On appeal from the Superior Court, Appellate Division, whose opinion is reported at 174 N.J. Super. 107 (1980).
For reversal and remandment -- Chief Justice Wilentz, and Justices Sullivan, Pashman, Clifford, Schreiber, Handler and Pollock. For affirmance -- None. The opinion of the Court was delivered by Pashman, J.
N.J.S.A. 2A:34-23 authorizes the trial court in divorce actions to "make such award or awards to the parties, in addition to alimony and maintenance, to effectuate an equitable distribution of the property, both real and personal, which was legally and beneficially acquired by them or either of them during the marriage." On December 31, 1980, the Legislature enacted L. 1980, c. 181, which amended this statute by excluding from equitable distribution all property "acquired during the marriage by either party by way of gift, devise or bequest . . . except . . . interspousal gifts." In this case we must decide whether the provision of the statute excluding gifts, devises or bequests from equitable distribution is to be given retroactive application and thus governs this divorce action, which was instituted and tried, as well as heard in the Appellate Division, before the effective date of the amendment.
For the reasons below, we hold that the statute as amended should be given limited retroactive application and therefore governs this case. Consequently, we reverse the judgment of the Appellate Division, 174 N.J. Super. 107, which held that gift and inheritance assets of defendant Felton Lewis Gibbons were subject to equitable distribution, and remand the case to the trial court for determination of the proper distribution of the marital assets in accordance with our opinion.
Plaintiff Mary Weitzel Gibbons and defendant Felton Lewis Gibbons were married on November 15, 1952, shortly after their graduation from college. Following Felton's military service, both went to graduate school and Felton received a Ph.D. in 1961. Mary, however, terminated her graduate studies prematurely to care for the couple's two children who were in born 1957 and 1958.
After Felton received his degree, he was appointed an associate professor at Princeton University. The wealth of their respective families enabled Felton, Mary and their children to
live at a far higher standard of living than Felton's income alone would have permitted. In addition to their house in Princeton, the Gibbonses purchased real estate in Italy and Rhode Island. They also acquired an art collection. Most of the family's expenses were paid out of the income from gift or inheritance assets that Felton had received from his family. In addition, Felton set up trusts to pay for the children's educational expenses.
The couple began to experience marital difficulties in the early 1970's. Their continuing difficulties led to separation and then to the institution of this divorce action by Mary in August 1976. The parties ultimately agreed to proceed with the divorce on no-fault grounds and the case was tried in October 1978.
The trial court granted a dual judgment of divorce and order that the couple's joint assets, valued at $421,500, be divided equally. The court also valued the couple's gift and inheritance assets available for distribution,*fn1 held that these assets should likewise to be divided equally, and thus ordered Felton to transfer $575,000 to Mary.*fn2 Subsequently, the court modified its judgment to include equitable distribution of Felton's pension, with a resultant award of an additional $14,750 to Mary.*fn3
Felton appealed the trial court's judgment to the Appellate Division. In a decision dated May 12, ...