August 4, 2008
YVONNE A. HOPKINS, PLAINTIFF-RESPONDENT,
DAVID O. HOPKINS, DEFENDANT-APPELLANT.
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted April 28, 2008
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 speak on behalf of the corporation. I'm just telling you what the law is in this state.
THE DEFENDANT: I'd just like to make a motion to have my - - this stay until the court - -
THE COURT: It's denied because you're not counsel to the corporation. Okay? This order is being entered today. I am not staying the order.
THE DEFENDANT: Well, my - - could I make my statement, Your Honor, or not?
THE COURT: No, because if you're making it on behalf of the corporation, that's impermissible. Okay? You're talking on behalf of the corporation.
THE DEFENDANT: Well, I would like to adjourn it.
THE COURT: No, I'm not adjourning it either. Okay? All right.
THE DEFENDANT: Because I was told that if those funds are disbursed - -
THE COURT: I don't care who told you anything. You are out of this picture. You filed for bankruptcy - -
THE DEFENDANT: But . . . HTH didn't file for bankruptcy.
THE COURT: Sir, you're not allowed to speak on behalf of HTH. Okay? The Court will be entering this order. All right? [Defendant's attorney], anything else you want to add to this?
[DEFENDANT'S ATTORNEY]: No, Judge.
THE COURT: Okay. Counsel, anything you want to address relative to anything Mr. Hopkins had to say? I understand there has been no appearance by anybody on behalf of HTH at this point. Is that correct?
THE DEFENDANT: They weren't served, Your Honor.
THE COURT: Sir, don't interrupt me again or you'll be sanctioned. Do you understand that?
THE DEFENDANT: I apologize.
THE COURT: Thank you. Anything else from either one of you?
The consent order provided that the "rights and obligations regarding equitable distribution of assets that are or may become assets of the bankruptcy estate" were subordinated to the trustee, that the trustee would receive $30,000 from the fund in court, and plaintiff would be paid the remaining balance of approximately $84,559.
The order "'was made subject to the trustee filing a notice of Information of Settlement of Controversy in the [Federal] Bankruptcy Court," and approval from the Bankruptcy Court. Hearings were conducted on defendant's objections to the "Notice of Settlement of Controversy" in the bankruptcy court on January 9, 2006, and January 17, 2006.
On January 17, 2006, the Bankruptcy Court "declined to disturb the state court's finding that the [t]rustee has exclusive authority to assert or settle claims regarding equitable distribution." Hopkins v. McDonnell, No. 06-683, slip op. at 2 (D. N.J. Aug. 4, 2006). The Bankruptcy Court held "that the [t]rustee was within his rights to make 'whatever settlement regarding equitable distribution he thought appropriate,'" and approved the trustee's agreement. Ibid. Accordingly, the Bankruptcy Court ordered that: 1) the trustee be paid $30,000 from the $114,559 held by the Family Part; and 2) that this amount would be "in full satisfaction of the [t]rustee's equitable distribution claim." Ibid. The order "noted that the sum would include $29,000 on account of the [t]rustee's claim to the fund and $1,000 on account of the [t]rustee's claim to certain other assets." Ibid. Defendant appealed the decision to the federal district court.
On January 26, 2006, after completing the divorce hearing, the Family Part judge issued a "Judgment of Conveyance of Real Estate." The order conveyed the marital residence to plaintiff, and extinguished "all right, title, and interest of David Hopkins in said property."
On February 16, 2006, an "Order Implementing Judgment" was issued, directing that the $20,000 in an attorney escrow account be used to pay HTH's corporate taxes, and that:
. . . All marital furniture and furnishings having been distributed to plaintiff, and there being in effect pendente lite orders prohibiting defendant from removing items from the Lackland Storage facility housing said items, defendant is hereby ordered to deliver immediately to his counsel for delivery to plaintiff all keys to the storage facility and furthermore Lackland Storage facility is hereby authorized and directed to permit [plaintiff] access to the storage facility maintained by [defendant] and to allow her to remove any and all items.
In the summer of 2006, plaintiff filed a motion to enforce litigant's rights, complaining that defendant had stopped making support payments. On August 4, 2006, defendant was found in violation of litigant's rights. The judge did not, as plaintiff had requested, require that defendant resume making mortgage payments on the marital residence, but did require defendant to resume making support payments of $300 a week and make various other payments. In a written opinion coincidentally issued that same day, the Federal District Court affirmed the decision of the Bankruptcy Court approving the trustee's settlement of defendant's equitable distribution claims.
On October 17, 2006, defendant was found to be in contempt of court "for his failures to comply with the orders of the [c]court dated January 10, 2003, January 14, 2005, February 16, 2006 and August 4, 2006." The order provides:
5. [Defendant] is and shall be solely liable for any and all tax interest or penalty obligation incurred on behalf of HTH Enterprises and shall remit all such amounts to the escrow agent, Walter Abrams, Esq., within three days of plaintiff's counsel's or accountant James Martin's transmittal of the proposed corporate tax returns required to satisfy the conditions of the Abrams Escrow.
6. Walter Abrams shall issue from the escrow account payment of the tax obligations necessary to satisfy the escrow arrangement . . . .
The parties were divorced on November 29, 2006. After imputing income of $65,000 a year to defendant, and determining that plaintiff was unable to work outside of the home because of her obligations to care for David, Jr., the Family Part judge ordered defendant to pay $500 a week to plaintiff in permanent alimony. The judge also awarded plaintiff $40,000 in counsel fees of the $100,000 requested. Defendant filed a notice of appeal on January 8, 2007.
In his brief to the Federal District Court, defendant's bankruptcy attorney contended that by virtue of the settlement, the trustee abandoned the following: (1) equity in the marital home, totaling approximately $168,000, (2) approximately $84,559 in cash from the fund in court to plaintiff, (3) furniture and furnishings in a storage unit, the value of which plaintiff had asserted exceeded $100,000, including a baby grand piano. The bankruptcy attorney also contended that it was inequitable for the trustee to abandon a claim for contribution by plaintiff towards the HTH tax liability. It was argued that defendant theoretically, as would any petitioner in a bankruptcy proceeding, be allowed exemptions of $18,450 in the marital residence, $9,850 in furniture and furnishings, and $1000 in his 1998 Mazda. By acceptance of $30,000 in full satisfaction of the debtor's share in the marital estate, of which the debtor received $1,000, not only was defendant stripped of $28,300 in possible distributions, but, most significantly, the estate available to creditors in satisfaction of all claims was substantially reduced.
By way of memorandum opinion, the Federal District Court approved the settlement. The opinion reads:
On January 17, 2006, the Bankruptcy Court, inter alia, declined to disturb the state court's finding that the Trustee has exclusive authority to assert or settle claims regarding equitable distribution. Consequently, the Bankruptcy Court found that the Trustee was within his rights to make "whatever settlement regarding equitable distribution he thought appropriate." The court also stated that Appellant's tax arguments were misplaced as they were not properly before that court and should have been made in the state court action. [(Citations omitted).]
In addition, the District Court said: the state court determined that Appellant's interest in equitable distribution was subordinate to the Trustee. The Trustee subsequently determined that Appellant's interest in the marital assets is $1,000. The Bankruptcy Court explicitly declined to disturb the state court's findings with respect to claims regarding equitable distribution. . . . Appellant may claim an exemption with respect to the $1,000 attributable to the marital assets, but any challenge to the equitable distribution is not properly before this [c]court and should have been addressed to the state court.
. . . Appellant's tax arguments were not properly before the court and should have been addressed to the state court. Accordingly, there are no findings or conclusions for the [c]court to review on this point. [(Citations omitted).]
Defendant asserts that the Family Part judge improperly imputed income to him. We agree.
Although the judge acknowledged that defendant earned a current yearly salary of only approximately $40,000, she found "that he has an ability to earn commissions and additional income through his real estate license," and imputed income to him of $65,000 per year. Accordingly, she concluded that defendant had the ability to earn an additional $20,000 annually. She considered him not to be a credible witness, and said that "there may indeed be available assets to him that were not disclosed. Clearly, he is able to afford to contribute to his son's medical school education in the amount of $10,000 which, at this point, could clearly be utilized for the support of his spouse."*fn2
"[A]ppellate courts should accord deference to family court factfinding." Cesare v. Cesare, 154 N.J. 394, 413 (1998). "When reviewing an alimony award, we must give deference to a trial judge's findings 'if those findings are supported by substantial credible evidence in the record as a whole.'" Overbay v. Overbay, 376 N.J. Super. 99, 106 (App. Div. 2005) (quoting Cox v. Cox, 335 N.J. Super. 465, 473 (App. Div. 2000)). A family court's "'decision to impute income of a specified amount will not be overturned unless the underlying findings are inconsistent with or unsupported by competent evidence.'" Id. at 106-07 (quoting Storey v. Storey, 373 N.J.Super. 464, 474-75 (App. Div. 2004)).
If a family judge determines that a party, "without just cause, is voluntarily unemployed or underemployed, income may be imputed to that" party. Caplan v. Caplan, 182 N.J. 250, 268 (2005) (imputing income in determining child support award); see Miller v. Miller, 160 N.J. 408, 424 (1999) (imputing income in determining proper alimony award). In Caplan, supra, 182 N.J. at 268, the court explained that in making the calculation for purposes of a child support award, the court should consider the employment status and earning capacity of that parent had the family remained intact; the reason for and intent behind the voluntary underemployment or unemployment; the extent other assets are available to pay support; and the ages of any children in the parent's household as well as child-care alternatives. Additionally, factors such as previously announced plans to retire at an early age, health of the parties, whether one party would remain out of the workforce to care for the children, and other similar considerations that the intact family had or would have contemplated, should be considered by the trial court in making the 'just cause' determination. [(citation omitted).]
Similar considerations apply when a court makes a determination that a party is underemployed for purposes of an alimony award. Id. at 269.
The Family Part's judge's decision to impute income to defendant stemmed from her belief that he was voluntarily underemployed, and had the "ability to earn commissions and additional income through his real estate license." This is inconsistent with the proofs, which were that other than his own real estate transactions conducted through HTH, defendant had sold one piece of real estate in five years.
The judge further stated that defendant could "easily" earn an additional $20,000 a year in telephone systems sales commissions. The facts do not support this separate conclusion. Rather, there is a progressive, marked decline in defendant's income, and a tenuous character to his current employment, that make it unlikely he will be able to earn $20,000 in additional salary.
Defendant's separate contention that the court should have imputed income to his wife has no merit. As the Family Part judge correctly found, the circumstances surrounding the round-the-clock care necessary for David, Jr., preclude her from gainful employment outside the home. Defendant cannot fairly challenge her decision to care for their disabled child instead of working outside the home.
The award of $40,000 in counsel fees to plaintiff, based on imputed income, and the suspicion that defendant was hiding unspecified liquid assets, was a misapplication of discretion. "An award of counsel fees is within the discretion of the trial court," and "unless an award represents an abuse of discretion, we ordinarily will not disturb that award on appeal." Chestone v. Chestone, 285 N.J. Super. 453, 468 (App. Div. 1995). When assessing counsel fees, the trial court should weigh:
(1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.
N.J.S.A. 2A:34-23 also requires a court awarding fees "'to consider the factors set forth in the court rule on counsel fees, the financial circumstances of the parties, and the good or bad faith of either party.'" Mani v. Mani, 183 N.J. 70, 93-94 (2005) (quoting N.J.S.A. 2A:34-23)).
In making the award, the judge said:
The plaintiff has been successful in her prosecution of this action. She has also established that the defendant was the primary reason that this case was tried. His continuous court filings, appeals, etc. necessitated the trial of this matter. The [c]court in reviewing plaintiff's certification notes that most of the charges related to the trial of this matter or the enforcement of various orders of the [c]court. Additionally, as was found earlier, [d]efendant has an ability to pay, while the [p]laintiff is not able to absorb these costs and therefore is in financial need. The [c]court has reviewed the affidavit of services of [plaintiff's attorney]. Her hourly rate is well within the appropriate rates for attorneys in the field and with her level of experience. Unfortunately the fees in this case are extremely high; plaintiff's request totals over $100,000. It would appear that given the financial circumstances of the parties, neither one is in a position to pay that amount of fees. Based on the aforementioned findings[,] the [c]court will award [plaintiff's attorney] fees in the amount of $40,000.
Defendant argues that he has no ability whatsoever to pay his wife's counsel fees. Unquestionably, much of the expense, stress and inconvenience of this protracted litigation results from defendant's failure to comply with court orders, filing of a bankruptcy petition, and delay in providing discovery. Nonetheless, because the judge's award was grounded in her mistaken imputation of income to defendant, the award of counsel fees is hereby reversed, and the matter remanded for reconsideration after a plenary hearing.
Defendant claims that the court should have granted his request for an adjournment of the November 15, 2005 hearing, as he was unprepared for more than a case management conference. His position ignores the plain language of the order to show cause, which indicated that on the return date plaintiff would seek payment of $45,000 from the fund in court.
It is equally clear, however, that defendant reasonably anticipated the trustee, based on her written submissions, would argue for the preservation of the fund in court for the benefit of the bankrupt's estate. Defendant had no notice whatsoever that on that date equitable distribution of the entire marital estate would be decided, including disposition of the marital home and furniture. Even if a trustee in bankruptcy stands in the shoes of the debtor, and has unfettered authority to negotiate equitable distribution, defendant was due more process than he received. Defendant was at least entitled to be heard regarding the merits of the proposed settlement and to place his concerns before the court. We therefore agree that at least as to the allocation of the tax liability, equitable distribution should be revisited at a plenary hearing. We make this decision knowing that after a hearing, after taking a more accurate pulse of defendant's financial circumstances, the allocation of the debt may be the same.
Once a party files for bankruptcy all "interests bec[o]me property of the estate." Reid v. Reid, 310 N.J. Super. 12, 19-20 (App. Div.), certif. denied, 154 N.J. 608 (1998). The trustee represents that estate, and in the case of a divorce "ha[s] the authority to dispose of the marital assets by way of settlement." Id. at 20. "'When a trustee prosecutes a right of action derived from the debtor, the trustee stands in the shoes of the debtor.'" Stanley v. Trinchard, 500 F.3d 411, 428 n.67 (5th Cir. 2007) (quoting Yaquinto v. Segerstrom, (In re Segerstrom), 247 F.3d 218, 224 (5th Cir. 2001)). Similarly, a "trustee would have to stand in the shoes of the debtor to defend against" claims as well. Metcalf v. Golden, (In re Adbox, Inc.), 488 F.3d 836, 840 (9th Cir. 2007); see also Fed. R. Bankr. Pro. 6009 ("[T]he trustee . . . may prosecute or may enter an appearance and defend any pending action or proceeding by or against the debtor, or commence and prosecute any action or proceeding in behalf of the estate before any tribunal.") Accordingly, defendant may have had little recourse, even if he been on notice of the possible outcome of the November 15, 2006 hearing. But the manner in which the matter was resolved does not give us full confidence in the fairness of the process.
It is inexplicable why defendant's matrimonial attorney would not, at a minimum, have sat in on the conference, to at least attempt to assert his client's position. It is also inexplicable why the bankruptcy trustee, once having initially raised defendant's tax liability immediately after entering her appearance, would have thereafter absolutely ignored it.
The Family Part judge should have placed on the record the nature of the discussions that resulted in the agreement. The better practice would have been to conduct a hearing, with the participation of both defendant's bankruptcy attorney and matrimonial attorney, and a decision rendered after an opportunity for everyone to be heard.
That process would assure that no important issues, such as the tax liability, would be overlooked. Unlike cases such as Reid, supra, 310 N.J. Super. at 20, in this case the parties did not agree that the bankruptcy court could assume jurisdiction of all issues related to the debtor's marital property. And in this case, the "consent" agreement only disposed of the positives, not the negatives; the assets, not the liabilities.
In Reid, the bankruptcy court "made substantial findings respecting the validity and fairness of the settlement." Ibid. Here, both the bankruptcy court and the district court assumed defendant had some form of participation in the equitable distribution allocation, as well as the allocation of the tax liability, in state court. The federal courts assumed he had an opportunity to be heard, and for that reason deferred to the state court. As the bankruptcy attorney succinctly stated in his January 12, 2006, letter brief to the Bankruptcy Court, "[t]he debtor should be afforded either his exemption or his rights of equitable distribution. Both cannot be taken away from him." Both the exemption and the right of equitable distribution were taken away from this defendant, and he is left only with a significant liability.
The Family Part judge made no findings as to the tax liability. It is not mentioned, either during the course of the November 15, 2006, hearing, or in the orders thereafter entered memorializing equitable distribution. References made in an October 17, 2006, order, to a tax liability, are actually to the franchise tax $20,000 escrow, not the HTH liability. Although the bankruptcy trustee has the right to enter into a comprehensive settlement as to equitable distribution, the settlement which was reached does not appear to have included the tax liability, only assets. After the plenary hearing, it may well be that the court ultimately decides to allocate the tax burden completely on defendant, however, a more considered decision must be made, and a hearing conducted at which defendant has a meaningful opportunity to be heard. At this juncture, the only aspect of equitable distribution, over which we consider ourselves to have jurisdiction despite the bankruptcy petition, is the allocation of the HTH tax debt, because it seems to have been omitted from consideration by everyone.
We are not convinced by defendant's argument that the fund in court was subject to a priority claim of the IRS. The funds are a marital asset properly within the reach of both the family court in a divorce proceeding, and the reach of the bankruptcy trustee.
In sum, we reverse and remand the alimony award previously made based on imputed income. Until a decision is made after a plenary hearing, the order will continue in effect, however, the trial judge can modify the order, if he or she deems it appropriate to do so, retroactive to the date of the divorce.
We also reverse and remand, in light of our comments about imputed income, the award in the amount of $40,000 in counsel fees. This too is without prejudice to any final determination. Although the proceeds of the last sale by HTH property were appropriately included in defendant's marital estate for purposes of equitable distribution, it was not fair to have omitted consideration of the tax liability when all the assets were awarded to plaintiff. Therefore, we remand as to that aspect of equitable distribution. Allocation of the debt is to be explored at the same plenary hearing as alimony and counsel fees. We do affirm as to the discrete subsidiary issues specifically mentioned in this opinion.
Affirmed in part, reversed in part, and remanded for further proceedings as to all remaining issues.