November 28, 2008
LINDA J. CLEMENTE, PLAINTIFF-RESPONDENT,
JOHN S. CLEMENTE, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division-Family Part, Monmouth County, Docket No. FM-13-379-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: September 10, 2008
Before Judges Cuff, C.L. Miniman and Baxter.
Defendant John S. Clemente appeals from various interlocutory orders entered in the course of this protracted matrimonial proceeding as well as virtually every provision of the August 7, 2006 Judgment of Divorce entered following a twenty-nine day trial. We affirm.
Plaintiff Linda J. Clemente and defendant were married on November 28, 1987, and initially resided in an apartment in Monsey, New York. Plaintiff worked as an occupational therapist; defendant worked as a cardiology resident at King's County Hospital. Defendant also conducted a private practice, supervised the emergency room in another hospital, and ran an ambulance company. Defendant claimed that he earned between $80,000 and $120,000 annually during the early years of the marriage.
In 1989, plaintiff became pregnant with the parties' first son. He was born on November 2, 1989. The parties moved to Marlboro, and defendant opened a private practice with his brother. Plaintiff became a full-time homemaker. On March 31, 1991, plaintiff gave birth to the parties' second son. A third son was born in December 1996. In 1993, the parties moved to a much larger home in Marlboro. Also in 1993, defendant purchased a building in Eatontown in which his medical practice is located.
Defendant is a self-described workaholic, who spent eighteen to twenty hours each day either at the medical practice or completing his rounds at various area hospitals. He was on call every night and weekend. He acknowledged that he spent at least half of every Saturday and Sunday at the hospital.
His work habits soon had a negative effect on his family. The parties lived parallel and increasingly separate lives. For example, in July 1993, plaintiff planned a trip to Long Beach Island with her sister-in-law and their respective children. Defendant arrived home just as they were about to leave and demanded that plaintiff stay home because he wanted to spend time with his family. When plaintiff began arguing with him, defendant became enraged and disabled her car by disconnecting a number of wires. Defendant conceded that he did open the hood to plaintiff's car and thought about tearing out the wires, but he did not actually do so.
Plaintiff maintained, and defendant admitted, that he was an absentee father. He did not know the names of his sons' teachers or friends, he never participated in school meetings regarding the children or took them to doctor's visits. The parties' oldest son had a history of impulse control problems and attention deficit disorder, which resulted in expulsion from several schools. Nevertheless, defendant did not support counseling with a clinical psychologist. In fact, defendant considered the psychologist a "quack."
Additionally, although provided with schedules pertaining to the children's activities, defendant never attended any of their sporting events, musical performances or religious ceremonies. According to plaintiff, defendant believed the children should not be involved in sports if it meant that they would not be home when he was.
In 1997, defendant suffered a heart attack while at work on a Saturday. He refused to go to a hospital. Instead, he enlisted the aid of one of his employees, a young nurse. Following this incident, defendant also learned that he was a type one diabetic.
Defendant and the nurse developed a close relationship following his heart attack. Both insisted that their relationship did not become intimate until late 2002 or early 2003. Nevertheless, defendant used business funds for the nurse's continuing education and several leased cars, including a 2002 Mercedes Benz, for her. In 1997, defendant also purchased a home, selected by the nurse, for her and her two children located close to the medical practice. Defendant created a corporation, Meridian Management, to take title to the home, and the nurse ostensibly made payments on the house as part of a lease/purchase arrangement that was later converted into a mortgage. Although requested by the court, neither defendant nor the nurse ever produced any proof of payments made on either the lease or mortgage. The nurse gave birth to defendant's child, a daughter, on May 30, 2005. Defendant confirmed that his sons reacted very negatively to this development.
Plaintiff recounted that she and the children had been close to defendant's brother, sister-in-law, and their children. In 1994, however, defendant insisted that plaintiff and his sons terminate this friendship. Defendant and his brother had a disagreement about their medical practice and became embroiled in litigation about the ownership of the practice. Defendant explained that he expected plaintiff to demonstrate allegiance to him during this dispute. He was also concerned that plaintiff might reveal litigation strategy to his brother or his sons would learn incorrect information.
Plaintiff recounted that her relationship with defendant deteriorated in 1997. She was criticized for either spending too much or buying items defendant considered too cheap. The parties ceased to be intimate and defendant began spending even less time with the children. Between 2000 and 2003, the verbal abuse plaintiff endured from defendant increased, and they had repeated arguments regarding the children's schedules and household operations. Plaintiff stated that defendant ridiculed her religious beliefs and insulted her intelligence. She claimed that defendant also maintained secret screen names on his computer and kept a private cell phone.
Defendant confirmed the increased conflict between the parties. He claimed that plaintiff deliberately scheduled events for the children to make them unavailable to him on weekends. Plaintiff denied this. Defendant further believed that plaintiff was to blame for their oldest son's significant emotional and behavioral problems at home and at school. Defendant pronounced plaintiff a terrible tutor who actually harmed their son through her efforts to help him. Defendant admitted, though, that he made no attempt to tutor their son himself because he was too busy or tired.
Plaintiff recalled that, in January 2003, defendant, while in a rage, broke a glass vase in front of the children. On March 18, 2003, defendant became enraged when she disturbed him to request help overseeing their oldest son's homework. Defendant flipped over the dining room table and threw a chair at plaintiff, causing her to fall. He then went after their son. Defendant denied that he engaged in any violent behavior on these occasions, although he admitted that he had hit their oldest son on prior occasions. Plaintiff also recounted an episode in June 2005, when defendant, who was angry about certain court proceedings, ripped a chandelier from the ceiling in the marital home in front of their oldest child.
On March 28, 2003, plaintiff learned of defendant's affair and decided to summon the police before confronting defendant. During this confrontation, she showed the police a bruise she asserted she sustained during the homework incident. The police subsequently arrested defendant and confiscated his gun collection; the charges against him were later dropped. Plaintiff also recounted another incident of physical abuse. She testified that, while pregnant with their youngest son, defendant pushed her and caused her to fall.
In early August 2003, defendant decided that the family should visit a military academy as a possible placement for their oldest son. On the day of the trip, their son refused to go. According to their son, defendant became angry and began smacking him on the head. Defendant insisted that he was more "bewildered" than angry. When their son ran out of the house, defendant chased him in his car. When their son doubled back to the house, defendant drove the car onto the lawn. Defendant then followed their son to his room and struck him on the leg with a piece of wood from a "smashed" kitchen chair. Defendant confirmed chasing his son and eventually confronting him with a stick, but denied striking him.
After this incident, plaintiff obtained a temporary restraining order against defendant barring him from the home. A final consent order was later entered in August 2003 whereby defendant formally relinquished possession of the home to plaintiff. Defendant claimed that he was forced to take up residence at the office for the better part of a year before finally moving in with his girlfriend. On August 26, 2003, plaintiff filed for divorce.
At trial, Dr. Lenore Walker, a psychologist, testified that plaintiff was a battered woman who had been subjected to physical abuse and psychological maltreatment by defendant throughout their marriage. Walker based this conclusion on the results of the psychological tests she administered to plaintiff, which revealed that plaintiff was suffering from moderate post-traumatic stress disorder and ongoing stress, as well as plaintiff's accounts of defendant's controlling and volatile behavior. Walker noted that, while defendant's behavior had clearly escalated over the years, plaintiff had inexplicably downplayed the frightening level of verbal abuse and violence in her home, and even made excuses for defendant. Walker believed that plaintiff had not revealed all the physical abuse to which she was subjected, and that she used dissociation as a defense mechanism against that abuse. Walker opined that plaintiff was unable to resume a full-time job at this point in time because of her high stress levels and the resulting memory problems she was experiencing. These impacts affected her overall intellectual functioning. She believed that plaintiff would benefit from psychotherapy, and that co-parenting with defendant was not a viable option as it would cause plaintiff's symptoms to persist.
According to plaintiff, after the divorce complaint was filed, defendant did not take advantage of the time allocated to him for parenting time. She further claimed that defendant refused to communicate with her directly regarding visits with the children. Defendant maintained, however, that the children simply had other engagements during his visitation time. He further claimed that plaintiff had poisoned the children against him and that she needed to take some psychology classes to understand the harm that she was causing them. Defendant also believed that once plaintiff understood that his girlfriend was a good person, she could use her influence to restore his damaged relationship with the children.
The oldest son's psychologist testified regarding his intermittent treatment of this child since 1995. He related that he interacted with school officials regarding the boy, as well as with his pediatrician, and gave plaintiff advice on how to handle him. He confirmed that defendant never participated in these appointments or conversations.
The psychologist recounted that he met with the parties' oldest son thirty-five times in 2002 and 2003. During these sessions, their son described his frustrations with his brothers, the conflict between defendant and his brothers, and the breakdown in the relationship between his parents. He also confirmed that there were repeated conflicts occurring between him and his parents. He discussed the military academy.
The psychologist stated that the parties' son told him that defendant had never had a relationship with him, only interacted with him negatively, and was generally "erratic, deceitful, and manipulative." He also related that he did not want to live with defendant.
Finally, the psychologist reported that defendant failed to show up at several appointments scheduled in Fall 2003 and then berated him when defendant allegedly arrived for an appointment ninety minutes late and the psychologist had not waited for him. The psychologist stated that he saw plaintiff alone regarding her son twelve times in 2004.
Judge Flynn appointed a parenting coordinator after receiving evidence of the strained relationship between defendant and his children and defendant's complaint that he was not seeing his children. The judge asserted that he hoped to facilitate visits over the up-coming holidays. On the first visit in December 2005, the parenting coordinator testified that the oldest son refused to go with defendant and the middle child became bored and insisted on returning home early so that he could attend a party. She noted that defendant was irate and blamed plaintiff.
The parenting coordinator was present when defendant arrived at the marital home to pick up the children for his next arranged visit. The children told her that they wanted to do things with defendant, but defendant frequently canceled or was late for their visits or simply took them to the Colts Neck house and promptly fell asleep on the sofa. The oldest son informed her that defendant disparaged plaintiff and often revealed information regarding the divorce.
During the parenting coordinator's meeting with the children, defendant called, insisted on speaking with her, and proceeded to berate her and tell her that she was not qualified to speak to his children. When defendant later arrived at the house, he rebuffed the parenting coordinator's attempt to speak with him, renewed his attacks on her, and then drove off without the children. Defendant did not deny that this occurred.
The parenting coordinator subsequently encountered great difficulty getting defendant to take her phone calls. Ultimately she was able to arrange for defendant to take his children to a Clemente family holiday party. However, the children did not enjoy the party and opposed defendant's unexpected request that they return to the Colts Neck home to open presents before returning to the marital home. When his request was rebuffed, defendant informed his children that they would receive no Christmas presents.
After this incident, defendant refused to speak to the parenting coordinator and, as a result, no additional visitation dates were scheduled. The parenting coordinator maintained that plaintiff did nothing to obstruct visitation.
Plaintiff's mother testified that she overheard a conversation between the oldest child and defendant. The son had activated the speakerphone. In this conversation, defendant referred to the testimony of the parenting coordinator, asserted that plaintiff had been brainwashing the children, and demanded that his son tell plaintiff to "get rid" of the parenting coordinator. According to plaintiff's mother, he was "done" with them if the son did not deliver this message. Notably, defendant admitted that he told his son that he hated plaintiff and that the parenting coordinator was purposely trying to make sure that he and the children were separated. As a result of this testimony, Judge Flynn suspended defendant's visitation rights.
In mid-2004, defendant revealed for the first time that he owed $1,000,000 in unpaid payroll taxes to the federal government. Apparently, defendant ceased paying these taxes in late 2002. Defendant blamed the situation on clerical mistakes and a lack of money. In contrast to his 2001 tax return, which reported $486,000 in gross income, the 2002 tax return (the last one that was available), reported only $81,190. Defendant further admitted that the IRS had placed a lien on his commercial properties in the amount of $800,000. An IRS document produced by defendant in December 2005 lists defendant's payroll tax arrearages at $1,176,470.
However, at the same time this debt began to accrue, defendant, along with a longtime friend, began to explore the possibility of expanding the medical practice to Florida. Defendant's friend claimed that defendant owed him $90,000 in connection with this venture, which they ultimately abandoned. He related that defendant was working off this debt by serving as a team doctor for the professional fighters he managed. Defendant's friend had no documentation to substantiate the monies owed or the debt that had since been forgiven.
In April 2005, defendant, his girlfriend and her two children moved into a $1,650,000 home in Colts Neck, allegedly purchased for them by one of defendant's patients.*fn1 The patient insisted that he alone made the entire $450,000 down payment on the property and that defendant paid him $11,000 monthly rent with a two-year option to buy. Defendant claimed the rent was $6000 per month. The patient stated that he received checks from defendant's friend and business partner on defendant's behalf; however, he admitted that he had no records reflecting defendant's payments. Although the friend confirmed that he wrote checks totaling $50,000 to defendant's patient, he too failed to produce any documentation.
At trial, the parties submitted evidence regarding defendant's ability to work and earn substantial income. Defendant's treating cardiologist recommended that defendant retire in the near future due to his cardiac problems and diabetes in order to avoid an early death. He confirmed that defendant had suffered a prior heart attack resulting in reduced cardiac function and further indicated that defendant had undergone cardiac catheterization and an angioplasty since January 2004. He conceded that defendant could reduce his stress level by working solely as a non-interventional cardiologist.
Also at issue was the value of the residential and commercial real estate owned by the parties, as well as the value of defendant's medical practice. Plaintiff's real estate appraiser utilized a market comparison approach and opined the marital home was worth $1,050,000 in August 2005. Defendant's appraiser used the same approach but determined that the marital home was worth $1,550,000. Plaintiff's appraiser further testified that the Eatontown, Hazlet and Howell buildings*fn2 were worth $1,150,000, $1,985,000, and $4,200,000, respectively, as of August 2005. Defendant's appraiser valued the buildings at $1,125,000, $1,353,812, and $3,085,000, respectively.
Plaintiff's forensic accountant, Lawrence Thoma, testified that defendant's medical practice should be valued as a going concern with substantial good will. He noted that defendant employs several physicians. He calculated the practice's net operating income, applied a capitalization rate of five, and, after adding in the hard assets of the practice, arrived at a value of $2,388,639. Later, at the court's request, Thoma reassessed the practice using a capitalization rate of three, resulting in a value of $1,730,000. Notably, Thoma maintained that he never received much of the financial documentation he had requested with respect to defendant's medical practice and that he discovered many anomalies in the records he did receive.
By contrast, defendant's accountant maintained that the practice should be valued on a liquidation basis because its liabilities exceeded its assets as a result of the unpaid payroll taxes, and because defendant intended to reduce his practice due to his compromised health. In drawing his conclusions, defendant's accountant relied in large part upon a report of questionable reliability prepared by another accountant and various other incomplete records dating back to 2003.
Thoma claimed that defendant had artificially reduced his 2002 reported income of $139,458. He estimated that defendant's post-tax income for 2002 should have been $310,266. He noted this figure compared favorably with the figures contained in a survey of the income of cardiologists prepared by the Medical Group Management Association. Thoma further asserted that it would be reasonable to impute income of $350,000 to defendant, the median income for non-invasive cardiologists in 2002 and 2003.
This matter was tried over forty-two days between October 2005 and March 2006. The judge recalled two witnesses for additional testimony on June 21, 2006. Judge Flynn issued a 153 page opinion discussing each issue on August 7, 2006. The Judgment of Divorce (JOD) was entered the same day.
The judge granted sole custody of the parties' three children to plaintiff and directed that defendant's parenting time with the two younger children be arranged through a mutually acceptable parenting coordinator. The judge awarded plaintiff permanent alimony in the amount of $14,312 monthly, compensatory alimony in the amount of $159,360, and child support in the amount of $387 weekly. The judge determined that the house ostensibly purchased by defendant's girlfriend was marital property and valued the entirety of the marital property at $6,385,342 and awarded each party $3,192,671 or its equivalent in value. In particular, Judge Flynn directed that plaintiff receive the marital home. Defendant received the residence purchased for his girlfriend and his medical practice. The judge also appointed a receiver and directed the receiver to oversee the sale of the real property in Eatontown, Howell and Hazlet at which defendant maintains his medical practice. Having found that plaintiff suffered from Battered Wife Syndrome, the judge also ordered defendant to pay for the therapy plaintiff requires to address this disorder.*fn3
On appeal, defendant argues that the pendente lite support award was the product of false swearing and it should have been modified in response to his September and December 2003 requests. He also contests the failure of the court to remove Lawrence Thoma as the joint forensic accountant, the pendente lite transfer of title to the marital home to plaintiff, and failure of the trial judge to recuse himself.
Defendant also contends that Judge Flynn should not have awarded sole custody of the three minor children to plaintiff, that the equitable distribution, alimony and child support awards are overreaching and represent a gross abuse of discretion, and the equitable distribution award is founded on erroneous valuations. Defendant argues that the finding that plaintiff suffers from Battered Wife Syndrome is against the weight of the evidence and that various post-judgment rulings are erroneous.
Several arguments presented by defendant require little, if any, discussion. Defendant's argument that a Family Part judge erred by transferring title of the marital home prior to entry of the JOD is moot. Judge Flynn awarded the marital home to plaintiff in the equitable distribution award. The contention that the trial judge should have recused himself is without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). Indeed, defendant conceded at oral argument that no conflict existed to warrant recusal.
We also discern no basis to review the denial of the September and December 2003 motions to modify pendente lite support. At trial, the parties adduced considerable evidence about the income and lifestyle of the family, and the trial judge modified the support obligation. We have noted that the vagaries of matrimonial practice often make it difficult to ascertain with any precision the actual financial needs and resources of the parties prior to trial. Mallamo v. Mallamo, 280 N.J. Super. 8, 16 (App. Div. 1995). Review of the earlier pendente lite orders at this time serves no purpose. Defendant presented evidence of the financial needs and resources of the family at trial, and the trial judge modified defendant's support obligation based on the abundant evidence produced at trial.
The trial judge awarded sole custody of the three children to plaintiff. Defendant contends this decision is founded on improperly admitted testimony from the psychologist who treated and counseled the parties' oldest son for ten years and is familiar with the entire family, and testimony adduced from the parenting coordinator long after the custody portion of the trial had been completed. We disagree.
N.J.S.A. 9:2-4(c) requires the trial judge to consider the following factors:
[T]he parents' ability to agree, communicate and cooperate in matters relating to the child; the parents' willingness to accept custody and any history of unwillingness to allow parenting time not based on substantiated abuse; the interaction and relationship of the child with its parents and siblings; the history of domestic violence, if any; the safety of the child and the safety of either parent from physical abuse by the other parent; the preference of the child when of sufficient age and capacity to reason so as to form an intelligent decision; the needs of the child; the stability of the home environment offered; the quality and continuity of the child's education; the fitness of the parents; the geographical proximity of the parents' homes; the extent and quality of the time spent with the child prior to or subsequent to the separation; the parents' employment responsibilities; and the age and number of the children.
In addition to the foregoing, a trial court resolving a custody dispute must not lose sight of the "primary and overarching consideration," which is the best interest of the child. Kinsella v. Kinsella, 150 N.J. 276, 317 (1997). "The best-interest analysis is an additional requirement 'superimposed upon an analysis of the statutory scheme'" which requires that the court consider any and all material evidence which has bearing on the custody decision. Ibid. (quoting Terry v. Terry, 270 N.J. Super. 105, 119 (App. Div. 1994)). In contested cases, the court is required under N.J.S.A. 9:2-4(f) to make a record of its reasons for its custody decision and "'must reference the pertinent statutory criteria with some specificity.'" Ibid. (quoting Terry, supra, 270 N.J. Super. at 119).
In his comprehensive and thoughtful opinion, Judge Flynn initially noted that defendant was a workaholic throughout the marriage, and plaintiff was responsible for family life and the raising of the children. He observed that defendant, who admittedly never attended any of the boys' school conferences or doctor appointments, and rarely attended an athletic event, described himself as a mere "interested observer" in the development of his children. The judge emphasized that defendant actually opposed his sons' participation in weekend activities because it meant they would be unavailable when and if defendant found time in his work schedule to see them. The judge further noted that, despite his oldest son's significant problems, defendant failed to keep even one appointment with the child's counselor or cooperate in any way with his treatment.
Judge Flynn found that the parties' children had been exposed to defendant's violent temper on numerous occasions including the Long Beach Island incident, the vase incident, the chandelier incident, the homework incident, and the military academy incident. He observed that defendant had also exhibited a total lack of insight into his sons' negative reaction to his girlfriend and their half-sister.
Finally, Judge Flynn recounted defendant's sorry history with respect to visits, including his unwillingness to interact with plaintiff, his failure to keep or be on time for scheduled appointments, his failure to arrange activities of interest to his sons, his retaliatory conduct during the Christmas 2005 visit, and his eventual refusal to utilize the services of the parenting coordinator appointed by the court solely to assure contact with his children during the holidays. The judge expressed his dismay over defendant's recorded attempt to convince his children to persuade plaintiff to demand the parenting coordinator's termination with the threat that defendant would never see them again. According to Judge Flynn, this conduct indicated not only that defendant was willing to involve the children in the litigation and expose them to the depths of his hatred for plaintiff, but also that defendant was more interested in "control of his family relationships rather than [with] any genuine love or concern for his sons." Judge Flynn observed that defendant "knew that it pained the plaintiff that her children were not developing a healthy relationship with their father," but saw this only as "an opportunity to blackmail her." The judge further noted that, although the parties had since selected a new parenting coordinator, defendant had yet to "follow through with the recommendation."
In view of the foregoing, Judge Flynn found that the parties have no ability to communicate "on almost any level" and particularly on any issue concerning the children. Understandably, the judge concluded that joint custody was "completely out of the question." He then found that plaintiff is the only parent "who is genuinely interested in the welfare of her sons." Moreover, he found that plaintiff had done nothing to interfere with defendant's relationship with his sons. Indeed, Judge Flynn found that "she has done all that she could to encourage it." By contrast, defendant "has shown that he is willing to interfere with any efforts to gradually reintroduce him into his sons' lives if the process does not match his own perceptions of how such reunification should be conducted and if it does not afford him complete control of that process and the people in it."
Judge Flynn also found that there had been a history of domestic violence within the family, the children communicated "a clear preference" to live with their mother, and plaintiff was the only parent to offer a stable environment for the children. The judge rejected defendant's offer to have his girlfriend, their young daughter, and her two children vacate the Colts Neck house in order to allow his three boys to become accustomed to living with him. The judge characterized this offer as further evidence of defendant's penchant for attempting to control the lives of his extended family. Ultimately, the judge found that plaintiff "is the only fit parent in the relationship" and "[t]here is no question in the Court's mind that the plaintiff should be the sole custodial parent of all of the children."
Defendant does not contend that the findings of fact are not supported by the record. Rather, he insists these findings are predicated on wrongfully admitted testimony from his son's counselor. At trial, defendant urged that testimony from the counselor would be unnecessary and cumulative, and he expressed fear that plaintiff would be allowed to engage in character assassination through this testimony. Judge Flynn overruled the objection and instructed the counselor to confine his testimony to facts, and the witness did so.
On appeal, defendant reiterates his argument that the counselor's testimony was of limited value because he treated his son only on a couple of occasions and he actually treated plaintiff more often than their son. Our recitation of the facts refutes this assertion. Rather, the record reveals that the counselor intervened at various times when the parties' oldest son's emotional and behavioral problems required assistance of a trained professional.
Defendant also contends that the trial judge erred when he delayed announcement of the custody decision until the conclusion of the entire trial. Under the circumstances of this case, we discern no error.
Rule 5:1-4(a)(1) provides that a matrimonial action that involves custody shall be given priority. Rule 5:8-6 also allows a judge to conduct the custody hearing in a matrimonial action prior to a final hearing on the remaining issues. This rule furthers the goal of an expeditious resolution of this issue. Nevertheless, the rule is stated in permissive rather than mandatory terms in order to effectuate the overarching goal of the best interests of the children.
Here, the record manifestly demonstrates that the trial judge recognized early in this protracted proceeding the severely fractured relationship between defendant and his sons. By mid-November, he realized defendant might not see his sons over the up-coming holidays. Although this situation seemed to be the product of defendant's obdurate behavior, Judge Flynn sought to intervene to prevent further deterioration in the relationship between father and sons. The attempts by the trial judge to change the familial dynamic and foster reunification amply justified proceeding with the trial of the financial issues and rendering a decision on all issues at the conclusion of this case. In short, under the unique circumstances of this case, particularly when the established custodial arrangement has not been altered, we conclude the trial judge wisely wielded his considerable discretion.
Defendant argues that the trial judge erred in his identification and valuation of marital assets. Specifically, he challenges the inclusion of the house ostensibly owned by his girlfriend as a marital asset, the valuation of the marital home and the buildings from which defendant operates his medical practice, and the valuation of his medical practice. Defendant also contends that Lawrence Thoma should have been removed as an expert. We address the latter issue first because Thoma served as plaintiff's expert and offered testimony regarding defendant's current and future income and value of the practice.
A. Removal of Lawrence Thoma
At the commencement of the matrimonial litigation, the parties through their attorneys agreed to retain Lawrence Thoma as the joint forensic accountant. In April 2004, defendant moved for discharge of Thoma as the joint forensic accountant because of disputes he was having with Thoma regarding the terms of the retainer agreement, payment of the retainer, and Thoma's refusal to meet with defendant until he had received defendant's business records. Initially the motion was denied, but the judge granted the motion when defendant renewed it. The judge directed, however, that Thoma could continue as plaintiff's expert. After plaintiff filed several motions to require defendant to comply with Thoma's requests for documents, defendant moved to have Thoma removed from the case.
Judge Flynn denied this motion. He cited Thoma's extensive experience and reputation as a skilled forensic accountant. The judge found that nothing had occurred that raised any concern about Thoma's ability to act professionally and fairly. The judge found that Thoma's insistence on reviewing business records rather than summaries and schedules prepared by defendant was reasonable and did not indicate any bias against defendant. Ultimately, Judge Flynn found that "all of the defendant's objections to Mr. Thoma's work on the case are frivolous and pretextual."
We agree with this assessment. Indeed, defendant does not cite any concrete example of unfairness or bias. His argument then and now seems confined to defendant's assertion that the various opinions rendered by Thoma are erroneous because they were based on incomplete information. This is a curious argument because defendant failed to give Thoma and his own accountant complete access to his business records. Any suggestion that Thoma formed an opinion that defendant was withholding information was created by no one other than defendant. Moreover, the argument advanced by defendant affects only the weight not the fairness of any and all opinions rendered by Thoma throughout the litigation.
B. Identification of Marital Assets
In effectuating an equitable distribution of marital assets pursuant to N.J.S.A. 2A:34-23.1, the trial court must first decide what property is eligible for distribution and determine that property's value. When the trial court's decision in this regard is challenged on appeal, the standard of review is whether the trial judge's findings are supported by adequate credible evidence in the record. Rothman v. Rothman, 65 N.J. 219, 233 (1974); Borodinsky v. Borodinsky, 162 N.J. Super. 437, 443-44 (App. Div. 1978).
Judge Flynn included the house in which defendant's girlfriend and her children resided as a marital asset. Judge Flynn found that defendant formed a corporation with the stated purpose of managing real property, the house in which his girlfriend lived was the only property acquired by the firm, no evidence of rent payments was presented, and the firm's tax returns revealed no evidence of rental income. Defendant's girlfriend exercised her right to purchase the house in 2000, but defendant submitted no evidence of a mortgage or payments on a mortgage. Defendant submitted no evidence of any payments made to the management firm in conjunction with the exercise of the purchase option. When defendant and his girlfriend and her children moved to Colts Neck, the girlfriend purportedly rented her former house, but she could name neither the tenant nor the rent. It is no wonder that Judge Flynn stated that he was "convinced that this property was bought, paid for, and now operated by the defendant out of funds which appropriately belong to the marriage."
In support of his argument that the facts found by the trial judge are erroneous, defendant relies on the single fact that the deed is in his girlfriend's name. This fact is hardly dispositive of ownership. Indeed, the various facts found by the trial judge are well supported by the evidence and the ultimate fact that the house is a marital asset is unassailable based on the evidential record.
C. Valuation of Marital Assets
Defendant's argument that the judge assigned erroneous values to various marital assets is without merit. As to the marital home, defendant argues that the trial judge should have accepted the valuation offered by his appraiser. As to the buildings in which defendant operates his medical practice, defendant argues that the trial judge adopted a capitalization rate that inflated the value of the various properties.*fn4 As to the medical practice, defendant contends that the trial judge erred in adopting a valuation of his medical practice as a going concern. He insists that the precarious state of his health precluded such a valuation. Defendant also argues that the judge selected an erroneous capitalization rate. In summary, defendant insists that the trial judge "engaged in a form of [post] hoc manipulation, by first deciding the case and, only after, engaging in its factual findings to support those conclusions."
Our review of the record supports no such assertion. The appraiser of the marital home noted that the house was ideally located on a cul-de-sac and had many amenities but it was also shopworn and in need of many small repairs. Four of six comparable home sales used by plaintiff's expert were literally around the corner from the marital home. By contrast, the appraiser selected by defendant used houses all of which were located more than a mile from the marital home.
As to the professional buildings owned by defendant, each appraiser used an income approach. Both experts agreed that the disparities in their valuations for the three properties were due to the capitalization rate selected by each. Notably, defendant's expert admitted that his capitalization rate of 9.12 percent was based on a mortgage rate that was high for the region. He also failed to forward to the judge the documents that he asserted supported the reasonableness of the mortgage rate.
As to the medical practice, defendant offered evidence of value from an accountant who acknowledged that he had never valued a medical practice. Moreover, the accountant accepted defendant's representation that his health was compromised and relied on incomplete records. Defendant's expert apparently never learned that defendant started to form a companion business in Florida in 2002. He admitted that he never received patient census data.
In short, there was a strong evidential basis for the trial judge to adopt the valuation of the marital home offered by plaintiff's appraiser, the valuation of the commercial properties offered by plaintiff's appraiser, and the valuation of the medical practice offered by plaintiff's forensic accountant. Having found that the factual findings are supported by the record, our inquiry is complete. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974).
We are similarly unpersuaded that the finding by Judge Flynn that plaintiff was a battered wife is not supported by the record. The opinion offered by plaintiff's expert was unrebutted. Of course, the trial judge was not required to accept that opinion; however, the record is replete with numerous incidents of terrorizing behavior and psychological and physical abuse.
In fashioning the alimony and child support award, Judge Flynn imputed annual income to defendant. Defendant argues that the use of imputed rather than actual income is unwarranted and that the imputed $350,000 annual income is excessive. We disagree.
A judge may award alimony (permanent, rehabilitative, limited duration, or reimbursement) as the circumstances of the parties and the nature of the case render fit, reasonable, and just. N.J.S.A. 2A:34-23; Cox v. Cox, 335 N.J. Super. 465, 474-83 (App. Div. 2000). Permanent alimony is generally awarded where economic need has been demonstrated and the marriage was of long duration. Cox, supra, 335 N.J. Super. at 476.
The basic purpose of alimony is "to assist the supported spouse in achieving a lifestyle that is reasonably comparable to the one enjoyed while living with the supporting spouse during the marriage." Crews v. Crews, 164 N.J. 11, 16 (2000). "The supporting spouse's obligation is set at a level that will maintain that standard." Innes v. Innes, 117 N.J. 496, 503 (1990) (citing Lepis v. Lepis, 83 N.J. 139, 150 (1980)). "Bare survival is not the proper standard, it is the quality of the economic life during the marriage that determines alimony." Hughes v. Hughes, 311 N.J. Super. 15, 31 (App. Div. 1998).
Pursuant to N.J.S.A. 2A:34-23(b)(1)-(13), a trial judge must consider thirteen separate factors in determining whether to award permanent alimony and in what amount. The three essential considerations in fixing an alimony award are the dependent spouse's needs, the dependent spouse's ability to contribute to the fulfillment of those needs, and the supporting spouse's ability to maintain the dependent spouse at the former standard of living to which the parties had become accustomed prior to their separation. Crews, supra, 164 N.J. at 24. When the supporting spouse is unemployed or underemployed, a court may impute income to him or her in order to set an appropriate alimony award consistent with the marital standard of living. Miller v. Miller, 160 N.J. 408, 424 (1999).
When assessing the appropriateness of an alimony award, a reviewing court must give "deference to [the] trial judge's findings . . . if those findings are supported by substantial credible evidence in the record as a whole." Reid v. Reid, 310 N.J. Super. 12, 22 (App. Div.), certif. denied, 154 N.J. 608 (1998). We may vacate a finding concerning alimony only if we conclude that the trial judge clearly abused his or her discretion by failing to consider all of the controlling legal principles or by making determinations that could not reasonably have been reached on the record. Rolnick v. Rolnick, 262 N.J. Super. 343, 360 (App. Div. 1993).
An award of child support is within the discretion of the trial court and will not be disturbed unless it is manifestly unreasonable, arbitrary or clearly contrary to the evidence. Raynor v. Raynor, 319 N.J. Super. 591, 605 (App. Div. 1999). Where the parental income exceeds the maximum set forth in the Child Support Guidelines, a trial court must supplement the maximum amount of support provided for in the Guidelines with an additional award determined through application of the statutory factors in N.J.S.A. 2A:34-23(a). Isaacson v. Isaacson, 348 N.J. Super. 560, 580-81 (App. Div.), certif. denied, 174 N.J. 364 (2002). The factors identified in this statutory section include the standard of living of the parent, all of the parent's sources of income and assets, the parent's earning capacity, the age and health of the parent, and any other factor the court deems relevant. N.J.S.A. 2A:34-23(a).
At trial, Thoma testified that defendant's reported income for 2002 of $139,458 had been artificially and improperly reduced and was, thus, grossly understated. Thoma reported that he removed thirteen different expenses, including rent overpayments, lease payments made on behalf of another company, and auto expenses, that had been improperly applied to reduce the medical practice profits, and, thus, defendant's income. Having removed these expenses, he offered a very conservative determination that defendant's post-tax income for 2002 should have been $310,266. This figure compared favorably with the results of a survey prepared by the Medical Group Management Association which showed that cardiologists nationwide were earning between $350,000 and $400,000 annually. Thoma asserted that it would be reasonable to assume that defendant was currently earning a yearly income of $350,000. Thoma characterized this as a very conservative assumption because this sum was consistent with the median income of a non-invasive cardiologist, and defendant, as an invasive cardiologist, would be expected to earn more.
In his decision, Judge Flynn initially noted that defendant had claimed an "absurdly low" income of $81,000 in his 2005 case information statement. The judge stated that he was unable to accept this figure because defendant had not supplied records confirming this amount. Instead, Judge Flynn found that defendant was concealing "the true nature, source and amount of his income" and ruled that he was going to "follow the path taken by Mr. Thoma" and "impute" an income to defendant of $350,000 per year. The judge was satisfied that this was a very conservative estimate of defendant's actual income. The judge pointed out that defendant owned several other businesses aside from the medical practice from which he had the capacity to derive income. The judge further explained his decision as follows:
Of course, beyond his regularly occurring annual income, and the income he could expect to receive . . . from the rental of the [Eatontown] property, the defendant should have had the additional benefit of the Court's award of equitable distribution. . . . But for his decision to stop paying taxes and surreptitiously divert the money, and but for his oppositional behavior throughout this litigation, the defendant could have expected to reap all of his share. . . . Instead, he has placed the parties in dire financial straits. The Court cannot reward him for his behavior by reducing a fair expectation of what he has the means to pay. He cannot be allowed to be the man who kills his parents and then seeks mercy because he is an orphan. . . .
[T]he Court will assume that the defendant has the resources and ability to make the payments required of him.
The judge also commented that [i]n considering the defendant's earning capacity, the Court is mindful of the New Jersey Department of Labor wage and benefit statistics . . . . The average annual salary listed therein for physicians and surgeons is $171,350. While this figure seems especially low, it really appears to apply to wage or salary earning physicians only, i.e., those that are employed by others such as those employed by [defendant's medical practice]. Indeed, the figures are fairly in line with the salaries the defendant pays his unaccredited staff physicians. The figures do not appear to cover sole practitioners who do not work for a salary and they certainly do not contemplate the likely earning capacity of an experienced specialist who employs close to twenty other physicians and staff to support his operations in multiple locations. Instead, the Court will rely on the tables submitted by Mr. Thoma . . . . While they more accurately cover the kind of practice engaged in by the defendant, even they do not consider the wide ranging scope of that practice. Moreover, the figure of $350,000 does not take into consideration the defendant's other business interests, both in and outside the field of medicine. If the plaintiff, her expert and the Court were to completely understand those interests, the number would certainly be higher. Thus, in relying on Thoma's figure, the Court believes that it is making a most conservative estimate.
Thereafter, Judge Flynn reviewed all of the criteria set forth in N.J.S.A. 2A:34-23(b), and expressly found that plaintiff's claimed monthly expenses of $14,312 accurately reflected the marital lifestyle and constituted an appropriate monthly alimony award. The judge ruled that plaintiff would not be required to obtain full-time employment until the youngest child was fifteen years of age, in five years time, because the parties had contemplated that plaintiff would remain home with the children. The judge determined that the original pendente lite award had been set too low and explained why plaintiff was in such dire straits during the litigation when defendant failed to make his monthly support payments. The judge revisited the original pendente award and ruled that plaintiff was entitled to an additional $159,360 in back support.
Judge Flynn also used the imputed $350,000 income to calculate defendant's child support obligation. The judge stated that, in light of the marital lifestyle contemplated before the divorce, he was not imputing more than "minimal" income to the plaintiff. Because the parties' combined income exceeded the maximum amount covered by the New Jersey Child Support Guidelines, Judge Flynn augmented the maximum weekly Guidelines amount of $362 by an additional $25 for a total award of $387 per week. Judge Flynn explained that no more was needed because plaintiff's alimony award, which was set in accordance with the expenses claimed in her case information statement for herself and the three children, already addressed the children's basic needs for food, clothing and shelter.
The balance of the issues raised by defendant, including the decision to reopen the record to take additional testimony from Thoma and plaintiff's real estate appraiser, and denial of an adjournment of the ability-to-pay hearing, are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).