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Maybaum v. Maybaum

July 2, 2007

LAUREN A. MAYBAUM, PLAINTIFF-APPELLANT,
v.
SCOTT K. MAYBAUM, DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-0134-98.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 31, 2007

Before Judges Lefelt, Parrillo and Sapp-Peterson.

Four to five years after entry of the dual judgment of divorce on September 5, 2001, the Family Part, in a series of orders dated April 22, 2005, October 5, 2005, March 31, 2006 and May 4, 2006, finally resolved all issues of equitable distribution and counsel fees remaining between the parties. It is from portions of these post-judgment orders that plaintiff Lauren Maybaum appeals.

The procedural history is long and complex and we mention only those facts pertinent to this appeal. Plaintiff and defendant Scott Maybaum married in June 1996 and had two children. Plaintiff filed for divorce eleven years later on July 2, 1997. At the outset of the marriage, each party acquired title to two liquor licenses from plaintiff's father, a successful businessman who owned liquor stores and a management company, Allied Management, Inc. (Allied), with real estate holdings.*fn1 Defendant became employed at Allied and eventually advanced to a management position in the company. Part of his management responsibilities entailed weekly checking of the inventory at the liquor stores, all of which, including the four stores owned by the parties, were managed by Allied for a management fee.

During the course of the marriage, plaintiff's father and an unrelated third party invested in various Dunkin' Donuts franchises. Defendant participated in the operation of these stores to some extent, but always under the auspices of plaintiff's father and Allied. By virtue of their familial relationship, the parties were joint owners of forty percent of the Dunkin' Donuts stores.

Sometime in 1996 or the early part of 1997, defendant formed his own company called Wine Country, Inc. He initially intended to open a wine store in the Scarsdale area, but later settled on and purchased property in Long Island, referred to as the "LT Purchase." However, defendant owned the Long Island property for only one year, having sold it and realized a profit of $650,000.

By the beginning of April 1997, the parties had, for all intents and purposes, decided to end their marriage. Not only did they separate their bank accounts, but defendant also gave notice to Allied that he was withdrawing the Ledgewood and Gillette stores from its management umbrella.

Following the divorce complaint on July 2, 1997, a series of pendente lite and case management orders were issued over the next several years. Orders of November 10, 1999, May 18, 2000 and June 14, 2000, addressed discovery issues relating to the LT Purchase and sale. A nineteen-day trial in 2000 resolved certain issues, but left others unresolved. An order of March 30, 2001, deferred counsel fee requests until the final judgment of divorce, and directed defendant to provide an accounting of the Gillette and Ledgewood stores and to preserve the stores' assets.

By decision of August 1, 2001, which was incorporated into a dual judgment of divorce issued on September 5, 2001, Judge Schaeffer, who presided over the nineteen-day trial, appointed William Morrison (Morrison), a certified public accountant, to value the stores and analyze the parties' income from all sources with the aid of a cash flow analysis from A.J. Wilner; appointed Charles DeFuccio (DeFuccio) as Discovery Master to facilitate discovery and assist Morrison; directed that discovery and the fiscal analysis be completed in 120 days; and stayed equitable distribution pending their completion. Another order, issued by Judge Schaeffer on November 8, 2001, granted defendant's request to sell the Gillette and Ledgewood stores, and further directed defendant to provide certain financial information and place the proceeds from sale of the Gillette and Ledgewood stores in escrow. Judge Schaeffer subsequently passed away and the case was reassigned to another Family Part judge. In April 2002, the parties cross-moved to buy-out the other's interest in the Gillette and Ledgewood stores. After hearing argument on the competing applications, on June 11, 2003, the Family Part judge entered an order granting plaintiff's motion to purchase defendant's interest in the Gillette and Ledgewood stores for $768,000 and directing that the sale be effectuated within 120 days.*fn2 The order also gave plaintiff the option to purchase the inventory on hand on the date of closing. The sale did not take place as directed and on April 20, 2004, defendant moved to enforce the June 11, 2003 order. On June 7, 2004, the judge granted defendant's motion and ordered the sale of the Gillette and Ledgewood stores to take place on or before July 7, 2004.

The July 7, 2004 deadline was not met. Instead, on August 26, 2004, plaintiff filed a motion requesting, among other things, that her payment for the Gillette and Ledgewood stores be offset by a credit for one-half of the inventory that existed in the stores on July 1, 1997, the date of the filing of the divorce complaint. Defendant countered with a cross-motion, seeking enforcement of the June 7, 2004 order directing sale of the Gillette and Ledgewood stores, and without any credit to plaintiff. On October 27, 2004, the judge ordered that a plenary hearing be held to determine, among other things, the credit, if any, due plaintiff on her share of the inventory as of July 1, 1997. In the meantime, Morrison issued his expert report on September 17, 2004.

At the plenary hearing on November 17 and 18, 2004, Morrison testified at length about inventory valuation both at time of closing, November 10, 2004, and at date of complaint, July 1, 1997:

[Plaintiff's Counsel]: Basically, would you agree that it's clear that [plaintiff] has delivered $768,000 to [defendant] in connection with the transaction?

[Morrison]: Yes.

[Plaintiff's Counsel]: With adjustments that are typical in terms of making the transfer effective on a date in the middle of the month.

[Morrison]: Yes.

[Plaintiff's Counsel]: And that subject to the Court's decision [defendant] has transferred all his interest in those businesses to [plaintiff].

[Morrison]: That's correct.

[Plaintiff's Counsel]: And would you further agree that what has happened here is that the parties took a physical count of the inventory at the two stores and calculated the dollar value of the -- what I'll call the November 10, 2004 inventory at an agreed upon figure as adjusted of $424,395.30?

[Morrison]: Yes, sir.

[Plaintiff's Counsel]: And because we didn't have an agreement it's clear that -- those funds were turned over to [plaintiff's counsel]. They're in his trust account.

[Morrison]: Yes.

[Plaintiff's Counsel]: Now what -- what is not represented here in the transaction that happened on November 10 is the credit, if any, that [plaintiff] may be entitled to in connection with the -- half the dollar value of the inventory on July 1 of 1997, correct?

[Morrison]: Correct.

[Plaintiff's Counsel]: So that as we --basically, as we look at the position of the parties at closing, let's just put ourselves back at the closing table, November 10, 19--2004, last week.

[Morrison]: Yes.

[Plaintiff's Counsel]: [Plaintiff] pays $768,000 for the business, right?

[Morrison]: Yes.

[Plaintiff's Counsel]: She has advanced, subject to credits, dollar for dollar, this $424,000 number, correct?

[Morrison]: Correct.

[Plaintiff's Counsel]: And she asked -- you understand she asks for the Court to recognize that she's entitled to a credit of 50 percent of the '97 inventory.

[Morrison]: Yes.

[Plaintiff's Counsel]: And so if we -- if we did a calculation, and we'll do it in a minute, what we're looking for -- what [plaintiff's] looking for is an adjustment off the $424,000 that's on deposit for inventory to give her a just participation in the inventory that existed in 1997.

[Morrison]: Correct.

[Plaintiff's Counsel]: The top half of P-5 for identification shows an approach to the transaction, which doesn't include the balance sheet adjustments, correct?

[Morrison]: Correct.

[Plaintiff's Counsel]: And it -- it would indicate, using also a year-end '96 figure that [plaintiff] would be entitled to a $295,736 credit against the inventory that she acquired last week, correct?

[Morrison]: Yes.

[Plaintiff's Counsel]: And so if we were doing the deal on that basis Lauren would pay, and has paid the $768,000 for the stores, and an additional 128,000 would be due for the inventory.

[Morrison]: Yes.

[Plaintiff's Counsel]: And that would be the end of the deal as you understand [plaintiff's] position.

[Morrison]: Yes.

[Plaintiff's Counsel]: So whichever way you look at this deal from [plaintiff's] position, she would pay, looking back from the vantage point of 2004 back to 1997, she'd be paying the 668,000 for the business, right?

[Morrison]: 768, sir.

[Plaintiff's Counsel]: Seven -- I misspoke. She'd be paying the $768,000 for the two businesses?

[Morrison]: Correct.

[Plaintiff's Counsel]: She would be buying the inventory as measured and calculated by agreement of the parties at 424,000?

[Morrison]: Correct.

[Plaintiff's Counsel]: She would get a credit for half of the inventory as it existed back at the date of value, and you used a number of 295,736, correct?

[Morrison]: Yes.

[Plaintiff's Counsel]: That could be a higher number if we apply, and we're not going to do that math here. ...


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