April 28, 2009
ANKICA JOVIC, PLAINTIFF-RESPONDENT,
MILAN JOVIC, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Somerset County, Docket No. FM-18-106-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 9, 2008
Before Judges Wefing, Parker and LeWinn.
In this matrimonial matter, defendant Milan Jovic appeals from the judgment of divorce entered on December 19, 2007 and three orders: one entered on July 2, 2007 denying his request to vacate an order entered on January 5, 2007 dismissing defendant's answer and counterclaim without prejudice for failure to file a case information statement (CIS) or a proposed notice of equitable distribution; an order entered on January 25, 2008 denying as untimely his motion for a new trial; and an order entered on February 8, 2008 denying his request for a new trial and for a stay pending appeal. We affirm.
Plaintiff filed the complaint for divorce on July 12, 2006. Defendant filed a timely answer and counterclaim. He then left the country and on October 25, 2006, Family Case Management sent a notice of dismissal to his attorney because he failed to file a timely CIS or a proposed notice of equitable distribution. On November 16, 2006, a case management order was entered requiring defendant to file a CIS by November 30, 2006. The matter was originally scheduled for a hearing on December 1, 2006 and was adjourned at defendant's request until January 5, 2007. Defendant still had not filed a CIS by January 5 and an order was entered dismissing the answer and counterclaim without prejudice. Thereafter, plaintiff moved to enter a default and filed a notice of equitable distribution.
The default hearing was scheduled for March 7, 2007 but was adjourned, again at defendant's request. On April 13, 2007, defendant moved to vacate the dismissal and reinstate the pleadings. The return date on the motion was adjourned and plaintiff again moved for a default hearing. The motion was ultimately decided on the papers and an order was entered on July 2, 2007 denying defendant's motion to vacate the January 5, 2007 order of dismissal.
A default hearing commenced on August 20 and continued on October 10 and 24, 2007. A decision was rendered on December 18, 2007 in defendant's absence and a judgment of divorce was entered on December 19, 2007. Defendant was traveling when the judgment was entered and his attorney advised him that the judgment required that he be removed from the marital home within fourteen days. Defendant moved on short notice for a stay and that application was denied in the January 25, 2008 order.
The parties were married on July 5, 1981 in Yugoslavia, which no longer exists. They have one daughter, now emancipated, who was born in Yugoslavia. They moved to New Jersey in 1984. According to plaintiff's testimony at the default hearing, they began having marital problems in 1994. Plaintiff testified that the parties made an oral agreement to separate and divide their assets and finances. She stated that they agreed to remain married for the sake of their daughter but did not maintain a traditional marriage relationship after 1994; they had separate bedrooms and defendant was absent from the home for extended periods of time.
Plaintiff testified that at the time they made the agreement in 1994, the parties did not have any joint bank accounts or real property but had two joint credit cards. Plaintiff could not recall having a joint bank account with defendant at Somerset Savings Bank. In January 1995, the parties requested the credit card companies to remove plaintiff from the joint accounts.
Plaintiff further testified that her father gave her large sums of money as gifts that she used to purchase real property and to cover her and her daughter's living expenses. These gifts were made by transfers from German banks into plaintiff's bank account. Plaintiff testified that she did not co-mingle any gifted funds from her father with defendant's assets.
Plaintiff testified that she used only her father's money to purchase two properties in Bound Brook (the properties). She first purchased 303 West High Street in 1995 for $121,900, with a $32,000 down payment from her father's gift and a $91,900 mortgage. Plaintiff testified that defendant did not contribute any money to the down payment. The deed and mortgage for 303 West High Street are in plaintiff's name only.
In 1996, plaintiff received a $200,000 inheritance from her father. In 2002, she purchased 309 West High Street with the inherited funds. She maintains that she used only her inherited funds for the $37,129 down payment. The deed and the first mortgage for 309 West High Street are also in plaintiff's name.
Plaintiff testified that defendant did not contribute to the carrying costs of either property, and she provided cancelled checks from her separate bank account as evidence that she alone paid the mortgages, utility bills, maintenance, condo fees, insurance, and property taxes for the properties.
After acquiring 309 West High Street, plaintiff decided to live there and use 303 West High Street as a rental property. She testified that she assumed all responsibilities for the rental property, including paying for repairs and appliances. The leases stated that plaintiff was the sole owner of the property.
Plaintiff provided financial support for the parties' daughter, including payment of her college tuition, studies abroad, and travel expenses without any contribution from defendant. Plaintiff also purchased a car for their daughter and paid for the insurance and maintenance without any contribution from defendant. Plaintiff claimed she incurred $36,969 in credit card debt paying for her daughter's expenses. She took out a home equity loan on 309 West High Street to refinance the credit card debt, and made all of the payments on the home equity loan from her own funds.
In 2002, plaintiff formed her own company, A Cleaning (A). The business formation documents for A list the business as a sole proprietorship with plaintiff as the owner. Defendant worked for two A clients for a period of time and was paid $300 per week. Plaintiff fired him, however, when he was accused of stealing from a customer and was arrested.
Defendant worked as a machine operator until 1996 when he incurred a work-related injury and began collecting disability benefits. Plaintiff testified that defendant never contributed any of his income before his injury or from his workers' compensation award to support the family.
At the October 24, 2007 default hearing, defendant, through his attorney's cross-examination of plaintiff, introduced several pieces of evidence to dispute plaintiff's claims. First, plaintiff was asked to identify photocopies of two checks from the United State's Treasury that were signed by the parties and deposited in the parties' joint Somerset Savings Bank account. Second, defendant introduced the second mortgage on 309 West High Street bearing his name. Third, in an effort to demonstrate that they had not separated, defendant provided copies of photographs that showed the parties socializing together over the years at several events. After the default hearing, the trial court found plaintiff's testimony credible in respect of the parties' separation agreement. The trial court found that defendant's pictures did not "contradict the claimed agreement." Moreover, the trial court found that plaintiff did not co-mingle her assets with defendant's and the "one [Somerset Savings Bank] statement from 1998 [did not] contradict plaintiff's position." The trial court found, however, that the separation agreement could not be legally recognized under Brandenburg v. Brandenburg, 83 N.J. 198 (1980), because the parties had not physically separated and continued to reside in the same house.
The trial court relied principally on plaintiff's testimony to equitably distribute the marital assets. As to the properties, the court found credible plaintiff's testimony that she used gifted or inherited funds for a portion of the down payments. For 303 West High Street, the court found that plaintiff used $22,800 of gifted funds toward the $32,441 down payment, and found that seventy percent of 303 West High Street was non-marital property and thirty percent was marital property. For 309 West High Street, the court found that plaintiff used $29,129 of gifted funds toward the $37,129 down payment, and found that 78.5 percent of 309 West High Street was non-marital property and 21.5 percent was marital property. The court then applied these ratios to the properties' net equity as of September 21, 2006, and found that $65,050 of 303 West High Street and $46,627 of 309 West High Street was marital property subject to equitable distribution.
The trial court found that in addition to the two properties, the marital assets included (1) plaintiff's 2001 Acura valued at $10,000; (2) plaintiff's profit sharing plan valued at $8,000; (3) plaintiff's $10,000 life insurance plan; (4) defendant's workers' compensation awards of $19,200 and $48,616; and (5) defendant's car, which he sold for $6,475. The court reduced total marital assets by $60,374, representing (1) plaintiff's $40,463 home equity loan; (2) plaintiff's $16,311 Citibank credit card balance; and (3) plaintiff's $3,500 MasterCard balance, because these monies were used for living expenses and their daughter's expenses. The net marital assets, therefore, amounted to $153,394, of which defendant was awarded $74,291, which included defendant's workers' compensation awards and the value of the car he sold.
The trial court declined to make an adjustment for the $2,406 difference between half of the marital assets and defendant's award. The court did not award defendant alimony because he receives non-taxable disability benefits and has an "ability to earn" while plaintiff's income is "somewhere in the mid-20's." Plaintiff was awarded the properties, subject to the distribution of defendant's marital share in them.
Defendant appealed and argues that the trial court abused its discretion in (1) failing to vacate the dismissal of defendant's answer and counterclaim on the grounds of excusable neglect; (2) making its award of equitable distribution based upon the separation agreement; (3) holding that there was a separation agreement; and (4) giving plaintiff credit for credit card debt and a $40,463 home equity loan. Defendant also argues on appeal that the trial court erred when it denied his motion for a new trial.
Defendant argues initially that the trial court abused its discretion in failing to vacate the dismissal of his answer and counterclaim (defendant's pleadings). He maintains that under Rule 4:50-1, his excuse of being out of the country to care for his mother in Serbia justified his failure to file a CIS within twenty days of filing his pleadings. He contends that the trial court incorrectly found that he failed to file a CIS for six months, and that his CIS was only three months late.
Defendant also argues that his pleadings should not have been suppressed, and that under Rule 4:23-5, he should have had the further opportunity to provide discovery. He contends further that if he had been granted oral argument at the hearing to vacate the default order he could have explained the delay in filing his CIS and the deficiencies contained therein.
"'The scope of appellate review of a trial court's fact-finding is limited. The general rule is that findings by a trial court are binding on appeal when supported by adequate, substantial, credible evidence.'" Crespo v. Crespo, 395 N.J. Super. 190, 193 (App. Div. 2007) (quoting Cesare v. Cesare, 154 N.J. 394, 411-12 (1998)). We particularly defer to fact-finding by the family court "[b]ecause of the family court's special jurisdiction and expertise in family matters." Ibid. (quoting Cesare, supra, 154 N.J. at 413). A "trial court's interpretation of the law and the consequences that flow from established facts are not entitled to any special deference," however. Manalapan Realty v. Manalapan Tp. Comm., 140 N.J. 366, 378 (1995).
Under Rules 4:43-3 and 4:50-1, a moving party must establish either "good cause" or "excusable neglect" to vacate either the entry of default or a default judgment. A default judgment "will not be disturbed unless the failure to answer or otherwise appear and defend was excusable under the circumstances." Fineberg v. Fineberg, 309 N.J. Super. 205, 215 (App. Div. 1998) (citing Marder v. Realty Construction Co., 84 N.J. Super. 313, 319 (App. Div.), aff'd, 43 N.J. 508 (1964)).
Defendant was required to file his CIS within twenty days of filing his answer and counterclaim. R. 5:5-2(b). The answer and counterclaim were filed on August 17, 2006. Defendant was, therefore, required to file his CIS by September 7, 2006. Despite at least two reminders from the court -- the notice of dismissal dated October 25, 2006 and the case management order entered on November 16, 2006 -- defendant did not file his CIS until April 13, 2007.
Defense counsel requested two adjournments of the notice of dismissal because he had difficulty communicating with defendant in Serbia. The adjournments were granted and the dismissal hearing was held on January 5, 2007, in defendant's absence. The order dismissing defendant's pleadings was entered on that date.
Defendant did not attempt to challenge the January 5, 2007 order until March 7, 2007, and did not file his CIS for another five weeks thereafter. The CIS was filed more than three months after defendant's pleadings were dismissed and more than six months after the time required under Rule 5:5-2(b).
Defendant had an obligation "to keep the court and counsel aware of his whereabouts." Fineberg, supra, 309 N.J. Super at 217-18 (citing In re Nackson, 221 N.J. Super. 187, 198 (App. Div. 1987), aff'd, 114 N.J. 527 (1989)). His right to present his case "carries with it the commensurate obligation to cooperate with the court, counsel and other litigants." Fineberg, supra, 309 N.J. Super. at 218. He did not provide a justifiable excuse for failing to comply. As noted by plaintiff, overseas "communication can be accomplished in today's world through a variety of mediums (telephone, cellular phone, email, facsimile and letters)." Defendant never explained why he could not communicate with the court, his counsel, or plaintiff. We are satisfied, therefore, that the trial court did not abuse its discretion and correctly dismissed defendant's pleadings.
Defendant raises a number of arguments respecting equitable distribution of the marital property. First, he claims that the trial court improperly based its equitable distribution on the parties' oral separation agreement; that there was no separation agreement or irretrievable breakdown of the marriage prior to plaintiff's filing the complaint; and that the trial court abused its discretion in applying the separation agreement to its equitable distribution. In Borodinsky v. Borodinsky, 162 N.J. Super. 437 (App. Div. 1978), we summarized the law governing equitable distribution in New Jersey:
Equitable distribution following divorce is governed by N.J.S.A. 2A:34-23. This statute authorizes the court to determine not only which assets are eligible for distribution and their respective values, but also how the allocation of the assets is to be made.
There is no restriction on the court with regard to ordering distribution in kind of the eligible assets or awarding a monetary equivalent thereof. But, nonetheless, the judge should consider the former relationship of the parties and the fact that post-divorce peace is more conducive to the welfare of the parties. [162 N.J. Super. at 443-44 (citing Rothman v. Rothman, 65 N.J. 219, 232 (1974); Gemignani v. Gemignani, 146 N.J. Super. 278, 282 (App. Div. 1977)).]
"Where the issue on appeal concerns which assets are available for distribution or the valuation of those assets, it is apparent that the standard of review is whether the trial judge's findings are supported by adequate credible evidence in the record." Ibid. (citing Rothman, supra, 65 N.J. at 233). But, where the issue on appeal "concerns the manner in which allocation of the eligible assets is made . . . an appellate court may determine whether the amount and manner of the award constituted an abuse of the trial judge's discretion." Ibid. (citing Esposito v. Esposito, 158 N.J. Super. 285, 291 (App. Div. 1978); Salmon v. Salmon, 88 N.J. Super. 291, 310 (App. Div. 1965)).
Here, the court explained that
[I]f there's a written separation agreement accompanied by an actual separation, the agreement date will terminate the period of acquisition for distributable assets.
Now if there is an oral agreement . . . only the actual division of marital property pursuant to that agreement will be considered sufficient evidence that the marital partnership is no longer viable and this is where there's a physical separation. Now the problem I have in this case is that there's no physical separation . . . the parties continued to live together. Not only did they live together [in 1994,] but they moved together in 96 to the new house, and then again in 2000 to the 309 High Street Address.
So I don't believe there's a physical separation that would bring the parties within the . . . requirements under Brandenburg, [supra, 83 N.J. at 198].
Although the court stated that it found "the parties made this financial agreement, and that is going to be a consideration . . . [in] making the equitable distribution in this case," (emphasis added) it clearly based equitable distribution on other factors. The court expressly relied on plaintiff's credible testimony that the parties led separate financial lives and that defendant did not contribute to any family expenses, and evidence that plaintiff used gifted and inherited funds to purchase the properties. Moreover, defendant would have not been awarded any portion of the properties if the court had based distribution on the oral separation agreement because the properties were purchased after the 1994 agreement.
Defendant next argues that the trial court's distribution of the properties was improper. As to 303 West High Street, he contends that the trial court's ratio of non-marital to marital property was incorrect because it should have divided plaintiff's total gifts used for the deposit, $20,424, by the total purchase price, $121,900. He maintains, therefore, that the court should have used an 83.3/16.7 marital to non-marital ratio applied to net equity of $216,870, instead of 70/30 non-marital to marital applied to $216,834.
As to 309 West High Street, defendant maintains that the property should have been distributed equally because plaintiff failed to establish that she used gifted or inherited funds for the deposit. He argues that plaintiff never provided any evidence that $29,129 of the $37,129 came from gifted or inherited funds, and maintains that the trial court abused its discretion in finding that 78.5 percent of 309 West High Street was non-marital property.
Defendant argues alternatively that both properties were marital homes and should have been divided equally. He claims that the parties lived in 303 West High Street from 1995 to 2000 and at 309 West High Street from 2000 to 2008. He further claims that the mortgages and taxes on the properties were paid with marital income.
We have carefully considered the trial court's calculations of the ratios for distribution of the properties and we are satisfied that they are supported by the record.
Defendant further argues that the trial court abused its discretion when it awarded plaintiff a $60,374 credit from the marital assets for the home equity loan and credit card debt, because plaintiff stated in her notice of equitable distribution that she would be solely responsible for her debts. He also maintains that he should have been awarded half of the marital assets, $76,697, rather than $74,291 for the assets in his possession.
The trial court properly found that plaintiff's home equity loan and credit card debt was a marital debt, subject to distribution because plaintiff incurred those debts to pay for family expenses, including their daughter's college education, to which defendant failed to contribute. That determination is fully supported by the record.
Moreover, the trial court's award of $74,291 in marital assets to defendant is supported by plaintiff's credible testimony that she "maintained the household, with no contribution by the defendant."
Defendant further argues that the court erred in finding that A was not a full-time business. After carefully considering the record in light of the applicable law, we are satisfied that this argument lacks sufficient merit to warrant further discussion in this opinion. R. 2:11-3(e)(1)(E). The trial court's judgment is supported by adequate credible evidence in the record. R. 2:11-3(e)(1)(A).
Defendant next argues that the trial court erred in denying his motion for a new trial on the ground that it was untimely.
R. 4:49-1(b). He contends that his late filing should have been excused because his counsel did not receive the final judgment of divorce until December 31, 2007; that he should have been granted a new trial on the grounds of fraud and misconduct by plaintiff; and that newly discovered copies of his workers' compensation checks contradict plaintiff's testimony that he did not deposit any of his income in her bank account.
A motion for a new trial under Rule 4:49-1 must "be served not later than 20 days after the court's conclusions are announced in a non-jury action." R. 4:49-1(b). A party may also seek relief from judgment under Rule 4:50-1(b) based on "newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under Rule 4:49." A motion for relief from judgment under Rule 4:50-1 "shall be made within a reasonable time, and for reasons (a), (b) and (c) of Rule 4:50-1 not more than one year after the judgment, order or proceeding was entered or taken." R. 4:50-2.
The trial court rendered its decision on December 18, 2007 and entered the final judgment of divorce on that same date. Defendant was required to file his motion for a new trial by January 7, 2008. He did not file the motion until January 28, 2008. Accordingly, his motion for a new trial was properly denied. R. 4:49-1(b).
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