Krafte, J.J.D.R.C. (temporarily assigned).
Is plaintiff-wife entitled to share by way of equitable distribution in the amount of mortgage-principal paydown during the viable portion of the marriage on a house owned by defendant-husband prior to marriage? We answer in the affirmative.
The parties were married on November 17, 1973, it being defendant's second marriage. As a result of his prior divorce he became the sole legal owner of what came to be the marital premises, and remains as such sole owner today. From November 17, 1973 through May 13, 1981 (the date of the instant complaint), defendant paid down $8,000 on the mortgage. Plaintiff claims such to be an asset subject to equitable distribution. Plaintiff readily admits that she has no interest in or claim against any incremental value of the marital home by way of economic conditions which might have increased its present market value. Indeed, no such valuation testimony has been offered.
It is unquestioned that such property as possesses immunity from inclusion in equitable distribution continues to enjoy immunity after being brought into the marriage. It is also
unquestioned that any incremental value also enjoys a like immunity. From this point, erosion commences.
Our Supreme Court, in Painter v. Painter, 65 N.J. 196 (1974), by way of footnote observation stated: "The immunity of incremental value to which we refer is not necessarily intended to include elements of value contributed by the other spouse, nor those for which husband and wife are jointly responsible." At 214, fn. 4.
Thus, incremental value of pre-owned assets is not automatically subject to immunity.
Using somewhat more expansive language, the Supreme Court of Oklahoma, in Collins v. Oklahoma Tax Comm., 446 P. 2d 290, 295 (Sup.Court 1968), said: "Although one spouse brings separate property to the marriage, enhanced value resulting from joint efforts, skill or funds of both working together constitutes jointly acquired property." (Emphasis supplied).
The Appellate Division, in Scherzer v. Scherzer, 136 N.J. Super. 397 (App.Div.1975), certif. den. 69 N.J. 391 (1976), addressed an incremental stock value question and ruled (at 401): "However, any increase in value occurring after the marriage should be considered eligible to the extent that it may be attributable to the expenditures of the effort of plaintiff-wife." (Emphasis supplied).
In Mol v. Mol, 147 N.J. Super. 5 (App.Div.1977), the court was faced with a full-blown claim of inclusion of both the complete incremental value of a pre-owned asset (home) as well as mortgage pay-down. The Mol court gave merely passing consideration to the mortgage reduction question and appeared to make no differentiation between it and general economic incremental factors. In fact, the Mol court remanded for failure of the trial court to make factual findings, leaving open the question of mortgage pay-down as constituting a nonimmune asset. The Mol court stated:
We hold that plaintiff is not entitled to share in that portion of enhancement in value of the house which was due solely to ...