On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-973-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Graves, J.N. Harris and Newman.
This is a post-judgment matrimonial matter. Following a six-day trial, the court rendered an oral decision on September 17, 2003, and entered a dual judgment of divorce (JOD) on October 31, 2003. Both parties appealed. In an unpublished opinion filed in 2006, this court affirmed in part, reversed in part, and remanded certain issues to the trial court for further consideration and clarification. Defendant J. Garvin Walsh, the former husband of plaintiff, Marjorie Walsh, appeals from a remand order dated November 27, 2007. We affirm.
The relevant background facts regarding the parties, their marriage, and their lifestyle were set forth in our initial opinion and need not be repeated here. We affirmed most of the trial court's findings and determinations, but we remanded five issues to the trial court. Prior to the remand proceedings, plaintiff withdrew her claim for equitable distribution of the restricted stock units issued to defendant, and defendant did not appeal from the portion of the remand order that modified his life insurance obligation. Therefore, this appeal is limited to the three remaining remand issues, which involve defendant's alimony obligation, an award of counsel and expert fees to plaintiff, and a credit awarded to defendant for the income taxes he paid.
With regard to defendant's alimony obligation in the amount of $10,000 per month, we concluded the trial court had erred by applying a Consumer Price Index adjustment to defendant's income during the marriage and by failing to consider defendant's income after the parties separated in 1998. We therefore directed the trial court to reconsider defendant's alimony obligation in light of his actual income and all other relevant circumstances, including the tax consequences of the alimony payments. In addition, we vacated the award of counsel fees and expert fees to plaintiff without prejudice to her right to submit a new application that complied with Rule 4:42-9. We also remanded a credit that defendant received for payment of joint income taxes because it was "not clear to what extent, if at all, the trial court may have intended to limit plaintiff's responsibility" for the additional charges resulting from the untimely filing of income tax returns by defendant.
On remand, the parties agreed there was no need for additional testimony, but they submitted "briefs and relevant documents" to the court. Following argument, the court issued a letter opinion together with a remand order on November 27, 2007. Pursuant to our instructions, the remand court considered defendant's average income during the marriage without applying the Consumer Price Index and found that he had the ability to pay plaintiff $10,000 per month. The court also reviewed defendant's income from 1998 through 2002, after plaintiff's complaint was filed but prior to the entry of the JOD on October 31, 2003, and found defendant's average annual income was $506,022. Additionally, the remand court addressed defendant's claim that plaintiff's income exceeded her needs as follows:
When the Court concluded that her alimony award would be $120,000.00, it also imputed income of $28,600.00. This provides gross taxable income of $148,600.00 to meet needs of $106,800.00. The difference, $40,000.00, is this Court's best estimate of the total tax liability on income of $148,600.00, both state, federal and other miscellaneous taxes. This equals approximately 27% of gross income being dedicated to state, federal and other miscellaneous taxes, a reasonable estimate. The record did not include tax consequences. Employing, for example, the 2006 Federal and State tax rates for single individuals, the Federal tax would be $35,939.00 ($15,107.50 28% excess over $74,200.00) and $7,339.57 (6.37% - $2,126[.]25) for a total of $43,278.57.
The court also reviewed its decision to require defendant to pay a portion of plaintiff's expert and legal fees. The court noted that it awarded plaintiff a total of $50,000 in legal fees and that two of the attorneys were unwilling to provide the affidavits required by Rule 4:42-9 because they had filed lawsuits against plaintiff to collect their fees. Nevertheless, the court concluded the counsel fees and expert fees it had previously awarded were "appropriate and reasonable":
The Court is satisfied, based upon the Court judgments, plaintiff's certification and billing statements attached, that plaintiff has paid more than $129,000.00 to prior counsel. This Court is fully aware that this was an extremely contentious litigation that extended almost five years. To deny a worthy party of a fair and just contribution to counsel fees because through no fault of her own no Affidavits of Services can be submitted would work a great injustice to the plaintiff. For the reasons stated in the original decision of the trial court, defendant delayed this matter, failed to provide reasonable discovery and did not file tax returns for years prior to the divorce. . . . Defendant has a far greater ability to pay counsel fees and, by his own actions, caused many of the Court appearance[s] and, in large measure, the trial itself. The Court is satisfied that the sum of $50,000.00 is appropriate and reasonable. The Court applies R. 1:1-2 relaxing the requirement to submit Affidavits of Services as the just and fair thing to do under the circumstances.
In addition, the JOD stated defendant was solely responsible for the services rendered by the court-appointed discovery master in the amount of $17,545, and the remand court affirmed that decision because "[h]is services were necessitated by defendant's conduct." The JOD also required the parties to be equally responsible for the fees owed to Amper, Politziner & Mattia, P.C., plaintiff's accounting firm, and the remand court determined the fee awards were properly based on the services rendered, the parties' circumstances, and the judgment entered in favor of the accounting firm by the Law Division in a separate action.
The remand court also explained why it rejected defendant's claim that he was entitled to a greater credit for the taxes he ultimately paid after failing to file income tax returns for several years:
Defendant in his certification and submissions provides Exhibit N which is essentially a restatement of defendant's Exhibit 19. That document indicates that plaintiff's share of joint taxes equaled $17,540.00. The Court accepts that as defendant's claim against plaintiff for taxes which he paid on behalf of plaintiff had they filed jointly for those years as was their practice. The defendant asserts that the sum should be much higher and that plaintiff should pay defendant for the incremental tax due because of her decision to file married/single. The Court rejects that argument. Defendant, over many years, failed to file tax returns. Plaintiff ultimately made the decision to file separately because of defendant's failure to file jointly on his own. It is the defendant's own conduct and his decision to defer ...