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Merdian v. Merdian

April 2, 2008

CRAIG A. MERDIAN, PLAINTIFF-APPELLANT,
v.
ELIZABETH H. MERDIAN, DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-1860-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 19, 2007

Before Judges Wefing and Parker.

Plaintiff Craig A. Merdian appeals from three orders entered on January 3, 2007 addressing the parties' post-judgment applications on equitable distribution of plaintiff's several different retirement benefits accrued during his employment with Prudential Financial, Inc. (Prudential).

The facts relevant to this appeal are as follows. The parties were married on June 16, 1984. They entered a Property Settlement Agreement (Agreement) in which they agreed that the end-date for the marital estate was March 29, 2002. The complaint for divorce was filed on March 5, 2004 and the judgment was entered on June 25, 2004, incorporating the Agreement.

The initial appeal, filed on September 22, 2006, was temporarily remanded pursuant to an order entered on November 6, 2006 by Judge Naomi Eichen (Retired on Recall) "for the limited purpose of enabling plaintiff and defendant to file and serve a motion for relief from [the orders under appeal]." The remand hearing was held on December 13, 2006, after which the January 3, 2007 orders were entered.

The post-remand orders were amended to the extent that they included certain language that plaintiff requested. Plaintiff nevertheless appeals and argues that (1) stock options granted on June 19, 2002 are exempt from equitable distribution; (2) the trial court erred in applying the Marx*fn1 coverture fraction to plaintiff's Cash Balance Pension Plan; and (3) the trial court erred in rejecting a constructive trust to divide plaintiff's non-qualified plans.

I.

Plaintiff claims that the stock options are forward looking because the stock option plan is intended to (1) motivate "superior employee performance;" (2) encourage "acquisition of an ownership interest in the Company by the Company's . . . employees;" and (3) "enabl[e] the Company to attract and retain the services of outstanding employees."

The trial court found that the options were "granted for efforts expended directly or indirectly during the marriage, notwithstanding that they were granted or awarded after the marriage had terminated" and ordered that the options applying to the period up to the end-date of the marital estate were subject to equitable distribution. Relying on Pascale v. Pascale, 140 N.J. 583 (1995), the trial court rejected plaintiff's argument that the stock options were 100% forward looking. We agree.

When an asset accrues after the end-date of the marital estate, the trial court must evaluate whether the asset should be included in equitable distribution. Brandenburg v. Brandenburg, 83 N.J. 198, 210 (1980). In the evaluation process, the trial court must decide "whether the nature of the asset is one that is the result of efforts put forth 'during the marriage' by the spouses jointly, making it subject to equitable distribution." Pascale, supra, 140 N.J. at 609. "'[A]ssets acquired after that enterprise or partnership no longer exists should not be so included' in the marital estate." Robertson v. Robertson, 381 N.J. Super. 199, 204 (App. Div. 2005) (quoting Portner v. Portner, 93 N.J. 215, 219 (1983)). The party challenging the inclusion of an asset in the marital estate bears "'the burden of establishing such immunity [from equitable distribution] as to any particular asset.'" Pascale, supra, 140 N.J. at 609 (quoting Landwehr v. Landwehr, 111 N.J. 491, 504 (1988)).

Here, the parties agreed that the end-date for the marital estate was March 29, 2002. The stock options were granted on June 19, 2002. The purpose of the stock option plan stated in Article I of the plan document:

The purpose of the "Prudential Financial, Inc. Stock Option Plan" (the "Plan") is to foster and promote the long-term financial success of Prudential Financial, Inc. (the "Company") and materially increase shareholder value by (a) motivating superior employee performance by means of performance-related incentives, (b) encouraging and providing for the acquisition of an ownership interest in the Company by the Company's and its Subsidiaries' (as hereinafter defined) employees and agents, and (c) enabling the Company to attract and retain the ...


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