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Olga Cadavid (F/K/A Nieto v. Zoilo Nieto

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


December 29, 2010

OLGA CADAVID (F/K/A NIETO), PLAINTIFF-RESPONDENT,
v.
ZOILO NIETO, DEFENDANT-APPELLANT.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-2182-00.

The opinion of the court was delivered by: Graves, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 26, 2010 - Decided Before Judges Stern, Graves and Sabatino.

The opinion of the court was delivered by GRAVES, J.A.D.

Plaintiff Olga Candavid and defendant Zoilo Nieto were married in 1997 and divorced on May 10, 2000. They are the parents of three sons. Defendant appeals from an order dated July 2, 2009, denying his request to vacate monetary sanctions imposed as a result of his failure to make an equitable distribution payment to plaintiff.*fn1 For the reasons that follow, we affirm.

In a property settlement agreement (PSA) incorporated into the judgment of divorce, the parties agreed "that $100,000 per year can satisfy all of the wife's and children's annual expenses," and defendant agreed to pay that sum for a period of seven years following the divorce. The PSA specified that defendant would pay approximately $3000 per month for the mortgage, real estate taxes, and homeowners insurance on the marital home, and the remaining $64,000 would be paid directly to plaintiff in monthly installments of $5333.33. Pursuant to the PSA, the $64,000 payment included limited duration alimony in the amount of $20,000 per year for seven years. With regard to the marital home, paragraph twenty-three of the PSA provided as follows:

The wife shall be permitted to remain in the marital residence for a period of seven (7) years commencing from the date of the execution of the Judgment of Divorce. At the time of the expiration of said seven (7) year period, the marital residence will either be sold and the net proceeds divided by the parties at a 60/40 ratio in favor of the husband or the wife shall purchase the husband's interest at 60% of the appraised value of the property at the time. At present, the parties estimate the fair market value of the property to be approximately $375,000.00 and there is a present mortgage balance of approximately $284,000.00, leaving a net equity of approximately $100,000.00. The husband represents that he shall place no liens or encumbrances on the property during the next seven (7) years and will continue to pay the mortgage as aforesaid and upon the expiration of said seven (7) year period, the wife shall be entitled to forty percent (40%) of the net equity in the property at that time.

On December 9, 2003, the parties signed an addendum to the PSA that allowed defendant to refinance the marital residence. However, the addendum stated that the terms of the original agreement were to "remain in full force and effect."

In 2007, prior to the expiration of her alimony, plaintiff filed a motion to increase child support. The court scheduled a plenary hearing and while the matter was pending, plaintiff and the children moved out of the marital home in Ridgefield. The plenary hearing was held in November 2007, December 2007, and January 2008. On March 25, 2008, the trial court ordered defendant to pay child support for the three children in the amount of $8839 per month and awarded counsel fees to plaintiff in the amount of $40,000.

Defendant appealed the trial court's decision. In an unpublished opinion, we affirmed the counsel fee award but reduced defendant's monthly child support obligation to $7488.15 effective March 25, 2008. Olga Cadavid, f/k/a Olga Nieto v. Zoilo Nieto, No. A-4270-07 (App Div. Apr. 13, 2009) (slip op. at 17). In our prior opinion, we noted that defendant is a successful businessman:

The parties are both immigrants from Columbia. The father, who came to the United States in 1982, is the successful founder and president of eight schools that teach English as a second language. The schools are located in New Jersey, New York, Florida, and Canada. Through limited liability companies unrelated to the schools, the father also owns interests in several commercial properties in New Jersey and Florida. In a June 2007 loan application, the father valued his various business interests at $8 million and the fair market value of his real estate holdings at $5.2 million. The Family Part calculated the father's annual income for purposes of child support at approximately $2 million annually, a figure which is uncontested on appeal. [Id. at 2.]

We also found that the motion judge did not err in declining to impute net positive earnings to plaintiff:

The mother was nineteen years old when she emigrated to the United States in 1997. At that time she enrolled in one of the father's schools to learn English. Approximately two months later, she married him. She then gave birth to three children in the short span of three years. The youngest of those children was six years old at the time of the hearings in this case. Throughout the marriage, the mother never obtained employment but cared for the children. She obtained an associate's degree from a community college only two years before the hearings began in this case. The mother drives the children to school, their extracurricular activities, their sporting events, and medical appointments. She also frequently drives the boys to meet their father for his parenting time.

At the time of the hearings, the mother was seeking employment as a daycare worker or as a teacher's assistant, positions for which she could expect to be paid only about ten to twelve dollars per hour. However, she apparently had yet to receive an offer of employment.

Given the mother's limited potential earning capacity and lack of prior work experience, as well as the benefits of the mother personally attending to the boys' transportation and other after-school needs, there are reasonable grounds for the judge's decision not to impute net positive earnings to the mother. [Id. at 10-11.]

On July 15, 2008, a Family Part judge granted plaintiff's motion to enforce the order entered on March 25, 2008. The court ordered defendant to pay "sanctions in the daily amount of $100" until the $40,000 counsel fee was paid in full. The court also granted plaintiff's request for additional fees in the amount of $2897.50.

After the former marital home was sold in February 2008, plaintiff filed a motion to enforce paragraph twenty-three of the PSA, which entitled her to forty percent of the net equity in the property when it was sold. On June 6, 2008, the court ordered defendant to pay plaintiff "the amount of $143,724.85 representing her 40% interest in the proceeds of . . . the former marital residence, pursuant to the terms of the parties' property settlement agreement dated April 10, 2000." The court ordered that the sum of $77,373.15, held by the closing attorney, was to be paid immediately and the balance of $66,351.70 was to be paid by June 16, 2008.

However, defendant failed to make the payment, and plaintiff's motion to enforce the June 6, 2008 order was heard on August 29, 2008. Prior to the motion's return date, defendant made a payment of $20,000. On August 29, 2008, the court ordered defendant to pay the balance of plaintiff's equitable distribution in the amount of $46,351.70 in three equal installments, with the first payment on September 26, 2008, the next payment on October 26, 2008, and the final payment on November 26, 2008. The court further ordered that if any installment was five days late, "sanctions will accrue at the rate of $100 per day until the installment payment is made in full."

Defendant failed to pay plaintiff equitable distribution in the amount of $46,351.70, but he made a $10,000 payment in October 2008. In February 2009, plaintiff filed a motion to enforce the July 15, 2008 counsel fee order and the August 29, 2008 equitable distribution order.

In response to plaintiff's motion, defendant claimed his income for 2008 had been "drastically reduced," and he provided the court with a copy of his individual income tax return for 2008, which stated that defendant's adjusted gross income was $169,776. However, the same return indicated that defendant had paid taxes in the amount of $96,306 and could have received a refund in the amount of $74,842, but instead elected to apply the refund to his 2009 estimated tax.

Following oral argument on April 13, 2009, the court ordered defendant to provide plaintiff with his personal and business tax returns for 2007 and 2008 by May 1, 2009, and scheduled an ability to pay hearing for May 4, 2009. The court also entered judgment in favor of plaintiff in the amount of $85,451.70, which included the equitable distribution sum of $36,351.70, together with per-diem sanctions totaling $49,100 pursuant to the order entered on August 29, 2008.

On April 24, 2009, defendant's attorney sent plaintiff's attorney two checks: one in the amount of $36,351.70 to pay the equitable distribution balance from the sale of the former marital home; and another in the amount of $48,041.50 for payment of counsel fees awarded to plaintiff on March 25, 2008, and various other dates. Defendant then filed a motion to: (1) vacate the portion of the April 13, 2009 order that required him to provide plaintiff with his personal and business tax returns;

(2) cancel the ability to pay hearing; and (3) vacate the per-diem sanctions for his failure to comply with the order entered on August 29, 2008. On May 8, 2009, the ability to pay hearing was adjourned until defendant's motion was heard, and defendant paid the accumulated sanctions in the amount of $49,100 "under protest" on May 15, 2009.

The court heard defendant's motion to vacate the sanctions on June 26, 2009. Defendant's attorney argued that the sanctions should be vacated because defendant did not have the ability to pay the sums ordered and because the imposition of sanctions in the amount of $49,100 for the delayed payments was "unreasonable, unjust, oppressive and extremely punitive." On the other hand, plaintiff's attorney argued that the sanctions were appropriate because of defendant's "willful failure to comply" with the order entered on August 29, 2008. In addition, plaintiff's attorney argued that defendant's 2008 income tax return confirmed that "[h]e didn't pay because he didn't want to pay."

The court set forth its reasons for denying defendant's motion in a written decision attached to an order dated July 2, 2009. The court's findings and conclusions included the following:

After applying the principles as set forth under R. 4:50-1 and supporting case law . . . the Defendant's application for vacating the sanctions is denied. Defendant has failed to establish that an injustice exists as a result of the imposition of those sanctions. Defendant was in complete control of his own destiny and chose to apply a significant amount of money towards future tax payments, thereby avoiding the payment of the equitable distribution, and Defendant continued to be in direct violation of prior court orders obligating him to pay. . . . [I]t is clear that the Defendant chose not to make the payments, and sanctions are warranted. Defendant reluctantly paid the amounts herein, only when faced with the possibility of incarceration.

On appeal, defendant presents the following arguments:

POINT I THE TRIAL COURT'S DECISION TO ENFORCE THE SANCTIONS LEVIED AGAINST THE DEFENDANT WAS IN ERROR AS THE PUNITIVE NATURE OF THE SANCTIONS VIOLATED R. 1:10-3 AND THE CONTROLLING DECISIONAL LAW OF THIS STATE.

POINT II THE COURT'S CONCLUSION THAT THE DEFENDANT'S FAILURE TO COMPLY WAS WILLFUL WAS UNSUPPORTED BY THE EVIDENCE IN THE RECORD.

POINT III THE MOTION JUDGE PREJUDGED THIS MATTER WITHOUT A FULL HEARING.

POINT IV THE COURT ERRED IN DIRECTING THE DEFENDANT TO PRODUCE HIS PERSONAL FINANCIAL INFORMATION, INCLUDING HIS PERSONAL AND BUSINESS INCOME TAX RETURNS.

POINT V THE COURT ERRED BY FASHIONING A NEW PROPERTY SETTLEMENT AGREEMENT FOR THE PARTIES.

After considering the arguments in light of the record, the briefs, oral argument, and the applicable law, we conclude they are clearly without merit. R. 2:11-3(e)(1)(A) and (E). We add only the following comments.

The scope of our review is limited. "The general rule is that findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). We do not disturb the factual findings and conclusions of the trial court unless "'they are so manifestly unsupported by or inconsistent with the competent, relevant, and reasonably credible evidence as to offend the interests of justice.'" Id. at 412 (quoting Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974)). Moreover, "[b]ecause of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding." Id. at 413.

We have described the imposition of a monetary sanction as "an entirely proper tool to compel compliance with a court order." Franklin Twp. v. Quakertown, 274 N.J. Super. 47, 55 (App. Div. 1994). Nevertheless, we have also recognized that monetary sanctions "must be fashioned in an amount sufficient to sting and force compliance, but must not be so excessive as to constitute ruinous punishment." East Brunswick Bd. of Educ. v. East Brunswick Educ. Ass'n, 235 N.J. Super. 417, 422 (App. Div. 1989); see also Ridley v. Dennison, 298 N.J. Super. 373, 381 (App. Div. 1997) ("Relief under R. 1:10-3, whether it be the imposition of incarceration or a sanction, is not for the purpose of punishment, but as a coercive measure to facilitate the enforcement of the court order.").

In the present matter, based on defendant's "pattern of ignoring prior court orders," the trial court concluded that the per-diem sanctions were properly imposed for the purpose of compelling compliance with the terms of the parties' PSA. Moreover, in light of defendant's overall financial circumstances, including his decision not to receive a substantial income tax refund, the court found that the sanctions were neither unreasonable nor excessive. We conclude from our examination of the record that the trial court's determinations are amply supported by sufficient credible evidence. Accordingly, the order denying defendant's motion to vacate the sanctions is affirmed substantially for the reasons stated by Judge Peter Melchionne in his written decision on July 2, 2009.

Affirmed.


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