July 13, 2007
MELANIE A. DUBOIS A/K/A MELANIE A. BRODEUR, PLAINTIFF-RESPONDENT/CROSS-APPELLANT,
MARTIN P. BRODEUR, DEFENDANT-APPELLANT/ CROSS-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division-Family Part, Essex County, Docket No. FM-07-2617-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: May 2, 2007
Before Judges Cuff, Winkelstein and Fuentes.
In this appeal from a final judgment of divorce, defendant Martin P. Brodeur, a professional hockey player, contends that the court erred in awarding his thirty-three year old wife, plaintiff Melanie A. DuBois, permanent alimony in the amount of $500,000 annually following a marriage of seven-and-one-half years, computed from the date of marriage to the date of separation. Defendant argues that permanent alimony was not appropriate because the marriage was not one of long duration and that the amount of the award is excessive and unsupported by the evidence of marital lifestyle and plaintiff's needs. In her cross-appeal, plaintiff contests the denial of her application for counsel fees, the counsel fee award in favor of defendant, and the award of team logo pendants to defendant. We reverse the permanent alimony award and remand for entry of an appropriate limited term alimony award. We also reverse the counsel fee award in favor of defendant. We affirm the judgment of divorce in all other respects.
On May 5, 2003, plaintiff filed a complaint for divorce against defendant. Custody and visitation issues were separately handled by a parenting coordinator and resulted in the entry of a consent order by the parties. A trial on the financial issues of child support, alimony and equitable distribution commenced in January 2005. Following twelve days of trial, the trial judge issued a written opinion and on October 20, 2005, the judge entered a final judgment of divorce.
Pursuant to this judgment, defendant was directed to pay child support in the amount of $132,112.32 per year plus 87% of the costs for the children's private schools, camps, and transportation for parenting time. He was also directed to pay permanent alimony to plaintiff in the amount of $500,000 per year. With respect to equitable distribution, the judgment awarded one-half of the total value of the marital assets, or $6,815,322.88, to each party. In addition, pursuant to a qualified domestic relations order, plaintiff was awarded one-half of defendant's retirement assets, and one-half of the $1,750,000 in deferred compensation payments to be received by defendant from 2006 through 2009.
Plaintiff was born on April 6, 1974, in Saint-Hyacinthe, Quebec, Canada. Defendant was born on May 6, 1972, in Montreal, Canada. Defendant started playing hockey when he was four years old. When he was seven, he started playing goalie. At the age of eight, he began attending a clinic with a goaltender coach and later attended camp with a famous Russian goaltender coach for one year. By this time, he was a starting goalie on his team.
In 1987, defendant was invited to play with a Midget Triple A team. This required him to attend a different school, located about half an hour away from his home. He played for this team for one year. It was during this time that he first met plaintiff; she was thirteen years old and he was fifteen.
In 1989, when defendant was seventeen and in high school, he was drafted into the Junior Hockey League. Although he was recruited by twelve different colleges, he chose to enter the Junior League, seeing it as his quickest route to the National Hockey League (NHL), his life-long dream.
Defendant was drafted by the Verdun Canadiens, which later became the Saint-Hyacinthe Lasers. He left his home town and moved to Saint-Hyacinthe, where the team arranged for him to live with a host family. He received a salary of $35 a week, plus $20 for gas. Playing with the Lasers required defendant to practice seven days a week and play three to four times a week. As a result, he was not able to finish high school.
It was during his first season with the Lasers that defendant began dating plaintiff, who was now fifteen and attending high school twenty minutes away in Saint-Liboire, where she lived with her family. Plaintiff did not date anyone else after that.
Following his first season with the Lasers, in the spring of 1990, the NHL draft occurred in Vancouver. Defendant was ranked as the number two goalie during this draft and was selected in the first round by the New Jersey Devils and signed an NHL contract. According to this contract, if defendant played in the Junior League, he would be paid $40 per week plus reimbursement for gas; if he played in the Minor League, he would be paid $35,000 for the year; if he played with the NHL, he would be paid $115,000 for the year. Defendant also received a signing bonus of $80,000. He deposited this bonus into an account in his own name.
Defendant returned to his home town of Montreal for the summer of 1990 and continued to train, first with the Junior League and then later in the summer with the Devils in New Jersey. Plaintiff was not with defendant during training.
Defendant was not chosen to play with the Devils for the 1990-1991 season. Because he was only eighteen, he was too young to play with the Devils' Minor League team, so he returned to the Lasers, in the Junior League, to continue to develop his skills.
Although defendant was again billeted with a host family during this season, he started spending a lot of his time at plaintiff's parents' house. When plaintiff turned seventeen, her parents permitted her to share a room with defendant in their house. Plaintiff claimed that their dating relationship had been exclusive from the start. Defendant, however, asserted that it took a while for them to get their "act together."
At the end of the 1990-1991 season, defendant returned home to Montreal. Plaintiff, however, claimed that they spent the summer together, staying half the time with defendant's family in Montreal and the other half with her family in Saint-Liboire.
Defendant came to New Jersey at the end of the summer of 1991 to train with the Devils, but again he was not selected to play with the team for the following season. For the 1991-1992 season, he played with the Lasers, earning $50 per week plus gas. He continued to date plaintiff and characterized their relationship during this time as that of "boyfriend [and] girlfriend."
Plaintiff explained that high school in Canada ended one year earlier than high school in the United States, but that it was followed by a two-year college preparatory school. So, in 1991, when she was seventeen, she began her first year of preparatory school. She admitted that she did not put a lot of effort into school because she knew that she and defendant were not going to be in Saint-Hyacinthe/Saint-Liboire for the following year because defendant would then be old enough to play in the Minor League. She also knew that she would go with him wherever he was playing because "[i]t was just the way it was," based on her discussions with him. She did not want to pursue a long-distance relationship.
During the 1991-1992 season, defendant was called up to play for the Devils when their goalies were injured. He played three or four games with the team until the NHL players went on strike. Defendant returned to the Junior League until the end of the strike. In the spring of 1992, defendant became the Devils' backup goalie. It was during this time that defendant required his first arthroscopic knee surgery. He received treatment and underwent rehabilitation in New Jersey. Plaintiff did not accompany him to New Jersey because she remained in school in Saint-Liboire.
At the end of the 1991-1992 season, defendant returned to Montreal. When he went to training camp in New Jersey, plaintiff did not accompany him but she visited him there.
Defendant was now twenty years old and qualified to play with the Devils' Minor League team in Utica, New York. In the fall of 1992, he drove to New Hartford, New York, along with some teammates and found an apartment to rent. He furnished the apartment. Shortly thereafter, plaintiff's parents drove her to New York, along with some furniture and her personal belongings, so that she could move in with defendant.
Plaintiff never completed her second year of college preparatory school. She admitted that she never had any objective to pursue a career because she knew, after two years of dating defendant, that "this was it." She also admitted that she had not been training for any career at age fifteen when she first met defendant, and that she did not participate in any after-school activities or sports, either before or after she met him.
It was undisputed that, during the time the couple spent in Utica, they did not discuss getting married and did not own any joint property or have any joint accounts, either in the United States or in Canada. At this time, plaintiff did not work. She was not in the country legally and did not speak English. Both plaintiff and defendant explained that getting married was not that important to them or their families.
Defendant was earning $35,000 a year while he played for the Utica team. Plaintiff spent her days watching television and shopping. She tried taking correspondence classes in Canada, but decided that it was not worth it because it would have taken her six years to complete one year of school.
At the end of defendant's first season with the Utica team, the couple returned to Saint-Liboire, where they rented an apartment. At the end of the summer of 1993, defendant attended training camp in New Jersey. Because of an injury to the Devils' goalie, defendant remained with the team. He played well enough for the team to hire him as a goalie for the 1993-1994 season. He was now earning an NHL salary of $140,000 per year.
Plaintiff joined defendant in New Jersey in October 1993. They rented a furnished apartment in Hackensack. The lease was in defendant's name only. Plaintiff still could not work because she was not in the country legally, though she was learning English. The couple had no discussions regarding employment or further education for plaintiff. She spent her time in Hackensack cleaning, cooking, and doing laundry.
The couple became engaged in December 1993 because "it was kind of the right thing to do at that time." Plaintiff explained that all of defendant's other team members were either married or engaged and looked at plaintiff and defendant strangely because they were simply living together. They did not set a wedding date at that time.
Defendant continued to play for the Devils, who made the playoffs in the spring of 1994. Defendant won the Rookie of the Year award.
Plaintiff and defendant returned to Saint-Liboire for the summer of 1994. They discussed starting a family, and plaintiff became pregnant that summer. They had tried to plan the pregnancy so that the baby would be born in the United States. Despite the pregnancy, the couple still did not select a wedding date. In August 1994, plaintiff miscarried; however, she immediately became pregnant again the following month.
Defendant played for the Devils for the 1994-1995 season. Due to a lockout that season, he played only forty-eight games, instead of the usual eighty or more, and received a proportionately lower salary. Nevertheless, the Devils agreed to renegotiate defendant's contract. The team paid him $850,000 for that shortened season. The check was deposited into an account in defendant's name only. The Devils won the Stanley Cup at the end of that season.
The couple's son, Anthony, was born on June 8, 1995. In July the couple bought a two-bedroom bungalow with a finished basement in a subdivision in Saint-Liboire. It was purchased in defendant's name alone, using his own money; there was no mortgage, and plaintiff did not contribute any funds to the purchase. She had participated, however, in the house search and the ultimate selection of the house. The couple married on August 19, 1995.
At the commencement of the 1995-1996 season, plaintiff signed a three-year contract with the Devils. According to this contract, defendant earned $1.5 million for the 1995-1996 season, $1.8 million for the 1996-1997 season, and $2 million for the 1997-1998 season. The contract also provided for bonuses based on performance and awards.
Once they were married, both parties concede that they began to purchase property in joint names, to open joint bank accounts, and to become partners in their investments. Plaintiff spent her time taking care of the baby, traveling,*fn1 and socializing with the other players' wives.
Two months after their marriage, the couple bought a home in North Caldwell for $595,000. Title was held in both names. The couple devised a plan to use the house in Saint-Liboire during holidays and defendant's off-season and plaintiff's visits with her family. In February 1996, plaintiff learned she was pregnant again. Twin boys, William and Jeremy, were born on October 29, 1996. After their birth, the couple hired a nanny, paying her $360 to $400 a week. Over the course of their marriage, the couple sometimes paid close relatives or friends to serve as nannies for their children.
In the summer of 1996, defendant played hockey in Vienna for the World Hockey Championship as part of Team Canada. Plaintiff accompanied him on the trip, after which the couple traveled to Paris and London.
On December 11, 1997, defendant negotiated a four-year contract with the Devils. It provided that defendant would earn $2,125,000 for the 1997-1998 season, $3,500,000 for the 1998-1999 season, $3,750,000 for the 1999-2000 season, and $4,000,000 for the 2000-2001 season. If the Devils exercised their option to hire defendant for the 2001-2002 season, he would earn $4,250,000. In addition, the contract called for defendant to earn deferred compensation as follows: $250,000 for the first year of the contract, payable by June 1, 2006; $250,000 for the second year of the contract, payable by June 1, 2007; $250,000 for the third year of the contract, payable by June 1, 2008; and $250,000 for the fourth year of the contract, payable by June 1, 2009. The contract also provided for performance bonuses.
With this contract, the parties were able to start saving money. To that end, they hired a financial advisor. Their plan was to save as much money as they could, i.e., to save whatever was left over after they lived the way they wanted because the couple knew that defendant's playing career would end when he was in his late thirties or early forties. Although the couple did not have to diminish their lifestyle, and actually upgraded it somewhat after this contract was signed, they both acknowledged that they could have lived a much grander lifestyle, if they had not been so concerned about saving money for the future.
It was around this time that defendant began receiving compensation for endorsements for such companies as Pepsi, Frito's, and Wheaties. The couple formed a limited liability corporation known as J.A.W. for defendant's endorsement money. The J.A.W. account, to which plaintiff had access, was used for business-related expenses.
Defendant also earned additional money by signing sports memorabilia and making personal appearances, both of which were handled by Steiner Sports, and for signing hockey cards, which was handled by Upper Deck. The amount of money earned by defendant from these ventures varied from year to year, with the amount usually depending on whether the Devils won the championship. In addition, some places of business paid defendant with free merchandise, such as cars, or with free credits for private jet travel.
Although plaintiff claimed that she witnessed defendant receiving cash for some of his signings or appearances, the president of Steiner Sports denied that it ever paid him in cash. On the other hand, defendant admitted that "sometimes" he received cash for signings and appearances, but he claimed that almost all of his additional compensation was received in check and was reported on his tax return.
On November 9, 1998, the parties sold their house and bought a bigger house, also in North Caldwell. This house was a 6000 square foot colonial that cost $960,000. The parties spent between $200,000 and $300,000 on renovations. Plaintiff supervised the renovations. Plaintiff also did most of the decorating herself.
At this point the couple did not have any real budget. They dined out frequently, either by themselves, with the children, or with other couples. The restaurants varied from local family restaurants to upscale restaurants in New York. They gave generous gifts to members of both families, including cash and cars, and paid for the education and housing expenses for various family members over the years. Plaintiff had a credit card and an ATM card for cash. She took money for whatever she needed, whenever she needed it. She shopped at both designer stores like Prada and neighborhood stores like Target. The parties never had disagreements over spending, and they never checked on what the other spent. They always had new cars because they would trade in their old ones after a year or two.
Both parties agreed that they never intended for plaintiff to pursue a career or employment because she needed to be available to defendant and the children. Defendant also admitted that plaintiff "was a great mother and great wife" and that she made all of the contributions one would have expected her to make to the relationship.
In January or February of 2000, the parties bought two pieces of property, totaling about four acres, in Saint-Adolphe, Canada, approximately forty-five minutes from Montreal. They built two houses on these properties. One is an 1800 square foot guest house, with two bedrooms and a loft. The other is a three-story, 4500 square foot house, with four bedrooms, a gazebo, and a finished basement, which the couple refers to as the "cottage." The vacant lots each cost $72,000 Canadian dollars (CAD). Plaintiff spent a lot of time with the architects to plan the structures, flying back and forth between New Jersey and Canada. She was also in charge of all the decorating and design details.
The larger of the two houses was finished first. Although the couple used it for the first time for Christmas 2001, construction was not finally completed until the summer of 2002. The home, which was intended to be the family's summer residence only, included a jet ski, a boat, a tennis court, and an in-ground pool. They hired a caretaker for the property.
Meanwhile, on October 2, 2001, defendant signed another multi-year contract with the Devils. This contract called for him to be paid $4,250,000 for the 2001-2002 season, $6,250,000 for each of the next four seasons (2002 through 2006), and $8,000,000 for the 2006-2007 season. It also called for defendant to receive deferred compensation in the amount of $750,000 for each of the four seasons from 2002 through 2006 (for a total of $3,000,000), with payments to be made beginning in 2006 and ending in 2010. The contract also provided for bonuses based on performance. This contract enabled them to upgrade their lifestyle due to their savings regimen instituted with the prior contract.
On March 14, 2002, the couple's fourth child, a daughter, Anabelle, was born. In April or May, plaintiff's brother and his wife came to live with plaintiff and defendant to help with the children.
In the summer of 2002, the parties bought an additional 400 acres of land in Saint-Adolphe for $400,000 CAD, adjacent to their four acre parcel. They did so to gain privacy and to protect themselves from encroaching development.
Plaintiff soon began to suspect that her husband was having an affair with her brother's wife. In the summer of 2002, she confronted defendant about her suspicions; both defendant and her sister-in-law denied having an affair, and plaintiff had no reason to disbelieve them. She allowed her brother and sister-in-law to remain living with them. On December 24, 2002, however, defendant admitted to having an adulterous relationship with his sister-in-law. When, on December 28, 2002, plaintiff learned that the affair was continuing, she removed defendant's belongings from the marital home and asked him to leave. He stayed in hotels and then an apartment for the first few months of 2003.
After the separation, plaintiff still had access to the couple's joint bank account and to her credit cards. Because she was uncertain about her future, she immediately withdrew $300,000 from their joint account and deposited the money into an account in her own name. Plaintiff admitted that she spent some of this money on plastic surgeries for herself and her sister and for a car for her sister. She claimed that some of the spending on her sister was consistent with the couple's prior gift-giving practices and that some of it was to compensate her sister for helping plaintiff with the children.
Plaintiff also used some of the $300,000 for living expenses for herself and the children because defendant, who did not receive paychecks during the off-season, had not deposited any money into their joint account. A formal pendente lite order was entered in February 2004 that required defendant to pay plaintiff $25,500 per month, plus all of the children's private school expenses and the shelter expenses for her and the children.
In May 2003, plaintiff contracted to buy a new house in the midst of construction in Essex Fells for $2,800,000. The parties listed the marital house for sale for $2,100,000 in October 2003. It sold for $1,745,000 in December 2004.
Meanwhile, plaintiff spent $1,000,000 more on the new home than the selling price of the former marital home, largely due to "extras" that she erroneously assumed were included in the contract price. Plaintiff used an advance against her equitable distribution to fund the purchase of the new home. The amount of the advance was stipulated by the parties and is not the subject of this appeal.
In June 2003, defendant purchased his own house in Livingston. At the time of trial in 2005, the house was listed for sale for $1,849,000. Defendant intended to sell it at the end of the hockey season.
It was stipulated that the 2004-2005 NHL season was cancelled due to a lockout, that defendant did not earn any portion of his salary, deferred compensation, or bonuses under his October 2001 contract, and that pursuant to a collective bargaining agreement effective July 2005, defendant's salary, deferred compensation, and bonuses under that contract were reduced by twenty-four percent. Hence, for the 2005-2006 season, defendant's salary was reduced from $6,250,000 to $4,750,000, and his deferred compensation for that season (payable during the 2009-2010 season) was reduced from $750,000 to $570,000. If defendant's option for the 2006-2007 was exercised, defendant's salary would be reduced from $8,000,000 to $6,080,000.
Both parties hired experts to analyze the expenditures they made in 2002, the last year they lived together as an intact family. These experts looked at the total family income for that year and attempted to account for every expenditure made by the couple from that income. The experts did not diverge significantly on the issue of the amount of money spent by the family that year. The dispute between the experts and between the parties centered primarily around the attribution of those expenditures, i.e. to defendant, to plaintiff, or to the family as a unit.
Plaintiff's expert concluded that plaintiff's monthly expenses in 2002 for herself and the children (exclusive of the children's private school and camp expenses) were $8145 for shelter, $4669 for transportation, and $27,249 for personal needs, resulting in total monthly expenses of $40,063, or $480,756 for the year. Defendant's expert concluded that the family's total shelter, transportation, and personal expenses for 2002 (including the children's private school and camp expenses) were $632,045 Of this amount, the expert allocated $264,607 to defendant alone, $84,244 to plaintiff alone, $70,275 to the children, and $212,919 as "joint and unallocated" expenses. Thus, assuming all of the joint and unallocated expenses were allocated to plaintiff and the children, they needed no more than $367,438 per year.
Plaintiff's expert, Michael Saponara, based his analysis on a review of all of the bank statements, canceled checks, and credit card statements for the family for the year 2002. He excluded expenses incurred for the Canadian properties as well as the children's educational expenses, camp, and hobbies and health and life insurance because defendant would be paying for those expenses separately. Saponara found that the family had spent $654,891 that year, either by check or credit card. An additional $74,000 was spent in cash evidenced by ATM withdrawals and checks written to the parties. He then concluded that $480,769 of that amount was attributable to just plaintiff and the four children. The rest represented those expenses incurred by defendant alone as well as one-time extraordinary family expenditures. Saponara claimed that he determined defendant's expenses by attributing to him anything that appeared on his credit card, such as professional insurance and various entertainment charges related to his profession.
Saponara admitted that he relied on plaintiff's assertions about her spending for herself and the children in each category. Then he used the raw data as a "reasonability" check to determine whether plaintiff's claims seemed reasonable. Saponara admitted that if plaintiff's claims were incorrect, then his conclusions would also be incorrect. However, he "had no reason to think that anything [plaintiff] was telling [him] was false."
Hence, the amounts claimed by plaintiff for each category were not necessarily linked to the expenditures observed from a review of the raw data. In fact, in some cases, the amounts claimed to have been spent by plaintiff for herself and the children actually exceeded the amount shown by the raw data, but this discrepancy could be attributable to cash expenditures made by plaintiff. The total "observed" expenses for plaintiff and the children were $436,624 for the year; the difference between that amount and the amount claimed in Saponara's report, $480,769, could be attributed to the cash outlays.
Saponara also admitted that for certain categories of expenses, especially the shelter expenses, he did not allocate anything for defendant's portion because plaintiff's expenses would not be reduced merely because defendant no longer lived in the house. He also allocated only fifteen percent of the family's food expenses to defendant because he was in training camp from September to mid-October every year and was on the road for half the time from mid-October to May. He also admitted that the family's food expenses included food for other house guests and residents, such as nannies, housekeepers, and relatives at various times of the year. Saponara allocated twenty-five percent of the family's food expenses to plaintiff, twenty-five percent to defendant, twenty-five percent to the four children, and twenty-five percent to the other people living in the house. He then reduced defendant's twenty-five percent based on his being away sixty percent of the time.
With respect to restaurant expenses, Saponara allocated to defendant only those expenses incurred when defendant and plaintiff went out to eat with defendant's teammates. All "family" expenses for restaurants were allocated one hundred percent to plaintiff. Saponara made no attempt to determine how much of these restaurant charges were attributable to defendant's portion because he believed that plaintiff's dining out with a "companion" was part of her lifestyle. Hence, to the extent that expenses attributable to plaintiff alone actually included defendant's portion, defendant stood as the "proxy" for plaintiff's companion.
As with the shelter expenses, Saponara believed that defendant could not be "objectively" removed from certain family expenditures when determining the marital lifestyle. The same was true for the amount spent on house furnishings, internet service, certain travel expenses such as EZ-Pass and parking, vacations, non-hockey-related entertainment expenses, and alcohol and tobacco.
Saponara further admitted that if he was unable to allocate an expense between the parties, he allocated all of it to plaintiff. Those categories where he had allocated nothing to defendant amounted to $21,694 per month, or more than half of plaintiff's estimated budget.
Defendant's expert, Barry Sziklay, prepared a lifestyle analysis for the intact family for both 2001 and 2002, though the parties agreed to use 2002 figures only. Like Saponara, Sziklay obtained all of the couple's canceled checks and credit card statements and met with both parties. However, unlike Saponara, Sziklay did not alter any of his conclusions based on what either party told him and did not include expenses that were not reflected in the records themselves. Sziklay relied on the parties only to help categorize certain expenses.
Sziklay further claimed that he did not attempt to allocate expenses between the parties because that would have been too subjective. Instead, unless an expense was clearly allocable to either party, or to the children, he classified it as "joint and unallocated" and left it for the court to allocate based on the testimony of the parties. Roof expenses fell within this category, as did any expense that was charged on a joint account. For example, Sziklay allocated $1,306 in shelter expenses to defendant, $1,347 to plaintiff, and the balance, $68,249, as joint and unallocated.
If, however, a party used his or her own credit card for an expenditure, then Sziklay allocated that expense to that party alone, without trying to ascertain the exact nature of the expense. He acknowledged that this procedure was less than perfect because a credit card could have been used for the expenses of someone other than the cardholder.
Sziklay found that, exclusive of investments, pension plan contributions, asset transfers, and certain one-time expenditures, the total family expenses for 2002 were $632,045. Of that amount, $153,212 were employment-related expenses allocable to defendant, i.e., those directly related to his profession with the Devils. These employment-related expenses included tickets to the playoffs that defendant purchased for friends and family members, as well as restaurant tabs that defendant paid for teammates. This left a balance of $478,833. Of that amount, Sziklay found that $264,607 were defendant's expenses, $84,244 were plaintiff's, and $70,275 were the children's, including their private school and camp expenses. This left $212,919 as joint and unallocated expenses. Sziklay noted that the figures for 2001 were fairly close to those for 2002. The expert characterized the couple's lifestyle as a "comfortable suburban" one.
Sziklay's figures did not include any costs associated with maintaining the home in Saint-Adolphe because that house was not completed until shortly before the parties separated and thus was not part of their marital lifestyle. Sziklay's analysis also did not include any cash received by the parties other than what was evidenced by ATM withdrawals or checks made out to themselves. The expert was unaware of any other cash available to the parties.
The trial judge found that the parties were ending a relationship that lasted approximately nine years, from the date of their engagement in December 1993 to the date of separation in December 2002. They had cohabited for approximately ten and one-half years and had actually been married for approximately seven and one-half years when plaintiff filed the complaint. Plaintiff was twenty-one and defendant was twenty-three years old when they married, and were thirty-one and thirty-three years of age, respectively, as of the date of trial. The judge concluded that, for equitable distribution purposes, the parties' relationship was one of neither long nor short duration.
Reciting the development of defendant's hockey career from the age of four until his relationship with plaintiff began, the judge found that "defendant's skill, talent, and capacity to play hockey predated the parties' relationship and marriage." He also referred to the growth of defendant's career after he met plaintiff and found that it was not disputed that defendant financially supported plaintiff both during the period they resided together and after they married. It was also not disputed that the parties initially did not have plans to marry, even after they got engaged in December 1993 because it was not that important to them. It was not until after their first son was born that the parties discussed plans to marry, and did not acquire assets in joint names until after their marriage in August 1995.
The judge found that plaintiff did not bring any assets or liabilities into the marriage, and that defendant brought into the marriage the Saint-Liboire residence, purchased with premarital funds in contemplation of marriage, as well as his NHL pension then valued at $13,641 (and worth $110,534 as of the complaint date) and an investment account then worth $310,000 (and worth $165,087 at the time of trial). He noted that defendant had waived any claim that his premarital assets were exempt but that he sought a greater share of equitable distribution resulting from his premarital financial contribution.
The judge found that in accumulating their marital assets, the parties had contributed equally to the marriage, with "plaintiff attending to the homemaking and childcare and the defendant being the sole wage earner, family investment coordinator and secondary caretaker of the parties' children."
The judge further found that defendant's acknowledgement of plaintiff as a "'great' wife" included the time they had cohabited prior to marriage, and that she played the role of "inamorata" both before and after they were married. Defendant wanted plaintiff at first to be his companion and later his wife and the mother of their children.
Hence, the parties' relationship was a shared enterprise and they could not go back in time and fault plaintiff for neglecting to receive an education, not finding employment, or not developing a career. The judge found that, even though plaintiff had sufficient time and childcare assistance to seek employment or to return to school, it was "clear that [she] would be unable to obtain any employment with education or training which would enable her to achieve an income to be self-supporting at a standard of living the parties had during the marriage."
With respect to the parties' property and marital lifestyle, the judge found that they had homes both in New Jersey and Canada that were beautifully landscaped and furnished and were valued at over millions of dollars, owned or used high-end cars, had domestic help, shopped at the finest stores, dined at high-end restaurants, vacationed both in the United States and abroad, had a time share in Florida, and had memberships in various country clubs. Their children attended private schools and the couple were generous both financially and socially with both sets of families, providing them with gifts and money and taking them on trips and vacations. Plaintiff had no financial limitation on what she could buy for herself and the children. It was clear to the court that "the parties progressively increased their marital lifestyle as the defendant's income increased." In addition to their homes, they acquired bank accounts, investment accounts, and pensions valued at over $13,500,000.
The judge further found that, following the parties' separation in December 2002, defendant earned approximately $3,170,096 in salary and bonuses plus $437,505 in deferred compensation from the Devils. As a result of defendant's post-separation income, the parties' marital assets increased by about $2,252,087.
The judge rejected plaintiff's argument that she was entitled to share in the value of defendant's professional sports contract. He found that the two valuation methodologies proffered by plaintiff's expert had "no basis in law or fact and clearly have no applicability to the defendant's employment contract under which he must continue to play hockey as a W-2 employee." Plaintiff's expert's methods were "rooted in partiality and [were] clearly unreliable and too speculative to value future earnings of a W-2 employee." The judge accepted the assumptions, judgments, and conclusions of defendant's expert as being "more reasonably grounded to the facts and data." Hence, the judge concluded that plaintiff failed to establish that defendant's future employment earnings constituted an asset subject to equitable distribution.
The judge then listed and valued all of the marital assets subject to equitable distribution. None of these assets or values are in dispute on appeal. The judge specifically found that any increase or decrease in the value of the assets following the filing of the complaint was due to market circumstances and that, since each asset was passive, it would be valued as of the date of distribution. Neither party challenges that finding on appeal.
The judge then distributed all assets equally to the parties. Plaintiff's total equitable distribution award amounted to approximately $6,850,000. Defendant's total equitable distribution was substantially similar. Of the amount awarded to plaintiff, approximately $5,316,479 was in liquid assets. In addition, she was entitled to a fifty percent share of defendant's retirement plans, which had a stipulated total value of $287,494, and if defendant elected to pay her the current value of his deferred compensation, she would have additional cash available to her in the amount of $484,556.
To address plaintiff's alimony request, the judge incorporated all of his findings with respect to equitable distribution. He found that given the amount of time that the plaintiff gave to the relationship and the child-care provided by her during the relationship both before and after the marriage ceremony, it is unlikely that the plaintiff will be able to increase her earning capacity through education and training to enable her to support herself at the quality of the parties' economic life during the marriage.
Moreover, defendant's ability to pay alimony to maintain the marital lifestyle was not a factor in setting the level of support. Hence, the major factors determinative of the alimony award were the parties' marital lifestyle, the income available to plaintiff from her investments, and her commitment to devote all of her time and energy to being a homemaker, caretaker of the children, and companion to her husband.
Turning to the expert testimony presented by both parties as to their marital lifestyle, the judge rejected the testimony of plaintiff's expert, Saponara, that $480,796 in yearly expenses should be allocated to plaintiff and the children. According to the judge, Saponara's "assumptions and judgments [were] not reasonably grounded to acceptable accounting practices as to the facts and financial raw data," and plaintiff had "failed to produce any credible evidence as to allocation of her household 2002 expenses at $480,796."
In addition, Saponara failed to provide an analysis of the parties' marital lifestyle. His analysis "resulted in an exaggerated conclusion that the plaintiff and her children had [a] 2002 standard of living defined by monthly expenses totaling $40,000 or $480,000 annually." Accordingly, the judge rejected Saponara's lifestyle allocation value assumptions and judgments and instead found that the principles, methodology, assumptions, and judgments of defendant's expert, Sziklay, were "more credible and acceptable as to the parties' 2002 marital lifestyle as evidenced by [the] conclusion that the family has expenses totaling $478,83."
The judge, however, rejected defendant's argument that the family expenses should be reduced by the amount spent on private airfare, gifts to each party's family members, funds used by plaintiff for the Saint-Liboire home, contributions made to the children's private school, and other unallocated shelter expenses. The judge also found that additional standard of living expenses had to be added to the $478,833 figure found by Sziklay.
The court finds that the family's lifestyle is defined by approximately $625,000 in annual 2002 expenses as the reasonable measure of the parties' standard of living enjoyed during the marriage. The court includes the expenses related to vacations whether associated with the defendant's playing hockey or not; the use of the Canadian properties enjoyed by the parties as expenses reflected on the defendant's case information statements; the use of automobiles provided by the automobile dealer without costs to the parties during the marriage as compared to the costs of ownership of their cars as well as a reasonable savings component as included in the parties' standard of living achieved during the marriage.
The judge also emphasized that all marital lifestyle expenses were paid with after-tax income.
The judge found that $132,208 represented the expenses for the children, exclusive of their shelter expenses, and that it "would be impermissible 'double dipping' or 'double counting' to include the children's support in making an alimony award . . . especially where the children no longer live with both parents but with each parent under a parenting plan."*fn2
The judge next found that plaintiff had approximately $5,250,000 in liquid equitable distribution assets to invest. Using a net rate of return of four percent, as certified by the couple's investment manager, the judge found that plaintiff would have annual investment income before taxes of approximately $210,000. The judge declined to impute investment income on the additional $944,000 received by plaintiff to purchase her new residence in Essex Fells.
The judge then concluded that defendant had a "continuing obligation to support the plaintiff in an effort to maintain her at the standard of living that the parties enjoyed during the marriage." Plaintiff was thus awarded permanent alimony in the amount of $500,000 annually, terminable on her remarriage or cohabitation with an unrelated adult male. The judge calculated that plaintiff's total annual gross income of $710,000 (alimony plus investment income) would provide her with $460,000 in after-tax income, the amount needed by her to maintain the marital lifestyle. The judge also established defendant's child support obligation at $132,112 annually and ordered defendant to pay eighty-seven percent of the children's camp, private school, and parenting time transportation expenses.
Finally, the judge found that both parties had the ability to pay their own attorney and expert fees and costs. He also found that plaintiff failed to demonstrate that defendant had acted unreasonably or in bad faith as to any of the issues presented to the court. Additionally, the judge concluded that defendant had demonstrated plaintiff's bad faith and unreasonableness in her "raising and prolonging the issue of celebrity good/will/future earnings" because prior New Jersey law had clearly established that a spouse's future W-2 employment earnings did not constitute a separately identifiable marital asset.
The judge further found that plaintiff had incurred $442,210 in counsel fees and $22,075 in costs, and that the hourly rates charged by her attorneys were reasonable within the Essex County vicinage. However, the majority of the hours set forth in the attorneys' certifications were not sufficiently described to enable the court to determine whether the services provided were reasonable. Moreover, some of the charges appeared to be cross-charges billed for inter-office conferences and memos, and others were related to services incurred by plaintiff for the sale of the marital home and purchase of her new home. Noting that defendant had paid $41,157 to defray plaintiff's attorneys fees and finding that plaintiff was not entitled to be reimbursed for the fees incurred in pursuing the celebrity goodwill issue, and that she had the financial ability to pay the balance of her fees, the judge declined to order defendant to pay any further attorney or expert fees or costs.
On the other hand, the judge found that defendant was entitled to be reimbursed for the legal and expert fees he incurred in having to defend against the celebrity goodwill issue and directed plaintiff to pay defendant $93,375 ($61,955 in legal fees and $31,420 for expert fees and costs).
Defendant challenges several aspects of the judgment of divorce other than the duration and amount of the alimony. He contends that he should have been awarded a greater share of the marital assets. This contention is premised on his contribution to amassing the marital assets, inclusion of premarital assets, and enhancement of marital assets by post-separation earnings.
Defendant also argues that the trial judge should not have awarded plaintiff half of the 2003 tax refund. He also asserts that the trial judge should have awarded him a credit for family expenses paid by him from his assets during the 2004-05 season because he did not work during that season. A labor dispute between owners and players led to a lockout and cancellation of the season. Alternatively, defendant argues that if family expenses during the lockout are not paid from marital assets, he is entitled to credit for payments of pendente lite support in excess of the family lifestyle.
None of these issues are of sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). Division of marital assets is vested in the discretion of the trial judge. Borodinsky v. Borodinsky, 162 N.J. Super. 437, 444 (App. Div. 1978). This court will disturb an equitable distribution award only if we find some departure from a general standard of reasonableness or a result distorted by a misconception or misapplication of the law or by factual findings unsupported by the record. Perkins v. Perkins, 159 N.J. Super. 243, 247-48 (App. Div. 1978). This record provides no basis to disturb the allocation of marital assets. The record similarly reveals no basis for this court to disturb the treatment of the 2003 tax refund or defendant's claim for credits.
In her cross-appeal, plaintiff argues that the trial judge erred in requiring her to pay the fees and expenses incurred by defendant to defend her claim that defendant's employment contract was a marital asset. She also claims that the trial judge should have required defendant to pay all or a significant portion of the fees incurred by her to prosecute the divorce. Finally, she contends that the trial judge erred by awarding team pendants to defendant. The latter issue is without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). Plaintiff's arguments regarding the fee awards are discussed later in this opinion.
The central issue of this appeal is the amount and duration of the alimony awarded to plaintiff. The judge awarded her $500,000 annually in permanent alimony. Defendant contends the amount is excessive and unsupported by the evidence. He also contends that an award of permanent alimony is unwarranted as a matter of law.
We have recounted the evidence concerning the marital lifestyle at some length. We have done so to illustrate not only the discrepancies in the facts regarding the marital lifestyle, but also to emphasize the similarity of those facts. Each expert adopted a different approach to identifying, categorizing and allocating expenses. In the end, however, the numbers were remarkably close.
The findings of fact made by a trial judge sitting without a jury are entitled to considerable deference. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). Those findings are entitled to enhanced deference when made by an experienced Family Part judge due to the expertise garnered over the years in this specialized area of the law. Cesare v. Cesare, 154 N.J. 394, 412-13 (1998).
In order to establish the amount of alimony to be paid, the judge must consider many factors including the age, education, health, vocational history, and wealth of the parties. N.J.S.A. 2A:34-23b. In a contested case, the judge must also consider and make specific findings of fact regarding the marital lifestyle. Weishaus v. Weishaus, 180 N.J. 131, 141 (2004); Crews v. Crews, 164 N.J. 11, 33 (2000); Glass v. Glass, 366 N.J. Super. 357, 376 (App. Div.), certif. denied, 180 N.J. 354 (2004). In the latter analysis, the judge attempted to identify the way the couple actually lived. Glass, supra, 366 N.J. Super. at 371. While that analysis may include a component for savings, id. at 378-79, the analysis, however, depending as it does on a reconstruction, is at most a best estimate of the marital lifestyle.
To be sure, the record reveals discrepancies in approach and the categorization of certain expenses. These discrepancies, however, provide no support for the contentions that the trial judge overestimated or underestimated various expenses or established an alimony figure that is without support in the record or beyond the bounds of reasonableness. Specifically, the judge considered not only the expenses reflected by credit card statements and ledgers of various accounts, but also the costs of vacations and the use of the Canadian properties, use of automobiles and planes provided by others, and the savings regimen adopted by the parties.
The judge correctly noted that the marital lifestyle was supported by after-tax income. Therefore, because alimony is taxable to the recipient, the judge must fashion an award that accounts for the taxes that must be paid to the supported spouse. The judge in this case did that and also considered the income that should be derived from the liquid assets awarded to plaintiff.
We are also unpersuaded that the limited number of years remaining for defendant to earn his current level of income requires a dramatic reduction in plaintiff's lifestyle now. Indeed, fixing current alimony in accordance with current incomes is entirely consistent with the couples' joint decision to aggressively save and invest to prepare for the eventuality of defendant's retirement and probable reduced income. Moreover, nothing precludes a motion to reduce the amount of alimony once defendant retires and his post-retirement employment and income is known. On the other hand, while we reject defendant's argument regarding the quantum of alimony, we agree that an award of permanent alimony is not appropriate in this case.
As of September 13, 1999, a court may award limited duration alimony, as well as permanent alimony, rehabilitative alimony, reimbursement alimony. L. 1999, c. 199. According to N.J.S.A. 2A:34-23(c):
In any case in which there is a request for an award of permanent alimony, the court shall consider and make specific findings on the evidence about the above factors [set forth in N.J.S.A. 2A:34-23(b)]. If the court determines that an award of permanent alimony is not warranted, the court shall make specific findings on the evidence setting out the reasons therefor. The court shall then consider whether alimony is appropriate for any or all of the following:
(1) limited duration; (2) rehabilitative; (3) reimbursement. In so doing, the court shall consider and make specific findings on the evidence about factors set forth above. The court shall not award limited duration alimony as a substitute for permanent alimony in those cases where permanent alimony would otherwise be awarded.
In determining the length of the term, the court shall consider the length of time it would reasonably take for the recipient to improve his or her earning capacity to a level where limited duration alimony is no longer appropriate.
According to N.J.S.A. 2A:34-23(f), nothing in the statute "shall be construed to limit the court's authority to award permanent alimony, limited duration alimony, rehabilitative alimony or reimbursement alimony, separately or in combination, as warranted by the circumstances of the parties and the nature of the case." Ibid.
It is well settled that a court dealing with an economically dependent spouse should consider the dependent spouse's needs, his or her ability to contribute to the fulfillment of those needs, and the supporting spouse's ability to maintain the dependent spouse at the former standard of living. Crews, supra, 164 N.J. at 24; Miller v. Miller, 160 N.J. 408, 420-21 (1999); Cox v. Cox, 335 N.J. Super. 465, 473-74 (App. Div. 2000). The goal of alimony is to assist the supported spouse in achieving a lifestyle "reasonably comparable" to the one enjoyed during the marriage. Steneken v. Steneken, 183 N.J. 290, 298-99 (2005); Crews, supra, 164 N.J. at 17; Cox, supra, 335 N.J. Super. at 473.
A trial court's findings regarding alimony should not be vacated unless the court clearly abused its discretion, failed to consider all of the controlling legal principles, made mistaken findings, or reached a conclusion that could not have reasonably been reached on sufficient credible evidence present in the record after considering the proofs as a whole. Heinl v. Heinl, 287 N.J. Super. 337, 345 (App. Div. 1996). Substantial weight should be given to the judge's observations of the parties' demeanor and credibility. Ibid.
In Cox, supra, this court extensively discussed the legislative amendment that added limited duration alimony as an option. We said:
Limited duration alimony is not intended to facilitate the earning capacity of a dependant spouse or to make a sacrificing spouse whole, but rather to address those circumstances where an economic need for alimony is established, but the marriage was of short-term duration such that permanent alimony is not appropriate. Those circumstances stand in sharp contrast to marriages of long duration where economic need is also demonstrated. In the former instance, limited duration alimony provides an equitable and proper remedy. In the latter circumstances, permanent alimony is appropriate and an award of limited duration alimony is clearly circumscribed, both by equitable considerations and by statute. [335 N.J. Super. at 476.]
Limited duration alimony is thus awarded in recognition of a dependent spouse's contributions to a relatively short-term marriage that demonstrated attributes of a "marital partnership." Id. at 483. Both limited duration and permanent alimony reflect the policy that marriage is an economic and social partnership and that the financial and non-financial contributions of both spouses should be recognized. Id. at 479. "All other statutory factors being in equipoise, the duration of the marriage marks the defining distinction between whether permanent or limited duration alimony is warranted and awarded." Id. at 483.
In recognizing the need for limited duration alimony, the Legislature focused "'upon the economic impact of the marriage on the parties by examining whether employment opportunities were lost or career opportunities delayed.'" Id. at 481 (quoting Report of the Commission to Study the Law of Divorce, Recommendation 13 at 46-47 (April 18, 1995)). It was contemplated that a court would determine whether "any economic dependency that might exist between the parties was created by the marriage or was the product of the parties' disparate skills and educational opportunities, unrelated to anything that happened during the marriage. The court's inquiry would focus not on the fact that the parties were married but upon the impact of the marriage on the parties . . . . [and on] whether either of the parties were economically disadvantaged by child-rearing responsibilities for children of the marriage." [Ibid. (quoting Report of the Commission, supra, Recommendation 13 at 46-47).]
The Divorce Study Commission found that limited duration alimony was not intended to be a replacement for permanent alimony "'where the length of the marriage and the contributions made by the dependent spouse are significant. In particular, it is singularly inappropriate in long marriages.'" Id. at 482 (quoting Report of the Commission, supra, Recommendation 13 at 47 (footnote omitted)). The Commission was of the "unequivocal view" that limited duration alimony "should be limited to shorter marriages and not be ordered in long-term marriages." Ibid.
In Gordon v. Rozenwald, 380 N.J. Super. 55, 61 (App. Div. 2005), this court had the opportunity to consider the purpose of limited duration or term alimony in the context of a motion to modify the term alimony provision of a negotiated matrimonial agreement. The parties had been married fifteen years at the time of the final separation and had two children. Id. at 61-62. At the time of divorce, the agreement negotiated by the parties contained a fifteen-year term alimony provision. Id. at 62. During the marriage, the husband was financially successful and the wife did not work. Ibid. Following dissolution of the marriage, the husband's earnings soared. Id. at 63. Although the wife worked, the earnings of the parties were grossly disparate. Ibid.
We observed that "[l]imited duration alimony is available to a dependent spouse who made 'contributions to a relatively short-term marriage that . . . demonstrated the attributes of a marital partnership' and has the skills and education necessary to return to the workforce." Id. at 65-66 (quoting Cox, supra, 335 N.J. Super. at 483. We noted that such a spouse is not entitled to permanent alimony because the commitment to the marital enterprise was not sustained and the period of economic dependency was not prolonged. Ibid. We also commented that
[t]he premise for a term of limited duration alimony under N.J.S.A. 2A:34-23c is primarily historical not predictive and it is not based upon estimates about financial circumstances at the time of termination.
Thus, the end date of a term of limited duration alimony is the equivalent of an arrangement to terminate support at a predetermined time or event, regardless of need. [Id. at 68.]
In Cox, supra, we held that limited duration alimony was not appropriate following a twenty-two year marriage. 335 N.J. Super. at 469-70. There, the wife was employed during the marriage and eventually enrolled in law school, passed the bar, and obtained a position as an associate in a law firm. Id. at 470. The husband earned substantially more than his wife throughout the marriage. Ibid.
In the course of this opinion, we sought to distinguish the four forms of alimony authorized by the Legislature: permanent alimony, limited duration alimony, reimbursement alimony, and rehabilitative alimony. Id. at 476. As to limited duration alimony, we said:
Limited duration alimony is not intended to facilitate the earning capacity of a dependent spouse or to make a sacrificing spouse whole, but rather to address those circumstances where an economic need for alimony is established, but the marriage was of short-term duration such that permanent alimony is not appropriate. Those circumstances stand in sharp contrast to marriages of long duration where economic need is also demonstrated. In the former instance, limited duration alimony provides an equitable and proper remedy. In the latter circumstances, permanent alimony is appropriate and an award of limited duration alimony is clearly circumscribed, both by equitable considerations and by statute. [Ibid.]
We also instructed trial judges to consider the underlying policy considerations that distinguish the forms of alimony when the judge must fashion an appropriate alimony award. Id. at 479. We concluded saying that "[p]ermanent and limited duration alimony, by contrast, reflect the important policy of recognizing that marriage is an adaptive economic and social partnership, and an award of either validates that principle." Ibid. Limited duration alimony provides flexibility for those situations when no alimony or permanent alimony would be unjust. Id. at 480.
The "defining distinction" between permanent and limited duration alimony is the length of the marriage. Id. at 483. Here, the judge referred to various periods that the parties were together, ranging from slightly more than seven years (from date of marriage to date of separation) to ten and one-half years (from date of cohabitation to date of filing of complaint). The judge correctly referred to the marriage as one of neither long nor short duration, although the term is decidedly closer to being considered one of short duration. See Hughes v. Hughes, 311 N.J. Super. 15, 31 (App. Div. 1998) (ten-year marital relationship cannot be considered short-term by today's standards). We also agree that a marriage of intermediate duration may justify alimony particularly when one of the spouses was financially dependent on the other spouse for all or a substantial part of the marriage. Id. at 33. Financial dependency, however, does not dictate an award of permanent alimony in all instances.
Both permanent and limited duration alimony serve the same goals and are designed to enable the supported spouse to maintain a lifestyle reasonably comparable to the one enjoyed while the family was intact. Steneken, supra, 183 N.J. at 298-99. In the case of limited duration alimony, however, the court makes a determination, based primarily on the length of the parties' marriage and the spouses need for support. It is not based on predictions of financial circumstances at the time of termination. Gordon, supra, 380 N.J. Super. at 68.
The decision to award permanent rather than limited term alimony in this case seems to have been predicated on plaintiff's inability to ever earn enough income to maintain the marital lifestyle on her own. In certain situations this is appropriate. See Robertson v. Robertson, 381 N.J. Super. 199, 207-08 (App. Div. 2005) (thirty-nine year old woman who surrendered employment opportunities entitled to permanent alimony after twelve-year marriage); McGee v. McGee, 277 N.J. Super. 1, 14-15 (App. Div. 1994) (fifty-seven year old unskilled and unemployed woman entitled to permanent alimony after relatively short-term marriage but economic dependence commencing prior to the marriage). This factor, however, is relevant only in the determination of the length of the limited duration alimony. In fact, to treat the time needed for the recipient to improve her earning capacity as anything other than a factor to determine the appropriate term of the alimony award, obscures the difference between rehabilitative and limited duration alimony. Cox, supra, 335 N.J. Super. at 481. In this particular case, because of defendant's very high earnings and the comfortable lifestyle the parties enjoyed, the judge's assessment that plaintiff will probably never be able to achieve that lifestyle on her own is undoubtedly correct. Given the unique facts of this case, however, a permanent alimony award is not appropriate.
The alimony analysis in a case such as this must reflect the transitory nature of defendant's capacity to earn a very substantial income and the transitory nature of the extent of plaintiff's dependency. Defendant was a sport prodigy who fulfilled his promise. His ability to play hockey at an exceptional level of performance is related almost entirely to his unique skills. The fact of plaintiff's economic dependence predated her relationship with defendant. The extent of her economic dependence on defendant is almost entirely related to his athletic prowess and that of his teammates. We do not minimize the emotional support provided by plaintiff and its contribution to his success. Permanent alimony, however, should not be awarded because a dependent spouse in a seven-year marriage will never be able to attain the luxurious lifestyle enjoyed for a brief period of time when the couple were in their twenties and early thirties and the supporting spouse was at the height of his highly lucrative athletic career. Additionally, in this case the parties anticipated the end of defendant's career, saved aggressively, and plaintiff has received half of the nest egg designed specifically to ameliorate the end of defendant's playing career and the probable diminution in income.
We recognize that plaintiff is the mother of four young children. This does not preclude limited duration alimony. In fact, limited duration alimony is particularly suitable for a situation such as here when the marriage was of short to intermediate duration and the woman is young and has young children. The judge is able to fashion an award that provides financial support to the former wife while she cares for the children.
Given the length of the parties' relationship and the current age of plaintiff, an award of limited duration alimony rather than permanent alimony should have been awarded. The term should be informed not only by the age of the children, but also by the parties' decision that plaintiff should be the primary and full-time caretaker of the children. We leave the length of the term to the sound discretion of the trial judge. Permanent alimony, however, given the limited duration of this marriage, plaintiff's young age, and a dependency that may have been fostered during the parties' relationship, but certainly not created by the relationship, is not warranted in this case.
In her cross-appeal, plaintiff contests the denial of her application for counsel fees and costs and the order requiring her to pay the fees and costs incurred by defendant to defend her claim that his employment contract was a marital asset and subject to equitable distribution. We address the latter issue first.
During the course of the matrimonial litigation, plaintiff argued that defendant's employment contract should be considered a marital asset subject to equitable distribution. In support of her claim, she retained an expert. Eventually, the judge found that the claim was without merit and that her persistence in advancing the claim was unreasonable and must be considered bad faith on her part. Thus, the judge awarded defendant the counsel fees and expert fees ($93,375) he incurred to rebuff this claim. On appeal, plaintiff argues that the judge erred in finding that she acted in bad faith. She concedes the novelty of the issue but asserts that she should not face the imposition of a sanction in her attempt to extend the law.
In awarding counsel fees pursuant to N.J.S.A. 2A:34-23, a court must consider the factors set forth in the court rule, Rule 5:3-5(c), the financial circumstances of the parties, and the good or bad faith of either party. Mani v. Mani, 183 N.J. 70, 93-94 (2005). The court should consider whether the party seeking fees is in financial need, whether the other party has the ability to pay, "the good or bad faith of either party in pursuing or defending the action, the nature and extent of the services rendered, and the reasonableness of the fees" sought. Id. at 94-95.
In Borzillo v. Borzillo, 259 N.J. Super. 286, 292 (Ch. Div. 1992), the chancery court held that the standard of bad faith adopted for awarding fees under N.J.S.A. 2A:15-59.1, the frivolous claims statute, is equally applicable to N.J.S.A. 2A:34-23. The court noted that bad faith in matrimonial actions could include the evasion of court-ordered obligations, intentionally misrepresenting the facts or the law, seeking relief "which one knows or should know that no reasonable argument could be advanced in fact or law in support thereof," or "[a]cts of a losing party that have been vexatious, wanton or carried out for oppressive reasons." Id. at 293-94.
However, one month later, in Kelly v. Kelly, 262 N.J. Super. 303, 308-09 (Ch. Div. 1992), another judge held that the term "bad faith" is not synonymous with "frivolity" as that term is used in N.J.S.A. 2A:15-59.1. Moreover, a mistaken or frivolous position, as opposed to a maliciously motivated position, cannot support the award of fees in a family action because the frivolous claims statute does not apply to actions cognizable in the Family Part. Id. at 308-09 and n.1.
Fees are awarded in family actions to permit parties with unequal financial positions to litigate on equal footing and "to prevent a maliciously motivated party from inflicting economic damage on an opposing party by forcing expenditures for counsel fees." Id. at 307. Hence, if both parties litigate in good faith, there should be no fee award unless the economic positions are disparate. "[W]here one party acts in bad faith, the relative economic position of the parties has little relevance [because] [t]he purpose of the award is to protect the 'innocent' party from unnecessary costs and to punish the 'guilty' party." Ibid.; accord Yueh v. Yueh, 329 N.J. Super. 447, 461 (App. Div. 2000).
Bad faith implies or involves actual or constructive fraud or a design to mislead or deceive. Kelly, supra, 262 N.J. Super. at 308.
[T]he action of the party against whom fees are sought must be such as to suggest an improper motive. It implies something more than a showing of a mistaken, unreasonable or frivolous position (although the degree of unreasonableness may be such as to permit an inference as to motive). It requires a party to have malicious motives, to be unfair, to desire to destroy the opposing party, to use the court system improperly to force a concession not otherwise available. [Ibid.]
This standard ensures that meritorious positions are not discouraged for fear of a fee award if there is an adverse decision. Id. at 309.
Here, the court found only that plaintiff sought relief on a claim that she should have known could not be supported by the law or the facts. Although the court concluded that this constituted bad faith, the court did not separately find that plaintiff acted with a malicious motive, that she intended to harass defendant, or that she misrepresented the law or facts.
Admittedly, plaintiff should have known that her claim for equitable distribution of defendant's employment contract could not be supported by existing law. In Piscopo v. Piscopo, 232 N.J. Super. 559, 565 (App. Div.), certif. denied, 117 N.J. 156 (1989), the court held that "celebrity goodwill" of the plaintiff a professional comedian, was a distributable asset. Notably, the court noted that the plaintiff's record of past earnings was undisputed, as was the fact that whatever celebrity he had achieved had occurred during the marriage, id. at 565 and the plaintiff had established a professional corporation through which most of his income as an entertainer flowed. Id. at 561.
As both of the experts who testified in the instant case established, goodwill has never been found to exist where an individual does not own a business and acts only as an employee contracted to work for someone else. In Dugan v. Dugan, 92 N.J. 423, 431-32 (1983), the Court held that goodwill can exist only in individual proprietorships and in personal service enterprises. In Seiler v. Seiler, 308 N.J. Super. 474, 479 (App. Div. 1998), this court held that goodwill belonged to the defendant's employer, where the defendant was an employee of a major insurance company and sold its products in accordance with the terms and conditions established by his employer. Noting that the defendant had no ownership interest in the company, the Seiler court found that no case in this State had ever recognized goodwill as an asset unassociated with a business entity. Id. at 480.
Our courts have also held that a person's earning capacity per se is not a separate marital asset. Stern v. Stern, 66 N.J. 340, 345 (1975). Rather, potential earning capacity is one factor to consider when determining what distribution would be equitable and when determining alimony. Ibid.
Plaintiff conceded that defendant's earning capacity was not distributable and that she was not seeking distribution of his celebrity goodwill. Rather, her claim was that the court should consider defendant's employment contract as a distributable asset. What made her claim "frivolous," however, was that her own expert did not opine that this claim was cognizable. Rather, he merely gave an opinion as to the value of the asset if the court were to recognize it as distributable.
Thus, plaintiff pursued a novel claim premised only on the argument of her attorney, unsupported by any expert opinion.
To say, however, that this pursuit constituted bad faith would require some showing that plaintiff acted with a malicious purpose. Such a showing is not evident on the record and the judge did not so find. Moreover, defendant had the clear financial ability to meet this claim and to vigorously defend against it. Consequently, the fee award against plaintiff should be vacated.
Plaintiff argues that the court erred in denying her request that defendant contribute to the payment of her legal fees. We disagree.
The judge found that both parties had the ability to pay their own attorneys' and experts' fees and costs. Plaintiff, in particular, had received through equitable distribution liquid assets in excess of $5,000,000 and was awarded $500,000 in alimony per year. Hence, according to the judge, the requests by both parties for fees "will turn on the parties' reasonableness and good faith of the positions advanced at the time of the divorce proceedings."
The judge noted that plaintiff's attorneys had submitted a certification of services that showed that she incurred $442,210.50 in counsel fees and $22,075.17 in costs. Of this amount, $41,157.50 had been paid by defendant, pursuant to a prior court order. Another $100,000 had been paid from a marital account as an advance against equitable distribution. The judge found that, based on the skill, reputation, and experience of plaintiff's attorneys, they had charged hourly rates that were reasonable within the legal community of Essex County.
However, the court also found that the majority of the hours spent on the case were not "sufficiently described for the court to review or analyze to determine whether such services were reasonable or would be compensated under good faith/bad faith." In particular, the court noted that the certification of services had indicated "cross charges billed apparently from inter-office attorney conferences and memorandums." In addition, the certification included services rendered to plaintiff for the sale of and litigation relating to the marital home and plaintiff's purchase of her new residence in Essex Fells. Absent any evidence of defendant's bad faith with regard to these residences, plaintiff was not entitled to legal fees for these services.
In addition, plaintiff's certification included over 135 hours spent by her attorneys in litigating the issue of the equitable distribution of defendant's employment contract. Having found the claim baseless, the judge held that "[s]uch time under the factual and legal circumstances is unreasonable and clearly overreaching."
With respect to expert fees and costs, plaintiff had submitted certifications indicating that she incurred $201,367. Of this amount, over $66,000 was attributable to the equitable distribution claim against defendant's employment contract. The judge found that plaintiff was not entitled to reimbursement for these fees because plaintiff's expert could not opine that defendant's contract was in fact a distributable asset.
On appeal, plaintiff contends that, in denying her request for counsel fees, the court's focus was too narrow because it failed to consider the financial disparity of the parties and instead focused only on the parties' good or bad faith. Specifically, she argues that defendant will be able to pay his own counsel fees out of current income and assets, whereas she will be compelled to rely on savings.
Plaintiff further argues that the court failed to consider that defendant "did not cooperate unless the Court compelled such cooperation." She claims that defendant had to be compelled to cooperate with the sale of the marital home, to pay pendente lite support, and to allow plaintiff to take an advance against equitable distribution in order to pay her counsel fees during the litigation.
Finally, plaintiff argues that the inclusion of some non-reimbursable charges in her certification, or the insufficient specificity of the reimbursable charges, should not be a basis for "a blanket denial of counsel fees."
In response, defendant argues that plaintiff's receipt of over seven million dollars in marital assets more than enables her to pay her own fees. In addition, he argues that her conduct during the litigation justified the court's decision that she pay her own fees. Specifically, he contends that plaintiff complicated the issue of the marital lifestyle by "creat[ing] a wish list for a lifestyle that never existed," that she incurred unnecessary pretrial legal fees by bringing unreasonable motions, and that she made demands at trial that were "mean spirited and [in] simple bad faith." He argues that she is not entitled to fees spent to help her purchase a new house or to pursue her claim against his employment contract, and that, due to payments already made towards plaintiff's fees, she currently owes only $243,657.
In awarding counsel fees under N.J.S.A. 2A:34-23, the court must consider all of the factors set forth in Rule 5:3-5(c), as well as the financial circumstances of the parties and their good or bad faith. Mani, supra, 183 N.J. at 93-94. The factors set forth in Rule 5:3-5(c) include:
(1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.
An award of counsel fees in a matrimonial action is discretionary and should not be disturbed on appeal absent a showing of abuse of discretion. Chestone v. Chestone, 322 N.J. Super. 250, 258 (App. Div. 1999).
Applying these principles here, we cannot find that the judge abused his discretion. Defendant should not be required to pay the fees and expenses incurred to advance an unmeritorious claim or services unrelated to the dissolution of the marriage. Defendant had paid approximately ten percent of the fees earlier in the litigation. Although there is a vast disparity in earning capacity, plaintiff received substantial alimony and equitable distribution awards. Under these circumstances, we cannot hold that the trial judge mistakenly exercised his discretion to deny plaintiff's request for counsel fees and costs.
In summation, we reverse the permanent alimony award and remand for entry of an appropriate limited duration alimony award. We reverse the order that requires plaintiff to pay counsel fees to defendant related to pursuit of her claim that his employment contract was subject to equitable distribution. We also affirm the judgment of divorce in all other respects.
Affirmed in part, reversed in part.