The process of law is a consistent evaluation caused by diverse circumstances and situations brought before our judicial system. Matrimonial courts have been called upon to address rights, settle disputes and fashion remedies regarding the equitable distribution of marital assets pursuant to statute. Since the inception of equitable distribution in 1971, the task of resolving disputes has evoked and been guided by equitable principles, perhaps the most significant of these being that equity will not suffer a wrong to be without a remedy.
Plaintiff Jacqueline Scavone and defendant Carmen Scavone were married on March 10, 1951. Three children were born of the marriage, all emancipated. The parties separated in 1984 and plaintiff filed a complaint for divorce in August of 1985. Defendant subsequently filed an answer and a counterclaim in September 1985 and January 1987 respectively.
During the course of the marriage, defendant acquired a one-half ownership interest in a seat on the New York Stock Exchange. Title is in defendant's name alone. Both sides agree that the seat is marital property, subject to equitable distribution and is a passive asset whose value fluctuates with variable market conditions without regard to the contribution or effort of anyone in general or defendant in particular.
The pivotal controversy presented to this court for resolution is whether the value of the passive asset is measured as of the date the complaint for divorce was filed (August 1985) or at the time of distribution in 1988. Plaintiff asserts the current value, approximately $700,000, is the most appropriate while defendant contends the value as of the date the complaint was filed, $400,000, is the correct valuation date. There is no dispute regarding the actual worth of the asset at the aforementioned times. Therefore, there is a stipulated differential of $300,000. Since defendant is a 50% owner, the differential, for our purposes, is $150,000. Though there is no actual stipulation, it is evident that both parties view distribution as being equal. There has been no testimony to the contrary. Therefore, there is a real difference of $75,000, depending upon the date selected.
The concept of equitable distribution evolves as courts are presented with various types of marital assets and their accompanying questions of designating dates for valuation. Reliable parameters are evolving and although the use of a consistent date such as the filing of the divorce complaint has its advantages, such date cannot be deemed an absolute.
[I]n determining what is equitable the trial judge must consider all the particular circumstances of the individuals before it . . . [and] [a] proper factor in that determination is any significant change in the valuation of marketable assets that occurs prior to final judgment. [ Scherzer v. Scherzer, 136 N.J. Super. 397, 400 (App.Div.1975) certif. den., 69 N.J. 391 (1976)].
Valuation of an asset at the time of trial itself is permissible, "depending on the nature of the asset and any compelling
In view of the lack of uniformity and lack of definitive direction regarding incremental values, this court finds the dates of valuation for varying assets to be established as set forth in the following paragraphs.
Passive, Immune Asset (Pre-marital, Gift, Inheritance) in One Name.
The clearest category of assets excepted from distribution pertains to the incremental value of passive assets acquired prior to the marriage or by way of gift or inheritance prior to or during the marriage. The immunity of assets acquired in such a manner is stated very clearly in N.J.S.A. 2A:34-23 and its accompanying statements.
However, all such property, real, personal or otherwise, legally or beneficially acquired during the marriage by either party by way of gift, devise or intestate succession shall not be subject to equitable distribution. . . .
The Senate Judiciary Committee statement set forth the purpose of the amendment to N.J.S.A. 2A:34-23 as an exemption of gifts, devises and bequests from equitable distribution.
To permit a compulsory division of the asset between the recipient and his spouse is contrary to the marital expectations of the recipient and the giving parent or relative. Since the efforts of neither spouse resulted in the gift, devise or bequest, it need not be regarded as a marital asset under the partnership concept of marriage. [Senate Judiciary Committee statement to Assembly Bill 1229, L. 1980, c. 181]
Passive assets can be defined as those assets whose value fluctuations are based exclusively on market conditions. Passive, immune assets, in one name, and their incremental values are viewed as separate property and are thus not subject to distribution. Painter v. Painter, 65 N.J. 196, 214 (1974).
In Mol v. Mol, 147 N.J. Super. 5 (App.Div.1977) the marital residence, owned by defendant-husband prior to the marriage was an example of a passive asset. The court stated that
plaintiff was "not entitled to share in that portion of the enhancement in value of the house which was due solely to inflation and to which she did not contribute in any way." Id. at 9. The action was remanded for findings of fact and conclusions distinguishing that portion of increased value which was the result of independent economic factors from "that portion to which plaintiff contributed or for which husband and wife were jointly responsible." Ibid.
This principle was relied upon by the Appellate Division in Wadlow v. Wadlow, 200 N.J. Super. 372, 381-382 (App.Div.1985), in its consideration of a security account which was established by plaintiff's parents, segregated during the marriage and never intended to benefit defendant-husband. The Appellate Division held that "[t]he value ...