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Machado v. Estate of Machado

November 7, 2007


On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-11997-79.

Per curiam.


Argued October 15, 2007

Before Judges Parrillo, Graves and Alvarez.

Plaintiff Celeste Machado appeals from a June 26, 2006 order of the Family Part denying her application for alimony arrearages and interest in the amount of $55,353.59, calculated from November 19, 1999 to January 13, 2006; terminating the alimony obligation of defendant Raul Machado,*fn1 effective November 19, 1999; terminating defendant's obligation to name plaintiff as a one-fourth beneficiary of an insurance policy, also effective November 19, 1999; vacating restraints imposed on the distribution of the assets of defendant's estate; and denying plaintiff's request for counsel fees. We affirm in all respects save for the denial of plaintiff's request for counsel fees and remand on that issue for findings of fact and conclusions of law.

The material facts are essentially undisputed. The parties were married on July 24, 1964 and had four children, the youngest of whom was emancipated on May 8, 1989. After seventeen years of marriage, the parties divorced on June 23, 1981. The final judgment of divorce (FJD) set spousal support at $150 per week and child support at $100 per week, for a total weekly support obligation of $250. The FJD also provided that plaintiff be named as one-fourth beneficiary, and the children named as three-fourths beneficiaries, of the life insurance policies held by defendant on January 1, 1980, which included a Hartford policy in the amount of $25,000 and an Arrow Uniform policy, in an unspecified amount. Defendant's obligation to maintain this insurance for the benefit of plaintiff and their children was to continue as long as he was obligated to pay support.

Defendant remarried after the divorce and subsequently acquired part of his ex-father-in-law's business, Arrow Uniforms, for which he worked during his marriage to plaintiff. He later started a new consulting business for which he came to work only part-time due to health problems. He reported gross sales from the consulting business of $44,934 in 2003, and $21,790 in 2004. Defendant's gross income in 2005 was $38,794.

Plaintiff did not work during her marriage to defendant. Two years after her divorce, in 1983, plaintiff began residing in her home with her boyfriend Michael Campione, with whom she lived for twenty years until his death in June 2003. Although they never married, they held themselves out to others as husband and wife, and the children called Campione their stepfather. In 1985, they started a video rental business which closed in 1992, after which plaintiff held a series of part-time jobs, and Campione became employed as a salesman. Plaintiff is currently employed as a medical biller earning approximately $35,000 a year.

Throughout the years, as each of the parties' children became emancipated, defendant would reduce his child support proportionately without formal modification of the FJD and by informal agreement. And despite plaintiff's cohabitation with Campione, defendant also continued paying alimony to maintain good will and because it was, in his opinion, "in the best interests of the children," who resided with plaintiff and Campione. However, defendant eventually terminated alimony as of November 19, 1999 and his last payment on May 7, 2001 reflected alimony arrears for five weeks in October and November 1999.

This much appears undisputed. The parties part company, however, over whether there was mutual agreement to terminate spousal support. According to defendant, he advised plaintiff in November 1999 that he could no longer afford to pay alimony and he assumed she agreed to the arrangement because she never pursued the matter thereafter: "that was what I felt that she had agreed to, she never asked for anything else. She never went to court, never said anything, [and] never asked me for a dime. We were at family functions after that, [and she] never said a word about [alimony payments]." Plaintiff, on the other hand, claims that defendant told her she was ineligible for alimony because of her cohabitation with Campione and that she "foolishly" believed him, although she also admits being aware that remarriage would terminate alimony. In fact, it was not until Campione's death in June 2003 that plaintiff consulted an attorney about having her alimony "reinstated."

As a result of that consultation, plaintiff's attorney sent defendant a letter dated December 27, 2004 requesting resumption of alimony payments and $39,000 in alimony arrears. When that effort proved unsuccessful, plaintiff filed a motion seeking the same relief. Defendant cross-moved to terminate alimony due to plaintiff's cohabitation with Campione. Both motions were denied without prejudice pending a plenary hearing. Discovery ensued, including the taking of depositions and an exchange of interrogatories. In the interim, defendant passed away, his estate was substituted as party to the action, and the parties entered into a consent order restraining the disposition of life insurance proceeds as well as any other assets of defendant's estate pending resolution of their dispute.

Eventually, the parties entered into a joint stipulation and the remaining factual issues were tried on May 23, 2006 with plaintiff as the only testifying witness. At the conclusion of the hearing, the Family Part judge, by order of June 26, 2006, denied plaintiff's application in its entirety. In a written opinion of same date, the judge concluded:

It was plaintiff's burden to show the economic effect from the cohabitation and that she [was] neither supporting nor being supported by Mr. Campione. The plaintiff's cohabitation with Mr. Campione was three years longer than her seventeen year marriage to the defendant. Where there is a showing of cohabitation, there is a rebuttal presumption shifting the burden of proof to the supported spouse to show that there is no actual economic benefit being received.

The plaintiff waited almost six years to enforce her alimony payment after she stopped receiving alimony in 1999 and more than two years after her paramour died on June 13, 2003. The plaintiff and Michael Campione shared a common residence, had a long-term intimate relationship, jointly contributed to household expenses, shared a business together and their relationship was known to family and friends for over twenty years . . . . The plaintiff's conduct or failure to act on her alimony claim gives credibility to the defendant's claim that he and the plaintiff orally agreed to the termination based on her cohabitation with Mr. Campione and defendant's claimed inability to pay after 1999. Given the facts of this case, the court finds the parties agreed to terminate alimony as of 1999. The court is also satisfied the plaintiff did not and could not establish there was no actual economic benefit she received from cohabiting with Michael Campione as defined by Gayet and Konzelman. The parties were clearly free to agree to terminate defendant's alimony obligation based on their 1999 domestic and economic circumstances . . . . [Moreover] . . . since 1999 the plaintiff ...

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