Appellate Division decision released on December 8, 2020, the Appellate Division affirmed the the trial court’s dissolution of the FRO.  What makes the matter interesting was that the plaintiff argued that she still required the FRO for her protection, despite maintaining a sexual relationship with the defendant after the entry of the FRO.  In fact, the plaintiff was caught on a recording calling the FRO, a “… loaded weapon . . . that I can pull and point at you at any time … No, the FRO is like a gun. ” as justification as to why she wasn’t presently afraid of the defendant (the recording was made during one of the sexual encounters, by the way.)

The Appellate Division gave a primer on the law as to vacating an FRO, as follows:

“With protection of the victim the primary objective, the court must carefully scrutinize the record and carefully consider the totality of the circumstances before removing the protective shield.” Kanaszka v. Kunen, 313 N.J. Super. 600, 605 (App. Div. 1998). In Kanaszka, we adopted Carfagno’s non-exclusive list of eleven factors that trial courts consider when determining
whether good cause has been shown. Id. at 607. Those factors, which are to be weighed “qualitatively, and not quantitatively,” Carfagno, 288 N.J. Super. at 442, include:

1) whether the victim consented to lift the restraining order; 2) whether the victim fears the defendant; 3) the nature of the relationship between the parties today; 4) the number of times that the defendant has been convicted of contempt for violating the order; 5) whether the defendant has a continuing involvement with drug or alcohol abuse; 6) whether the defendant has been involved in other violent acts with other persons; 7) whether the defendant has engaged in counseling; 8) the age and health of the defendant; 9) whether the victim is acting in good faith when opposing the defendant’s request; 10) whether another jurisdiction has entered a restraining order protecting the victim from the defendant; and 11) other factors deemed relevant by the court.

In this case, the trial court found that the plaintiff did not objectively fear the defendant; and that the plaintiff did not act in good faith when opposing defendant’s request to vacate the FRO.  Of significant import, the Appellate Division noted:

Regarding factor two, plaintiff’s lack of objective fear, the court found that “there are several issues that point to [her] failure to sustain this factor.” Specifically, the court referenced plaintiff’s “repeated liaisons with [defendant]” and her comments that she had “sex with [defendant] because ‘she trusts him.'” The court further noted that plaintiff referred to the FRO as a “loaded gun” and that she “repeatedly refuse[d]” to enforce the FRO against him.

The court also relied on these facts in its determination that the plaintiff did not act in good faith under factor nine. Indeed, the court reiterated that “[i]nstead of violating [defendant] for . . . alleged violations [of the FRO], [plaintiff] [did] nothing. She carrie[d] on an eight-month relationship, even showing up at [defendant’s] door only dressed in a raincoat. And now she takes the position that she needs the [FRO].” The court also equated the plaintiff’s reference to the FRO as a “loaded gun” to “what is commonly referred to as using [the FRO] as a sword and not a shield.”

This case really doesn’t seem like a close call.  One simply cannot use the threat of arrest for violating a restraining order to keep someone in line while they continue their physical relationship.  One would think that a person is either scared or they are not.  Either way, it seems as though justice was done in this instance.

Eric S. Solotoff, Partner, Fox Rothschild LLPEric 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 Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

We see it all of the time.  The support (alimony and child support) obligor’s income is made up of multiple components – typically salary, bonus and/or deferred compensation.  In cases where the bonus/deferred comp makes up only a small portion of the total yearly income, you usually wont see too much fighting about what the income to use for support purposes should be.  On the other hand, when the majority of the income comes from bonuses and/or deferred compensation, that’s were the fighting starts.  Sometimes, the question is simply one of timing – i.e. how should the support be paid when a bulk of the income comes in a lump sum either once or a few times per year.  They payor often wants to pay as they get the income – meaning- paying base support on his/her salary, and then paying a percentage or amount of the additional income as support when it comes in.  On the other hand, the recipient wants the steady, reliable monthly support because their mortgage and other bills aren’t variable.

In these cases, the fight also turns to whether the income above the salary varies greatly from year to year.  If a court adjudicates a case like this, the judge will usually compute the payor’s average income and then fix the support in a monthly or weekly amount.  Often, where these is some level of trust, the recipient wants to share in the upside when income is up and the payor wants the other party to share in the downside when income is down, it is not unusual for their to be a base amount of support based upon the salary (or some agreed upon base) and then supplemental support often based calculated as a percentage of the bonus/deferred comp.

At other times, the payor takes the position that support should only be based upon the base salary and/or less consideration should be given to the additional income.  This seems to be what happened in the unreported (non-precedential) Appellate Division decision released on December 2, 2020 in the case of T.J. v. M.J.

In that case, the parties divorced after a 27 year marriage.  The husband’s total annual compensation during the last five years of the marriage averaged just over $1,170,000.  His compensation at Goldman Sachs included a base salary of $400,000, a bonus, which in the last two years of the parties’ marriage averaged over $450,000 per year, and restricted stock units.  The wife, who was a CPA but stopped practicing as an accountant in 1988, was imputed $40,000.  As to marital lifestyle, the court found that the wife was credible and that the husband was not – and that to maintain her marital lifestyle, she would need $13,000 per month.  To that, the court added $4,000 per month finding that the parties had regularly saved money during the marriage.  Accordingly, the total monthly alimony award was $17,000.  Parenthetically, the husband’s trial position was that alimony should only be $4,500 per month or less than 5% of his gross income.  Despite the fact that he was going to have substantially more net income per year more than the wife (more than six figures), the husband appealed.  The Appellate Division affirmed the trial court’s award.

The Appellate Division synthesized part of the husband’s argument as follows:

Plaintiff spends considerable time arguing that the family court did not appropriately consider his ability to pay alimony. In making those arguments, he focuses on his base salary of $400,000 per year. He contends that if you considered just his base salary and you assume that he pays forty percent in taxes, he has a monthly income of $20,000. That is, $400,000 less forty percent
equals $240,000, divided by twelve equals $20,000. He argues that it is unfair that he should have to pay $17,000 of that to defendant.

He also argued that making him pay through a wage garnishment violated the law.  Specifically, he contended that he is paying eighty-five percent of his monthly net take-home pay to the wife which he argues causes the garnishment to be a violation of 15 U.S.C. § 1673, which establishes the maximum allowable garnishment level as sixty-five percent of an obligor’s disposable earnings. The Appellate Division disagreed noting:

The flaw in plaintiff’s argument is that he completely ignores his annual bonus. 15 U.S.C. § 1672(a) defines “earnings” to include bonuses. The undisputed evidence at trial established that in 2018, 2017, and 2016 plaintiff’s annual bonuses were $505,000, $418,950, and $486,674 respectively. As already noted, plaintiff receives other forms of compensation and there was substantial credible evidence supporting the court’s finding that plaintiff’s annual income exceeded $1 million. The substantial credible evidence amply supports that plaintiff had the ability to pay alimony in the amount of $17,000 and the garnishment did not violate 15 U.S.C. § 1673.

Now, the alimony statute also requires the court to consider the investment income that can be earned from the equitable distribution, which in this case was apparently substantial (though the exact amount was not disclosed in the opinion.)  Quite frankly, this factor is often honored in the breach and is not usually specifically considered.  In this case, the Appellate Division noted:

In making his arguments concerning what defendant might earn, plaintiff ignores the  substantial investment income he would be able to earn. The family court was clearly aware of the assets that the parties had accumulated during their marriage. Accordingly, we discern no error or abuse of discretion in the family court’s rulings on alimony.

I have heard this rationale a lot – i.e. that the payor has similar ability to earn investment income on his/her share of the equitable distribution.  That, of course, begs the question of why this factor is even in the statute if courts typically ignore how potential investment income reduces the recipient’s need.

Either way, what is clear is that the argument requesting a court to focus substantially on the salary, as opposed to the total income, is not likely to be a winner.

Eric S. Solotoff, Partner, Fox Rothschild LLPEric 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 Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

Very often, uncertified expert reports are attached to certifications and courts are asked to accept them though there is no ability to cross examine the expert, etc.  Sometimes, that even happens at a default or other hearing.  That is, a party tries to put the report into evidence without any testimony – direct or cross-examination of the expert.  A default hearing occurs for a few reasons.  Sometimes, the defendant never actually answers the Complaint. Other times, a party is defaulted because they fail to answer discovery or cure discovery deficiencies.  Other times, a default can occur if they don’t show up for trial.

This is what happened in the recent unreported (non-precedential) opinion in the case of A.T.M. v. S.M. decided on November 10, 2020.  While this is quite a long opinion (36 pages) for an unreported decision, for purposes of this post, most of the facts are not important.  That said, in this case, the plaintiff was defaulted because she did not appear at trial, claiming that she was both ill and out of the country.  At the default hearing, the value of defendant’s medical practice was a substantial issue.  During the case, the parties had a joint forensic accountant who issued a report valuing the practice at $506,000.  He also traced certain marital funds that were at issue.

At the trial, without conducting voir dire (that is, questioned the expert regarding his credentials), the court qualified the accountant as an expert in forensic accounting and admitted his report into evidence without requiring him to testify.  In the court’s decision, the accountant’s opinions were accepted.  Plaintiff appealed arguing that the trial court erred by admitting the forensic accountant’s valuation report into
evidence at the default hearing without the accountant testifying and being subject to cross-examination.   The Appellate Division agreed and reversed the trial court’s decision.  In so deciding, the Appellate Division went back to basics regarding hearsay and held:

“Hearsay is ‘a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.'” State v. Branch, 182 N.J. 338, 357 (2005) (quoting N.J.R.E. 801(c)). “Hearsay is inadmissible unless it falls within one or more of the exceptions enumerated in our evidence rules.” State ex rel. J.A., 195 N.J. 324, 336 (2008) (citing Branch, 182 N.J. at 357).

Expert reports “are hearsay and generally are not admissible.” Corcoran v. Sears Roebuck & Co., 312 N.J. Super. 117, 126 (App. Div. 1998) (citing Hill v. Cochran, 175 N.J. Super. 542, 546-47 (App. Div. 1980)). A nontestifying expert’s opinion constitutes inadmissible hearsay. Brun v. Cardoso, 390 N.J. Super. 409, 422 (App. Div. 2006). Admission of a non-testifying expert’s report deprives the opposing party “of the ability to cross-examine the author of the report on [a] central issue of the case.” Ibid. 

The Appellate Division noted that if the expert had testified and substantiated his findings, his report may have been admissible to assist the trial court. That said, that isn’t what happened.  Rather, the judge said that he did not see a reason for the expert to testify “without anybody here to cross examine him…”  The judge also said that …” I have looked at [the report] and there is nothing that jumps out at me” and “there is nobody here to challenge his findings.”  Moreover, the plaintiff objected to the report being entered into evidence.

The Appellate Division then went into basics regarding trial practice, noting:

“Our legal system has long recognized that cross-examination is the ‘greatest legal engine ever invented for the discovery of truth.'” State v. Basil, 202 N.J. 570, 591 (2010) (quoting California v. Green, 399 U.S. 149, 158 (1970)). Cross-examination of an expert is often a crucial element in determining the accuracy, reliability, and probative value of the expert’s findings and opinions. See State v. Martini, 131 N.J. 176, 264 (1993) (“To determine the credibility, weight and probative value of an expert’s opinion, one must question the facts and reasoning on which it is based.” (citing Johnson v. Salem Corp., 97 N.J. 78, 91 (1984))).

The Appellate Division concluded that by admitting the expert’s report in evidence without requiring him to testify and be subjected to cross-examination, the trial court effectively prevented plaintiff from questioning him regarding the facts relied upon by the expert, his method of valuation, and the accuracy of his conclusions both as to the valuation issue and the dissipation issue.  By relying on the findings and opinions
expressed in the report, the court decided major issues in the case based solely on inadmissible hearsay and that this error was “clearly capable of producing an unjust result.”  Accordingly, the decision was reversed.

Separately, the court was critical of the entry of default given that plaintiff said that she had medical issues.  Moreover, when default is entered, the proceeding party is supposed to file a Notice of Proposed Final Judgment 20 days in advance which didn’t happen here because the default was entered on the first day of trial.  Accordingly, the default was reversed, as well.

Bottom line, while it was seemingly appealing to proceed without the testimony of the joint expert, had he simply been called to testify, the result in this case may have been different. .

Eric S. Solotoff, Partner, Fox Rothschild LLPEric 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 Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

Many people opt for binding arbitration because it is supposedly faster and cheaper, and binding – thus final.  Some people have to arbitrate their matters that they cannot settle amongst themselves, because there are issues that they cannot try before a court given the court’s mandatory obligation to report certain matters to the proper authorities (e.g. taxing authorities). While many people seek the finality of a binding result, many others are concerned that because an arbitrator is human, she/he could make a mistake.  Accordingly, they want the ability to appeal the matter to a reviewing body of some sort.  However, the two main arbitration statutes have a very limited right of review.  Moreover, as we found out in 2007 in Hogoboom v. Hogoboom, parties cannot contract for a right of appeal of an arbitration decision to the Appellate Division.  So what do many people do?  As I have said on this blog before, their arbitration agreement provides a right of appeal to appellate arbitrators and expands the ability to review a matter to errors of law and fact, just like any other appeal.   Yet, time after time, we see Appellate Division decisions either rejecting appeals of arbitration awards or affirming the entry of an arbitration award and noting the limited rights of appeal.

These issues came up again in the case of Levinson v. Levinson, an unreported (non-precedential) Appellate Division decision released on November 9, 2020.  In the case, after mediation failed, the parties agreed to arbitrate their matter pursuant to the New Jersey Alternative
Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to -30.  After the arbitration was concluded, the plaintiff moved to confirm the arbitration award and the defendant moved to set it aside claiming fraud and that the arbitrator exceeded his authority.  The trial court entered a judgment of divorce and order incorporating the final arbitration decision. In its opinion, the trial judge rejected defendant’s arguments, finding the arbitrator reached his decision after reviewing ample evidence submitted by both parties and determining which of
the expert opinions in the record was most credible.  However, in reaching its decision, the trial court applied provisions of the Uniform Arbitration Act (UAA), N.J.S.A. 2A:23B-1 to -31, establishing the grounds on which the court may vacate or modify an arbitration decision, rather than the corollary provisions of the APDRA, which were applicable to the parties’ motions.

After substantially more motion practice, an appeal followed which ultimately affirmed the trial court’s orders even though the wrong statute was applied.  In doing so, the court noted right off the bat that the scope of re3view of an arbitration award is narrow.  The court then reviewed the law and the different arbitration statutes noting that when parties to a matrimonial proceeding agree to arbitrate disputed issues, they may designate whether the proceeding will be submitted pursuant to the APDRA or the UAA – and absent a specific designation, the UAA applies.

Under the APDRA, the court may only vacate, modify or correct an award for limited reasons, as follows:

(b) In considering an application for vacation, modification or correction, a decision of the umpire on the facts shall be final if there is substantial evidence to support that decision; provided, however, that when the application to the court is to vacate the award pursuant to paragraph (1), (2), (3), or (4) of subsection c., the court shall make an independent determination of any facts relevant thereto de novo, upon such record as may exist or as it may determine in a summary expedited proceeding . . . .
(c) The award shall be vacated on the application of a party who . . . participated in the alternative resolution proceeding . . . if the court finds that the rights of that party were prejudiced by:

(1) Corruption, fraud or misconduct in procuring the award;
(2) Partiality of an umpire appointed as a neutral;
(3) In making the award, the umpire’s exceeding their power or so imperfectly executing that power that a final and definite award was not made;
(4) Failure to follow the procedures set forth in this act, unless the party applying to vacate the award continued with the proceeding with notice of the defect and without objection; or
(5) The umpire’s committing prejudicial error by erroneously applying law to the issues and facts presented for alternative resolution.
. . . .
(e) The court shall modify the award if:
(1) There was a miscalculation of figures or a mistake in the description of any person, thing or property referred to in the award;
(2) The umpire has made an award based on a matter not submitted to them and the award may be corrected without affecting the merits of the decision upon the issues submitted;
(3) The award is imperfect in a matter of form, not affecting the merits of the controversy; or
(4) The rights of the party applying for the modification were prejudiced by the umpire erroneously applying law to the issues and facts presented for alternative resolution.

The Appellate Division further noted that under the APDRA, there is no appellate review of the trial court’s decision to confirm, modify, or correct an arbitration award.   Moreover, as long as the trial court provides a rational explanation for its decision, the Appellate Division must dismiss the appeal “regardless of whether we may think the trial judge exercises that jurisdiction imperfectly.”  (Citing Fort Lee Surgery Ctr., Inc.
v. Proformance Ins. Co., 412 N.J. Super. 99, 104 (App. Div. 2010)).

By contrast, under, the UAA, the rights of review are as follows:

 a. Upon the filing of a summary action with the court by a party to an arbitration proceeding, the court shall vacate an award in the arbitration proceeding if:
(1) the award was procured by corruption, fraud, or other undue means;
(2) the court finds evident partiality by an arbitrator, corruption by an arbitrator, or misconduct by  an arbitrator prejudicing the rights of a party to the arbitration proceeding;
(3) an arbitrator refused to postpone the hearing upon showing of sufficient cause for postponement, refused to consider evidence material to the controversy, or otherwise conducted the hearing contrary to section 15 of this act, so as to substantially prejudice the rights of a party to the arbitration proceeding;
(4) the arbitrator exceeded the arbitrator’s powers;
(5) there was no agreement to arbitrate . . . .;
(6) the arbitration was conducted without proper notice of the initiation of the an arbitration . . . .

The court may modify or correct an arbitration award under the UAA pursuant to N.J.S.A. 2A:23B-24. if:
(1) there was an evident mathematical miscalculation or an evident mistake in the description of a person, thing, or property referred to in the award;
(2) the arbitrator made an award on a claim not submitted to the arbitrator . . . .;
(3) the award is imperfect in a matter of form not affecting the merits of the decision on the claims

In dealing with the fact that the wrong statute was applied, the Appellate Division found that the relevant review provisions were “substantive equivalents and thus, defendant suffered no meaningful harm by the application of the wrong statute.

Again, the issue here, stems not from the review, but arguably from the agreement to arbitrate, because agreeing under either statute, without contracting for an appellate arbitration, limited the scope of the review from the outset.

Eric S. Solotoff, Partner, Fox Rothschild LLPEric 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 Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

Over the years, I have blogged about alimony formulas, “rules of thumb” and similar ways that alimony is settled.  I say settled, because in most instances, courts are not allowed to use a formula to determine alimony.  Basically, there are two types of formulas that we often see.  One takes a percentage of the differences in the parties’ income (or imputed incomes) to come to a fixed amount of alimony to be paid.  The other – often used in cases where someone’s income fluctuates substantially from year to year – calculates alimony on some percentage of total income, often up to a cap but sometimes not.  In most of those cases, there is a floor to the alimony too.  Just as a court cannot use a formula for a fixed amount of alimony so too can they not really use a formula for variable alimony either though I have seen the Appellate Division affirm constructs like this from time to time.

On November 16, 2020, the Appellate Division issued an unreported (non-precedential) opinion in the case of P.J.W. V. E.B.W., which handled an agreed upon formula in an interesting way.  During the last 4 years of the marriage, the Husband’s income averaged $910,000 per year.  In the parties 2013 divorce, they agreed that the husband would pay the wife of 25% of husband’s total gross compensation up to a total of $1,250,000.00 per year in alimony (payable as a 25% of his salary when received and 25% of the bonus up to the cap.  The Agreement also included a standard clause that the parties could seek to modify alimony based upon a change of circumstances.

In the first 5 years post divorce, the Husband’s income averaged $850,000. However, in October 2017, he was notified that he was going to be fired as of January 5, 2018.  After a job search, the husband obtained a job with a base income of $200,000 ($220,000 less than his prior base income).  The Husband then filed a motion to reduce his alimony and child support based.  The Court found that there was a prima facie showing of a change of circumstances and ordered discovery and a plenary hearing.  Both parties hired employability experts, as a result.  Before the plenary hearing, the husband took a new job with a $265,000 salary with a potential for bonuses and stock options, causing the expert reports to be updated.

After the plenary hearing, wherein the experts differed on whether the husband made a good faith job search, the trial court granted plaintiff’s motion to modify his alimony obligations by requiring plaintiff to pay twenty-five percent of his salary and bonuses based on his compensation from his new employer and the appeal followed.  The Appellate Division affirmed the decision as to alimony.

The rationale for the decision was fascinating, however.  First, the Appellate Division agreed with the trial court that the 25% formula was not limited solely to the husband’s employer at the time of the divorce.  But the Appellate Division went even further, suggesting in a way, that the plenary hearing was not even necessary, when they held:

Given our interpretation of the Support Agreement, plaintiff did not need to show a change of circumstances. Nevertheless, even if plaintiff had to show such a change, the factual findings made by the family court establish that plaintiff showed a change of circumstances warranting a reduction in his alimony obligation. There is no dispute that plaintiff was fired from his job at
Barclays. Thus, he lost the position that was compensating him over $900,000 per year. (Emphasis added)

The Appellate Division also rejected the wife’s claim that the husband was voluntarily underemployed, deferring to the trial court’s opinion that expressly found that the husband had engaged in good-faith efforts to obtain new employment maximizing his compensation.

The cause for alarm was the finding that, per the Agreement, that the husband didn’t need to show a change of circumstances.   Despite what appears to be a reduction in income in the neighborhood of $400,000 or more, that seemingly didn’t make a difference because the formula was simply enforced.  Now, maybe in this case it wouldn’t have made a difference because the court found that the job search was in good faith and there was a change of circumstance.  That said, under the same rationale, if the agreement was strictly enforced, it might not matter if there was a good faith job search.  While the result in this case may have been fair (though I suspect that the wife disagrees), if a future court follows this rationale, maybe the result won’t be as fair.

Eric S. Solotoff, Partner, Fox Rothschild LLPEric 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 Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

The newly unreported (does not set precedent) decision of Covone v. Curreri makes two bold moves: (1) asserting that the passage of time is not a change in circumstance warranting a modification to child support and (2) confirming that the trial court has authority to allocate expenses between parents even without proof of their financial circumstances.  When rendering this decision, affirmed by the Appellate Court, it seems that the trial court inadvertently gave some tips for couples with young children who are divorcing/setting child support.

Kid counting money

In this matter, the parties had a child in 2002 and then divorced in 2003.  In their divorce agreement, the parties set the former husband’s child support obligation and agreed to review it in April 2005.  The parties then entered into a Consent Order with an updated child support amount in 2005, and included cost of living adjustments (COLA) to increase child support in the years that followed, which they did.

In 2010, the parties agreed to retain a Parent Coordinator (“PC”), which is a professional (usually a family law attorney) who helps resolve custody/parenting time related disputes between parties, with the goal of reducing litigation.  Unless otherwise authorized by agreement of the parties, a PC’s recommendations are not binding.  Thus, if one party does not agree to the recommendation, it does not take effect.  The other party can file an application with the Court seeking to incorporate the recommendations into a Court Order, which is what happened here when the former husband refused to sign a Consent Order that the PC drafted with respect to parenting time and child support.

As should be expected, after the former husband refused to sign the Consent Order, the former wife filed a motion with the Court seeking:

  •  Adopting the PC’s recommendations;
  • Compelling the former husband to attend therapy with their daughter;
  • Compelling the former husband to file an updated Case Information Statement (setting forth income, budget, assets and liabilities) in order to recalculate child support, arguing that the passage of time (13 years) is a change in circumstance warranting such recalculation; and,
  • Compelling  the former husband to contribute to educational and extraordinary expenses on behalf of their daughter, such as SAT costs, driving lessons, college visits, prom costs and senior class trip. Practice tip: the sharing of these expenses are often outlined in the divorce agreement even when a child is so young that the actual allocation cannot be defined.  The agreement can simply list that extraordinary expenses will be shared at the relevant time based upon the parties’ financial circumstances, which would have required the financial circumstance/Case Information Statement exchange that the former wife sought.

Close up of wooden gavel isolated on white background

After a hearing and updated briefs from each party, the Court denied the former wife’s request for the former husband to file an updated Case Information Statement and for the recalculation of child support simply because 13 years had passed since the present obligation was set.  The Court did not seem to care that the former husband was driving a Maserati and had other luxury assets.

Citing to Martin v. Martin, the Court reiterated that the passage of time is not a change in circumstance warranting a child support modification and, in fact, that is why we have COLAs.  Here, the parties had implemented COLAs since the last time child support was determined, resulting in an increase of over $2,000 over those 13 years.

On the other hand, the Court did find that the child’s status as a high school senior did result in the parents having to incur additional expenses that are not covered by child support, thereby ordering that the parties equally share the expenses requested by the former wife and for the parties to confer before incurring any such expense above $500.

In a somewhat surprising fashion, the Appellate Division affirmed the decision.  While the child support order seems on point because there was no evidence of a change in circumstance  with respect to child support that would open up discovery of the party’s financial circumstances (required for post-divorce financial issues), it is questionable as to how the trial court could have determined that the extraordinary expenses should be equally shared without proof of financial circumstances.  Even the Child Support Guidelines state that extraordinary expenses are to be shared pro rata, i.e.: in proportion to income.  If using the Guidelines to calculate child support, which the parties did here, there is even a specific line in the Guidelines that demonstrates each party’s percentage share of income.  Moreover, generally in order to have a court compel the sharing of expenses, the cost (or estimated) cost must be provided.  In fact, the Case Information Statement, addressed above, asks for an attachment when seeking contribution toward college expenses.

The Appellate Division, in affirming the decision with respect to equal allocation for the child’s expenses, said that the Court exercised its discretion in the absence of accurate financial circumstances of either party.  This ignores that the former wife asked for the former husband to be required to produce such proofs (and presumably she would have had to also), and rewards the former husband for refusing to do so.  If his obligation would have otherwise been more than 50% upon such discovery exchange, the former wife is the one making up the difference out of pocket.

Thus, even if the law is correct to deny a discovery exchange with respect to base child support, it should have required financial circumstance proofs before allocating child-related expenses – understanding that it could have opened the door to a child support recalculation. Even if it did, child support is for the child – not a reward or punishment for the parents – so if ultimately a recalculation resulted, where is the harm?

Beyond the takeaway of never being so sure what the court or Appellate Division will decide, a good tip is for couples divorcing with young child.  In many of those circumstances (unless one part is significantly more wealthy than the other), you may want to build in reviews over time with required disclosures, and confirm an agreement to share extraordinary expenses at the relevant time based on financial circumstances at the time.  Both of those agreements will likely require a financial disclosure and you will not be left without modifying child support while your former spouse is driving a Maserati and equally paying for expenses when your share perhaps should have been less.

Lindsay A. Heller is a partner in the firm’s Family Law practice, based in its Morristown, NJ office. You can reach Lindsay at 973.548.3318 or lheller@foxrothschild.com.

Lindsay A. Heller, Associate, Fox Rothschild LLP