On appeal from Superior Court, Chancery Division, Family Part, Morris County.
Before Judges Shebell and Long.
The opinion of the court was delivered by LONG, J.A.D.
Defendant Carol McGee challenges certain aspects of the final judgment of divorce which dissolved her marriage to plaintiff, Paul McGee. On appeal, Mrs. McGee argues that the trial Judge erred in his award of equitable distribution by failing to consider the premarital history of the parties; improperly awarded her "rehabilitative alimony" when permanent alimony was warranted; and neglected to apply the proper standards to her motion for counsel fees. Upon careful analysis of this record in light of these contentions, we reverse.
The parties began their relationship in June 1981. At that time both had been divorced, Dr. McGee once and Mrs. McGee twice. When they began seeing each other, Dr. McGee had been living in an apartment. Mrs. McGee was living in the house she received by way of equitable distribution from her second divorce. She had designed the house and supervised its construction in 1973. The house and pool were situated on two acres; there was an adjoining lot of almost eleven acres.
Mrs. McGee was in default on the mortgage on the house while she was going through her divorce from her second husband, although she was paying the utilities. The house, acreage and animals, including five horses she had had for twenty-four years at the time of trial, were extremely important to Mrs. McGee who, according to Dr. McGee repeated this fact at least "500 times in nine years." In 1982, due to Mrs. McGee's mortgage, tax and insurance defaults (she owed $62,955.54), the bank proceeded to foreclosure and ultimately obtained final judgment. In April 1982, shortly prior to the sheriff's sale, Dr. McGee purchased the property from Mrs. McGee as a result of his relationship with her. He paid the bank for the mortgage and all other debts associated with the house. He obtained a mortgage on the house to do this, borrowing at least $10,000 in excess of what was required, so he could use the money for his own "purposes."
According to Dr. McGee's testimony at trial, he bought the house because he heard a "constant harangue" from Mrs. McGee about her fear of losing the house.
She was terrified of losing the house and so on and so forth and she really had no recourse other than me. I said to her, "if you want me to help you with that house, I will insist on two things: I want the house in my name and the two acres and the separate lot also in my name." I said "otherwise, I am not going to help you."
Dr. McGee testified that he did not know the precise value of the house and the adjoining unencumbered eleven acres at the time he purchased them. Mrs. McGee was not represented by an attorney in this transaction which, as Dr. McGee recognized, was entered into when she was under financial strain. In 1981, the value of the house located on the two acres was estimated by Dr. McGee to be approximately $150,000. The value of the eleven acres at that time is unknown. The house was fully furnished when Dr. McGee took title to it.
In February 1983, Dr. McGee moved in with Mrs. McGee. They became engaged in 1983 and cohabited in the house (with a separation in 1984) until 1991. They were married in 1989.
From 1981 onward, Dr. McGee supported Mrs. McGee financially. They lived comfortably and functioned as if they were husband and wife. Dr. McGee supplied credit cards for Mrs. McGee's use. He paid all of the household bills and gave her $300 a week. For her part, she functioned as a wife. She undertook all of the household domestic responsibilities; cooked dinner; ran errands; did the cleaning and the laundry; cared for the horses and shopped for food and clothing for herself and Dr. McGee. In short, they engaged in a traditional marital partnership long before the formalities of marriage took place. Mrs. McGee testified that people assumed they were married and that they actually held themselves out as a married couple during the long period of premarital cohabitation. Nancy Roessel, a neighbor, who was maid of honor at the couple's wedding, stated that the parties "did everything together" and that they appeared to be husband and wife prior to their actual marriage. Dr. McGee admitted that they occasionally held themselves out as husband and wife.
In 1984, the parties decided to improve the house and began extensive renovations. Mrs. McGee left her employment with Dr. McGee's approval to oversee the improvements on the house because "she had a lot of knowledge in construction." She did not return to work.
Dr. McGee is now fifty-one years old and a medical doctor in private practice, licensed since 1972. Throughout his relationship with Mrs. McGee, he continued to work at his practice and doubled his income between 1982 and 1991. In 1982 he had gross earnings of between $100,000 and $120,000. In 1987, he grossed $152,700 from his practice. In 1988, he sold a limited partnership for which he received $26,492, and had gross earnings of $182,298. In 1989, he earned $200,688 and he sold another limited partnership for $34,305. In 1990, he earned $190,011; in 1991, $230,162 and in 1992, $216,000. Neither Dr. nor Mrs. McGee obtained an appraisal of the medical practice, nor was any expert called by her to indicate to the court the value of the practice. Dr. McGee's Keogh plan, which had a value of approximately $180,000 at the time of trial, was not acquired during the marriage and no contributions were made by him to the plan during the parties' relationship.
Mrs. McGee is a fifty-seven year old woman with minor medical problems (a thyroid condition). She does not have any post-secondary education. In 1981, she worked for a small publishing company in Fredon and, thereafter, had sporadic employment. She ran a magazine delivery service; worked for an attorney in New York for a year or less and was also placed as a secretary at AT&T by a temporary agency for one year. For some time, in 1983 and 1984, she worked in Dr. McGee's medical office as a receptionist on Wednesday evenings and Saturdays. In 1983, she earned $1175 from Dr. McGee and $14,359 from Lakeland Temporary Services. Mrs. McGee did not return to work thereafter. She testified that, since her separation from Dr. McGee, she has signed up with two temporary agencies and that she has been tested for employment. Mrs. McGee has no computer skills. She believes that her lack of skills and her age are impediments to her self-sufficiency.
At trial a significant amount of testimony was adduced on Mrs. McGee's charge that Dr. McGee was guilty of committing several assaults against her as a result of which she alleged post-traumatic stress syndrome. The Judge rejected this claim and no appeal has been taken from the adverse judgment. Thus, the facts surrounding the matter have been omitted from this opinion.
Throughout his relationship with Mrs. McGee, Dr. McGee lived up to his significant financial obligations from his prior marriage. Dr. McGee paid alimony to his first wife from 1982 to 1987. In 1982, alimony was set at $450 a week. The divorce permitted cost of living increases so that he was paying $650 a week for the last year of alimony payments. Therefore, his annual alimony ranged from $23,400 to $33,800 by the time his obligation to his first wife ended in April 1987. In 1982, child support for Dr. McGee's two children was set at $100 per week per child. Because of cost of living allowances, Dr. McGee was paying $130 per child per week by May 1987 and $165 per week per child at the time of trial when both children were at home.*fn1
These figures mean that Dr. McGee paid total support of $33,800 from May 1982 through April 1983 and at least $44,200 from May 1986 through April 1987. Although we do not know what the exact payments were in the intervening years, a conservative calculation of four years at $33,800 plus one year at $44,200 adds up to $179,400.
Child support payments from 1987 to 1991 were at least $130 per child per week. This adds up to $54,080 over four years. Additionally, both children attended summer camp at a cost of $300 per child per week. Dr. McGee's daughter attended for a total of five years. She spent four weeks at camp for the first three years and eight weeks at camp for the next two years. His son spent four weeks at camp for each of two summers. The total cost for summer camp was $10,800, a sum which Dr. McGee paid alone. Dr. McGee also paid $14,000 to send his daughter to Blair Academy for one year, 1989-90. Furthermore, he paid $4400 for both children's orthodonture. Dr. McGee's support of his children and former spouse cost at least $262,680 from 1982 to 1991, not including what he paid for their unreimbursed medical and dental bills.
In 1985, Dr. McGee refinanced the marital home and took out $26,000 in cash from the equity. In 1987, he took out a home equity line for $98,000. According to Dr. McGee's testimony, both sums were for "general operating" costs. Additionally, Dr. McGee testified that when he purchased the home at the sheriff's sale in 1982, he took out $10,000 in equity for his own purposes. Dr. McGee's actions denuded the house of $134,000 of equity. Importantly, while Dr. McGee testified that he had made over $100,000 worth of improvements over the years, the checks entered into evidence to support Dr. McGee's claims only total about $32,000.
Thereafter, he reconveyed the marital home and adjoining lots back to himself and Mrs. McGee. This occurred prior to their marriage. During the course of their cohabitation, Mrs. McGee's furniture was gradually replaced by the parties.
The trial Judge granted the parties a divorce and ordered the marital home sold. He stated:
I must order that the real estate be sold, not separately, but together. The plaintiff has requested that he be given the right to be a buyer. His buying price for the defendant's equitable distribution -- which I find should be on a 50/50 basis by the way. . . I find that the proposal of the plaintiff to buy out the interest of the defendant in the lot and residence is a fair one.
The methodology employed by the Judge for the buyout was as follows:
The property is appraised at $234,000. There's $175,000 in mortgages. The equity is reduced by what would be a real estate broker's commission, a realty transfer fee, etc., which makes the sum of $25,000 in effect more than half of the net equity that the defendant would realize if there were a sale. This sale must be competent -- this sale to the plaintiff must be accomplished in the following way or that -- the property will be immediately listed with a broker. And that is as follows. The -- within 7 days of today's date, the plaintiff will pay to the defendant the sum of $5,000. Within 7 days of today's date, the defendant will execute a deed for her interest in the property to the plaintiff. The deed will be held by Mr. Laemers in escrow. The $20,000 balance owed to the defendant will also be held by Mr. Laemers in his trust account and it is to be deposited there within 7 days of today's date, if that is doable. Because I realize it's got to be withdrawn from a Keogh Plan. But I want it, if possible, within 7 days. The defendant needs time to find new housing, to relocate her animals and get herself organized for her future. And so, she shall have 60 days from today's date to vacate the premises. During that 60 day period, the plaintiff will maintain the status quo with regard to all payments being made regarding the pendente lite order. All payments. At the close of 60 days, the defendant is to receive the sum of $20,000 from Mr. Laemers' trust account and Mr. Laemers can, at that time, record the deed to the plaintiff for the property. Regarding the animals, I find the suggestion of the plaintiff to be a good one. The animals, the horses shall remain in the barn and they may remain there until September 30, 1993, at which time they are to be moved.
The Judge further ordered six months of rehabilitative alimony at $750 per month. He stated:
Regarding alimony. The defendant claims that this is a permanent alimony case. The plaintiff claims that it is not an alimony case at all. The court finds that this is a case which requires rehabilitative alimony. There is little question in my mind, but that the defendant is healthy and capable of going into the work place. While her doctors testified, and I use the term plurally, no one testified that she's not able to work. No one testified that she needs treatment. No one testified that she needs a medical regime of any sort. She has had 2 years, at approximately $60,000 a year while the parties are separated, to find herself employment, she has chosen not to so do. Nonetheless, I think that she's entitled to rehabilitative alimony, so that she can have an opportunity to get on her feet, get the career training she ...