On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Union County, Docket No. FM-20-979-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Lintner, Sabatino, and Alvarez.
Defendant, David O. Hopkins, appeals from a judgment of divorce which awarded plaintiff, Yvonne A. Hopkins, alimony, equitable distribution, and counsel fees. Both parties are pro se on the appeal, but were represented by counsel in the trial court. We reverse and remand for additional fact-finding as to equitable distribution, alimony, and counsel fees.
The parties married on June 6, 1970, and have three adult sons. Plaintiff is currently sixty years old, and defendant is sixty-one. As plaintiff poignantly said during the divorce hearing, "[i]n 1998[,] our son, David, was the victim of a hitand-run, and he was severely brain injured. And our lives totally changed." David, Jr., is unable to walk or speak, and has lived with his mother since 2002 because he requires round-the-clock care.
The relationship between the parties is acrimonious; they had not spoken for four years prior to the trial. Plaintiff believes that defendant was opposed to her assumption of David's care, which she considers essential to their son's physical and intellectual improvement and good health. Defendant denies this. In any event, the initial separation occurred under the cloud of a domestic violence restraining order, which was ultimately dismissed. The youngest son is currently enrolled in medical school.
Plaintiff stopped working in approximately 1997 as a music teacher. She earned $33,750 that year. In addition to employment as a salesman in various capacities throughout the marriage, defendant earned substantial income from real estate investments. It was his practice to encumber these investment properties to the full extent of their appreciated value, and to use loan proceeds to maintain the family's comfortable lifestyle. Once the properties were stripped of value, defendant would sell them.
By at least 2000, that approach began to falter. Although the time frame is not clear, defendant began to incur significant credit card debt in order to make mortgage payments and meet other day-to-day expenses.
By 2001, when the separation occurred, in addition to the marital home, the parties owned only one apartment building, managed by a holding company, HTH Enterprises, Inc. The sale of that apartment building in 2003 realized a profit of $114,559, which sum was eventually held as a fund in court. An attorney held an additional $20,000 in escrow for satisfaction of corporate franchise taxes. The sale of the building triggered a tax liability in defendant's name for 2003 of $96,123, together with a penalty of $28,356.28, and $13,631.98 in interest calculated as of April 10, 2006, for a total due of $138,111.26.
Defendant has a real estate broker's license, and during the marriage sporadically sold real estate in addition to making real estate investments. In 1997 or 1998, defendant began to sell business telephone systems for a manufacturer, but was laid off in 2001. Since that time he has sold that particular brand of telephones, but for a smaller company. In 2002, defendant earned $65,000, which he testified included approximately $10,000 from a savings account accumulated with the manufacturer, that was paid over to him when he was terminated. He earned $57,000 in 2003, $49,000 in 2004,*fn1 and $41,000 in 2005. Defendant attributed his declining earnings to market conditions in the telecommunications industry, and the fact that his current employer does not sell computerized equipment, which results in a low demand for the product. He testified that when he was first hired by his current employer in 2001, there were five sales representatives, and that by 2006 only two remained, including himself. Defendant also testified that he earns approximately $1373 every two weeks plus reimbursement for automobile expenses. He currently resides with his mother, as he claims he cannot afford to live elsewhere as long as his current alimony obligation continues.
The divorce trial commenced on May 18, 2005, and continued on May 31 and June 2. Defendant admitted during those proceedings that he withheld from discovery the pay stub which included sales commissions paid over and above his base salary. Defendant also admitted to having a real estate listing under another real estate broker's name because, as he explained it, he would otherwise be unable to access the multiple listing registry. With the exception of personal investment property, defendant testified he had sold only one piece of real estate in five years.
At the June 2, 2005, hearing, defendant also acknowledged paying $37,000 to the University of Pennsylvania between 2001 and 2005, when the parties' youngest son was a student there, although he could not explain where he got the money to make the payments. He eventually admitted making some of the payments with money orders purchased with HTH funds, despite a January 31, 2003 pendente lite order which restrained him from selling, transferring, altering or dissipating marital assets.
On May 31, 2005, plaintiff filed a Chapter 7 bankruptcy petition which stayed the divorce proceedings. On June 2, 2005, the first Family Part judge "suspended" defendant's obligation to pay the mortgage on the marital residence.
Various orders related to pendente lite support and enforcement have been filed post-complaint. The bankruptcy proceedings did not progress smoothly either, as defendant in that forum failed to disclose the $114,559 fund in court. On August 9, 2005, plaintiff was granted relief from the bankruptcy stay, so she could conclude the divorce.
On November 4, 2005, plaintiff obtained an order to show cause why $45,600 should not be paid to her out of the fund in court. The order to show cause returnable November 15, 2006, was served on the trustee in bankruptcy, who filed a memorandum of law in the matrimonial proceeding in opposition to the partial distribution. The trustee took the position that because the proceeds of the sale of HTH were only in defendant's name, plaintiff had no equitable interest in the fund. The trustee took the further position that only the bankruptcy court could determine if the fund was includable in the debtor's marital estate, and that plaintiff had not shown, under Crowe v. DeGioia, 90 N.J. 126 (1982), a need for injunctive relief.
At the start of the November 15, 2005 order to show cause hearing, at which plaintiff, defendant and their respective matrimonial attorneys were present, the trustee stated "[t]hat Mr. Hopkins now has a 96,000 dollar tax liability." Because defendant had not previously filed his tax return, the trustee had not known the amount of taxes due until shortly before the hearing.
After the trustee's opening comments, the Family Part judge immediately suggested a conference in chambers. When the conference was over, and the parties went back on the record, defendant's attorney said that he "did not participate" in the conference. In fact, the judge acknowledged that during the conference, defendant and his attorney were not present as it included only plaintiff's attorney, the trustee, and the judge.
The Family Part judge then presented defendant's counsel with a consent order, prepared by plaintiff's counsel, for his signature which he had not previously seen. When defendant's attorney refused to sign the consent order, the judge stated: "Mr. Hopkins does not even have the ability to consent to this," and did not press the issue any further. The judge then reasoned, "by removing this case into the bankruptcy court it removed his ability to consent and that it was now the determination of the trustee, through counsel, to enter into this settlement."
While plaintiff testified about her understanding of the consent order, defendant and his attorney were provided with their first opportunity to read the document. When asked if there was anything he wanted to place on the record, defendant's counsel responded by asking that defendant be permitted to make a statement. This exchange follows:
THE COURT: Make a brief statement, but you're not a party to this. If you - - I want to make sure you understand that. Do you understand that, sir?
THE DEFENDANT: Yes. The funds that were put into escrow were not my funds, they are HTH Enterprises, a corporation, and - -
THE COURT: I'm not making any ruling on that, sir. I am making a ruling based upon the agreement that was reached between the trustee and counsel for your wife.
THE DEFENDANT: Well, just for the record, those are HTH's funds.
THE COURT: [Your attorney], I understand, is not here as an attorney on behalf of HTH, he's [your] attorney, correct? And you are not an attorney, so you can't speak on behalf of the corporation.
THE DEFENDANT: Well, I am the president of the corporation.
THE COURT: You can't speak. Under - - in the court of law in the state of New Jersey, even an officer of the corporation cannot represent a corporation themselves, they have to have counsel to do that. Put on - - you're representing that those are HTH funds. I understand that's your position, but you're not an attorney, you're not permitted to ...