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Overbay v. Overbay

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 21, 2009

W. BRUCE OVERBAY, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
v.
MARY ELLEN OVERBAY, DEFENDANT-APPELLANT/CROSS-RESPONDENT.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Hunterdon County, Docket No. FM-18-1083-01.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 28, 2008

Before Judges Graves and Grall.

This case returns to us after remand proceedings directed by our previous opinion. See Overbay v. Overbay, 376 N.J. Super. 99 (App. Div. 2005). Following an eight-day evidentiary hearing, the remand court reduced the imputed rate of return on defendant's inheritance from 7.4 percent to 4.5 percent, decreased defendant's monthly budget from $8000 to $7000, and increased plaintiff's alimony payment from $3000 per month to $3750 per month retroactive to the date of the trial court's initial decision on September 1, 2002. Both parties have appealed, claiming that the court erred. After reviewing the record in light of the contentions advanced on appeal, we affirm in part, reverse in part, and remand.

In our initial decision, we noted the parties were divorced on September 17, 2002, after approximately thirty-one years of marriage. At the time of trial, plaintiff W. Bruce Overbay "was in good health earning $132,000 per annum plus a significant benefits package as a result of his employment at ExxonMobil." Id. at 102. Defendant, on the other hand, had "significant medical problems," including heart problems, which resulted in two hospitalizations. Id. at 103. Defendant was teaching two classes at a local university, earning $12,000 annually, and she had investment income from an inheritance valued at $1,143,695. Id. at 103-04.

Although plaintiff agreed that defendant's inheritance was exempt from equitable distribution, the income that defendant received from the investments she inherited was a critical factor in assessing defendant's need for alimony. The rate of return on defendant's investments at the time of trial was approximately two percent. Citing Miller v. Miller, 160 N.J. 408 (1999), the court ruled that "the entire inheritance except for $60,000 would be subject to investment with an imputed yield of 7.4%." Based on this imputed rate of return, which decreased defendant's need for alimony, the court determined that plaintiff should pay alimony in the amount of $3000 per month:

[G]iven the present circumstances of the parties, I find that the plaintiff should pay the defendant $3,000 per month permanent alimony. As I previously stated, I determined that the defendant's reasonable expenses amount to $8,000 a month. In order to obtain this amount, the defendant would have to have a gross income of approximately $128,000 a year. To achieve that total the defendant should receive approximately $80,000 a year from her assets, $12,000 from her employment and $36,000 alimony. The defendant in her letter memorandum suggests that a tax reserve amounting to 25% being set aside. Taking 25% from $128,000 amounts to $32,000 which would leave the defendant with $96,000 annum or $8,000 per month.

In our earlier decision, we noted that Mr. Miller was an experienced investor with a high tolerance for risk. Therefore, he was comfortable with a more aggressive investment strategy than Mrs. Overbay, whose goal was "to maintain the principal and not let anything happen to it." Overbay v. Overbay, supra, 376 N.J. Super. at 108. Accordingly, we found that the trial court erred when it attributed additional investment income to defendant based on a 7.4 percent imputed rate of return, and we directed the court to redetermine the amount of alimony to be paid by plaintiff to defendant. Id. at 113.

During the remand hearing, both parties presented expert testimony regarding the rate of return to be imputed to defendant's investments, and the court heard testimony from its own expert, Ronald W. Subber, a certified financial planner and chartered financial consultant. The remand court's findings of fact and conclusions of law on this point included the following:

I find in view of the blue print laid down by the Appellate Division and after considering the testimony of all witnesses and having reviewed the evidence submitted that it is appropriate to impute additional earnings from the defendant's inheritance comparable to a prudent use of her investments. I find a reasonable imputation in 2000 to be 4.5 percent. These are my reasons: 1) Mr. Subber suggests a number between 4 and 5 percent. I agree with his analysis and with his conclusions; 2) the defendant's own expert admitted in his testimony that 4 percent would be a reasonable number; 3) the historical rate of return from 1997 to 2001 was about 3.2 percent. That's more than the lowest yield of 1.9 percent in 2001 and less than the return of 4.4 percent in 2000; [4] at age 55 in 2002 the defendant was still a relatively young individual; [5] as to health issues, while they're significant, I don't find those to be so serious that the defendant can't demonstrate more flexibility in her portfolio mix. Her condition has been relatively stable for 15 years and her employment status has not been impacted; [6]

I find the plaintiff's expert's assessment of 6.64 percent to be too high considering the defendant's circumstances that were borne out by the testimony and the evidence.

In my decision I utilized the gross number of $1,083,695 available for investment.

Based on a yield of 4.5 percent, this would result in income of $48,766.27 in 2002 or about $26,766.27 more than what she earned in 2001. It's also $31,233.73 less than what I imputed in my earlier decision in 2002.

We conclude from our review of the record that the court's findings on this issue are amply supported by the evidence presented during the remand hearing. As that evidence demonstrated, defendant is able to generate additional investment income, "without risk of loss or depletion of principal." Overbay, supra, 376 N.J. Super. at 111. Consequently, we do not disturb the court's decision to impute a 4.5 percent yield on defendant's inheritance.

In its initial decision on August 12, 2002, the trial court found that while the parties were married they maintained "a comfortable lifestyle." Id. at 102. However, the court also found that defendant's monthly budget was "inflated." In determining defendant's monthly expenses, the court anticipated the sale of the former marital home and defendant's purchase of a "suitable dwelling for herself without a mortgage or a relatively modest one." The court determined that defendant's monthly expenses could be reduced from $13,687.92 per month to $8000 per month.

With respect to the Schedule A expenses on defendant's case information statement, the court reduced defendant's mortgage and tax expenses by $1000, and the amount budgeted for repairs and maintenance was reduced by $393.64. As to Schedule B, automobile insurance expenses were reduced by $89, and registration, license and maintenance expenses were reduced by $50 because defendant had only two vehicles instead of three. With regard to Schedule C, medical insurance was reduced by $655.28; tax reserves were reduced by $2500; and savings were reduced by $1000. Thus, defendant's monthly budget was ultimately reduced by $5687.92, and the court fully explained how it calculated defendant's budget. Nevertheless, at the remand hearing, plaintiff argued that defendant's budget was actually $6905 per month, and defendant argued that her budget exceeded $8000 per month.

Prior to the remand hearing, defendant filed a case information statement dated June 28, 2005, in which she stated that her total monthly budget was $10,013. At the hearing, however, defendant relied on her 2002 case information statement with a monthly budget of $13,687.92.

On the other hand, plaintiff prepared a spreadsheet, which purported to show that defendant's actual budget at the time of divorce was $6905 per month. Plaintiff's spreadsheet, which contained more than ninety category descriptions, itemized the family expenses for the sixteen-month period from December 1, 1998 to March 31, 2000. The final column of the spreadsheet showed "budget reductions" in the total amount of $6782. Thus, plaintiff argued that defendant's "adjusted budget after budget reductions" was only $6905 ($13,687.92 - $6782 = $6905.92).

Based on plaintiff's spreadsheet, which was marked into evidence as Exhibit P-27, the court determined that it had overstated defendant's needs in its initial decision, and it reduced defendant's monthly budget from $8000 to $7000:

As to the defendant's needs on remand, I find that the defendant's budget, as set forth in my August 12th decision of $8,000 net per month must be corrected. I overstated her needs. I say that because the plaintiff provided in Exhibit P-27 the detailed breakdown of expenses from December 1998 to March 2000. He sets forth defendant's numbers versus actual expenses from his records. In reviewing this exhibit, the defendant's actual expenses, I find, . . . would have been, rather, $6,906. I'm rounding it off to $7,000 because, for example, the plaintiff allowed zero for airfare. Some minor adjustment has to be made for that. Therefore, I believe, the $7,000 net number for the defendant is a fair figure.

The defendant offered nothing to convince me that her budget of $13,687.92 had credibility in 2002 during the trial and now on remand as well. The defendant asked for $7,000 a month more from the plaintiff. This request is totally unsupported by the credible evidence. I find no basis and fact to support her position.

I find no basis to change plaintiff's income for alimony purposes from my earlier decision in 2002 in which I determined the plaintiff's income at $132,000. The defendant argues I should use $175,000 or $43,000 -- I find that while the plaintiff did have additional benefits of $43,000, none of those are available as income [for] alimony purposes. About $27,000 of the $43,000 was represented by medical, dental, life insurance, accidental death, disability and basic family protection. All of which was part of the Exxon Mobil benefits plan, none of which is available as income.

"[T]he 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." Crews v. Crews, 164 N.J. 11, 16 (2000); see Innes v. Innes, 117 N.J. 496, 503 (1990) ("The basic purpose of alimony is the continuation of the standard of living enjoyed by the parties prior to their separation."). The amount of alimony is to be "mainly determined by the quality of economic life during the marriage, not bare survival." Lepis v. Lepis, 83 N.J. 139, 150 (1980).

In reviewing an alimony award, we are obliged to defer "to a trial judge's findings as to issues of alimony, 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). A trial judge "must fully and specifically articulate findings of fact and conclusions of law." Heinl v. Heinl, 287 N.J. Super. 337, 347 (App. Div. 1996). "The absence of adequate findings . . . necessitates a reversal to allow the trial judge to reconsider the alimony decision." Ibid.; see Strahan v. Strahan, 402 N.J. Super. 298, 310 (App. Div. 2008).

In the present matter, the remand judge failed to set forth adequate findings to substantiate the reduction of defendant's monthly budget from $8000 to $7000. For example, defendant stated in her initial case information statement that she needed $289 per month for prescription drugs, and the court did not reduce that expense when it reduced her monthly budget from $13,687.92 to $8000 per month. Nevertheless, plaintiff's spreadsheet showed a monthly reduction of $286 for prescription drugs, and the court apparently accepted that figure without further explanation. In addition, plaintiff's spreadsheet reduced plaintiff's expenses for hair care from $50 per month to zero dollars per month; it reduced the amount allocated for domestic help from $75 per month to zero; and it eliminated the sum of $72 per month that plaintiff had budgeted for club membership and dues. Again, all of these expenses were part of defendant's budget in 2002, but were eliminated after the remand hearing without any specific findings by the court.

In our view, the remand judge erred by merely adopting the budget reductions proposed by plaintiff in exhibit P-27. See Esposito v. Esposito, 158 N.J. Super. 285, 291 (App. Div. 1978) (noting that the "carte blanche acceptance" of one party's contentions as to the valuation of disputed items with "no articulation by way of factual preference or analysis" does not represent "an adequate finding of fact which can stand judicial scrutiny on appeal"). Because the remand court's findings as to defendant's budget are inadequate to substantiate the reduction from $8000 to $7000, we reinstate the $8000 amount. R. 2:10-5. On remand, the court must use defendant's $8000 monthly budget and redetermine alimony based on her income as modified by the trial court and now affirmed by this court. We expect that the remand court will be able to make that determination without expanding the record or requiring additional submissions by the parties.

Defendant's remaining arguments in support of her appeal and plaintiff's remaining arguments in support of his cross- appeal, are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed in part, reversed in part, and remanded to the judge who heard the matter below for further proceedings consistent with this opinion. We do not retain jurisdiction.

20090721

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