December 12, 2008
PRAVIN PATEL, PLAINTIFF-APPELLANT/CROSS-RESPONDENT,
PRATIBHA KATARIYA, DEFENDANT-RESPONDENT/CROSS-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, FM-12-1417-06F.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 17, 2008
Before Judges Stern, Payne and Waugh.
Plaintiff-husband appeals from paragraphs of an amended dual judgment of divorce entered on June 7, 2007, following a bench trial. The judgment was based on the trial judge's memorandum opinion of May 9, 2007. Defendant-wife cross appeals from other paragraphs of the judgment. A partial settlement agreement had been reached prior to the trial, and consent orders were entered. Custody, parenting time, child support and other issues were resolved, and the trial proceeded on the contested financial issues.
On the appeal plaintiff challenges a $25,000 credit given to defendant with respect to the marital home, challenges the award and amount of alimony ($150 a week for two years), claims a pendente lite order (of $3,000 a month for maintenance of the marital premises and child support)*fn1 should have been retroactively modified, and contests the $5,000 award of counsel fees to defendant. Defendant claims that her alimony was insufficient in length and asserts it "should not have been limited to a two-year payout as a means for rehabilitating herself." She also challenges the failure of the judge to award her fifty percent of the child support ($14,752) paid by plaintiff in October 2005 by virtue of a judgment entered with respect to a child from a prior marriage, challenges the dismissal of her Tevis claim,*fn2 asserts that "a Lynn trust,"*fn3 should have been imposed, and claims she was entitled to a greater amount of counsel fees.
The proofs at trial include the following relevant facts. The parties were married in 1997. Their daughter was born on October 29, 1999. All marital residences, including the condominium located at 63 Hawthorn Drive in Edison that is subject to equitable distribution, were rented or acquired in defendant's name, ostensibly to shield any assets from satisfying plaintiff's severely delinquent child support obligations arising from his previous marriage.
Both parties are well educated and have substantial work experience. Plaintiff earned a degree in engineering from the University of Baroda in India and a master's degree in computer science from Boston University. He has worked as a computer programmer since moving to the United States. Defendant earned a bachelor's degree in law, a bachelor's degree in home science, and master's degrees in computer science and business administration at universities in India. In India, she worked in a family-owned photo business, and has worked in both the computer and financial planning fields since her marriage. By the time of trial, she held licenses permitting her to sell stocks and bonds, and had completed a course to become a certified financial planner but had not yet sat for the licensing examination.
Available records indicate that the parties' relative individual incomes fluctuated due to employment changes throughout the marriage. Generally, defendant earned more than plaintiff for the first few years of marriage, while plaintiff earned substantially more for at least the final two years, during most of which he was employed by Merrill Lynch at an annual base salary of $125,000 plus a bonus. However, two months following filing of his complaint, plaintiff left his employment with Merrill Lynch for a position with Trishul Associates ("Trishul") where he earned approximately $85,000 a year. The parties separated at the end of 2005 after plaintiff had secretly hidden a video camera in the parties' living room and videotaped evidence of defendant's alleged adulterous affair with a business associate and had allegedly committed acts of domestic violence against defendant.*fn4
The trial judge awarded defendant alimony in the amount of $150 per week for the limited duration of two years. In accordance with Lepis v. Lepis, 83 N.J. 139, 150 (1980) and N.J.S.A. 2A:34-23(b), the judge acknowledged his obligation to consider the financial needs, income and earning ability of the parties, the duration of the marriage, the parties' age and physical and emotional health, the marital standard of living, the parties' parental responsibilities, and the history of contributions to the marriage by each party. See also Crews v. Crews, 164 N.J. 11, 16 (2000) (reaffirming "the Lepis principle that the goal of a proper alimony award 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"). The court found that, despite the early years of the marriage, at the time of divorce plaintiff was both actually earning and capable of earning more than defendant. Although defendant then earned $57,800 per year working at Wachovia Bank, based on expert testimony and her education, the judge concluded that defendant was capable of earning an annual salary of $70,000 once she sat for and passed the Certified Financial Planner exam for which she had already completed the course work.
As already noted, approximately two months after filing the complaint, plaintiff left his employment with Merrill Lynch and took a position with Trishul, where he reported that his annual salary was $85,000. Plaintiff explained that he sought new employment at that time because a number of co-workers at Merrill Lynch had recently lost their jobs and a new employee was hired to do a type of programming with which he was not familiar. The judge found that explanation unsatisfactory and lacking "sufficient proof." Moreover, the court calculated plaintiff's projected salary for 2007 at $96,744, and used a figure of $95,000 for purposes of calculation of alimony and child support.
Both parties challenge the alimony award of $150 per week for two years, which the judge granted to defendant in order to "provide [her] with sufficient time to complete her examination and become a Certified Financial Planner and to develop a consistent incentive/bonus income." Plaintiff contends that, given the parties' earning history during the marriage, for most of which he claims to have earned less than defendant, defendant was not in fact a supported spouse entitled to any alimony. He further contends that, even if she were entitled to alimony, the court erred in calculating the amount of alimony based on the inappropriate income figure of $95,000 that was imputed to him. Defendant, on the other hand, argues that because the court rejected plaintiff's explanation for why he left his employment at Merrill Lynch, defendant should have been awarded alimony based on an imputed salary consistent with plaintiff's actual income for 2005 and 2006, which she claims was $155,000 and $135,480, respectively,*fn5 and that the award should have a duration of four to five years to allow her time to sufficiently increase her earning power.
The trial judge "projected" plaintiff's 2007 income to be $96,744, but did not explain that calculation. Defendant explains that the figure of $96,744 is arrived at by extending the $80,000 total income listed on plaintiff's 2006 W-2 from Trishul for the time he was employed there to a full year. The W-2, of course, does not indicate a weekly salary. According to several 2007 pay stubs also in the record, however, plaintiff's weekly salary was $1,634.62, which would project a base salary of the $85,000 that plaintiff claims he actually earns. While this discrepancy between the W-2 and weekly pay stubs might easily be explained, for example, by a one-time or annual bonus in addition to his base salary, neither the court's opinion nor the evidence in the record adequately resolve the discrepancy.*fn6
The court made no express finding that plaintiff was underemployed. The court did determine that plaintiff's explanation for leaving Merrill Lynch was unsatisfactory, but also acknowledged expert testimony that indicated that plaintiff could not be expected to find another position that paid a comparable salary to that received at Merrill Lynch. For purposes of determining alimony, the judge endeavored to use a figure based on actual income.
Furthermore, the court did not find, at least expressly, that defendant was the supported spouse, see Crews, supra, 164 N.J. at 16 (noting that alimony "is to assist the supported spouse"), although it did note defendant's claim that plaintiff failed to contribute a substantial portion of his income to the support of defendant and the parties' child during the marriage. In any event, even assuming that defendant was the supported spouse, the court made no finding with respect to the parties' standard of living during the marriage, except merely to indicate that "[t]he parties, on admission, did not live an extravagant lifestyle. The parties only dined out or vacationed rarely and rented a home until the marital home was purchased in 2003." But see id. (noting "[t]he importance of establishing the standard of living" because "[i]t serves as the touchstone for [establishing] the initial alimony award"). Nor did the court make a finding as to whether defendant's alleged monthly budget of $5,977, as reported on her case information statement, was accurate or reflective of the appropriate standard of living. Such a determination must be made as an alimony award is designed to afford the supported spouse the standard of living enjoyed during the marriage. See Steneken v. Steneken, 183 N.J. 290, 298-99 (2005) (quoting Crews, supra, 164 N.J. at 16).
We remand for further findings and conclusions relating to the alimony determination based on all relevant factors with emphasis on the parties' marital lifestyle and their projected incomes as well as the duration of the marriage and the period necessary for defendant to be able to earn enough to maintain her lifestyle when combined with what defendant can fairly afford to pay. See N.J.S.A. 2A:34-23(b) (listing factors for consideration when making an alimony determination); see also N.J.S.A. 2A:34-23(c) (noting that when awarding limited duration alimony, the court "consider[s] the length of time it would reasonably take for the recipient to improve his or her earning capacity to a level where limited duration alimony is no longer appropriate"); N.J.S.A. 2A:34-23(d) (noting that rehabilitative alimony is "awarded based upon a plan in which the payee shows the scope of rehabilitation, the steps to be taken, and the time frame, including a period of employment during which rehabilitation will occur").
Prior to plaintiff's departure from Merrill Lynch, the trial court entered a pendente lite support order based on plaintiff's stipulated annual salary of $125,000. The order required plaintiff to make monthly payments of $3,000 for maintenance of the marital residence and support of the child. On April 28, 2006, the court denied, without prejudice, plaintiff's motion to modify the pendente lite support amount, finding that "plaintiff failed to demonstrate a prima facie case of changed circumstances" or that his then employment status either was "involuntary" or permanent. With regard to healthcare coverage, which plaintiff no longer had, the court ordered that plaintiff either "pay for COBRA coverage or [alternatively] pay all costs associated with" obtaining and maintaining coverage for defendant and their child through defendant's employment. When plaintiff failed to comply with this aspect of the order, on August 18, 2006, the court retroactively augmented his monthly support obligation by $100 to cover a portion of the healthcare costs for defendant and the child. After the trial, the court denied plaintiff's request to retroactively modify his pendente lite support obligation, finding that the award was not "grossly inequitable" to plaintiff. He now appeals that denial.
Orders for pendente lite relief are designed to maintain the status quo pending full investigation of the matter and trial, and may be retroactively modified, if appropriate, thereafter. Mallamo v. Mallamo, 280 N.J. Super. 8, 11-13 (App. Div. 1995). See also Innes v. Innes, 117 N.J. 496, 504 (1990) (alimony modification within the court's discretion).
Plaintiff argues that the trial court abused its discretion in failing to adequately consider his substantial drop in income due to his change of employment and failed to properly determine the actual differences in the parties' earnings. Plaintiff further asserts that his economic circumstances at the time of judgment were far different than they were when the pendente lite order was entered.
As we have remanded to reconsider the issue of alimony based on the parties' true income and lifestyle, this issue should be reexamined as well.
Defendant's was the only name listed as owner on the deed to the marital home at the time of divorce. The trial court rejected defendant's contention that she was entitled to the full equity in that home. However, it did allow her a credit of $25,000 toward equitable distribution to reimburse her for the down payment made with what she claimed were non-marital funds. Plaintiff disputes that ruling.
Defendant bore the burden of proving that these funds, ostensibly originating from a bank account in India and family gifts, were in fact immune from equitable distribution as non-marital assets. See Pascale v. Pascale, 140 N.J. 583, 609 (1995) (citing Landwehr v. Landwehr, 111 N.J. 491, 504 (1988)). Defendant testified that she could not recall all of the details of how she acquired this sum, and the trial judge summarized her credibility on the subject as follows:
With regard to the defendant's testimony, she indicated that she brought the sum of $27,000.00 from India to the United States but has little recollection as to where the money came from. She testified that in 2002, she was in India and returned with the sum of $27,000.00. She claimed that either an employee of her father or brother converted rupees into U.S. dollars which she returned with to the United States. Yet, the defendant provided no documentation indicating where these funds originated. She further testified that she utilized $25,000.00 as a down payment, which she claims was deposited in a series of checks. However, marked into evidence was a deposit of $30,000.00 with a notation, down payment, which the defendant could not explain.
Subsequently, in his opinion the judge added that "defendant has not produced any proof of where [the $25,000 deposit] originated from." The court nevertheless concluded that "[d]espite the fact that the [defendant] has not provided any documentation, I do find her testimony to be credible in this regard," and allowed her the $25,000 credit.
While a trial court's determination of credibility and fact-finding is ordinarily afforded substantial deference, contradictory credibility evaluations are not and the credit cannot be justified on the findings made. See State v. Elders, 192 N.J. 224, 244 (2007) (explaining that findings need not be accorded deference where "so clearly mistaken 'that the interests of justice demand intervention and correction'" (quoting State v. Johnson, 42 N.J. 146, 162 (1964))). This subject should also be re-examined on the remand.
The trial court rejected defendant's claim that she should be credited $7,376 toward equitable distribution of marital assets to compensate her for half of the $14,752 plaintiff paid during the marriage to settle his severely delinquent child support obligations from a previous marriage. Plaintiff claimed that the funds used to pay the settlement amount were borrowed from friends and produced a series of what purported to be promissory notes accounting for the total borrowed. The court determined that:
Neither party fully or accurately provided proof as to where these monies originated.
I reviewed the Promissory Notes submitted as well as the testimony of the parties. I cannot find that the defendant has met her burden in establishing that the monies were joint assets.
However, defendant bears no such burden. Like the funds used for the down payment on the marital home, these funds used by one spouse during the marriage to pay a debt, albeit that spouse's own debt, must be presumed a marital asset. Pascale, supra, 140 N.J. at 609. As plaintiff seeks to exempt that asset from distribution, he bears the burden of proving that the asset is immune, and the issue must be reexamined based upon that burden.
Finally, we find no basis to discuss any other issues raised. See R. 2:11-3(e)(1)(A), (E). Suffice it to say that if plaintiff has not complied with the judgment under review, a trust for the benefit of the parties' daughter can be reconsidered. See DeVane v. DeVane, 280 N.J. Super. 488, 493-94 (App. Div. 1995); Lynn v. Lynn, 165 N.J. Super. 328, 339-44 (App. Div.), certif. denied, 81 N.J. 52 (1979). Similarly, the issue of counsel fees should be reconsidered under the standards provided in Rule 5:3-5(c) at the conclusion of the proceedings.
The matter is remanded for further proceedings consistent herewith. The judge shall provide a statement of reasons for his findings and conclusions on the issues which must be decided on the remand. We do not retain jurisdiction.