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Granate v. Sharav

August 27, 2007


On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Camden County, FM-04-985-05C.

Per curiam.


Submitted August 21, 2007

Before Judges Lisa and Holston, Jr.

Defendant, Yacov Sharav, appeals the Family Part's August 2, 2006 supplemental final judgment of divorce which determined issues of child custody, alimony, child support, equitable distribution and attorneys' fees.

Plaintiff, Barbara Granate, and defendant were married on June 16, 1995. One child was born of the marriage, Cheyenne, born November 10, 1995. The parties have been separated continuously since July 1, 2003. Plaintiff filed a complaint for divorce on January 10, 2005. A final judgment of divorce was entered on March 21, 2006. After a three day proof hearing over a three-month period, on August 2, 2006 the court, by letter opinion, decided the issues of custody/parenting time, equitable distribution, alimony, child support and counsel fees. This opinion was memorialized in the order of the same date from which defendant appeals.

Defendant is a citizen of Israel. Plaintiff is an American citizen and resided in Haddon Township with the parties' minor daughter when the cause of action accrued. Plaintiff filed a complaint based on the parties' continued separation of eighteen months with no reasonable prospect for reconciliation. The trial court dismissed defendant's answer and entered default against defendant on February 17, 2006, for his failure to comply with the discovery schedule established in prior court orders. Defendant's motion to vacate the default order was denied as a result of his continuing failure to comply with plaintiff's discovery requests. Consequently, an order was entered precluding defendant at the proof hearing from testifying and presenting any proofs, but he was permitted to defend by challenging plaintiff's proofs by evidential objections, cross-examination and closing argument. Defendant was personally present on two of the trial dates. His counsel was present on all three trial dates.

Plaintiff's first attorney propounded interrogatories and a sixty-nine paragraph notice to produce documents upon defendant's attorney. There were incomplete responses to both the interrogatory questions and to the items requested to be produced. The six documents referenced in defense counsel's belated letter of April 1, 2005, as being supplied were far short of the document request demanded.

Over a ten month period, plaintiff made repeated demands for defendant's compliance with her discovery requests but only partial compliance was provided. Case management orders were entered May 10, 2005, and November 4, 2005. The November 4, 2005 order required fully responsive answers to the interrogatories and notice to produce be served upon plaintiff by December 5, 2005. The order further provided that if defendant were not in compliance with the order, defendant was subject to having his answer struck and defenses suppressed. The order additionally provided for a conference with the court on December 6, 2005 relative to the parties' compliance with the order.

On December 29, 2005, after plaintiff had complied with defendant's discovery requests, plaintiff through substituted counsel inquired of defendant, who had discharged his attorney and was proceeding pro se, regarding the outstanding discovery defendant owed plaintiff.

On January 27, 2006, plaintiff filed a motion to dismiss defendant's answer for failing to produce discovery. By order dated February 17, 2006, the court dismissed defendant's answer. The order noted that defendant had failed to comply with the discovery schedule of prior court orders. While some interrogatory answers had been supplied, they were neither signed nor certified. Defendant had not completely answered some interrogatory questions and had not answered at all other interrogatory questions. Additionally, defendant had not complied with most of the requests contained in the Notice to Produce. The court, as a result, entered a default judgment against defendant.

Thereafter, defendant reengaged his prior counsel, who moved to vacate the default judgment prior to the March 21, 2006 scheduled proof hearing. The court denied the motion by order dated March 16, 2006. The order recited that defendant had failed to comply with plaintiff's discovery requests.

Plaintiff's brief in opposition to defendant's motion to vacate detailed the discovery that still had not been produced. Plaintiff had propounded ninety-seven general interrogatories, forty-five custody interrogatories and a sixty-nine paragraph notice to produce documents. Although defendant's uncertified responses to the custody interrogatories reflected little disagreement regarding parenting issues, the uncertified answers to the general interrogatories were incomplete and the answers given were not numbered to correspond to the appropriate question. As respects the notice to produce, defendant produced no business records, ledger, bank statements, documents evidencing business loans, copies of leases, 2004 and 2005 tax returns, or documents concerning his new business operation at Suburban Station. Many of the documents that were produced were in Hebrew and bore no English translation.

The trial commenced on March 21, 2006 and continued on April 7 and May 24, 2006. Despite defendant's default, defendant participated by cross-examination of his counsel. Documents were accepted from defendant in evidence, and he was permitted to make clarifying statements without first being sworn, which resulted in rulings favorable to defendant as explained in the court's letter opinion. For example, the court noted that one of the two condominium apartments owned by plaintiff in Israel was not proved by wife to be subject to equitable distribution. The court also determined that no marital funds were proved to have been used to maintain a rental property owned by defendant which he stated he acquired prior to the marriage, and thus, the court determined was not subject to equitable distribution. The court also determined that there was a failure of proof as to any pensions, 401K retirement accounts, annuities or profit sharing plans owned by defendant. Therefore, the court found only that "[p]laintiff is entitled to fifty percent of the marital coverture portion of any accounts that may be disclosed [or] discovered."

Defendant asserts, however, that as a result of his preclusion from presenting proofs and affirmative defenses to plaintiff's proofs, plaintiff was awarded a "windfall" based on erroneous estimates of defendant's earning capacity, which was not supported by competent evidence. Additionally, defendant claims he has been denied any definite right to visit with his daughter in Israel, where he lives, despite the parties' agreement that plaintiff should be awarded sole custody of their daughter and he should enjoy liberal visitation with her when he is in New Jersey and visitation in Israel when Cheyenne is accompanied by plaintiff.

Defendant contends that after the parties separated, he returned to live in Israel, where he was salaried as an employee of EL AL Airlines. Defendant claims that in addition to the Haddon Township marital home, the parties owned two small businesses that sold retail food, one at the Cherry Hill Mall and one at the Gallery Mall in Philadelphia. Defendant owned one condominium with equity of $9000 in Israel in the Kofar Hyam project and another piece of farming real estate in Israel, which the judge determined because it was acquired prior to marriage was an asset exempt from equitable distribution.

After separation and after plaintiff filed for divorce the parties agreed by consent order dated May 4, 2005, that defendant would transfer to plaintiff the Cherry Hill business and defendant would retain the Gallery business. Post-separation, defendant contended he tried, without success, to start a third business at Suburban Station in Philadelphia. According to plaintiff, defendant invested $75,000 to start that business. Defendant contends there were no proofs to support plaintiff's contention. Wife testified the start up monies came from marital funds.

Plaintiff stated in her initial testimony she anticipated earning $25,000 from the Cherry Hill store. The court accepted that testimony although by the third day of trial, she contended she intended to terminate the business because she could not afford the lease and because of competition from another "hot dog vendor" in the mall. The court concluded that each of the stores had the ability to yield $25,000 per year in net income. Thus, the court attributed $86,000 in income to husband, $50,000 from the two businesses operated by him and another $36,000 traceable to his employment as a security manager at EL AL Airlines. The court attributed $25,000 in income to plaintiff.

Defendant contends the court erred in only attributing $25,000 in income to plaintiff. Defendant contends the 2004 business tax return indicated the Cherry Hill Mall store, which plaintiff had been operating since June 2005, obtained a profit of $72,000, thus contradicting plaintiff's testimony that the store could be projected to only earn $25,000 per year. However, that tax return reflected corporate income that predated plaintiff's taking over the Cherry Hill Mall operation. Plaintiff contends there was an ample basis for the judge to accept the $25,000 figure. Plaintiff testified that profits were being placed back into the business to expand its product line. Defendant's own statements were that he earned $21,000 from the Gallery and Suburban Station stores combined and that each of the three stores owned by the parties had the same income producing capacity. Additionally, plaintiff testified the business was handed over to her with broken equipment, which required replacement and $10,000 in bills owed to vendors. The pendente lite order providing for the transfer of the Cherry Hill business to plaintiff required defendant to satisfy the debt against the business before transferring the business but he did not do so.

Defendant contends that plaintiff had a work history as a station manager for EL AL Airlines earning in her last year of employment $45,000 and a several month work history with a marketing firm in 2000 at a $35,000 annual salary. Plaintiff explained her reasons for terminating both positions. Both required extensive travel, the airline job was no longer available except at a minimum wage of $7.00 per hour, and with defendant not available to care for the parties' daughter, because he is only in New Jersey three to four days a month, she was unable to continue in a position that required multiple nights away from home each week because of her responsibility to care for Cheyenne.

In addition, plaintiff testified to the standard of living maintained by the parties. She stated that from defendant's earnings they were able to maintain monthly expenses totaling $6990 per month. Defendant's income was attributable to the three stores that defendant maintained as of the parties' 2003 separation, his employment at EL AL and from his rental properties in Israel. It was plaintiff's estimate that total gross income of defendant in 2003 was $120,000 to $125,000. Plaintiff testified that if her projected income of $25,000 were subtracted from the parties' previous income of $125,000, defendant would be left with earnings of $100,000. Thus, plaintiff contends there was a reasonable basis for the court's award of limited duration alimony for five years in the amount of $350 per week based on defendant's combined income from two businesses and his EL AL Airlines salary at $86,000 per year.

Defendant contends the record does not support plaintiff's claim that she incurred $33,000 in household bills from defendant's failure to pay child support for fifteen months and the court's awarding $26,000 of this amount to plaintiff as a credit against his equity in the parties' Haddon Township house. Plaintiff testified that the bills were for mortgage payments, groceries, clothing and other necessaries.

Defendant further contends that the court's equitable distribution award is not supported by the evidence. Even though the court allocated fifty percent of the equity in the marital home to husband and exempted assets owned by him in Israel from equitable distribution, defendant objects to credits given to plaintiff against his net equity in the marital home of $68,500 based on the parties' total equity of $137,000. In the court's oral opinion in a post-judgment motion brought by plaintiff for enforcement of the August 2, 2006 order which is the subject of this appeal, the court explained the court's reason for its assignment of credits to plaintiff from defendant's equity rather than ordering him to pay plaintiff money directly. Thus, his obligations to plaintiff were payable from the fifty percent equity which he was awarded in the marital home. The court explained:

I gave her the house. He owed her money from different things that he had done which I then turned around and said okay rather than have him pay her money we're going to chip away at his equity in the house. So the numbers that were used were $37,500 which was her half of the seed money for the Suburban Station food station, okay? He used [$75,000]. I gave her back [$]37,[600] of that. He owed her $26,000 per her calculation for prior court orders that had not been met, and they had to do with child support, payment of household expenditures, that equated to [$16,000] that he owed her, took that out of the [$]68,500. I awarded her $10,500 in counsel fees for a number of reasons, as I set forth in my decision, the primary one was the disparity in the parties' incomes and the fact that he had been so uncooperative in production of documents that it made her case so much more expensive because of the additional work that we had to go through and that Mr. Craig had to do in order to present the Plaintiff's case.

In addition, he owed her half of the value of the Kofar [Hyam] Condominium, her half was $4500, that came off. So once I added up the [$]10,500 for the counsel fees, the $4500 he owed her for the condo, the [$16,000] he owed her for the expenditures, and the [$37,500] he owed her for the start money ...

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