August 8, 2011
MICHELE R. MEYERS, PLAINTIFF-RESPONDENT,
ANDREW H. MEYERS, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-539-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 16, 2011
Before Judges A.A. Rodriguez, Grall and C.L. Miniman.
Defendant Andrew Meyers has filed a notice of appeal from two post-judgment orders entered in a matrimonial action commenced by his former wife, plaintiff Michele Meyers. The orders were entered on March 11, 2010 and July 13, 2010, and the notice of appeal was filed on July 21, 2010. Although the appeal from the March 11, 2010 might appear to be untimely, it is not. The court's decision on that order authorized defendant to supplement his filings on the initial motion; defendant did so and the order of July 13, 2010 is the final order on that motion. As a result, the March 11 order is an interlocutory order which may be reviewed together with the final July 13 order.
The July 13, 2010 order denies defendant's application to disburse funds held in escrow pursuant to the terms of an amended final judgment of divorce entered on December 1, 2009. We affirm that order because defendant has presented no argument demonstrating that the trial court abused its discretion by continuing this provision of the judgment, which was fashioned to effectuate the court's distribution of debt incurred prior to the entry of judgment.
To provide context for our discussion of the issue raised in the appeal from the July 13 order, we have drawn the pertinent background facts from the trial court's written decision issued after the bench trial on equitable distribution and spousal support. The parties were married in September 1968 and have three children who are all emancipated. They separated in August 2005. When the judgment of divorce was entered, plaintiff was about sixty-two years old and defendant was sixty-three. Between 1991 and 2004, defendant's earnings fluctuated but averaged about $140,000 per year. Although plaintiff was not in the work force prior to 1990, she had acquired a college degree and employment as a teacher. By 2009 her annual salary was about $84,000. The parties had acquired two homes - a marital residence in New Jersey and a vacation home in New York State - a 401K, a 403B account, pension benefits and a retirement account, and IRAs. In 2007, defendant withdrew the entire amount in his 401K, $335,378.27, and incurred medical expenses, fines and penalties related to multiple DWI charges in New York and New Jersey. As of November 2009, he had not filed an income tax return since 2004.
Prior to entry of judgment, the marital residence was sold and the proceeds, except for $50,000 distributed between the parties equally to fund their litigation costs and $11,989.19 to cover defendant's debts, were in escrow. The parties' vacation home was listed for sale, and they anticipated proceeds between $325,000 and $450,000.
The trial court made these following determinations relevant to equitable distribution. The parties were to share the property subject to equitable distribution equally, subject to specific allocations of debt. Pertinent here, the court made defendant responsible for "all DMV charges as a result of his DWI charges"; all income tax, interest and penalties due as a result of his actions in liquidating his retirement accounts and all income tax, interest and penalties for income he earned after December 31, 2004; all specified creditor debts; fifty percent of specified costs plaintiff incurred in connection with the marital residence; and $23,000 he owed plaintiff on a promissory note. In addition, the court determined that it was appropriate to establish an escrow account in the amount of defendant's known debts plus a ten-percent reserve and forty percent of defendant's income in the years defendant did not pay taxes, a rate the court deemed appropriate given the tax and penalty rates. Paragraph 2(F) of the amended final judgment states that obligation, and paragraph 2(H) provides for defendant's attorney to hold that escrow account pending disbursement pursuant to the judgment.
On March 11, 2010, the trial court entered an order denying defendant's motion to delete from the amended final judgment "[t]he requirement that any sums currently in the trust account of [defendant's attorneys] be held for the purpose of payment of federal and/or state income taxes." In the written decision accompanying the order, the court indicated that its review of IRS regulations disclosed, contrary to the opinion of defendant's accountant, fraud exceptions under which the government could feasibly pursue recovery from plaintiff. On that basis, the court reasoned that the escrow could be adjusted when defendant filed returns for all of the relevant years and taxes, interest and penalties were fixed.
Although the order does not so provide, the court authorized defendant to supplement his submission on the motion. The court's written decision specifies circumstances under which it would "consider the release of at least a portion of the tax escrow," and it states that the court "will permit" defendant to submit the materials directly "without the need to file a new motion."
On May 27, 2010, through the certification of his accountant, defendant submitted his tax returns for some but not all of the years required; there was no return for 2008. A letter from the IRS indicated that as of April 27, 2010, defendant owed $113,689.78 for tax years 2006 and 2007, including interest and penalties through May 16, 2010. The letter also indicated that defendant owed $74,150 for tax year 2005, which did not include interest and penalties. The escrow account held $94,921.47 as of May 26, 2010.
The court's reasons for denying defendant's application to release the escrowed funds are set forth in a written decision dated July 1, 2010. The court found that defendant's tax liability exceeded the amount of his escrowed funds; defendant had not presented authority establishing that plaintiff could not be held accountable for defendant's tax debt; and defendant had not presented any information showing that his share of the proceeds from the sale of the parties' vacation home, which could be subject to a tax lien, would cover the debt. The court further determined that defendant's offer to indemnify plaintiff was illusory without proof that he had the ability to do so. Accordingly, the court denied the motion.
Because the judge's findings are supported by the record and demonstrate that his decision to retain the escrow until defendant's tax liability was resolved was not an arbitrary exercise of his discretion, we affirm. Cesare v. Cesare, 154 N.J. 394, 411-13 (1998). In effect, the court's order did no more than enforce the provision of the amended final judgment that required the establishment of the escrow. Defendant did not challenge or seek any relief from that judgment until the time for reconsideration and appeal had expired. Accordingly, defendant was bound by the judgment, and we cannot conclude that the court acted arbitrarily in enforcing it.
The arguments defendant offers to support his claim that the judge's order was arbitrary and without rational basis have insufficient merit to warrant discussion in a written opinion.
R. 2:11-3(e)(1)(E). He simply asserts, incorrectly, that the court improperly shifted the burden of proving a negative to him by requiring him to "prove" that the federal government could not seek to recover from plaintiff amounts that defendant owed as a result of his failure to pay taxes during their marriage. The question of tax liability under undisputed circumstances is a legal question, and defendant makes no legal argument tied to and supported by tax law in his opening brief. Moreover, in his reply brief, which does cite law relevant to federal tax liens, defendant raises an issue not raised in the trial court or his opening brief - the significance of New Jersey law on attorney's liens. This court does not generally consider issues raised for the first time on appeal or issues raised for the first time in a reply brief. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973); In re Bell Atl.-N.J., Inc., 342 N.J. Super. 439, 442-43 (App. Div. 2001). We see no reason to deviate from those customary principles here.
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