September 10, 2010
MARJORIE M. WALSH, PLAINTIFF-RESPONDENT,
J. GARVIN WALSH, DEFENDANT-APPELLANT.
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 21, 2010
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 In an unpublished opinion filed in 2006, this court affirmed in part, reversed in part, and remanded certain issues to the trial court for further consideration and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 filing of tax returns which have caused the additional payment. Plaintiff should pay that share of her taxes which she would have been obligated to pay had the parties filed timely joint tax returns, $17,540.00.
On appeal, defendant presents the following arguments for our consideration:
THE TRIAL COURT'S AFFIRMATION OF THE PRIOR ALIMONY AWARD SHOULD BE REVERSED BECAUSE IT WAS BASED UPON THE ERRONEOUS BELIEF THAT THIS COURT HAD AFFIRMED ITS FINDING REGARDING PLAINTIFF'S NEEDS. THE FINDING OF THE COURT BELOW IN REGARD TO [PLAINTIFF'S] NEEDS IS NOT THE "LAW OF THE CASE." THE TRIAL COURT ERRED BY FAILING TO RECOGNIZE ITS MANDATE ON REMAND. THE TRIAL COURT MADE AN IMPROPER DETERMINATION OF ALIMONY BECAUSE IT FAILED TO HEED THE DIRECTION OF THIS COURT.
THE TRIAL COURT ABUSED ITS DISCRETION BY MAKING A DETERMINATION OF PLAINTIFF'S NEEDS THAT WAS NOT SUPPORTED BY ADEQUATE, SUBSTANTIAL, CREDIBLE EVIDENCE IN THE RECORD. THE TRIAL COURT FAILED TO MAKE ADEQUATE FINDINGS REGARDING THE MARITAL LIFESTYLE. PLAINTIFF'S TRIAL CIS WAS A FALSE DESCRIPTION OF HER NEEDS.
THE TRIAL COURT ERRED BY MAKING AN AWARD OF ALIMONY THAT WAS IN EXCESS OF PLAINTIFF'S NEEDS.
AN AWARD OF EXPERT OR COUNSEL FEES RESTS, AT MINIMUM, UPON A DETERMINATION OF NEED. THE FAILURE OF THE TRIAL COURT TO ADDRESS NEED NECESSITATES A REVERSAL OF ITS AWARD.
THE TRIAL COURT'S AWARD TO PLAINTIFF OF HALF OF HER ECONOMIC EXPERT FEES WAS CONTRARY TO THE RULES OF COURT AND RELEVANT STATUTES, IS WITHOUT PRECEDENT, AND SHOULD BE VACATED. THE RULES OF COURT DO NOT PROVIDE FOR AN AWARD OF FEES IN THIS MATTER. THE NEW JERSEY STATUTES DO NOT PROVIDE FOR AN AWARD OF EXPERT FEES IN THIS MATTER. THE COMMON LAW AND THE CASE LAW PROVIDE NO PRECEDENT FOR THE TRIAL COURT'S AWARD OF EXPERT FEES. BECAUSE NEITHER THE RULES OF COURT NOR THE STATUTES PROVIDE FOR AN AWARD OF FEES IN THIS CIRCUMSTANCE, AND BECAUSE EXCEPTIONS TO THE AMERICAN RULE MUST BE STRICTLY CONSTRUED, THE AWARD OF FEES FOR PLAINTIFF'S ECONOMIC EXPERT MUST NOT STAND.
THE COURT'S REASONING IN AWARDING ONE-HALF OF PLAINTIFF'S EXPERT FEES IS FUNDAMENTALLY FLAWED. THE AWARD WAS AN ABUSE OF DISCRETION AND SHOULD NOT STAND. THE TRIAL COURT MADE NO FINDINGS OF FACT TO SUPPORT ITS CONCLUSION THAT [AMPER, POLITZINER & MATTIA, P.C.] PROVIDED A SERVICE TO BOTH PARTIES. ABSENT FACTS TO SUPPORT THE COURT'S CONCLUSION, THE TRIAL COURT'S JUDGMENT SHOULD NOT BE SUSTAINED. THE TRIAL COURT'S DETERMINATION ON REMAND THAT ITS PRIOR JUDGMENT WAS AMPLY SUPPORTED BY NEW SUBMISSIONS WAS IMPROPER. THE SERVICES PROVIDED BY [AMPER, POLITZINER & MATTIA, P.C.] WERE OF NO VALUE TO EITHER PARTY, AS THE TESTIMONY AND REPORT ABOUT THOSE SERVICES WERE IRRELEVANT TO ANY QUESTION AT ISSUE IN THE TRIAL.
THE TRIAL COURT'S AFFIRMATION OF ITS FEE AWARDS WAS AN ABUSE OF DISCRETION, BECAUSE IT DISOBEYED THE SPECIFIC DIRECTIONS OF THIS COURT REGARDING PROPER EXERCISE OF ITS DISCRETION.
THE TRIAL COURT'S FAILURE TO FOLLOW THE SPECIFIC INSTRUCTION OF THIS COURT WAS IMPROPER AND WAS BASED UPON AN EQUALLY IMPROPER DETERMINATION MADE WITHOUT FACTUAL SUPPORT IN THE RECORD. ACCORDINGLY, THE AWARD OF COUNSEL AND EXPERT FEES MUST BE VACATED.
THE AWARD OF COUNSEL FEES IN FAVOR OF PLAINTIFF IS BARRED BY THE EQUITABLE DOCTRINE OF UNCLEAN HANDS. MISREPRESENTATION. EQUITABLE FRAUD.
THE TRIAL COURT'S INVOCATION OF THE "RELAXATION RULE" TO OVERCOME [PLAINTIFF'S] DEFICIENT APPLICATION FOR COUNSEL FEES IS BARRED BY THE DUE PROCESS CLAUSE OF THE UNITED STATES CONSTITUTION.
THE TRIAL COURT'S FINDINGS REGARDING APPELLANT'S PRESUMED BAD FAITH ARE NOT SUPPORTED BY THE RECORD; THE AWARD OF COUNSEL FEES BASED ON THOSE FINDINGS SHOULD BE REVERSED. NO FACTS SUFFICIENT TO SUPPORT A FINDING OF BAD FAITH WERE CITED BY THE TRIAL COURT. THE TRIAL COURT'S HOLDING THAT APPELLANT SHOULD PAY THE ENTIRE COST OF [THE DISCOVERY MASTER'S] SERVICES WAS ARBITRARY AND CAPRICIOUS.
THE TRIAL COURT'S AWARD TO APPELLANT OF A CREDIT FOR INCOME TAXES PAID WAS INADEQUATE, INEQUITABLE, BASED ON FACTS NOT IN EVIDENCE AND UPON A FLAWED INTERPRETATION OF THE EXISTING RECORD. THE AWARD SHOULD BE REVERSED.
After considering these arguments in light of the entire record,*fn1 the briefs, oral argument, and the applicable law, we conclude they are without sufficient merit to warrant extended discussion in a written decision. R. 2:11-3(e)(1)(A) and (E). We add only the following comments.
It is beyond dispute that trial judges must comply with the pronouncements of appellate courts. Reinauer Realty Corp. v. Borough of Paramus, 34 N.J. 406, 415 (1961). See also Tomaino v. Burman, 364 N.J. Super. 224, 233 (App. Div. 2003) ("[T]rial judges are bound to follow the rulings and orders of the Appellate Division."), certif. denied, 179 N.J. 310 (2004).
That is what happened here. Based on our examination of the record, we are satisfied the remand court conscientiously considered each of the remand issues and carried out its fact- finding responsibilities in accordance with Rule 1:7-4.
Moreover, we are convinced the remand court correctly applied the controlling legal principles and its findings and conclusions are adequately supported by substantial credible evidence. Cesare v. Cesare, 154 N.J. 394, 412 (1998). Accordingly, we find no error or abuse of discretion, and we affirm the order under review substantially for the reasons stated by the trial judge in his oral decision on September 17, 2003, and his written decision on November 27, 2007.