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Abrams v. Abrams

December 19, 2007

TRACEY ABRAMS, PLAINTIFF-RESPONDENT,
v.
DAVID ABRAMS, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-748-03B.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 26, 2007

Before Judges Lintner, Parrillo and Alvarez.

Defendant David Abrams appeals from post-divorce judgment orders of the Family Part entered on May 8 and May 16, 2006. For the reasons that follow, we reverse those portions of the orders directing defendant to pay penalties and interest resulting from plaintiff Tracey Abrams' non-payment of her one- half share of the parties' 2003 federal and state income tax liability; to pay all of their daughter's future uncovered medical expenses with Monmouth Psychological Associates, as well as those already incurred with Princeton University Medical Center; and to pay plaintiff's counsel fees. We affirm the orders in all other respects.

The parties were married on June 25, 1989 and have three children, all of whom were unemancipated at the time of the post-judgment motions at issue here. During the marriage, defendant, a licensed chiropractor, earned about $250,000 per year, while plaintiff, a homemaker, earned only $5000 annually. The parties amassed certain assets, including their marital home, a 2001 Jaguar S Type 4.0, a 2000 Dodge Caravan, and a 1998 Cessna 182 airplane. They also held money in several bank and brokerage accounts, and held trust accounts for their children's college education, including one Merrill Lynch & Company account for each of their three children, with plaintiff acting as sole custodian on all three, and a J.B. Hanauer & Company account containing $8000, with defendant acting as sole custodian.

The parties separated in 2002 and began negotiating the terms of their impending divorce. Over one year later, a proposed property settlement agreement (PSA) was drafted, providing for, among other things, alimony to plaintiff of $71,000 per year effective February 1, 2004, reduced to $30,000 per year commencing three years later; equitable distribution*fn1; and equal division of the costs of uncovered medical expenses beyond the first $250, for which plaintiff is solely responsible, plaintiff being obliged to use physicians designated by defendant's medical insurance carrier. Provision was also made for the joint filing of federal and state income tax returns for 2003. As part of the child support obligation, the parties agreed that the existing trust accounts would first be utilized to fund the children's college education before any contribution by the parties, with the exception that defendant would place an additional $109,000 in trust for this purpose. Finally, for present purposes, the PSA provided that a defaulting party would reimburse the other party "for any and all expense, costs and reasonable attorney's fees resulting from or made necessary by the bringing of any suit or other proceeding to enforce any of the terms, covenants or conditions of this Agreement."

On April 29, 2004, the PSA was amended on the record. At that time, the parties clarified that defendant's $109,000 contribution to the children's college education fund would be placed in a new account within eighteen months, with both parties acting as joint custodians. The parties also clarified that defendant would pay plaintiff one-half of the $125,000 equitable distribution ($62,500) one year from that date (April 29, 2005) and the other one-half one year from then (April 29, 2006).

The parties further discussed payment of their 2002 and 2003 federal and state income taxes. At the time, an obligation of $1,031.18 was past due for 2002. An extension had been granted to file their 2003 return, which would have otherwise been past due as well. Regarding the payment of any 2003 taX liability, the parties expressly agreed to split the obligation evenly.*fn2 As to their 2002 tax obligation, specifically, the following discussion between the parties ensued:

[Plaintiff's Counsel]: The 20, the balance left in your trust account, which is $23,500 to each. What's going to happen with that?

[Defendant's Counsel]: Well that's in the agreement . . . Is there any objection to taking the first 2,000 to pay the 2002 taxes?

[Plaintiff]: I object to that. I need that money now. You're holding everything else off on me. I need that now.

[Defendant]: Well, who's going to. [Plaintiff's Counsel]: Let her know what it is and then she'll have to pay it.

[Plaintiff]: And I'll reimburse you for it.

[Defendant]: Oh, okay, all right. [(emphasis added).]

A judgment of divorce was then entered, incorporating the PSA as amended on the record.

Certain post-judgment developments are relevant to the issues on this appeal. The parties' eldest daughter, A.A., had developed an eating disorder and plaintiff sought treatment for her with Dr. Bierne, an out-of-network psychiatrist with Monmouth Psychological Associates (MPA), incurring $570 in uncovered medical expenses. A.A. was also treated by Dr. Erwin, another out-of-network psychiatrist with MPA, incurring $3,402.95 in uncovered expenses. Apparently her condition did not improve and on the advice of the MPA, A.A. was treated at the inpatient psychiatric facility at Princeton University Medical Center. Defendant's medical insurance did not entirely cover A.A.'s treatment at this facility and defendant was directly billed $2,680.04, which he refused to pay. The parties dispute whether defendant was notified of, or consented to, any of these uncovered treatments.

Another post-judgment development concerned payment of the parties' income tax obligations. In August 2004, the parties' accountant, Walter Weinberg, completed the parties' 2003 tax return (on extension) and determined that they owed a total of $9798 in federal taxes and $6530 in New York taxes, due on August 14, 2004. Consequently, defendant paid his one-half share of $4899 to the IRS and $3265 to the State of New York on August 20, 2004. Plaintiff, however, did not pay her share of these taxes. As a result, the IRS assessed the parties $1291.58 in interest and penalties, and the State of New York assessed them $1211.65.

As of June 9, 2005, defendant had failed to make either his first scheduled equitable distribution payment of $62,500, or his $109,000 contribution to the children's college education account. Plaintiff then filed a motion to enforce litigant's rights, and defendant cross-moved for custody. By orders of June 9, 2005, the Family Part judge directed, among other things, that:

[1] Defendant is hereby ordered to pay to plaintiff the sum of $54,500.00 [of the $109,000 due] within 10 days. . . . Defendant is further ordered to pay the remaining payment of $54,500.00 on or before April 29, 2006.

[2] Defendant is hereby restrained from removing, transferring or otherwise altering the children's accounts which shall ...


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