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Caplan v. Caplan

November 12, 2003


On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Somerset County, Docket Number FM-18-614-98.

Before Judges Havey, Newman and Fall.

The opinion of the court was delivered by: Fall, J.A.D.


Argued: September 8, 2003

In this matrimonial matter, we examine the procedures applicable to establishing a child support obligation where the parents' combined net unearned income exceeds the maximum threshold established by the child support guidelines, Rule 5:6A, Appendix IX-F, under circumstances where both parents have significant income-producing assets, neither parent has any earned income, and one parent, who had been a high-income earner, is voluntarily unemployed.

Here, after a non-jury trial on limited issues, plaintiff Sandra G. Caplan appeals from the court's rulings on issues of child support, counsel fees, and management of certain trust funds, as memorialized in the supplemental final judgment entered on February 20, 2002, and from an order issued on May 15, 2002, denying her motion for reconsideration. Defendant cross-appeals, contending the trial judge improperly required him to contribute toward expenses unrelated to the children's needs, and that the effective date of the child support determination was erroneous. The following factual and procedural history is relevant to our consideration of the issues advanced on appeal.

The parties were married on April 17, 1988. Two children were born of the marriage: Daniel, on July 26, 1989; and Jacob, on December 12, 1991. Plaintiff was born on April 29, 1963; defendant was born on November 4, 1963. The complaint for divorce was filed on January 12, 1998; an answer and counterclaim for divorce was filed on March 23, 1998.

The parties entered into mediation and, on January 30, 2001, executed a settlement agreement resolving issues of custody, parenting time, equitable distribution, and alimony. Pursuant to that agreement, plaintiff agreed to waive alimony and to the distribution of various assets to defendant in return for a lump-sum payment made to her by defendant in the amount of $2,075,000. Additionally, defendant agreed to deed the marital domicile, 41 Deer Creek Drive, Basking Ridge, then valued at approximately $910,000 with no mortgage encumbering the property, to plaintiff. Plaintiff represented that the terms of the settlement would permit her to live at a standard of living reasonably comparable to that achieved during the marriage.

On February 8, 2001, the court entered a"Final Judgment Fixing Custody and Parental Contact," which established custody and parenting time in accordance with the terms of the parties' agreement. Under that agreement, the parties were to share joint legal custody of the children. Primary residential custody was vested with plaintiff, with secondary residential custody awarded to defendant. The judgment set forth a detailed parenting-time schedule. The parties also acknowledged their agreement that a Special Needs Trust would be established for their son Daniel, and that there would be future issues relating to Daniel, such as his education, vocational training, residence, and health care. The parties agreed to select a mediator to assist them in addressing those issues. The amount of defendant's obligation for child support and associated expenses of the children, and the issue of counsel fees on the application for child support, were unresolved.

By letter to defendant dated June 5, 2001, entitled"Separation Agreement and Release," the terms of defendant's separation from his employment with Citibank, N.A. and Salomon Smith Barney, Inc. were outlined by his employer. The"agreement" acknowledged that the parties had been negotiating the terms of the agreement since April 16, 2001. The agreement set forth that defendant's employment was being terminated, effective June 30, 2001, due to a reduction in force. At that point, defendant was age thirty-seven. In consideration for entering into the agreement, defendant's employer agreed to compensate defendant with gross severance pay in the amount of $115,384.62; continue health care coverage at no cost for three months and pay 50% of the costs thereof for another three months; and provide defendant with job placement services commencing on the effective date of the agreement. Prior to the termination of his employment, defendant had gross earned income of $1,796,326 in 1996; $2,434,773 in 1997; $1,093,531 in 1998; $2,945,454 in 1999; and $4,615,273 in 2000.

The unresolved issues of child support and counsel fees were tried non-jury in the Family Part on April 30, May 2, June 5, and June 13, 2001. On December 28, 2001, a judgment of divorce was entered dissolving the marriage. On January 16, 2002, the judge placed his decision concerning the tried issues on the record. On February 20, 2002, the court entered a supplemental judgment memorializing that decision; in summary, it provided, as follows:

1. Effective January 16, 2002, defendant was required to pay child support to plaintiff in the amount of $5,391.34 per month, allocated $2,695.67 per child;

2. Plaintiff shall pay 34.82 percent, and defendant 65.18 percent, of the following expenses on behalf of the children:

a. Medical insurance, which will be maintained by defendant, and unreimbursed medical expenses, including hospital, prescriptions, psychiatric, and counseling costs;

b. Summer camp;

c. Dental expenses, including orthodontia;

d. Bar Mitzvah expenses;

e. $10,000 contribution to each child's UGMA account;

f. Jacob's college, graduate school and miscellaneous educational costs not covered by his UGMA account;

g. Daniel's post secondary education, training costs, health insurance and residential expenses;

3. Daniel's current UGMA shall be placed in a Special Needs Trust and defendant shall provide plaintiff with trust statements twice each year, with the costs of the trust to be borne by the parties in accordance with their respective percentages;

4. Defendant shall manage Jacob's UGMA account and his Special Needs Trust, and provide plaintiff statements twice each year;

5. Defendant shall be responsible for complying with applicable tax laws on behalf of Daniel and Jacob;

6. Plaintiff shall claim both children as dependents for tax purposes;

7. Each party shall maintain a life insurance policy on his or her life in the amount of $1,000,000, with the children as equal beneficiaries, with the other party named as trustee. Upon emancipation of one child, the policy coverage may be reduced by $500,000;

8. Plaintiff's application to require defendant to purchase an automobile and provide automobile insurance for each child upon reaching the child's seventeenth birthday is denied without prejudice;

9. Plaintiff's application to require defendant to devise and bequeath all assets set forth on his case information statement to the children, is denied;

10. Each party shall pay their own respective counsel fees.

In considering the evidence and rendering his decision on these issues, the trial judge stated, in pertinent part:

Mr. Caplan was employed by Salomon Smith Barney from July 1987 until June 2001 as a mortgage trader. Mr. Caplan was terminated and a separation agreement signed.

In the agreement, Mr. Caplan was provided with two months compensation after he actually left the trading desk, pre-taX severance pay in the amount of $115,000, and he retained deferred compensation, all of which had been included in the total of his income-producing assets. Mr. Caplan's current unemployment does not adversely affect his ability to support his two sons, Daniel and Jacob.

Mrs. Caplan has not worked outside the home since the minor child Daniel was born, except for a brief period in 1999 when she earned $2,591.

The parties' son Daniel is a special needs child. He is enrolled in a special education program in public school. He has been diagnosed with ADHD.

Mrs. Caplan is a stay-at-home mother who spends her time helping her sons, especially Daniel, with important everyday activities.

Mrs. Caplan sold the former marital home for its worth [$910,000] and purchased her new home on Landow Road for $549,000. Her new home is smaller than the parties' marital home.

Mr. Caplan has remained unemployed voluntarily since his termination. He is also living in his home in Maryland.

With regard to the Caplans' lifestyle during their marriage, Mrs. Caplan characterized their life together as an"upper-class standard of living" where they lived in a mortgage-free home of 4,000 square feet and drove BMW and Mercedes automobiles.

The Caplans had live-in help, vacationed in Africa, Europe and Mexico and frequented Broadway shows and expensive ...

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