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Pascale v. Pascale

Decided: June 22, 1994.


On appeal from the Superior Court of New Jersey, Chancery Division, Family Park, Middlesex County.

Before Judges Dreier, Brochin & Kleiner.


The opinion of the court was delivered by

KLEINER, J.S.C. (temporarily assigned)

The marriage of plaintiff, Debra Pascale, and defendant, James Pascale, was dissolved by a dual judgment of divorce entered September 11, 1992, after a six day trial. Plaintiff's appeal and defendant's cross-appeal, both contend, for different reasons, that the court erred in its decisions pertinent to equitable distribution of property and child support. Plaintiff also alleges that the court's counsel fee award was inadequate.

The litigants were married on June 19, 1977. Three children were born of their marriage: Kyle, on April 4, 1984, and twins, Lauren and Corrine, on April 16, 1986. In July 1990, the parties physically separated within the marital residence. Plaintiff filed a complaint for divorce on grounds of extreme cruelty on October 28, 1990, and defendant filed a counterclaim also alleging acts of extreme cruelty.

Prior to their trial, the parties submitted three consent orders to the court: on March 19, 1991, an order was executed allocating to each party specific financial obligations; on September 23, 1991,

a visitation and custody arrangement was approved;*fn1 on April 3, 1992, an order compelled defendant to vacate the marital residence and acknowledged that a revised court order would be required if a support agreement could not be negotiated.

At the time of trial, plaintiff was employed as a human resources manager at Liposome Company, Inc., a position she held since 1987. Defendant was employed as the administrator of Princetown Township, a position he held since 1983. Plaintiff earned $52,200 per annum and defendant earned $73,290. Testimony indicated that defendant anticipated receiving a salary increase to $76,938 per annum if the then pending municipal budget was approved.


The trial court determined that the marital home was valued at $270,000 and was owned subject to a first mortgage of $96,600. The home, titled jointly, was purchased in January 1986 with a down payment of $90,000. That sum represented accumulated marital savings derived primarily from salaries and proceeds from the sale of IBM stock which yielded $35,000. That stock had been gifted to plaintiff prior to marriage and had remained titled in plaintiff's maiden name until it was transferred to a joint brokerage account in 1985 in anticipation of the home purchase. The court divided the value of the home equally. It determined that defendant's interest would be $72,700 computed as follows: marital home value, $270,000, less $96,600 owed on the first mortgage, less $14,000 owed to plaintiff resulting from an equitable and equal division of defendant's pension plan. The court ordered defendant to convey title to plaintiff subject to the first mortgage effective October 1, 1992, and ordered plaintiff to pay defendant $72,700 on or before September 1, 1997, and to satisfy the existing first

mortgage debt that same date. The $72,700 debt owed by plaintiff would accrue simple interest at 8 percent per annum effective January 1, 1994. The court specifically denied plaintiff's demand that she receive credit for her contribution to the original purchase price of $35,000 derived from the sale of IBM stock.

Plaintiff contends the denial of this claimed credit of $35,000 was error. Defendant contends that the five year deferral of his receipt of the home equity of $72,700 was error.

We recognize that property owned by a spouse prior to marriage remains the separate property of the spouse and is not distributable. Painter v. Painter, 65 N.J. 196, 214, 320 A.2d 484 (1974); Orgler v. Orgler, 237 N.J. Super. 342, 350-51, 568 A.2d 67 (App. Div. 1989). Additionally,

the income or other usufruct derived from such property, as well as any asset for which the original property may be exchanged or into which it, or the proceeds of its sale, may be traceable shall similarly be considered the separate property of the particular spouse. The burden of establishing such immunity as to any particular asset will rest upon the spouse who asserts it."

[Painter v. Painter, supra, 65 N.J. at 214; See also Landwehr v. Landwehr, 111 N.J. 491, 504, 545 A.2d 738 (1988).]

However, we also recognize that interspousal gifts are subject to equitable distribution. N.J.S.A. 2A:34-23; Perkins v. Perkins, 159 N.J. Super. 243, 246, 387 A.2d 1211 (App. Div. 1978); Pascarella v. Pascarella, 165 N.J. Super. 558, 564, 398 A.2d 921 (App. Div. 1979).

Although plaintiff's IBM stock is clearly identifiable as pre-marital property and the proceeds are clearly traceable, the testimony of the parties and their standard of living negates any possible Conclusion that it was plaintiff's intent to preserve a separate ownership interest in the proceeds derived from the sale of that stock.

This couple entered marriage as a young couple without any appreciable assets other than plaintiff's IBM stock. Until their severe marital discord commenced, they shared all of their income and all of their liabilities. They were clearly united economically. Their decision to purchase the marital home and title it jointly was

a joint decision as was the decision to sell the IBM stock and to apply the proceeds to their down payment to reduce their joint mortgage indebtedness. Prior to their marital discord neither took any affirmative step which would evidence an intent that the IBM stock was not an interspousal gift. Wadlow v. Wadlow, 200 N.J. Super. 372, 380-81, 491 A.2d 757 (App. Div. 1985) (the terms of a will evidenced intent of the husband to acknowledge that certain co-mingled funds were still the property of his wife's family).

Although the trial court is permitted to recognize that the acquisition of certain property may be traced more directly to one partner than the other, the court is not compelled to distribute property to accommodate that origin. Perkins v. Perkins, supra, 159 N.J. Super. at 247. The court's denial of plaintiff's claim of total credit of $35,000 or its failure to treat the distribution of the marital home unequally was not an abuse of its discretion and we shall not disturb that decision.

We reach the same Conclusion in reviewing the court's decision to permit plaintiff to reside in the home for five years. Trial courts have the discretion to permit post-divorce possession "for good reason." Daly v. Daly, 179 N.J. Super. 344, 350, 432 A.2d 113 (App. Div. 1981); Gemignani v. Gemignani, 146 N.J. Super. 278, 284, 369 A.2d 942 (App. Div. 1977). "Underlying the permission to the wife to remain in the home is the joint duty of the parties to provide suitable shelter for the children. A correlative is the recognition that available economic resources are usually not sufficient to provide a comparable residence if the asset is liquidated." Daly v. Daly, supra, 179 N.J. Super. at 350 (citation omitted). This by no means requires a showing of economic hardship on the part of the possessory spouse. Id.

Here, plaintiff asked the court to allow her to remain in the marital home for a five year period -- until Kyle began high school and until the twins began their new school. The trial court did not find this request "unreasonable." We also find it was reason

able to grant such a request under the present circumstances. The parties' three children have lived in the marital home all their lives. The children are at the present time ages ten and eight. It is reasonable to infer that requiring them to move due to an immediate sale of the house would not be in the best interests of the children. Moreover, defendant's interest in the house is preserved as he is receiving compensation at a reasonable interest rate for having to wait for his distribution.

As we noted in Daly v. Daly, id., at 350-51:

This delayed realization [of a spouse's distributive share of the marital residence] must be recognized by a reasonable rate of interest, . . . or an equity interest in the asset. . . . Any final decisions should recognize (1) a fair return for delayed realization, (2) or an equity interest, and (3) the extent of each party's contribution to the protection and enhancement of the asset prior to sale.

Here, it is clear that the trial court fully recognized the criteria discussed in Daly. Requiring, as defendant demands, that plaintiff demonstrate the non-existence of other affordable housing within the same community as a prerequisite to a grant of a reasonable request to remain in the marital home for a fixed and relatively short period of time will not be sanctioned by this court nor will we declare that the trial court's refusal to mandate that proof constitutes an abuse of discretion. The court's decision was carefully reached and should be affirmed in the absence of any specific proof that the decision was arbitrary or unreasonable.

We reach the same Conclusion with respect to defendant's additional argument that the equitable distribution value should await a determination of the actual value as of the date of payment to him of his interest in the property. Although the decision to defer valuation may have merit in individual cases, we cannot discern any particular reason why the rejection of that concept here was error. This is particularly true where the court carefully imposed a definite date for final payment, included an appropriate interest factor of 8 ...

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