June 23, 2008
PAMELA A. SCHVEY, PLAINTIFF-APPELLANT,
ROBERT M. SCHVEY, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-549-94.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 17, 2007
Before Judges Lintner, Graves and Sabatino.
The parties in this divorce action were married on May 15, 1972. They have two sons: Jeffrey is now twenty-three years old, and Gregory is now twenty-one years of age. A final judgment of divorce (JOD) was signed on October 1, 1997, and an amended final judgment of divorce (AJOD) was signed on January 9, 1998. We have reviewed this case on two prior occasions.*fn1 In our last decision, which remanded several issues to the Family Part, we noted "this divorce case that began in 1993 . . . has been ceaseless and perpetual since that time." State v. Schvey, No. A-6316-02 (App. Div. June 6, 2005) (slip op. at 2).
According to plaintiff, the matter was previously remanded because the motion judge made "unsupported, unexplained decision[s] without the benefit of any documentation," and the same mistakes were repeated during the remand proceedings: "In the present 'hearing' [the] lower court does the same thing. Cross-examination was not even permitted." In addition, plaintiff presents the following arguments:
THE LOWER COURT'S REFUSAL TO AWARD APPELLANT EQUITABLE DISTRIBUTION FOR THE ROYAL JEFFGREG PROPERTY (1 FOURTH ST. SOUTH ORANGE, N.J.) VIOLATED THE AMENDED DUAL JUDGMENT OF DIVORCE, VIOLATES EQUITABLE CONCEPTS OF LAW AND WAS NOT SUPPORTED BY THE FACTS.
THE LOWER COURT'S ORDER AS TO PHOENIX LIFE INSURANCE POLICIES MUST BE REVERSED BECAUSE IT VIOLATES THE AMENDED JUDGMENT OF DIVORCE, IS NOT EQUITABLE, AND WAS BASED ON MISTAKES. FURTHER THE COURT VIOLATED THE AMENDED JUDGMENT BY ELIMINATING THE REQUIREMENT THAT RESPONDENT MAINTAIN LIFE INSURANCE.
THE COURT ERRED AND VIOLATED THE AMENDED DUAL JUDGMENT OF DIVORCE IN ITS ORDER OF MARCH 24, 2006 AS DISTRIBUTION OF ASSETS WHICH WERE SPECIFICALLY TO BE DIVIDED UNDER THE AMENDED DUAL JUDGMENT OF DIVORCE BY ADDING WORDS "PROVIDING THAT SAID ACCOUNT(S) EXIST.["]
THE COURT DID NOT HAVE THE AUTHORITY OR A VALID BASIS TO DENY APPELLANT'S EQUITABLE DISTRIBUTION OF THE AZTECH 401 K PLAN, BEARER BONDS, THE SECOND CHASE IRA ACCOUNT AND [ELIMINATE] DISTRIBUTION OF ANY ADDITIONAL SUCH RETIREMENT PLANS.
THE COURT ORDER UNEQUALLY DIVIDED TWO OF THE RETIREMENT FUNDS LISTED IN PARAGRAPH 37 OF THE AMENDED DUAL JUDGMENT OF DIVORCE WHICH CALL FOR AN EQUAL DISTRIBUTION AND WITHOUT THE BENEFIT OF ACCOUNT [DOCUMENTATION] AND ONLY RESPONDENT'S BARE ASSERTIONS.
THE CHANCERY DIVISION, FAMILY PART, LOWER COURT INTERFERED WITH THE COLLECTION OF LAW DIVISION JUDGMENT RESULTING IN REDUCING PLAINTIFF'S EQUITABLE DISTRIBUTION BY $1,000,000 OVER AND ABOVE THE BALANCE OF THE DIVORCE SETTLEMENT PLAINTIFF HAS NOT RECEIVED AND SHIFTED THE BURDEN OF PROOF FROM RESPONDENT TO PLAINTIFF RESULTING IN PLAINTIFF [LOSING ANOTHER] $500,000.
THE LOWER COURT DID NOT HAVE THE AUTHORITY OR BASIS TO VACATE THE RULE 5:6[B] COST OF LIVING INCREASE ORDER DATED DECEMBER 1, 2004 [Pa 188-4A], VIOLATED THE AMENDED DUAL [JUDGMENT] OF DIVORCE, VIOLATES EQUITABLE CONCEPTS OF LAW AND WAS NOT SUPPORTED BY THE FACTS.
THERE IS NO BASIS IN THE LAW OR FACT FOR THE DENIAL OF APPELLANT'S EFFORTS TO ENFORCE LITIGANT'S RIGHTS AND THE ORDER FORBIDDING FUTURE EFFORTS TO ENFORCE LITIGANT'S RIGHTS AND THE JUDGE IS ALSO EFFECTIVELY [OVERRULING] THE MAY 10, 1999 ORDER OF THIS [APPELLATE] COURT.
THE LOWER COURT'S REFUSAL TO AWARD [PLAINTIFF] CAMP AND MEDICAL EXPENSES VIOLATED THE AMENDED DUAL JUDGMENT OF DIVORCE, VIOLATES EQUITABLE CONCEPTS OF LAW.
THE LOWER COURT SHOULD NOT ALLOW RESPONDENT'S NON[-]COMPLIANCE WITH THE COURT ORDERS TO CONTINUE.
THE LOWER COURT MADE DECISIONS BASED SOLELY ON THE UNSUPPORTED CERTIFICATION OF THE RESPONDENT WHERE THERE WERE CLEAR MATERIAL DISPUTES OF FACT AND FURTHER IGNORED MATERIAL FACTS PRESENTED BY THE APPELLANT AND OFTEN SUPPORTED BY DOCUMENTS.
Based on our review of the record, we are convinced the abbreviated remand proceedings----which were more than oral argument but less than a plenary hearing----compromised plaintiff's right to a fair hearing. Because plaintiff was not afforded an adequate opportunity to present evidence in support of her claims, and defendant was not subjected to cross-examination, we are constrained to reverse and remand for discovery and a meaningful plenary hearing. See Doe v. Poritz, 142 N.J. 1, 106 (1995) ("Fundamentally, due process requires an opportunity to be heard at a meaningful time and in a meaningful manner.").
The genesis of the present dispute is a motion filed by plaintiff to enforce litigant's rights. In a certification in support of her motion, plaintiff alleged defendant had failed to equitably distribute various marital assets as required by the AJOD, and she asked the court to enforce the AJOD and to compel defendant's compliance with previous orders. On February 5, 2003, the court ordered "[d]iscovery to take place over the next 30 days," but it is unclear if discovery occurred. On June 16, 2003, the court denied plaintiff's motion for the reasons set forth in a letter opinion. The letter opinion reads, in pertinent part, as follows:
The bulk of the plaintiff's requests seek reconsideration of previously adjudicated issues and attempts to ignore prior judicial determinations, including this court's order of November 15, 2002. The plaintiff is representing herself post[-]judgment and seems to never end the litigation and files voluminous and unnecessary motions.
The court believes that the elements of the final judgment have been performed. Proof of life insurance has been provided and stocks and bonds were divided. When the parties separated in 1996 all personality was taken by the wife. Judge Glickman in his August 8, 2002 order made a determination as to the mother's apartment in New York City. Proof that the trust accounts were established has been provided to the wife. The procedural history between the parties is in excess of fifteen typed pages. All issues raised have been previously litigated with full determinations made by the court. . . . .
Alimony and child support shall not be further reduced or reinstated. The court's prior determination which was not appealed shall remain as previously ordered.
However, the QDRO for Packard Press must be presented and approved by Packard Press and signed by the court if no QDRO exists. This QDRO will be prepared and approval secured by Puder and Poltrock within 60 days from today. No further accountings or discovery is required from or by either party.
All matters are closed by the court and any remaining prayers of relief not specially addressed in this opinion are denied.
Plaintiff appealed from the order dated June 16, 2003, and, in our second opinion on June 6, 2005, we returned the matter to the trial court with the following instructions:
Plaintiff specifically seeks $1,071,819 from defendant for equitable distribution that she claims was never distributed to her by defendant. This sum consists of: (1) $56,898 from life insurance policies; (2) $400,000 from the Royal [JeffGreg] property; (3) $463,309 from pension and retirement benefits; (4) $12,953, "plus half of the bearer" bonds; (5) $71,460 from the joint accounts defendant held with his mother; and (6) $67,200 in jewelry, personalty and furniture. Plaintiff also seeks an accounting of the $60,500 she contends is missing from the children's trust accounts.
We remand for the motion judge to make findings of fact with respect to the above items sought by plaintiff. If a plenary hearing is required to resolve issues of fact, it shall be held under terms and conditions, including discovery, as set forth by the judge in his discretion.
Subsequently, on October 3, 2005, the trial court held a case management conference "for the purpose of reviewing the remand directions." During that proceeding, plaintiff requested an opportunity to conduct additional discovery, but the court stated it would "determine if there's a need for further discovery" after it received written submissions from each of the parties.
At the next case management conference on January 6, 2006, the court informed counsel that testimony would be necessary to resolve "a number of these issues," and the court provided the following directions:
[T]he two dates I'm choosing are Wednesday, March 1 and Thursday, March 2, both times at 1:30. Mrs. Schvey will go first, the day of March 1, and Mr. Schvey, in regard to March 2, and this is how I want you to break it down for me -- and even if this has been a prior submission over the last ten years, this is a new record for the Appellate Division. . . .
One, I want both of you to make a list of all orders, beginning with the final judgment through today, in a chronological order, a separate packet. Then we're going to break things down into three categories, enforcement being Category No. 1, modification being Category No. 2, and new relief being Category No. 3.
In an apparent effort to narrow the issues in dispute, the court scheduled a pretrial conference for February 21, 2006. At the pretrial conference, plaintiff produced a list containing nineteen enforcement issues, two modification issues, and six new issues. Defendant's list contained one enforcement issue, one modification issue, and one request for new relief. The court advised that "every open issue has to have testimony in order for me to decide it," and the court stated: "I may do tandem testimony at the end of each issue." When one of the attorneys asked "what are we going to do if this takes three months," the court replied:
It won't. There's 27 items. It's really going to be statement testimony. She'll tell us the -- it's almost going to be a narrative response. You know, I expect our roles to be minimal, all right? She'll read the first one and tell us the orders and then he'll respond to it. We have the list, so everybody will be prepared, we won't be hearing it for the first time and it should be I think fairly straightforward.
I'm just trying to organize this. . . .
So my intention would be that we're going to start off with her 27, with the supportive orders, okay, that I have here and she'll tell us the dates and then what is or isn't.
I will turn to him and he'll respond to that particular one.
The parties were the only witnesses to testify at the remand hearings, which took place on March 1 and 3, 2006. Nevertheless, because of the restrictions imposed by the court, the parties' testimony was quite limited, even though it was often conflicting. Moreover, neither party was subjected to cross-examination, and, undoubtedly, this compromised the court's ability to make necessary credibility and factual determinations. See State v. Castagna, 187 N.J. 293, 309 (2006) ("[C]ross-examination . . . has been described as 'the greatest legal engine ever invented for the discovery of truth.'" (quoting California v. Green, 399 U.S. 149, 158, 90 S.Ct. 1930, 1935, 26 L.Ed. 2d 489, 497 (1970))); see also Peterson v. Peterson, 374 N.J. Super. 116, 124 (App. Div. 2005) ("[C]ross-examination is the most effective device known to our trial procedure for seeking the truth." (internal quotations omitted)). For example, during the hearing on March 1, 2006, when plaintiff's attorney produced written confirmation that defendant had withdrawn $172,426.92 from the Packard Press Retirement-Investment Plan on September 5, 2000, defendant's attorney suggested the letter might be "fabricated." However, when the hearing resumed on March 3, 2006, defendant's attorney admitted plaintiff "never got her half and she's entitled to her half." Nevertheless, because defendant was not subjected to cross-examination, he was never required to explain why he failed to comply with the AJOD dated January 9, 1998, for more than eight years. Similarly, defendant was never required to explain why he failed to provide plaintiff with her fifty percent share of a Chase Manhattan IRA in the amount of $23,457.51 for so many years.
There are instances in which, in order to avoid the necessity of a remand, an appellate court may make the necessary findings of fact "pursuant to the constitutional grant of necessary original jurisdiction and R. 2:10-5." Pressler, Current N.J. Court Rules, comment 1 on R. 1:7-4 (2008). However, "[o]ur original factfinding authority must be exercised only with great frugality and in none but a clear case free of doubt." Tomaino v. Burman, 364 N.J. Super. 224, 234-35 (App. Div. 2003) (internal quotations omitted), certif. denied, 179 N.J. 310 (2004). This is not such a case. Nevertheless, because the issues on appeal must be reconsidered by the trial court, we add the following comments.
The original JOD stated: "The Husband shall retain his interest in . . . Royal JeffGreg, Inc. [a commercial property] . . . free and clear of any interest of the Wife." However, the AJOD stated: "Within ten (10) days hereof, the Husband shall provide proof of the $125,000.00 check from inherited funds which he utilized to invest in Royal JeffGreg. In the event that such proof is not provided, the [c]court shall determine the distribution of Royal JeffGreg within fourteen (14) days."
Following a motion by plaintiff, another order was entered on September 30, 1999, which stated:
Pursuant to paragraph 34 of the Dual Judgment of Divorce, defendant was required to submit proof that property known as Royal [JeffGreg] (One 4th Street) was purchased with inherited funds. If defendant does not provide that proof prior to October 6, 1999, plaintiff may apply to this [c]court for an order authorizing the sale of that property.
Nothing more was done at that time.
Ultimately, plaintiff moved to enforce litigant's rights and to establish her interest in the Royal JeffGreg property. In a certification dated April 22, 2003, plaintiff alleged that defendant took out seven mortgages totaling $636,300 on the Royal JeffGreg property. Three mortgages, totaling $350,000, were taken after the complaint for divorce was filed but prior to the divorce. The remainder of the mortgages were taken in 1997 and 1998, after the JOD was entered. At some point, defendant stopped paying the mortgages and property taxes. In June 1999, a complaint for foreclosure was filed, and in December 1999, default was entered. According to plaintiff, she was not aware of the foreclosure proceedings until October 3, 2000. The property was sold at a sheriff's sale on October 26, 2001.
In our prior opinion, we noted plaintiff claimed she was entitled to receive $400,000 from the Royal JeffGreg property, and we remanded plaintiff's claim for reconsideration. During the hearing on March 1, 2006, plaintiff repeated her allegations, but the court reasoned "the only issue in play is the $125,000," and it determined defendant "was able to do what he did" because plaintiff "didn't get an order of any kind that prohibited liens or encumbrances against the property." Later in the hearing, the court stated the issue was moot because "the property was foreclosed and is gone."
On appeal, plaintiff argues that the judge's belief that only $125,000 would be subject to distribution "has no rational basis." We agree. The issue at the time of the divorce was not whether defendant had $125,000 that was subject to equitable distribution. There was no dispute that $125,000 had been used to purchase Royal JeffGreg. The issue at the time of the divorce was whether the asset, here commercial property, was marital or non-marital. If the money defendant used to invest in the property was inherited from his father as he claimed, the asset would be exempt from equitable distribution. N.J.S.A. 2A:34-23(h). If the money used to purchase the asset was not inherited, it would be subject to equitable distribution. Ibid. However, the burden of establishing that an asset is immune from equitable distribution rests upon the spouse asserting it, Landwehr v. Landwehr, 111 N.J. 491, 504 (1988), and defendant never provided any proof that the asset was purchased with inherited funds. Therefore, it was clearly Royal JeffGreg, and not the $125,000, which was subject to distribution.
Plaintiff also argues that her claim for equitable distribution is not moot because the foreclosure and loss of property resulted solely from defendant's "unethical action," which was designed to circumvent the court's authority "and to steal Appellant's equity." She maintains that defendant "walked away" from the property "with $636,000 in his pocket," and the court should afford her relief by applying the equitable concept of "unclean hands."
In making an equitable distribution of marital property, the court must consider, among other things, "[t]he contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property." N.J.S.A. 2A:34-23.1(i). In Kothari v. Kothari, 255 N.J. Super. 500, 506 (App. Div. 1992), the court noted the Legislature did not define "dissipation" of marital property, but found that the term was "a plastic one, suited to fit the demands of the individual case." In Painter v. Painter, 65 N.J. 196, 218 n.6 (1974), the Court stated that "any disposition of property in fraud of the other spouse could be promptly made the subject of appropriate judicial action," and in Monte v. Monte, 212 N.J. Super. 557, 567-68 (App. Div. 1986), we stated that an intentional dissipation of marital assets by one spouse would constitute a fraud on the marital rights of the other spouse. There was no need for a court order prohibiting the dissipation of marital assets in those cases, and we are satisfied plaintiff was not required to obtain such an order in this case.
The court also ruled that plaintiff had no remedy because the property had been lost to foreclosure. If the property had been lost through no fault of either party, that ruling would be understandable. But when only one party deliberately dissipates the value of property that is subject to equitable distribution, equity dictates that he or she must be held accountable for the loss. See Vander Weert v. Vander Weert, 304 N.J. Super. 339, 349 (App. Div. 1997) ("[A]s a general matter, the distributable marital estate is deemed to include assets diverted by one of the spouses in contemplation of divorce and for the purpose of diminishing the other spouse's distributable share."). Accordingly, plaintiff is not precluded from pursuing this claim, or any of the other claims she has presented to us, at the remand proceedings, which shall take place after the parties are afforded a reasonable opportunity to obtain discovery.
Reversed and remanded for a plenary hearing in accordance with this opinion. We do not retain jurisdiction.