May a court order the sale of marital assets prior to the entry of a judgment of divorce? Some confusion reigns because Grange v. Grange, 160 N.J. Super. 153 (App.Div.1978), held that a court does not have the power to order the sale of a marital dwelling "prior to the dissolution of the marriage by a judgment of divorce." Id. at 159.
It has been assumed by many that Grange casts a net so broad that prior to the dissolution of a marriage by a judgment of divorce a court does not have the power to order the sale of any marital assets regardless of the factual situation involved. But is Grange really so expansive? The issue on appeal was:
[s]imply stated . . . whether in a matrimonial matter the court may make a pendente lite order relating to the equitable distribution of the marital assets
and, more specifically, order the sale of the marital dwelling absent the consent of the parties. Id. at 157.
When Grange answered in the negative, it obviously only struck down the pendente lite sale of a marital dwelling in a situation where one of the parties sought an early sale of a marital asset. Yet, its application has extended far beyond its actual holding. And what is astonishing is that this inflexible rule has reigned uncontested for seven years with remarkably little erosion (in that period only three reported cases have even cited Grange) and despite scholarly criticism. See Supreme Court Committee on Matrimonial Litigation Final Report -- (Pashman II), supplement issued with 108 N.J.L.J. 41, July 15, 1981.
Many theories have been advanced for the philosophy underpinning the rule. Some say that at the final hearing equity may dictate that marital assets be distributed in kind and, if they are sold earlier, this option is foreclosed. Others say that the statute, N.J.S.A. 2A:34-23, provides for the equitable distribution of marital assets at the time of the entry of a judgment of divorce -- and not before. Still others, including Grange, say that since a marital dwelling is held as a tenancy by the entirety its distribution while the marriage subsists "would violate the very concept of a tenancy by the entirety." Id. at 158.
The husband, an engineer, and wife, a homemaker with a high school equivalency and no work skills, had one child. In 1983 they separated due to marital problems arising from the husband's sudden loss of employment. Over a year and a half later, while the husband was still unemployed, the wife filed a complaint for divorce and a pendente lite motion for support. Their Case Information Statements discloses no income and two major assets -- the marital residence with $87,000 in equity and Exxon stock worth $4,000. For 20 months the husband, due to his unemployment, has failed to pay any support and the wife has been forced to live off accumulated savings, which are being quickly dissipated. Based on her monthly budget, what
is left will last only another month or two. She now seeks to sell the Exxon stock and use the proceeds to support her and the child of the marriage.
A literal and facial reading of N.J.S.A. 2A:34-23 reveals what appears to be conflicting policy pronouncements. The first sentence vests the court with broad discretion to make such orders as are necessary for the maintenance of the parties and their children. If this was all the statute said, the power of the court in appropriate cases to enter a pendente lite order to sell marital assets would be clear. But what creates doubt is the last paragraph, which appears to conflict with the earlier language and divests the court of some of its vast powers by providing that " where a judgment of divorce . . . is entered the court may make [an] award . . . to effectuate an equitable distribution of the property. . . ." (Emphasis supplied). This language has suggested to some that marital assets may be sold only incident to the entry of a judgment of divorce -- and not before.
If we apply a broad interpretation to the last paragraph of N.J.S.A. 2A:34-23, as is assumed to have been adopted by Grange, the result in this and many similar cases will be that in the absence of any income the courts will be without power to ensure the continued maintenance of the wife and children in spite of the fact that there are sufficient marital assets available to do so. Can this ...