January 3, 2011
DEBORAH J. BROWN, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
FRANK J. BROWN, SR., DEFENDANT-APPELLANT/CROSS-RESPONDENT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, Docket No. FM-03-56-01.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted November 16, 2010 - Decided
Before Judges Wefing and Koblitz.
In this post-judgment matrimonial litigation, defendant Frank J. Brown, Sr. appeals the imposition of sanctions payable to plaintiff. Plaintiff Deborah J. Brown cross-appeals seeking increased counsel fees. After review of the contentions advanced by both parties in light of the relevant facts and law, we reverse both the trial court's imposition of sanctions and award of only partial counsel fees.
The parties were married on June 18, 1988. A judgment of divorce (JOD) was entered on February 11, 2002. Paragraph 2 of the JOD provides:
[Defendant] also has a Pension Plan with the State of New Jersey. This Pension plan shall be subject to a QDRO under which the Plaintiff will receive 50% of the cove[r]ture value. Defendant's attorney shall prepare the QDRO. Further, the Defendant shall take Option 4 as an irrevocable option in regard to the payout of the pension, guaranteeing Plaintiff's benefit in case of Defendant's death.
The QDRO referenced a qualified domestic relations order to provide plaintiff with fifty percent of the coverture fraction in which the numerator is the number of years the parties were married during which defendant was a member of the retirement system, and the denominator is the total years of service credits he receives when he retires. Option 4 reduces the lifetime benefits to the retiree, but allows him to name one or more beneficiaries to receive a specified lifetime monthly retirement allowance.
On January 24, 2003, the court entered an order requiring defendant to obtain a $75,000 term life insurance policy naming plaintiff as beneficiary, in consideration of the fact that defendant may not execute option 4 until his retirement, and the pension benefits payable to plaintiff were estimated to be approximately $77,000. Defendant was required to provide proof of such policy within forty-five days and annually provide proof that the policy was still in existence with plaintiff as the named beneficiary. The order also directed defendant to maintain the policy with plaintiff named as beneficiary until he provided proof of compliance with paragraph 2 of the JOD.
Defendant did not obtain life insurance as directed by the court, and he submitted a retirement application on September 8, 2008, seeking the maximum pension benefit to him, not selecting option 4 as required by the JOD. Defendant acknowledged to the court he knew he was responsible for selecting option 4 but did not admit he did not choose it. His deceit was only revealed later after the court issued an order, pursuant to plaintiff's enforcement motion, on February 27, 2009, which allowed plaintiff to obtain a copy of defendant's retirement application. Defendant subsequently withdrew this retirement application. The February 2009 court order called for defendant to obtain the required insurance within thirty days and imposed a daily sanction payable to plaintiff of $250 per day for every day of delay beyond the thirty days.
Defendant did not secure the insurance until April 24, 2009. Plaintiff filed an application to enforce the February 2009, order, seeking the previously ordered sanction of $8000 for the thirty-two day delay and counsel fees for both enforcement motions in the amount of $3556. She certified that she worked as a real estate agent earning under $15,000 per year and claimed defendant received over $100,000 in salary and military pension. Defendant indicated that he would be retiring on January 1, 2010,*fn1 and that plaintiff would receive $743 per month from his pension as her benefit. The trial court in its order of October 9, 2009, awarded $8000 in sanctions ($250 per day for thirty-two days) and $1000 in counsel fees to plaintiff without holding a hearing or making any specific factual findings beyond noting that defendant had not complied with the court's orders.
Defendant argues on appeal that the court erred in imposing sanctions for the thirty-two day delay in obtaining life insurance without specifically finding that defendant was in willful noncompliance with the February 2009, order and that the $250 imposed was an arbitrary amount unconnected to any specific finding. He also argues that plaintiff was not harmed by the delay and should not profit under Rule 1:10-3 or Rule 5:7-5. We agree with these arguments.
Rule 5:7-5 addresses enforcement of support or health insurance provisions and is not directly applicable to enforcement of a life insurance provision. Rule 5:3-7 addresses additional remedies on violation of orders relating to parenting time, alimony, or child support. Neither Rule specifically applies to a failure to provide life insurance. Rule 5:3-7, however, does permit the imposition of monetary sanctions for failure to obey a parenting time or support order. Monetary sanctions also may be imposed for failure to comply with a life insurance provision, especially in a situation such as presented here, where the life insurance is to ensure a pension right. The purpose of Rule 5:3-7 "is to illustrate the enforcement provisions available to the trial court in addition to those prescribed by [Rule] 1:10-3." Pressler & Verniero, Current N.J. Court Rules, comment on R. 5:3-7 (2011).
Pursuant to Rule 1:10-3, a party may apply to the court for relief from a litigant's contempt. Rule 1:10-3 allows a court to "make an allowance for counsel fees to be paid by any party to the action to a party accorded relief under this rule."
A judge has a duty to make findings of fact and conclusions of law "on every motion decided by written orders that are appealable as of right." R. 1:7-4(a). Failure to perform this duty "'constitutes a disservice to the litigants, the attorneys and the appellate court.'" Curtis v. Finneran, 83 N.J. 563, 569-70 (1980) (quoting Kenwood Assocs. v. Bd. of Adjustment of Englewood, 141 N.J. Super. 1, 4 (App. Div. 1976)). Moreover, "naked conclusions do not satisfy the purpose of [Rule] 1:7-4." Curtis, supra, 83 N.J. at 570. "Rather, the trial court must state clearly its factual findings and correlate them with the relevant legal conclusions." Ibid. Moreover, "[t]he absence of adequate findings . . . necessitates a reversal." Heinl v. Heinl, 287 N.J. Super. 337, 347 (App. Div. 1996).
"Relief under Rule 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." Ridley v. Dennison, 298 N.J. Super. 373, 381 (App. Div. 1997). "[A] monetary sanction imposed pursuant to [Rule] 1:10-3 is a proper tool to compel compliance with a court order." Ibid. Monetary sanctions under Rule 1:10-3 must be "related to the litigant's damages" and not punitive. D'Atria v. D'Atria, 242 N.J. Super. 392, 408 (Ch. Div. 1990). "The sanction, while 'in an amount sufficient to sting and force compliance . . . must not be so excessive as to constitute ruinous punishment.'" Franklin Twp. Bd. of Educ. v. Quakertown Educ. Ass'n, 274 N.J. Super. 47, 56 (App. Div. 1997) (quoting E. Brunswick Bd. of Educ. v. E. Brunswick Educ. Ass'n., 235 N.J. Super. 417, 422 (App. Div. 1989)). When a court imposes sanctions that are sufficiently punitive, a hearing is required pursuant to Rule 1:10-2. Additionally, before imposing a sanction, the court "must consider the offending party's ability to pay and the sanction's impact on that party in light of its income, status and objectives, as well as the sanction's impact on innocent third parties." E. Brunswick Bd. of Educ., supra, 235 N.J. Super. at 422-23.
Here, the trial court found only that defendant failed to comply with prior orders. When defendant initially submitted his retirement application, he engaged in bad faith by purposefully failing to choose option 4. Had plaintiff not actively sought verification of defendant's pension choice and obtained proof through the court's intervention of his violation of his obligation to select option 4, defendant's choice not to name a beneficiary would have been final once he began receiving his pension.
By not complying with his obligation to obtain $75,000 in life insurance for six years, defendant saved a considerable amount of money from 2003 until 2009. In 2009, defense counsel indicated that this insurance cost defendant more than $4000 per year once he finally obtained it.
Given the clarity of the issues and the inability of the parties to afford continued litigation, we exercise original jurisdiction in this matter. See R. 2:10-5; Auletta v. Bergen Ctr., 338 N.J. Super. 464, 474-76 (App. Div.), certif. denied, 169 N.J. 611 (2001); see also, e.g., New Jerseyans for Death Penalty Moratorium v. D.O.C., 370 N.J. Super. 11, 18 (App. Div. 2004), aff'd as modified, 185 N.J. 137 (2005) (where we exercised our original jurisdiction in awarding counsel fees and determined the "reasonable hours" counsel spent on his supplemental brief).
We are constrained to find that the imposition of $8000 in sanctions awarded to plaintiff without a hearing or any specific fact finding was inappropriate. Due to her vigilance, plaintiff was not ultimately financially disadvantaged by defendant's recalcitrance other than by the payment of counsel fees. No coercive purpose would now be served by the imposition of sanctions against defendant because he has complied by retiring after selecting option 4 of his pension.
The trial court granted less than one-third of the counsel fees requested. Although mentioning its obligation to review the factors in Rules 4:42-9 and 5:3-5, and Williams v. Williams, 59 N.J. 229, 233 (1971), the court did not consider any factor other than defendant's noncompliance when assessing counsel fees. Plaintiff's counsel fees should be completely paid by defendant due to his bad faith, which caused this enforcement litigation. We have reviewed the counsel fee application submitted by plaintiff to the trial court. After considering counsel's 15.7 hours of work and hourly rate of $205, we find it to be entirely reasonable. The counsel fee award should be modified to reflect the entire $3556 fee requested. Defendant's behavior in disobeying the JOD and two subsequent court orders was extremely unfortunate and led to extensive litigation.
Reversed and remanded for the entry of an order consistent with this decision.