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Nancy Isaacson v. George R. Hirsch

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


May 6, 2011

NANCY ISAACSON, PLAINTIFF-APPELLANT,
v.
GEORGE R. HIRSCH, DEFENDANT-RESPONDENT.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-2210-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 7, 2011

Before Judges Grall and LeWinn.

Plaintiff Nancy Isaacson and defendant George R. Hirsch were married in a Jewish religious ceremony on September 9, 1998. There were no children born of this marriage. After about nine years and seven months of marriage, plaintiff filed a complaint for divorce. Following a bench trial on the parties' respective claims under their pre-marital agreement, a judgment of divorce was entered in December 2009. The judge's determination of the amount plaintiff owed defendant for his interest in the marital residence was finalized in orders entered on March 12 and July 1, 2010.

Plaintiff appeals from those orders memorializing the judge's interpretation of the parties' pre-marital agreement, fixing the amount owed defendant and denying her request for counsel fees. Defendant filed but subsequently withdrew a notice of cross-appeal. Because the judge properly interpreted and applied the parties' pre-marital agreement and her factual findings relevant to the division of jointly-held property and counsel fees are supported by the record, we affirm those determinations. We remand for the limited purpose of having the judge address a request for counsel fees that was reserved for decision in an order of June 10, 2009, but never addressed by the judge.

The facts pertinent to the division of property are essentially undisputed. This marriage was the second for both parties. When they decided to marry, plaintiff had one child and defendant had two; both parties were practicing law as partners in separate law firms; both parties owned real estate, plaintiff one home and defendant one home in New Jersey and one in Maine; and plaintiff's residence was subject to a first and second mortgage.

The parties executed a pre-marital agreement. Pertinent here, the preamble to the pre-marital agreement states:

[T]he parties desire to fix, limit, and determine by this agreement, insofar as is permissible by law, the interests, rights, and claims which will accrue to each of them in the property and estate of the other by reason of their marriage to each other, and to accept the provisions of this agreement in lieu, and in full discharge, settlement, and satisfaction, of any and all interests, rights, and claims which otherwise each might or could have, under the law, in and to the property and estate of the other, both before and after the other's death[.]

Article 1 is entitled "pre-marital property." Section 1.1 defines "separate property" broadly to include all property owned by that party (to the exclusion of the other) of every kind and nature whatsoever, owned at the time of the contemplated marriage . . . , including, but not limited to: any property into which same may be converted; any income from any such property; and any increments, accretions, or increases in value at any time of such property, whether due to market conditions or the services, skills, contributions or efforts of either party.

Section 1.1. goes on to include as separate property not only assets listed by the parties on schedules appended to the agreement but also any interest either party "may have or acquire" in any "IRA, 401(k) or other retirement benefit, right or plan."

Article 2 addresses property acquired in separate name and jointly during the marriage. Pursuant to section 2.2A, "[a]ny property acquired during the marriage by either party and taken in separate name shall be deemed to be the acquiring party's separately held property, free from any claim by the other party." Section 2.2, like section 1.1, preserves as separate property "any interest either party may have or acquire in any IRA, 401(k) or other retirement benefit, right or plan." In contrast, Section 2.2B, which addresses property acquired in "joint name," provides: "[a]ny property acquired during the marriage by either party and taken in joint name shall be deemed to be the parties' jointly held property, regardless of the precise type of joint ownership acquired."

Section 1.2 states the parties' agreement regarding their pre-marital homes and marital residence. They agreed to sell their separate homes in New Jersey and purchase one residence to be owned by them jointly. With respect to the purchase of a marital residence, section 1.2 provides for them to contribute "in such amounts as they shall mutually agree, except that neither party shall require the other to contribute more than $20,000." They further agreed that "[c]arrying charges of the new home and the parties' living expenses shall be shared by the parties in such proportions as shall be appropriate according to their circumstances." Defendant agreed to "increase his share . . . appropriately" if he were to sell his house in Maine.

Article 3 addresses debts and the parties' respective individual debt and support obligations. It requires each to pay his or her own out of separate assets.

Article 4 addresses financial arrangements during the marriage. Paragraph 4.1 provides:

4.1 No Dedication of Income Except as Set Forth Herein. Except as stated herein (and particularly in paragraph 1.2 above), the parties specifically make no delineation as to the precise use of their post-marital income and joint marital property (defined by paragraph 2.2B above) other than to state their general intention that such post-marital income and joint property shall be used for the purpose of maintaining their agreed-upon lifestyle and for the accumulation of such assets, as the parties (or either of the parties) may wish to acquire.

Article 5 addresses financial issues that may arise upon termination of the marriage. Paragraph 5.2 includes mutual waivers of support. Most pertinent here, paragraph 5.3 addresses the division of property as follows:

(a) Each party's separate property (see paragraph 1.1, 2.1, 2.2A, and 2.3 above) shall remain that party's separate property, free from any claim by the other party; and

(b) Such property as may be herein denominated joint property (see paragraphs

1.2, 1.3, and 2.2B; see also paragraph 2.1) shall be equally divided between the parties and so distributed. . . . Any net proceeds of sale [of the joint residence] . . . shall be distributed first to each party to reimburse that party for the amount of that party's contribution to the initial acquisition cost, and then divided equally between the parties regardless of the portion of their contributions to the property's carrying charges.

Days before their marriage, the parties also entered into a "ketubah." Plaintiff presented testimony from a rabbi who explained that a ketubah is a religious marriage contract. It obligates a husband to work for, protect and watch over a wife and "pay her first" if they divorce, which meant give her money to "get her on her feet." Plaintiff contends that the ketubah supports her interpretation of the agreement, while defendant argues that it supports his.

In August 1998, the parties took out a $39,000 bridge loan and purchased a marital residence. Defendant sold his New Jersey home and contributed $19,000, and when plaintiff subsequently sold her home, she paid the balance of the bridge loan by using $24,332.80 set aside at closing to cover her second mortgage. Plaintiff was able to then pay her second mortgage through a $25,000 loan from her parents, which she agreed to repay with interest at a rate of $180 per month.

During the marriage, the parties had separate checking accounts and a joint account. Defendant's earnings were higher than plaintiff's. Prior to 2003, defendant's earnings were between about $250,000 to $350,000 per year and plaintiff's were between about $100,000 to $113,000 per year. From 2003 to 2007, defendant's earnings increased to between about $350,000 and $450,000 but plaintiff's remained relatively constant.*fn1

During the early years of the marriage, defendant paid approximately two-thirds of the living expenses, which included a payment that covered principal and interest on the mortgage plus property taxes. Plaintiff paid about one-third. Defendant did not make the mortgage payment from the joint account. According to plaintiff, "from time to time," she had her draw from her firm deposited directly into the joint account. Some years the parties filed separate income tax returns and other years they filed jointly. That decision was made based on the tax consequences.

In 2000, defendant sold his home in Maine. Also in 2000, and every year thereafter, the property taxes on the marital residence increased - from $9917 in 2000 to $20,927 in 2006. As noted above, the taxes were included in the mortgage payment and defendant continued to make that payment. Starting in 2004, he also contributed $800 more per month toward household expenses than he had in the earlier years of the marriage.

During the marriage, defendant paid his children's expenses beyond the obligation as stated in his first judgment of divorce - $324,000 for college and $248,000 for other expenses. He did this without consulting plaintiff. In addition, he deposited about $23,500 in investment accounts, but, according to plaintiff, he told her his investment account held only a "couple of thousand dollars." Defendant also paid pre-marital debt, about $126,000, from income he earned during the marriage.

After the divorce complaint was filed, plaintiff purchased defendant's interest in the residence. At the time of the divorce, its value was $715,000 and there was a $343,681 mortgage and a $41,254 home equity loan encumbering it.

The judge interpreted the parties' pre-marital agreement as a whole and in light of its plain terms and the manner in which they conducted their financial affairs during the marriage. She concluded that paragraph 4.1 was not, as plaintiff argued, an agreement to pool earnings during the marriage and use them solely for marital expenses and acquisition of marital assets. Consequently, the judge denied plaintiff's demand for reimbursement of one-half of the money defendant used to pay his children's expenses and pre-marital debt and fund his investment account. The judge did not expressly address plaintiff's claim that defendant breached the pre-marital agreement by delaying until 2004 performance of his obligation to contribute more to marital expenses and assets after the sale of his Maine residence in 2000. Nor did she expressly address defendant's response to that claim, which was that he satisfied that obligation by paying the undisputedly increased property taxes.

With respect to division of the equity in the marital residence, the only asset held in joint names, the judge divided it as provided in paragraph 5.3(b) of their pre-marital agreement. The balances due on the mortgage and home equity loan were deducted from its value, and the contributions defendant made to the down payment and plaintiff made to pay-off the bridge loan were deducted and credited to them. The remainder was equally divided.

On appeal, plaintiff contends that the judge misinterpreted the pre-marital agreement. She does not argue that this pre-marital agreement is unenforceable; instead, she relies on the terms of the agreement.

Our review of the trial court's interpretation of an agreement is de novo. Fastenberg v. Prudential Ins. Co., 309 N.J. Super. 415, 420 (App. Div. 1998). In interpreting the agreements, we give their terms their "usual and natural meaning," Middlesex County Sewerage Authority v. Borough of Middlesex, 74 N.J. Super. 591, 604 (Law Div. 1962), aff'd o.b., 79 N.J. Super. 24 (App. Div.), certif. denied, 40 N.J. 501 (1963), read the documents as a whole and avoid interpretations that render terms or provisions meaningless. Cumberland County Improvement Auth. v. GSP Recycling Co., 358 N.J. Super. 484, 496 (App. Div.), certif. denied, 177 N.J. 222 (2003). To the extent that the documents are ambiguous, the parties' practical interpretation - as reflected by their actions - is a "consideration of great weight." Anthony L. Petters Diner, Inc. v. Stellakis, 202 N.J. Super. 11, 20-21 (App. Div. 1985) (internal quotations omitted).

We fully agree with the trial court's interpretation of this agreement. Paragraph 4.1 cannot be read, as plaintiff suggests, to regulate spending of earned income during the marriage beyond maintaining an agreed-upon lifestyle. Paragraph 4.1, set forth in full above, is repeated here for ease of reference.

4.1 No Dedication of Income Except as Set Forth Herein. Except as stated herein (and particularly in paragraph 1.2 above), the parties specifically make no delineation as to the precise use of their post-marital income and joint marital property (defined by paragraph 2.2B above) other than to state their general intention that such post- marital income and joint property shall be used for the purpose of maintaining their agreed-upon lifestyle and for the accumulation of such assets, as the parties (or either of the parties) may wish to acquire.

The thrust of this paragraph is to permit, not restrict, individual expenditures. The references to paragraph 1.2, which addresses only sharing of carrying charges on their home and living expenses, and paragraph 2.2B, which addresses only property held jointly, reinforce that interpretation. Where accumulation of assets is at issue, paragraph 4.1 leaves the question of separate or joint holding to the individual absent agreement by stating that their "general intention" is "the accumulation of such assets, as the parties (or either of the parties) may wish to acquire." (emphasis added). Thus, the expression of "general intention" upon which plaintiff relies obligates contribution to the "agreed marital" lifestyle but leaves the accumulation of assets to the discretion of each party and thereby leaves each party considerable discretion to spend and save as that party sees fit.

Other provisions of the pre-marital agreement support the foregoing interpretation of paragraph 4.1 and further undercut plaintiff's claim that defendant's expenditures on his children, pre-marital debt and investment were improper. Paragraph 3.1 makes each party responsible for his or her pre-marital debt, but it does not say that the party may not pay the debt out of his or her current income. Paragraphs 3.2, 3.3 and 3.4 have the same import with respect to child support, obligations to former spouses and mortgages on their separately held homes. Moreover, paragraph 2.2A provides that "[a]ny property acquired during the marriage by either party and taken in separate name shall be deemed to be the acquiring party's separately held property, free from any claim by the other party," and that rule applies to increases in value attributable to the contributions of the party.

Finally, we agree with the trial judge's determination that the evidence about how the parties arranged their finances during the marriage clarifies any ambiguity in paragraph 4.1 about the breadth of each party's discretion regarding use of his or her income. That finding is adequately supported by the record and unassailable.

We reject plaintiff's claim that the trial judge gave too little weight to the parties' ketubah. Setting aside questions about the propriety of a court enforcing the civil aspects of this religious document, the evidence presented as to the terms of the ketubah and its meaning sheds no light on the issues that are in dispute here. See Mayer-Kolker v. Kolker, 359 N.J. Super. 98, 100-03 (App. Div.), certif. denied, 177 N.J. 495 (2003); Aflalo v. Aflalo, 295 N.J. Super. 522, 532-44 (Ch. Div. 1996).

For the foregoing reasons, we affirm the judge's determination that plaintiff was not entitled to any reimbursement for funds defendant spent or saved out of his earned income during the course of this marriage.

Plaintiff also contends that defendant breached the agreement by failing to increase his contribution to living expenses after he sold his home in Maine. As noted above, the judge did not specifically address the pertinent evidence, but there is undisputed evidence that refutes plaintiff's claim. Defendant alone shouldered the burden of a contemporaneous increase in property taxes on the marital residence and after four years also increased his cash contribution to living expenses. Thus, the record supports the judge's implicit rejection of the breach plaintiff claimed.

We have considered plaintiff's objection to the judge's division of equity in the marital residence and determined that the judge's order is fully consistent with the parties' agreement. Plaintiff received what she paid on the bridge loan in the form of equity in the home, which is what paragraph 5.3(b) requires. Her argument to the contrary lacks sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Although we find no error or inadequacy in the judge's factual findings or legal conclusion warranting intervention by this court with respect to jointly-held property and income earned during the marriage or counsel fees related to the trial, we must remand for a determination relevant to counsel fees. While we affirm the denial of plaintiff's request for fees incurred at trial substantially for the reasons stated by the judge in her December 22, 2009 written decision as noted at the outset of this opinion, on June 10, 2009 the judge reserved plaintiff's request for fees on a motion. The judge did not, however, address that request in her decision of December 22, 2009. Accordingly, we remand to permit the judge to decide the issue.

Affirmed in part and remanded for the limited purpose of addressing the question of counsel fees reserved in the June 10, 2009 order. We do not retain jurisdiction.


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