December 15, 2009
GYMLYN CORBIN, PLAINTIFF-APPELLANT,
JERRY CORBIN, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Hunterdon County, Docket No. FM-10-151-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 28, 2009
Before Judges Fisher and Sapp-Peterson.
In this post-judgment dispute over defendant's obligation to pay to plaintiff, as part of his alimony obligation, fifty percent of his annual bonuses, plaintiff appeals from that part of the trial court's order declining to treat defendant's stock options as bonuses, declining to award plaintiff post-judgment interest on the bonuses the court determined plaintiff was entitled to receive, and declining to impose sanctions in the form of counsel fees based upon defendant's failure to disclose the full amount of his bonuses. The court interpreted the parties' Inter-spousal Agreement (ISA) as not intending to include, as bonuses, stock options or restricted stock grants. In declining to award post-judgment interest, the court noted that it did "not have a beginning date [from] which to begin calculating interest." Finally, although the court awarded $500 in counsel fees in connection with the enforcement portions of the motion, it declined to award additional counsel fees as a sanction, finding that the imposition of sanctions was not warranted. We affirm.
The record before the court disclosed that the parties entered into the ISA on October 22, 2004 and it was subsequently incorporated into the Final Judgment of Divorce. At the time the parties entered into the ISA, defendant was employed by Aventis, where he earned bonuses and stock options. Paragraph 3.4 of ISA provides:
In addition to his base salary, Husband
typically receives bonuses which vary from year to year. Wife shall be entitled to one-half (1/2) of Husband's gross bonuses payable as alimony in addition to that provided in 3.1 which shall be taxable as income to her and deductible by the Husband. Commencing in 2005 and each year thereafter, Husband shall provide Wife with proof of his bonus income and make payment directly to Wife. Husband's bonus income shall not be utilized in calculating either parties' [sic] child support obligation.
The ISA also addressed stock options in Paragraph 4.3:
Stock Options: Husband was granted various stock options from 1999 through 2003. Options granted in 1999 and 2000 are vested and could be exercised. Options granted in 2001, 2002 and 2003 are not vested. Husband agrees to sell 50% of the shares from 1999 to 2003 when directed by Wife, provided Husband is otherwise entitled or able to exercise such options.
The parties agree that Wife is entitled to the net proceeds (after payment of all taxes and costs related to their sale based on Husband's marginal tax rates) of all options exercised by Husband on her behalf.
Husband shall make payment to her of her share of the proceeds within fifteen (15) days of receipt of same.
In accordance with the ISA, defendant paid plaintiff fifty percent of the cash bonuses he received after deducting Social Security and Medicare taxes for the years 2005 and 2006. In 2006, defendant commenced employment at Integra Life Sciences, where he also earned bonuses and stock options. Defendant received his bonus for 2007 in March of that year but did not at any time during 2007 pay plaintiff her fifty percent share. Plaintiff filed a motion to enforce litigant's rights on April 2, 2008, seeking enforcement of the ISA provision governing bonuses for the years 2006, 2007 and 2008 along with post- judgment interest, limited discovery and counsel fees. Five days later, defendant paid plaintiff $37,417.92, which amount represented plaintiff's share of defendant's 2007 and 2008 bonuses.
In her moving papers, plaintiff argued that she was entitled to fifty percent of the gross amount of defendant's bonuses rather than fifty percent of the net amount that defendant received. The trial court agreed and, in its April 28 order, ordered defendant to pay an additional $4,859.99. The court disagreed that plaintiff was entitled to fifty percent of defendant's restricted stock grants, finding:
The documentation shows that both Aventis, Defendant's former employer, and Integra, his current employer, use the term "bonus" on paychecks to designate that benefit. A "bonus" is listed in both companies' pay stubs for Defendant, and is thereby distinguished from the companies' stock grants, which are memorialized elsewhere. Further, the [ISA] also distinguishes them not only by including them in separate paragraphs but also by giving them separate treatment. Pursuant to the [ISA] provision, bonuses are treated like income with Plaintiff receiving 50% of gross. Defendant would then deduct a payment from his bonus as additional alimony, if it were eligible. As to stock options, they were to be divided after the taxes are taken out. That is, Plaintiff received 50% of the net.
From the language on its face the court finds the term "bonus" to have been used consistently in the payroll documents from Defendant's former employer, where he worked, when the [ISA] was negotiated, and in the [ISA] itself. The fact that the same terminology was used in his post-divorce payroll documents has no bearing on intent at the time the [ISA] was entered, but does serve to maintain a clear picture of what Plaintiff is entitled to now.
It is confusing that the parties deducted taxes out of the 2006 bonus, thereby treating it as stock options [that] were to be treated under the terms of the [ISA]. However[,] this anomaly is not probative of an intent to have the term "bonus" include a grant of stock. At best, from Plaintiff's perspective, it is probative of a confusion over the amount of the bonus, gross or net, to be shared with Plaintiff, or it is probative of Defendant's willingness to take financial advantage wherever the opportunity present[s] itself.
The court was not told his reasons for deducting taxes from the bonus. However, it is significant that this was done long after the [ISA] was negotiated and signed. The fact remains that the intent of the language in the [ISA] was to treat the form of compensation called "bonus" differently from stock options, which were treated as assets.
Stock was not mentioned in the alimony provision. The court finds that the alimony language would have included future stock options or grants if that were the parties' intent.
Citing Rule 4:42-11, the court denied plaintiff's request for post-judgment interest, finding that Paragraph 3.4 of the ISA did "not provide a due date for when Defendant's payments should be made." The court further stated that it did not "have a beginning date for which to begin calculating interest." In awarding plaintiff $500 for counsel fees, the court cited Franklin Tp. Bd. of Educ. v. Quakertown Educ. Ass'n, 274 N.J. Super. 47 (App. Div. 1994), Rule 1:10-3, and Kelly v. Kelly, 262 N.J. Super. 303 (Ch. Div. 1992), and found that "[d]efendant deducted Medicare and Social Security taxes out of his gross bonus before paying Plaintiff her half. Defendant agreed to share equally his gross bonus. His actions created Plaintiff's need to file a motion to enforce litigant rights. Defendant shall be responsible for $500 of Plaintiff's counsel's fee."
Plaintiff filed a second motion to enforce litigant's rights on May 21, 2008, and also sought reconsideration of some of the terms of the court's April 24 order. Through the limited discovery the court ordered, plaintiff had obtained updated financial information on defendant for the years 2005, 2006, and 2007. Following oral argument conducted on July 3, the court ordered plaintiff to pay $6,039.08 for 2006 and 2007 bonus arrearages and $1009.84 for 2005 bonus arrearages. The court, however, once again denied counsel fees and post-judgment interest, and declined to treat defendant's stock options as bonuses:
Plaintiff requests the court to reconsider the decision because the court erroneously interpreted the term "bonuses" as set forth in the PSA as "cash bonuses". Plaintiff does not provide any new evidence or facts from her original application. Her argument that Paragraph 3.4 of the parties' Judgment of Divorce dated December includes the term "bonuses" should include stock grants is undermined by the fact that the Defendant received two cash bonuses in March of 2007. Therefore, Defendant was to pay his gross bonuses which was taxable to her and deductible by Plaintiff [sic]. The parties are the ones who, with counsel, negotiated the PSA language. They must live with it. The court was not erroneous in its analysis as set forth above.
Plaintiff requests the court to reconsider Paragraph 2 of its previous order denying her request to pay post-judgment interest on half of the bonuses did not [sic] Defendant did not pay. The court was not erroneous not to impose post-judgment interest. The court did not have beginning date to calculate interest. The PSA did not say when the payments were due. Plaintiff has not even been provided a suggestion of what could have been a reasonable due date and what period of time has run since Defendant received his bonuses. Plaintiff did not have a judgment against Defendant for payment. Nor did Plaintiff assert a due date for her share of the bonuses.
On appeal, plaintiff contends the court "erred by failing to enforce the explicit terms of the parties' judgment of divorce as to the division of defendant's 'bonuses'" or, alternatively, should have ordered discovery and scheduled a plenary hearing. Plaintiff also claims the court abused its discretion when it failed to sanction defendant for refusing to disclose the correct amount of his bonuses and for refusing to pay fifty percent of his 2005 bonus. Additionally, plaintiff urges that the court abused its discretion when it failed to award reasonable post-judgment interest on the portions of defendant's bonuses he improperly withheld. Finally, plaintiff urges that if any aspect of this matter is remanded, it should be heard by a different judge. We reject each of plaintiff's contentions. We affirm substantially for the reasons expressed by Judge Ann R. Bartlett in her April 28 and July 3, 2008 orders. We add the following comments.
The scope of our review of a trial judge's findings is a limited one. Generally, we will not "disturb the factual findings and legal conclusions of the trial judge" unless they are "so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Rova Farms Resort, Inc. v. Investors Ins. Co. of America, 65 N.J. 474, 484 (1974) (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div. 1963)). This is particularly true in matters arising in the context of family court proceedings. "Because of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding." Cesare v. Cesare, 154 N.J. 394, 413 (1998).
Here, we are satisfied that based upon the record before the trial court, we find no error in the court's determination to deny plaintiff fifty percent of defendant's stock grants. Both Aventis, defendant's employer at the time the parties entered into the ISA, and Integra, defendant's current employer, distinguish bonuses from stock grants. The ISA also distinguishes bonuses and stock grants by expressly addressing them in separate articles in the ISA. They are also treated differently. For instance, the ISA makes no mention of future stock grants in any alimony provision, but does mention a limited-time stock sharing for the purposes of equitable distribution. Therefore, we find no reversible error in the trial court's finding that stock grants are not bonuses subject to the fifty percent split between the parties.
Turning to the denial of post-judgment interest, the grant of post-judgment interest "is ordinarily not an equitable matter within the court's discretion but is, as a matter of longstanding practice, routinely allowed." Bd. of Educ. of Newark v. Levitt, 197 N.J. Super. 239, 244-45 (App. Div. 1984); see also R. 4:42-11(a). However, a court may prohibit or reduce post-judgment interest upon a showing of good cause to the contrary. Levitt, supra, 197 N.J. Super. at 245.
Here, the court found that the ISA provided no date by which defendant was to pay plaintiff's share of his bonuses. Moreover, the court observed that plaintiff made no effort to even proffer what plaintiff deemed was a reasonable date from which to calculate prejudgment interest. The court found further that plaintiff did not have a judgment against defendant for payment and never raised before the court a due date for her share of the bonuses. We are satisfied that there was good cause to prohibit the award of post-judgment interest on this record.
Likewise, we reach a similar conclusion with respect to the denial of plaintiff's application for a counsel fee award as a sanction for what plaintiff characterized as defendant's misrepresentations. "The award of counsel fees in matrimonial actions is discretionary with the trial court, [under Rule] 4:42-9(a)(1), and an exercise thereof will not be disturbed in the absence of a showing of abuse." Berkowitz v. Berkowitz, 55 N.J. 564, 570 (1970); see also R. 5:3-5(c). Defendant argued that his incentive pay was not a bonus. The court found that this argument "is just that[,] an argument and not willful misrepresentation." The court also found that plaintiff was unreasonable in filing her motion seeking to compel defendant to pay half of his 2005 bonus without first seeking to verify the amount of the bonus or "broaching the subject of discovery with Defendant." Finally, the court noted that the results of plaintiff's motion were mixed. These findings are supported by substantial, credible evidence in the record.
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