On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Passaic County.
Bilder, Muir, Jr. and Skillman. The opinion of the court was delivered by Skillman, J.A.D.
The primary issue presented by this matrimonial appeal is whether a house acquired before marriage, with the intention that it would become the parties' marital home, is exempt from equitable distribution because title was placed in the name of only one of the parties. Also involved are subsidiary issues regarding the equitable distribution of other property, including defendant-husband's interest in a family business, and the fixing of defendant's obligations with respect to pendente lite support.
In early February of 1967, defendant gave plaintiff an engagement ring, and afterwards an engagement party was held and a wedding was planned for the following summer. Around this time, defendant spoke to his mother about buying a house from her which she had recently inherited. Defendant also spoke to plaintiff about the house, asking whether "we want to go on a nice honeymoon or buy the house." The parties agreed to buy the house. Defendant and his mother had the house appraised and established an $18,000 purchase price based on that appraisal. A contract of sale was entered into on February 10, 1967 and a closing was held on April 25, 1967, four months before the parties' marriage on August 26, 1967. Defendant made a $5,000 down payment on the house and executed a note and mortgage with a bank for the balance of the purchase price. Plaintiff testified that she understood the house would be jointly owned because defendant described it as "their house." However, plaintiff did not attend the closing and title was placed solely in defendant's name. Plaintiff moved into the house in June 1967, two months before the parties were married. Defendant moved into the house immediately after the marriage, and the parties continued to reside in the house until they separated in October of 1985.
The parties made substantial repairs and improvements to the house both before and during the marriage. Before the
marriage, the parties had the bathroom completely remodeled. Plaintiff also did a substantial amount of work herself, including hanging curtains, finishing the floors, and cleaning the entire house. After the marriage, the parties replaced a hot water heater, converted the furnace to gas, replaced the roof, replaced the front and back porches, installed combination storm and screen windows, refinished the kitchen and insulated the attic.
The trial judge found that there was implied contract between the parties that the house, although acquired in defendant's name while the parties were engaged, would be a marital asset. Therefore, he concluded that "[d]esignation of the title in the name of one of the parties should not bar a determination of the property's intended and active status as a marital asset." The trial judge also concluded that the house should be valued as of the date of trial, that its value was $155,000, and that the property should be divided equally between the parties. Accordingly, he gave defendant 60 days from the entry of judgment to purchase plaintiff's share in the house, and further directed that if defendant did not avail himself of this opportunity, the house should be sold and the proceeds divided equally.*fn1 We affirm the trial judge's conclusion that the marital home is subject to equitable distribution, but conclude that his valuation of this marital asset was not adequately explained.
N.J.S.A. 2A:34-23 authorizes a court, where a judgment of divorce is entered, 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." The appellate court decisions interpreting the phrase "during the marriage" in N.J.S.A. 2A:34-23 have all been concerned with establishing the terminal point of a marriage. See, e.g., Brandenburg v. Brandenburg,
83 N.J. 198 (1980); Di Giacomo v. Di Giacomo, 80 N.J. 155 (1979); Smith v. Smith, 72 N.J. 350 (1974); Rothman v. Rothman, 65 N.J. 219 (1974); Painter v. Painter, 65 N.J. 196 (1974). None of these decisions have involved a determination of when a marriage commences for the purpose of establishing which assets are subject to equitable distribution. Therefore, the decisions dealing with the terminal point of marriage are the most pertinent guide in determining whether a marital home acquired before a marriage ceremony may be subject to equitable distribution.
In Painter v. Painter, supra, the Court observed that "[r]eading [ N.J.S.A. 2A:34-23] literally, the terminal point [of marriage] would seem to be the day the judgment of divorce is granted." 65 N.J. at 217. However, the Court concluded that the use of this date would be impractical and decided that the "better rule" would be that "for purposes of determining what property will be eligible for distribution the period of acquisition should be deemed to terminate the day the complaint is filed." 65 N.J. at 218. This rule was refined in Smith v. Smith, supra, 72 N.J. at 360-362, where the Court held that when the parties to a divorce action have entered into a formal settlement agreement accompanied by their physical separation, the date of the written agreement should be treated as the date of termination of the marriage for the purpose of equitable distribution. The Painter rule was further refined in Di Giacomo v. Di Giacomo, supra, where the Court held that when separated marital partners orally agree to divide marital assets and then divide a large portion of those assets in accordance with the agreement, the date of the oral agreement should be treated as the date of termination of the marriage. See also Portner v. Portner, 93 N.J. 215 (1983); ...