June 11, 2007
MICHAEL HOPKINS, PLAINTIFF-APPELLANT,
HEATHER HOPKINS, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division-Family Part, Camden County, FM-04-569-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: May 23, 2007
Before Judges Cuff and Baxter.
In this appeal concerning the dissolution of the parties' five-year marriage, we review the Judgment of Divorce entered following a seven-day trial. Plaintiff Michael Hopkins contests the allocation of marital debt, the inclusion of two parcels of real estate in the marital estate, the valuation of those parcels, and the inclusion of a pre-marital investment account in the marital estate. Plaintiff also challenges the designation of defendant as primary residential custodian of the three children and the award of counsel fees to defendant. We affirm in part, reverse in part, and remand for correction of the Amended Judgment of Divorce as required by this opinion.
The parties began cohabitation in 1995. Defendant Heather Hopkins had one daughter from a prior marriage born in 1993. The couple lived at 1371 Oriental Avenue in Gloucester City, a two-bedroom bungalow owned by plaintiff. In September 1996, still unmarried, they purchased 821 Hudson Street and were residing there in April 1999 when they wed. Their three daughters were born in 1996, 1997, and 2001.
Plaintiff worked as a tax preparer for his father, who ran his own tax service. At about the time the parties began living together, defendant joined the father's tax service business. After their second child was born in September 1997, defendant went to work full-time for an attorney as a paralegal. After the parties married in 1999, defendant worked for the United States Bankruptcy Court, before returning in 2005 to her prior paralegal position. Plaintiff remained at the tax service throughout the marriage and assumed full operation of the business after his father's death in 2001.
According to plaintiff, his father had purchased and gifted various stocks to plaintiff over the years. Plaintiff valued those premarital stock gifts at approximately $60,000. On his case information statement (CIS), however, plaintiff listed only PECO stock, valued at $4300, as a premarital gift from his father. Plaintiff listed $5000 in stocks or bonds acquired during the marriage, $2200 described as "[j]oint stocks," and an additional $3500 for securities without denominating whether they were jointly owned. According to plaintiff, defendant had asked during their marriage that he put the stocks his father had given him in joint names, but he refused. Plaintiff listed retirement accounts totaling $6200; defendant's retirement account was worth $9629.
According to plaintiff, the parties accumulated substantial credit card debt paying their living expenses. He claimed that defendant had exhausted her credit limits in 2000,*fn1 and by June 2004, defendant was dependent on him for support. Plaintiff also claimed that he was supporting the three children, plus defendant's daughter from the previous marriage. The debt increased around the time the parties separated in 2004. At one point in his testimony, plaintiff stated the credit card debt totaled $47,000, and then later referred to four particular credit card balances totaling approximately $39,000. His CIS, however, listed debts to six credit card companies totaling $63,365.
At the time of trial, monthly mortgage payments on the marital home at 821 Hudson Street were about $850, with a balance of approximately $69,000. Plaintiff valued the property on his CIS at $110,000. After the parties moved to the 821 Hudson Street house, plaintiff became involved in other real estate ventures. Plaintiff and his father purchased 403 North Fillmore Street for $11,500 in 2000. The property was located across from a chemical plant, and plaintiff estimated that it required $30,000 in renovations in order to sell it. After plaintiff's father died in 2001, the property was owned by plaintiff and his mother. As of trial, it was rented for approximately $680 per month.
Plaintiff and his father acquired another income property at 433 Monmouth Street in 2001 for $32,500. According to plaintiff, his father loaned to him his half of the purchase price and expected to be repaid. On his CIS, plaintiff listed himself and his mother as owners and $16,500 as a debt to his mother for his half-share. By the time of trial, the tenants had vacated and the property needed repairs, but plaintiff planned to re-rent it.
Plaintiff rented the parties' initial residence at 1371 Oriental Avenue, which he had purchased in 1992. The approximate $780 he received in monthly rent covered the monthly mortgage on that property.
231 North Fillmore Street was a house owned by plaintiff's grandmother before she died in 1997. Plaintiff inherited the property and rented it to defendant's mother.
According to plaintiff, his father's estate acquired 115 Hickman Avenue in 2004 as a result of a lawsuit, but subject to liens. He said his father had helped a prior owner pay back taxes on it "for a number of years" resulting in a tax lien, which taxes "we continued to pay" even after his father's death. Moreover, plaintiff also asserted that his father became involved with the property due to a business account receivable and as a result of a "def[a]mation of character suit . . . that . . . came up after my father actually passed away." In any event, plaintiff listed it on his CIS as an "inheritance from father" though the title report showed he acquired it by deed from the prior owner in November 2003. Plaintiff estimated the value at $45,000, but testified that it was uninhabitable at the time of trial. According to the title report, the property was subject to a federal tax lien of $17,279 and an $8000 judgment. He also testified that he then had no plans for the property which, he said, was "basically my mother's property because she had to get about $100,000 in loans to basically pay on the bills" against the property. Plaintiff conceded he had listed no mortgages on the property on his CIS, but testified there were "about $30,000 or $40,000 on [sic] loans on this property," and expressed that he intended to deed it to his mother but took no further action.
Defendant, however, testified that plaintiff never told her that he owed any money to his father or his father's estate. She also knew of no loans by plaintiff's mother to plaintiff or to defendant herself.
Plaintiff's mother equivocated as to whether her husband ever loaned plaintiff money to buy realty. She did recall a loan to plaintiff for a vehicle. She said "[t]here may have been many [loans between her husband and plaintiff], there's one I didn't know of, I don't remember the exact amount." She also said that her husband once "spoke of some money that [plaintiff] had owed him" for the Monmouth Street property and that plaintiff was supposed to pay her husband back, but when asked if plaintiff had repaid the loan or if she had requested plaintiff to repay it, she said she never asked plaintiff for the money, and that "[i]f I loan--or gave something to somebody, it was a done issue, I wasn't upset about it." Her husband never told her that if plaintiff owed them money and he were to die, plaintiff should repay it. She also did not refer to any documents she had seen regarding a realty loan.
Ellen Conte was plaintiff's real estate appraiser. As of February 2005, she valued the parties' marital home on Hudson Street at $110,000. She valued the 403 North Fillmore Street property at $58,292 using the cost approach and $52,000 using the comparable sales approach. The 433 Monmouth Street property was valued at $79,000 under the sales method and $103,000 using the cost approach. The appraiser "put [the] most weight on the sales comparison approach on all three appraisals." Conte acknowledged that the values "appear[ed] kind of low compared to other areas of southern New Jersey," but could not explain that anomaly other than by referring to the data she used from the Multiple Listing Service system.
Michael Tacknoff was presented by defendant as an expert realty appraiser. He appraised the parties' Hudson Street property at $135,000 as of June 2005 using a more conservative sales approach. At trial, however, he felt the property was worth "a little bit more" than $135,000 given an interim sale of another comparable property.
A considerable amount of the testimony was presented by both parties on the issue of custody of the children. We do not detail this testimony because plaintiff's challenge to the custody determination focuses on the absence of an interview by the judge of the children rather than the evidential basis of the decision. Generally, plaintiff depicted himself as an involved parent who exercised good judgment at all times. He characterized defendant as a neglectful and impatient caretaker. Defendant, on the other hand, testified that she was the parent who assumed virtually all of the parental obligations. She characterized plaintiff as a distant and largely absent father.
Plaintiff retained Dr. John Guerin and presented him at trial as an expert in custody and visitation. His direct testimony was generally more favorable to defendant. In fact, in his report he concluded that defendant had "shouldered most of the responsibility for raising" the girls to date, that she was the one who "provided structure and stability for them," and that her contention that plaintiff's "motivations are of a vindictive nature" was supported. Among his recommendations were that: defendant remain the parent of primary residence; the "current [visitation] schedule be maintained" though perhaps expanded on Tuesdays by approximately an hour to make up for travel time; and that the girls be permitted to attend school in defendant's district. Also, each parent should be given the "right of first refusal" if the other needs child care beyond the existing after-school arrangements. Finally, Guerin believed defendant was entitled to have input in the girls' therapy being conducted by plaintiff's therapist, "including the right to refuse treatment."
Clearly, the most contentious issue between the parties was the issue of custody of the three children. Plaintiff argues that the trial judge erred by designating defendant as the primary residential parent. He contends that the failure of the judge to interview the girls contributed to his erroneous custodial decision.
Rule 5:8-6 governs trial of a child custody issue. The rule specifically addresses interviews of the children by the court; it provides:
As part of the custody hearing, the court may on its own motion or at the request of a litigant conduct an in camera interview with the child(ren). In the absence of good cause, the decision to conduct an interview shall be made before trial. If the court elects not to conduct an interview, it shall place its reasons on the record.
Here, the judge did not conduct an interview or place his reasons for not doing so on the record. On the other hand, we have searched the record and have found no request by plaintiff's attorney to conduct an interview, or an objection when the judge did not interview the children or provide his reasons for not doing so. Plaintiff does not identify by transcript reference or appendix reference any such request or objection. Notably, plaintiff had considerable opportunity to do so. The trial consumed seven days over seven weeks. During that time, plaintiff's visitation was adjusted and expanded to account for new fall activities for the girls. Plaintiff also filed a motion for reconsideration following delivery of the oral decision on January 31, 2006. Although plaintiff noted that parenting time was a major issue, he voiced no objection to the failure to interview the children.
An interview with a child is discretionary rather than mandatory. The comment to Rule 5:8-6 notes that the rule now "follows the view of the Family Practice Committee that ordinarily the mental health professionals are better equipped than the judge . . . to conduct a meaningful interview." Pressler, Current N.J. Court Rules, comment on R. 5:8-6 (2007).
Here, the trial judge had the opportunity to observe the testimony of Dr. Guerin, to review his report, and to consider the testimony of both parents, the paternal grandmother, and a friend of plaintiff as it pertained to the parenting capabilities of each parent and the best interests of these children. Given the considerable amount of evidence submitted on this issue, we cannot conclude that the omission of the interview contributed in any material sense to a wrong decision on the custodial issue.
In his oral decision, the trial judge generally allocated the marital assets and liabilities on an equal basis. In doing so, he included the property at 115 Hickman Avenue and 433 Monmouth Street as marital assets, and included an investment account as marital property.
A judge is required to employ a three-step process to effectuate the equitable distribution of marital property. A judge must identify the marital property, value it, and then allocate the marital property in an equitable fashion. Rothman v. Rothman, 65 N.J. 219, 232 (1974); N.J.S.A. 2A:34-23.1. The analysis includes marital debts. N.J.S.A. 2A:34-23.1(m). The burden of establishing immunity from equitable distribution of a particular asset rests with the party who seeks to exclude an asset. Painter v. Painter, 65 N.J. 196, 214 (1974). See also Dotsko v. Dotsko, 244 N.J. Super. 668, 676 (App. Div. 1990) (where husband sought to exclude a gift from a parent, he had the burden to establish that this property acquired during the marriage should be exempt from equitable distribution). Ultimately, however, the fashioning of an appropriate allocation of marital property is vested in the discretion of the trial judge. Savoie v. Savoie, 245 N.J. Super. 1, 5 (App. Div. 1990).
Nevertheless, the findings of fact must be supported by substantial credible evidence. Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). If so, those findings are binding. Ibid.
Here, we are satisfied that the inclusion of the real property located at 115 Hickman Avenue and 433 Monmouth Street as marital property was appropriate. The evidence proffered by plaintiff in support of his attempt to exempt those properties was inadequate to carry his burden of proof. Similarly, we discern no error in the values assigned by the trial judge to each property. The evidence of encumbrances on each property was at best confused and uncertain.
We also identify no error in the allocation of marital debt. In plaintiff's May 4, 2005 CIS, plaintiff listed $63,365 of credit card debt. A later order required him to "locate his credit card statements from the date of marriage until the date the divorce complaint was filed." At trial, plaintiff identified five credit card accounts. The statements from these accounts received in evidence disclose balances of $39,281.85. The trial judge rounded the marital credit card debt at $39,280 and assigned half of the debt, $19,640, to each party. This finding of the amount of debt and the allocation of the debt is well-supported by the record. Cesare, supra, 154 N.J. at 411-12; Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974).
On the other hand, plaintiff presented clear evidence in support of his claim that the New York Global Securities account was a pre-marital asset. There is no evidence that this asset was ever treated as a joint asset. Ownership of the account always bore plaintiff's name and it was never commingled with other marital assets. Inclusion of this account, valued at $6559, in the marital estate was error. It should not have been subject to equitable distribution.
Finally, we address the provision that plaintiff pay half of defendant's counsel fees. The certification of services submitted by defendant's attorney disclosed fees of $23,250. Plaintiff is responsible for $11,625, or half of the fees incurred by defendant. Plaintiff contends that his arguments for custody and exemption from equitable distribution of some real property were advanced in good faith.
The judge explained his decision to award counsel fees to defendant as follows:
The Court has considered the pleadings, considered the authenticity of the complaints, the motions filed, and the Court will require Mr. Hopkins to pay one-half of Mrs. Hopkins' attorneys fees. She'll be responsible for paying one-half of her attorneys fees.
I make that finding based upon a concern for what the Court finds has been a requirement the Plaintiff to bring to trial issues that were easily resolvable or a matter of simple math and the Court finds that he has not provided sufficient detailed information with regard to certain assessments that he made.
Notably, plaintiff does not question the need for the services or the cost of the legal services provided by defendant's attorney. He contends that he has a substantial child support obligation but never explicitly or implicitly argues that he lacks the financial ability to pay. Moreover, we agree with the trial judge's assessment of the quality of the proof adduced by plaintiff and the amenability of resolution of virtually every contested issue without need for a trial. We, therefore, decline to disturb the counsel fee award.
In sum, we affirm the Amended Judgment of Divorce in all respects but one. The New York Global Securities investment account was exempt from equitable distribution. We, therefore, remand for correction of the Amended Judgment of Divorce to reflect the exempt status of this asset and to adjust the sum due to defendant.
Affirmed in part; reversed in part and remanded for correction of the Amended Judgment of Divorce.