December 11, 2008
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-236-07.
The opinion of the court was delivered by: Sapp-peterson, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 22, 2008
Before Judges Lisa, Reisner and Sapp-Peterson.
In this custody dispute, defendant A.T. appeals from three orders*fn1 issued by the Family Part: (1) the June 13, 2007 order directing her to pay $8,500 in pendente lite counsel fees in connection with her May 25, 2007 motion for reconsideration of the court's March 23, 2007 order denying defendant's motion to stay plaintiff's divorce complaint and dismiss plaintiff's custody petition; (2) the January 15, 2008 order denying her motion for registration and enforcement of the order of the One-Member First Instance Court of Athens (First Instance Court) issued April 22, 2004, granting temporary custody of the minor children born of the marriage to her; and (3) the February 13, 2008 order directing her to pay $2,500 in counsel fees to plaintiff's attorney and $900 for trial preparation by Dr. Sharon Ryan-Montgomery, plaintiff's custody expert. We reverse the June 13, 2007 order awarding counsel fees and the February 13, 2008 order directing reimbursement of the expert's trial preparation fee, but otherwise affirm.*fn2
Plaintiff and defendant, who are originally from Greece, are both naturalized United States citizens. They married in 1991 in New Jersey and resided in Boonton. They have three children, two of whom were born in New Jersey: A.A., a son, born March 25, 1992, and S.A., a daughter, born July 22, 1993. Their last child, P.A., a son, was born in Greece on July 1, 2000. In 1995, the parties returned to live in Greece where plaintiff pursued a business enterprise with a friend that involved exporting American products to Greece. After a couple of years, the business venture proved unsuccessful, but the parties and their children remained in Greece. Defendant secured full-time employment with the Greek government, for whom she had previously worked. According to plaintiff, in July 2003, based upon an agreement reached by both plaintiff and defendant that the family should return to the United States, he and their two sons, A.A. and P.A., returned to Boonton with the expectation that defendant would eventually join them with their daughter. According to defendant, however, no such agreement had ever been reached. Rather, plaintiff led her to believe that he was only returning to New Jersey for a visit, as he had done in the past, because his parents were there and also for business reasons.
After it became clear to defendant, during a telephone conversation with plaintiff, that he was not returning, defendant filed an application on October 31, 2003, before the First Instance Court seeking temporary custody of all three children.*fn3 On December 1, 2003, defendant filed a criminal complaint with the District Attorney of the Magistrate's Court of Athens alleging that plaintiff had abducted her two children, was illegally detaining them and threatening to do likewise with respect to their daughter.
A hearing was conducted by the First Instance Court on March 31, 2004. Neither party personally appeared, but were represented at the proceeding by a designated representative. Two witnesses allegedly testified at this proceeding. Defendant submitted an affidavit in support of her application. On April 22, 2004, the Greek court entered an order granting temporary custody to defendant. The court's written decision, incorporated in the order, references its consideration of "the opposing party['s] affidavit[.]" However, plaintiff denies ever submitting a sworn statement in connection with this particular proceeding. The court found that the parties had not reached an agreement that they would return to Boonton, New Jersey, and that Boonton had "minimum [G]reek families and has no Greek school. Thus[,] the children are forced to attend an American school." The court also concluded:
[T]here are no individuals to take care of the children, since the defendant works, his parents are overage and furthermore must also take care the three minor children of his sister who died. On the contrary, the applicant is a capable mother, her parents as well as her sister assist her for [sic] the children's care[.] Subsequently [sic] she is the most appropriate person to take care the children. Moreover, they must continue [t]heir studies at a Greek school as attended also during previous years.*fn4
Defendant claims the order granting her temporary custody of the children was served upon plaintiff in Boonton on December 29, 2004. Plaintiff denies that he was ever served with the order. On May 10, 2004, defendant filed a complaint in the First Instance Court for divorce and custody of the three minor children. Then, on February 25, 2005, defendant commenced an action under the Hague Convention on the Civil Aspects of International Child Abduction (Hague Convention - International Child Abduction) in federal district court in New Jersey.*fn5
On August 14, 2006, plaintiff filed a verified complaint for divorce and, in the complaint, also sought custody of the three children born of the marriage. Defendant claimed that the following month, on September 4, 2006, plaintiff was served with a copy of the divorce complaint that had been filed in Greece two years earlier. Defendant also contended that plaintiff had been served with a copy of the divorce complaint in December 2004. Plaintiff denied ever being served with a divorce complaint. On December 8, 2006, in accordance with the Hague Convention for Service Abroad of Judicial or Extra-judicial Documents in Civil and Commercial Matters, Nov. 15, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638, defendant was served in Greece with a copy of plaintiff's New Jersey's summons and complaint for divorce, custody, child support, equitable distribution, counsel fees and costs.
On January 5, 2007, defendant filed a Notice of Limited Appearance, seeking a stay of plaintiff's divorce complaint and the dismissal of plaintiff's custody application. On March 23, 2007, the court denied defendant's motion, finding that it had subject matter and personal jurisdiction over the divorce action which would proceed concurrently with the Hague Convention -International Child Custody action that was pending in federal district court. On May 25, 2007, the court denied reconsideration of the March 23, 2007 order and reserved decision on plaintiff's cross-motion for counsel fees pending resubmission and an updated certification. The court found that defendant "waived any further objections to the exercise of jurisdiction, sufficiency of service or joinder of parties, pursuant to [Rule] 4:6-3, [Rule] 4:6-6 and [Rule] 4:6-7."
On June 13, 2007, the court entered two orders. The first, a consent order, allowed plaintiff to withdraw his April 5, 2007 request to enter default, permitted the court to "have jurisdiction to enter a judgment as to marital status of the parties only[,]" and allowed defendant to file a responsive pleading to plaintiff's "pending Complaint for Divorce within ten (10) days." In the second order, the court awarded counsel fees to plaintiff totaling $8,500. In a statement of reasons included in that order, the court stated:
The decision of May 25, 2007 was an affirmation of the prior decision and it denied defendant's application for reconsideration. The Court applied the principles set forth in [Rule] 5:3-5(c); particularly, (3) the reasonableness and good faith of the positions advanced by the parties and (7) results obtained. The issues are complex as there are three parallel litigations, in Greece, in Federal Court and in this Court. The Court has reviewed the Affidavit of Services and concludes that $7,500.00 is reasonable and appropriate for the firm of Paras, Apy & Reiss, P.C. This firm assumed the primary burden of addressing the international issues and those issues relating to the three separate courts. The firm of Arons & Solomon, P.A., as principal counsel, undertook some efforts in assistance of co-counsel. The Court has specifically not awarded fees to both firms for their appearance in Court as that would be duplicative.
A final judgment of divorce (FJOD) was entered on July 3, 2007. The FJOD expressly incorporated the Greek divorce judgment that the court acknowledged had been entered in Greece on March 25, 2007 and stated that all other issues between the parties "remain[ed] unresolved and subject to adjudication of this Court."
On December 3, 2007, defendant filed a notice of motion seeking to register and enforce the April 22, 2004 Greek custody order, and also seeking the entry of a declaratory order granting custody of all three children to her.*fn6 On December 21, 2007, plaintiff served a subpoena upon Dr. Ryan-Montgomery to appear as an expert witness at the New Jersey custody trial, which was scheduled for January 14, 2008. A check in the amount of $900 was issued to reserve Dr. Ryan-Montgomery's time to appear at the trial.
Trial commenced on January 15, 2008. The court first addressed defendant's motion to register and enforce the temporary custody order issued by the Greek court. Defendant argued that under principles of comity, the court was obliged to defer to the earlier Greek order because plaintiff had voluntarily submitted himself to the jurisdiction of the Greek court and had filed a counter application for custody. The court disagreed and found that because the record of the Greek proceedings was so lacking in factual findings, the court was not required to defer to the earlier decision.
Just before testimony commenced, the court confirmed that the parties had reached an agreement on the issue of custody as to their son, A.A., and their daughter, S.A., and that the court was being asked to only decide the issue of custody as it related to their son, P.A. Plaintiff testified and produced three witnesses on his behalf. Defense counsel stipulated to the admissibility of the custody evaluation report prepared by plaintiff's expert, Dr. Ryan-Montgomery, in lieu of her testimony. The report cards for the parties' two sons were admitted as joint exhibits. Defendant did not appear for the trial, nor did she produce any witnesses on her behalf or introduce any exhibits. Defense counsel, however, cross-examined the witnesses.
In summation, defense counsel indicated that in view of the court's decision denying defendant's motion to register and enforce the Greek temporary custody order and the evidence plaintiff presented, defense counsel expected that custody would be awarded to plaintiff and therefore focused his argument on whether counsel fees should be awarded. He argued that defendant's actions during the course of the litigation were motivated by good faith and that ultimately the stay of the divorce proceedings that defendant sought, which the court initially denied, was granted when the parties received a trial date on the federal action. Defense counsel further argued that throughout the course of the proceedings, the court never ruled on the validity of the Greek order granting temporary custody. Additionally, defense counsel maintained that the motion for reconsideration was filed in good faith because there in fact had been a mistake, namely, the court, during the March 23, 2007 oral argument, remarked that there was no proof that plaintiff had been served with the divorce complaint, when in fact there was proof of service in the court's file and his file that both he and the court had apparently overlooked. Finally, defense counsel argued that the economic positions of the parties were both "exactly the same."
Plaintiff's counsel's summation addressed both custody and counsel fees. She argued that the proofs presented on plaintiff's behalf addressed all of the statutory factors, set forth in N.J.S.A. 9:2-4(c), which guide courts in custody determinations, and plaintiff had demonstrated the best interest of P.A. was that custody be awarded to plaintiff. On the question of counsel fees, plaintiff's counsel argued that plaintiff's income was nominal, defendant's attorney refused to accept service of the divorce complaint, defendant had not yet paid the pendente lite counsel fee award ordered in June 2007, and plaintiff was required to pay a trial preparation fee for Dr. Ryan-Montgomery, only to be told on the day of trial that there was no objection to the introduction of the report in lieu of her testimony. Plaintiff's counsel also argued that defendant took unreasonable positions during the course of the litigation:
[Defendant] has simultaneously appeared through counsel, argued her case, and objected to jurisdiction. . . . [Plaintiff] has been required to pay for appearances at motions, early settlement panels, case management conferences, and trial, none of which [defendant] has appeared at.
[Defendant] through counsel agreed to attend mediation. That was an agreement that was done with the assistance of the Court. My office spent a considerable amount of time searching for a Greek-speaking mediator and speaking for a -- and looking for a Greek-speaking therapist for the children because we were going to try to tie the mediation and the therapy together. And then it didn't happen. She wasn't coming.
At the conclusion of summations, the court directed an inquiry to plaintiff's counsel: "You're asking for two things, the custody decision and the fees. Is that correct?" It was at that time that plaintiff's counsel advised the court, "Well, I'm also asking for Your Honor to address equitable distribution." She advised the court that she was holding approximately $81,000 in her trust account, which represented proceeds from the sale of the former marital home. During the trial, plaintiff testified that the house was a premarital asset and no marital funds were used to maintain it. Defense counsel argued that the increased value of the home as of the date the parties married was subject to equitable distribution. Plaintiff's counsel disputed this position. The court made no findings at that time on the issue of equitable distribution, but did render its oral decision awarding sole legal and physical custody to plaintiff.
Although defense counsel presented no proofs in support of defendant's counterclaim for custody of P.A., the court expressly recognized its obligation to render a decision in the "best interest of the child." The court explained that before rendering its decision, it was obliged "to view all the facts and make a clear decision regardless of whether both sides are represented, by represented I mean present testimony, or not."
The court initially determined that it was not necessary that it conduct an interview with P.A. before reaching its decision because Dr. Ryan-Montgomery had interviewed both boys and the results of those interviews were included in her report, which was introduced into evidence, without objection, in lieu of her testimony. Both boys expressed their strong preference to remain with their father and each other, in the United States, without being pressured by their mother to return to Greece.
The court then considered the relevant statutory factors set forth in N.J.S.A. 9:2-4(c). The court found that both parents were fit and expressed their desire to be awarded custody of P.A. However, given their geographic locations and the refusal of plaintiff to allow A.A. and P.A. to travel to Greece and defendant's refusal to permit S.A. to travel to Boonton, the court determined that it could not expect any cooperation between the parents in making decisions related to P.A.'s well-being. The court concluded that for the past five years, plaintiff and his sons had been living in New Jersey, and plaintiff had provided a stable home environment, which also included his elderly parents with whom both boys enjoyed a close relationship. The court also observed that during the time the entire family lived in Greece, plaintiff had been the primary caretaker for all three children.
The court considered Dr. Ryan-Montgomery's findings that the boys were thriving in their current environment and were successful students. The court also referenced plaintiff's testimony that both boys were involved in extracurricular activities, including music and sports. The court found the school records that were admitted as joint exhibits confirmed Dr. Ryan-Montgomery's findings and plaintiff's testimony that both boys were doing extremely well.
The court expressed that it had no idea how defendant planned to meet P.A.'s emotional, physical, or educational needs since "[s]he's chosen not to come here even though she's aware of the proceedings and has participated through counsel." While the court was confident plaintiff could meet P.A.'s needs, it found that defendant had failed to demonstrate "either [an] ability or willingness to co-parent. She has simply stayed in Greece and objected to the kids being here." The court was therefore satisfied that awarding sole legal and physical custody to plaintiff was in P.A.'s best interest. On February 5, 2008, the court entered an order awarding custody of P.A. to plaintiff and releasing the $81,000 being held in escrow to plaintiff.
In an order dated February 13, 2008, the court directed defendant to reimburse plaintiff for Dr. Ryan-Montgomery's $900 trial preparation fee and awarded plaintiff $2,500 in counsel fees. In the statement of reasons incorporated in the order, the court found that had defense counsel advised his adversary and the court within a reasonable period of time that he would not object to the admissibility of Dr. Ryan-Montgomery's report in lieu of her appearance, plaintiff would not have incurred this cost and the court would not have had to "set aside as much time for trial as it had."
As to counsel fees, the court found that defendant failed to proceed in good faith regarding her claimed entitlement to equitable distribution of the $81,000 because she failed to submit a case information statement, failed to appear at trial to provide testimony and otherwise failed to present any evidence to dispute this claim. The judge concluded that "[d]efendant simply required plaintiff to present its proofs and the Court to spend its time and efforts reaching a decision which was inevitable." The court viewed defendant's conduct during the course of the litigation as unreasonable and as a justification for the award of the $2,500 in counsel fees. The present appeal followed.
On appeal, defendant raises the following points for our consideration:
THE SUPERIOR COURT ERRED BY REFUSING TO DEFER THE JURISDICTION OF THIS MATTER TO THE REPUBLIC OF GREECE AND ENFORCE THE RULINGS OF THE COURTS OF THE REPUBLIC OF GREECE.
A. REPUBLIC OF GREECE HAS PREFERENTIAL JURISDICTION TO DETERMINE [THE] CUSTODY OF [P.A.]
B. THE RULINGS OF THE COURTS OF THE REPUBLIC OF GREECE DO NOT OFFEND PUBLIC POLICIES OF NEW JERSEY.
THE SUPERIOR COURT ERRED IN AWARDING COUNSEL FEES TO PLAINTIFF-APPELLEE BECAUSE PLAINTIFF-APPELLEE FAILED TO COMPLY WITH THE REQUIREMENTS OF N.J.S.A. 2A:34-23 AND THEREFORE THE AWARD OF COUNSEL FEES SHOULD BE REVERSED.
A. THE SUPERIOR COURT FAILED TO PROPERLY CONSIDER THE FINANCIAL CIRCUMSTANCES OF THE PARTIES WHEN AWARDING COUNSEL FEES.
B. THE SUPERIOR COURT FAILED TO PROPERLY CONSIDER THE BAD FAITH STANDARD WHEN AWARDING COUNSEL FEES.
Under the Uniform Child Custody Jurisdiction and Enforcement Act, N.J.S.A. 2A:34-53 to -95*fn7 (the Act), a New Jersey court has jurisdiction to make an initial custody determination only if
(1) this State is the home state of the child on the date of the commencement of the proceeding . . . ;
(2) a court of another state does not have jurisdiction under paragraph (1) of this subsection . . . and
(a) . . . the child and at least one parent or a person acting as a parent have a significant connection with this State other than mere physical presence; and
(b) substantial evidence is available in this State concerning the child's care, protection, training and personal relationships;
b. Subsection a. of this section is the exclusive jurisdictional basis for making a child custody determination by a court of this State.
The Act also expressly provides that the term "state" used in the Act includes foreign nations. N.J.S.A. 2A:34-57(a). New Jersey courts are to give full faith and credit to child custody orders issued from foreign nations except when "the child custody law of a foreign country violates fundamental principles of human rights or does not base custody decisions on evaluation of the best interests of the child." N.J.S.A. 2A:34-57(c). See VanHaren v. VanHaren, 171 N.J. Super. 12, 22-23 (App. Div. 1979) (declining to enforce a South Carolina order awarding a father permanent custody of his children because awarding permanent custody to mother was in the children's best interest).
Here, there was never any dispute that at the time plaintiff filed the divorce action in September 2006, the court had jurisdiction to make an initial custody determination because P.A. had been living in Boonton with plaintiff and his brother for the past three years. On the other hand, it is equally undisputed that at the time defendant sought temporary custody of P.A., along with the two other children, in the Greek court, P.A. had been residing in Greece continuously for the past eight years except for the three months that preceded the filing of the emergency application for temporary custody. In deciding it had jurisdiction to consider the custody dispute, the trial judge never resolved whether plaintiff had notice of the Greek custody proceeding, whether he had voluntarily subjected himself to the jurisdiction of the Greek court and filed a counter application for custody. Rather, the judge concluded that without a sufficient factual record by which to determine how the Greek court reached its decision and what factors it considered, the court could not determine whether the proceeding comported with fundamental principles of human rights or included an evaluation of the best interest of the children.
In Sensient Colors v. Allstate Ins. Co., 193 N.J. 373, 386 (2008), the Court reiterated that "New Jersey has long adhered to 'the general rule that the court which first acquires jurisdiction has precedence in the absence of special equities.'" (quoting Yancoskie v. Del. River Port Auth., 78 N.J. 321, 324 (1978)). Thus, the question here is not whether the trial court, under the Act, had the power to exercise jurisdiction over the parties' custody dispute, but whether the court should have restrained itself in view of the prior order issued by the Greek court.
Application of the first-filed doctrine is not inflexible and, in appropriate circumstances, may yield to "special equities" if application of the doctrine "would contravene the public or judicial policy of the forum state." City of Philadelphia v. Austin, 86 N.J. 55, 64 (1981). See also Gosschalk v. Gosschalk, 48 N.J. Super. 566, 579 (App. Div.) (noting that a trial court is not under any "compulsory duty . . . to stay a proceeding pending before it" because a similar cause of action was first instituted elsewhere), aff'd o.b., 28 N.J. 73 (1958).
N.J.S.A. 9:2-4(c) provides in pertinent part:
In making an award of custody, the court shall consider but not be limited to the following factors: the 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 visitation 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.
A trial court must not only consider these statutory factors before making a custody determination but must also make a record referencing the statutory factors it has considered and the reasons for its custody determination. Gubernat v. Deremer, 140 N.J. 120, 139 (1995) (citing In re Baby M., 109 N.J. 396, 453 n.17 (1988)). Superimposed upon the consideration of these factors is the ultimate determination that the custody decision reached by the court be guided by the "best-interest-of-the-child" standard:
The "best-interest-of-the-child" standard is more than a statement of the primary criterion for decision or the factors to be considered; it is an expression of the court's special responsibility to safeguard the interests of the child at the center of a custody dispute because the child cannot be presumed to be protected by the adversarial process.
[Kinsella v. Kinsella, 150 N.J. 276, 317-18 (1997).]
Here, the Greek proceeding arose from an emergent application. In its written decision granting defendant temporary custody, the Greek court referenced the fact that Boonton had "minimum [G]reek families and has no Greek school[,]" the children were forced to attend American schools, there was no one to take care of the children, the plaintiff worked and his parents were too old to take care of the children. The decision described defendant as a "capable mother," noted that her parents and her sister assisted her with her child care needs, and that the children could continue with their Greek studies as they had done in the past. Assuming that these findings represent the Greek equivalent of a "best-interest-of-the-child" determination, they fall woefully short of the factors our Legislature has mandated that New Jersey courts consider in making custody determinations. See N.J.S.A. 9:2-4(c). Moreover, what evidence was submitted, the reliability of that evidence, and how the Greek court evaluated the evidence in reaching its conclusions is not set forth in the decision.
Further, the decision of the Multi-Member First Instance Court of Athens issued March 27, 2007, granting a judgment of divorce by default, did not address child custody, despite the fact that defendant sought a determination of this issue in her petition. Rather, the court "accept[ed] the complaint of [defendant,]" ordered that the "marriage of the litigants is untied," and imposed "on the defendant the legal fees of the claimant[.]" Thus, no final determination of custody was ever reached by the Greek court.
In our view, the absence of a permanent custody determination by the Greek court and the absence of any record of the Greek court's consideration of the statutory factors, as outlined in N.J.S.A. 9:2-4(c), when it rendered its temporary custody decision, contravenes the public policy of this state to safeguard the interests of children who are at the center of a custody dispute. Ibid. We are not unmindful, and apparently nor was the trial court, that the record suggests that plaintiff may have engaged in forum shopping. Nonetheless, the overriding objective of the court must be "the best interests of the child." Here, this consideration and the absence of a thorough record of the Greek proceeding led the trial court to properly conclude no deference should be accorded to the Greek custody determination. We are satisfied that "special equities" militated against according deference to the temporary custody determination by the Greek court. City of Philadelphia v. Austin, supra, 86 N.J. at 64.
Defendant contends that the court mistakenly exercised its discretion in awarding plaintiff counsel fees because it failed to properly consider the parties' respective financial conditions before awarding counsel fees to plaintiff and also failed to properly consider the standard for the award of counsel fees when there is an allegation of bad faith in the conduct of the litigation. Citing Kelly v. Kelly, 262 N.J. Super. 303, 307 (Ch. Div. 1992), plaintiff argues that "where one party acts in bad faith, the relative economic position of the parties has little relevance."
"[T]he award of counsel [and expert] fees in a matrimonial action is discretionary with the trial court and an exercise thereof will not be disturbed in [the] absence of a showing of abuse." Chestone v. Chestone, 322 N.J. Super. 250, 258 (App. Div. 1999); (citing Berkowitz v. Berkowitz, 55 N.J. 564, 570 (1970)); see also N.J.S.A. 2A:34-23 (authorizing award of attorney and expert fees). As a reviewing court, we will only intervene where we are satisfied that the decision to award counsel fees was "so wide of the mark as to constitute a mistaken exercise of discretion." Chestone, supra, 322 N.J. Super. at 258. We, however, are obligated to conduct the review and must determine whether the trial court's determination is based on facts supported by the record and a correct application of the legal standards.
The standards governing award of fees in matrimonial litigation are clear:
[T]he court must consider whether the party requesting the fees is in financial need; whether the party against whom the fees are sought has the ability to pay; the good or bad faith of either party in pursuing or defending the action; the nature and extent of the services rendered; and the reasonableness of the fees. [Mani v. Mani, 183 N.J. 70, 94-95 (2005) (discussing proper application of N.J.S.A. 2A:34-23, and the factors set forth in Rule 5:3-5(c), which incorporates by reference Rule 4:42-9) (emphasis omitted).]
Considering "bad faith for counsel fee purposes relates only to the conduct of the litigation[.]" Id. at 95. We have noted that "'where one party acts in bad faith, the relative economic position of the parties has little relevance' because the purpose of the award is to protect the innocent party from unnecessary costs and to punish the guilty party." Yueh v. Yueh, 329 N.J. Super. 447, 461 (App. Div. 2000) (quoting Kelly, supra, 262 N.J. Super. at 307. Nonetheless, there are limitations on fees that may be awarded on the basis of "bad faith."
In order to avoid unfairly discouraging litigation, conduct that warrants the award of counsel fees must be egregious and unjustified. Such conduct occurs, for example, where a party has engaged in litigation tactics that either unnecessarily complicated discovery or the trial or unjustifiably increased the cost of the litigation through defiance of court orders resulting in enforcement motions. See Yueh, supra, 329 N.J. Super. at 462 (discussing relevance of failure to comply with discovery and defiance of court orders); Chestone, supra, 322 N.J. Super. at 259 (approving consideration of lack of candor); Kothari v. Kothari, 255 N.J. Super. 500, 513 (App. Div. 1992) (approving consideration of conduct involving dissipation of assets that had an impact on the "type of trial" required). We have held, however, that "failure to settle disputed claims is not in itself a permissible consideration in assessing a fee." Diehl v. Diehl, 389 N.J. Super. 443, 455 (App. Div. 2006).
In this case, the trial court did not award plaintiff fees based upon plaintiff's inability to defray his litigation costs or defendant's ability to contribute to plaintiff's legal fees. Rather, the trial court found that defendant had acted unreasonably in the conduct of litigation.
With respect to the $8,500 counsel fee awarded following defendant's motion for reconsideration of the court's March 23, 2007 ruling denying defendant's motion to stay the divorce complaint and dismiss plaintiff's custody application, the court indicated that it particularly focused upon "the reasonableness and good faith of the positions advanced by the parties and the . . . results obtained" pursuant to Rule 5:3-5(c).
Excerpts from the March 23, 2007 oral argument demonstrate that a significant portion of the court's analysis focused upon the disputed question of whether plaintiff was aware of the temporary custody proceeding, whether he had filed a counterclaim for custody in that proceeding, and whether he had been served with the temporary custody order after the lengthy divorce complaint:
THE COURT: Well, as I recall the papers[,] the complaint, they assert, was filed in 2004 and he was served around Labor Day at his house in Boonton. Another --someone else in the family received the papers. That's what I seem to recall.
[PLAINTIFF'S COUNSEL 1]: We absolutely deny that he has been served or that anybody else in the family received any papers. And we leave them to their proofs. . . .
[DEFENDANT'S COUNSEL]: Judge, could you get a straight answer[?] Did he file a counterclaim in Greece? We still haven't gotten an answer to that question. Did he submit to the jurisdiction and file a counterclaim asking the Judge to give him the kids?
THE COURT: Well, you've . . . asserted that, and I've asked where he's denied it. And so far no one has told me where to look in his papers where he denies that a counterclaim was filed. If it's there I'd like to know. I could have missed it.
[PLAINTIFF'S COUNSEL 1]: On the affidavit filed by [plaintiff], Paragraph 10 --
THE COURT: Okay. Because I think there may be a couple. Let me make sure --
[PLAINTIFF'S COUNSEL 1]: I'm so sorry. I believe --
[PLAINTIFF'S COUNSEL 2]: There's only one by John.
[PLAINTIFF'S COUNSEL 1]: There's only one by our client, Your Honor, and that was in response to the original application.
THE COURT: Okay. Paragraph 10.
[PLAINTIFF'S COUNSEL 1]: And that is . . . beginning in Paragraph 10 is where he set forth his representations with respect to the --
THE COURT: See, the language itself is contradictory. It says, "Addressing an emergency ex parte application", but he knew about it and sent somebody. That's not ex parte. So I'm not even sure what that means.
THE COURT: I'm just looking at what [plaintiff] says here [in plaintiff's affidavit].
[PLAINTIFF'S COUNSEL 1]: Right.
THE COURT: And maybe it's not here. But it looks to me like he says, "In March there was a hearing which was conducted ex parte. I didn't appear and I submitted no affidavit, although a friend of mine --" That sounds like it's not ex parte.
[PLAINTIFF'S COUNSEL]: Right.
THE COURT: It sounds like [plaintiff] knew about it and elected to send somebody to the hearing. That's what it sounds like. And he doesn't deny the counterclaim there.
I -- again, I'm just looking at the plain words.
THE COURT: Has the defendant made any attempt to prove to me that there is a valid proceeding, which she intends to follow? I don't have the complaint. I don't have the proof of service. And then I look and I say under New Jersey principles of default, as I recall properly, and I didn't get a chance to look for the rule, in fact, I know this is absolutely the case because we do it on a monthly basis, if a complaint is not served within six months the complaint is dismissed.
And we do that on our own. No one has to ask for it. It's an automatic review. This complaint in Greece exists for about two years, more so. I'm being told 90 days would result in a default -- in a dismissal, but here in New Jersey it would at least be 60 days. So the fact that it wasn't served for two years, if it even exists, and if it was served, suggests to me that special equities might exist, which should mean that the Greek combination of not -- no registration, no proof of proceeding, the length of time may, in combination, constitute special circumstances, which is -- and everybody is referring to the American Home Products [v. Adriatic Ins. Co., 286 N.J. Super. 24 (App. Div. 1995)] case. I think that's what everybody is referring to when you talk about that, those special equities, it seems like I should allow this to proceed.
THE COURT: I'm then being asked in terms of this action to stay this proceeding for completion of the Greek proceedings. But I think the defendant has lost her opportunity to do that by virtue of the amount of time it's taken for her to serve the complaint.
THE COURT: If the Greek complaint had been filed and served in due course I'd probably feel -- I'm not sure that I would defer to it, but that would be a much stronger case. But here, for whatever reason, the defendant waited more than two years and I think by virtue of the delays she lost her opportunity to proceed . . . in Greece . . . and require me to defer to that Greek Court.
There has been no attempt to register the application. As I said, we have not even been given -- and I find no fault in [defense counsel], but I can't even confirm by copy of the complaint that that's even been filed. So for all those reasons I'll dismiss the defendant's application.
In moving for reconsideration, defense counsel explained to the court that in the earlier motion, there had been a question concerning whether the divorce complaint in Greece had been served. Defense counsel proffered proof in the form of two affidavits from the "State Department process servers swearing they personally served [plaintiff,]" thus refuting plaintiff's claim in his affidavit that he had not been served. The court, however, responded that its March 23, 2007 decision "seemed to be more based upon the passage of time." The court continued: "But it does seem to me, at least initially, that the fact that there's now a judgment of divorce in Greece, that is a different factor that could warrant a reconsideration, so -- at least a review of this matter again. I don't know if that helps[.]"
After considering the arguments, the court denied reconsideration. The court agreed that perhaps plaintiff had notice and participated in the Greek custody proceeding via his representative, but found that the consequence of the Greek decision was "that Greece has entered a judgment of custody without ever seeing the kids or having any idea where the two boys have been or what they've done for the last four years." The court concluded that it was "looking at the best interest of the child. The fact that [plaintiff] may have forum shopped is not really the significant issue[,]" and that the argument of forum shopping was more properly directed to the federal courts in connection with the Hague Convention proceeding.
Our review of this record does not convince us that defendant acted unreasonably or in bad faith. The court denied defendant's motion to stay plaintiff's divorce complaint, reasoning that "by virtue of the delays [defendant] lost her opportunity to proceed in Gree[ce] . . . and to require [it] to defer . . . to that Greek Court." Upon realizing that proof of service was in the court's file and defense counsel's file, defense counsel moved for reconsideration to demonstrate that defendant had not, as the court found, essentially sat on her rights for two years. This conduct was reasonable and not indicative of bad faith, particularly in view of the court's statement during the March 23, 2007 hearing that had "the Greek complaint . . . been filed and served in due course I'd probably feel -- I'm not sure that I would defer to it, but that would be a much stronger case." (emphasis added). Under these circumstances, the court mistakenly exercised its discretion to award $8,500 in counsel fees based upon the court's conclusion that defendant acted unreasonably and in bad faith in pursuing reconsideration.
We do not, however, find that the court mistakenly exercised its discretion in awarding $2,500 in counsel fees following the two-day trial in January 2008. Ordinarily, a defendant is under no obligation to present any evidence in defense of a claim asserted by a plaintiff. A defendant may hold a plaintiff to his or her proofs. Here, however, defendant not only denied the allegations contained in plaintiff's complaint related to custody of P.A. and economic issues, she also filed a counterclaim. Defendant sought equitable distribution, alimony, custody of P.A., and child support. Defendant submitted no proofs in support of those claims. The court, in its statement of reasons, noted that defendant failed to submit a case information statement or any other proof to support her claim for equitable distribution.
Defense counsel argued that to the extent any portion of the $81,000 being held in trust represented the increased value of the premarital property from the date of the marriage, that amount was subject to equitable distribution. Defendant, however, submitted no evidence demonstrating that any increased value of the property was attributable to defendant's active contribution to the property's growth and development rather than due solely to market forces. See Pascale v. Pascale, 140 N.J. 583, 609 (1995) (noting the "guiding principle of Painter [v. Painter, 65 N.J. 196 (1974)] remains: Property clearly qualifies for distribution when it is attributable to the expenditure of effort by either spouse during marriage") (internal quotations omitted); see also Sculler v. Sculler, 348 N.J. Super. 374, 381 (Ch. Div. 2001) (holding "[p]roof that an asset is immune from equitable distribution raises a rebuttable presumption that any subsequent increase in value will also be immune" and that the non-owner spouse bears the burden of demonstrating otherwise). Because defendant put forth no evidence to support her counterclaim for equitable distribution, we agree that she acted unreasonably or demonstrated bad faith in pursuing a claim for the equitable distribution of the proceeds from the sale of the former marital home.
Finally, with regard to Dr. Ryan-Montgomery's $900 trial preparation fee, plaintiff's counsel, in summation, represented to the court the following:
[T]he Court entered an order requiring the exchange of witness lists, exchange of exhibit lists prior to the trial. We did that. We provided an exhibit list, witness list. We were told of objections to all of our exhibits with the exception of the two report cards.
Among those exhibits was Dr. Ryan-Montgomery's report. We get here . . . my client expends money for . . . Dr. Sharon Ryan-Montgomery to prepare to come here yesterday and for the time that we anticipate she'll spend testifying.
The morning of the trial, after the money is paid, non-refundable, we're advised that there's no objection to that report going into evidence. Money wasted.
The exhibit list sent to the court and copied to defendant's attorney is dated January 7, 2008. The $900 check issued to Dr. Ryan-Montgomery is dated four days earlier. There is nothing in the record that evidences any attempt by plaintiff's counsel, in advance of issuing the check, to ascertain whether defense counsel would agree to the introduction of the report at trial in lieu of the expert's testimony. In fact, the trial record reveals that even after defense counsel proposed to accept Dr. Ryan-Montgomery's report in lieu of her testimony, plaintiff's counsel requested a "minute" to think about the proposal, out of concern that the court may wish to ask the expert questions.
As a reviewing court, "the general rule is that findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). Moreover, "[b]ecause of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding." Id. at 413.
Here, assuming that defense counsel received the exhibit list and report on January 7, 2008, the same date that the exhibit list was prepared, we do not find that a one-week period during which defense counsel presumably reviewed the report and discussed its contents with defendant reflects unreasonable litigation conduct designed to protract the legal proceedings and increase plaintiff's costs. We therefore conclude the court mistakenly exercised its discretion in ordering defendant to reimburse plaintiff for Dr. Ryan-Montgomery's trial preparation fee.
In summary, we affirm the court's January 15 order denying registration and enforcement of the April 22, 2004 order issued out of the Greek court awarding temporary custody of the three children to defendant, and that part of the February 13, 2008 order awarding $2,500 in counsel fees to plaintiff. We reverse that part of the June 13, 2007 order awarding counsel fees in connection with defendant's motion for reconsideration of the court's March 23, 2007 order denying defendant's motion to stay the divorce complaint and to dismiss plaintiff's custody application and that part of the February 13, 2008 order directing defendant to reimburse plaintiff for the $900 expert trial preparation fee.
Affirmed in part, reversed in part.