On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-1608-03A.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Rodríguez, Yannotti and Chambers.
In this matrimonial action, defendant Joseph R. Cole appeals from the provisions of certain enforcement orders regarding the financial issues between the parties. Specifically, defendant contends that the trial court assigned a value to three retirement accounts that were to be distributed between defendant and plaintiff Justine P. Cole without any factual basis in the record for doing so. He also maintains that he should be given a credit of $19,800 toward his lump sum alimony payment. Finally, he asserts that the counsel fees awarded against him as sanctions were unwarranted. We agree and reverse and remand for the reasons expressed below.
We will not explore all of the procedural byways of this litigation or the ancillary issues raised in this appeal, but rather we will focus on the substantive and procedural issues that resolve the disputes at hand. The parties were married on April 30, 1994, and this divorce action was filed in 2003. The parties reached a resolution of the financial issues involved in the divorce, and that agreement was memorialized in the consent order dated May 14, 2007.
Among its provisions, the May 14, 2007 order required defendant to make plaintiff a lump sum payment of $75,000 in consideration of plaintiff's waiver of alimony. The payment was to be made from defendant's share of funds held in the trust account of plaintiff's counsel. The order also provided that three of defendant's retirement accounts, valued at approximately $43,985, were to be equally divided between the parties "at their current balances." Defendant was permitted to retain a fourth retirement account valued at $94,992.55.
Thereafter, defendant's former attorneys Budd Larner, P.C. asserted an attorney's lien thereby blocking distribution of funds being held in escrow by plaintiff's attorney. By order dated September 21, 2007, the trial court released to plaintiff her equitable distribution share from these escrowed funds. However, the order required that the $75,000 for the lump sum payment in lieu of alimony remain in escrow until defendant secured other funds to put in escrow as security for the attorney's lien of Budd Larner, P.C. Defendant was required to pay plaintiff $300 per week in alimony until she received the $75,000 lump sum payment. The order further required defendant to "liquidate" the three retirement accounts and divide the proceeds equally with plaintiff. He was also ordered to "liquidate" his fourth retirement account. His share of the retirement accounts was to be placed in Budd Larner, P.C.'s escrow account pending resolution of its attorney's lien.
Defendant contends that the trial court's requirement that he liquidate the retirement accounts was contrary to the agreement of the parties and violated ERISA, 29 U.S.C.A. § 1001 to 1461, and that the administrator of his retirement accounts refused to comply with the order, advising that a QDRO (qualified domestic relations order) was needed. The trial court denied defendant's request to modify the September 21, 2007 order and by order dated February 8, 2008, once again ordered that defendant "liquidate" his three retirement accounts and threatened sanctions.
The Judgment of Divorce was entered on August 8, 2008, and it incorporated the order of May 17, 2007, resolving the financial issues. An order entered that same day, awarded Budd Larner, P.C., a judgment of $50,000 for its attorney's lien. The trial court also ordered that plaintiff's lump sum payment of $75,000 in lieu of alimony that had been held in escrow be paid to her. Upon that payment, defendant's obligation to pay her $300 a week ended. The accumulated interest in the trust account was to be divided equally between plaintiff and defendant, and defendant's share was to be distributed to Budd Larner, P.C. Defendant was ordered to "liquidate" his retirement accounts, pay plaintiff her share from the proceeds, and pay from his share or other funds any balance due Budd Larner, P.C. Plaintiff's counsel distributed the funds in his trust account in accordance with these instructions.
A series of motions was heard by the trial court on October 17, 2008. At this hearing, defendant represented that he had attempted to secure a fifty-fifty division of the retirement accounts with the use of QDROS. Plaintiff indicated she would not agree to these orders because the value of the accounts had deteriorated due to market conditions that occurred after the financial settlement had been reached. Plaintiff demanded half of the value of the accounts as they stood in May 2007, which would provide her with more money than half of the value of the accounts as they stood in August 2008.
The trial court also heard defendant's motion for reconsideration of the August 8, 2008 order on the basis that the requirement that he liquidate the retirement accounts was contrary to the parties' agreement and violated federal law. The trial court acknowledged that the earlier orders should have provided that the retirement accounts "roll-over" and that the reference to "liquidate" should not have been used. On appeal, plaintiff acknowledges that the trial court's requirement that the three retirement accounts be liquidated was in conflict with the May 14, 2007 order resolving the financial issues of the parties.
By order dated October 17, 2008, the trial court vacated the provision of its August 8, 2008 order requiring liquidation of defendant's retirement account. Instead of liquidation, the order required that defendant roll-over plaintiff's share of the three retirement accounts. The order states that the value of the three retirement accounts is $70,256, and hence fixed plaintiff's share at $35,128. This order also required defendant to pay plaintiff's counsel fees "for the necessity of filing this [m]otion." By order of October 27, 2008, defendant was ordered to pay plaintiff's counsel $2,947.50 in counsel fees. In response to plaintiff's motion to ...