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William E. Rains v. Carole A. Rains

September 15, 2011


On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-583-06.

Per curiam.


Argued March 1, 2011

Before Judges Parrillo and Espinosa.

Defendant Carole A. Rains appeals from an order that terminated the obligations of plaintiff William E. Rains to pay alimony and maintain life insurance. We reverse and remand.

Plaintiff and defendant were married in 1984 and had two children. At the time of the subject motions, plaintiff had worked for AT&T for twenty-seven years and was the Director of Finance; defendant had a Bachelor of Science degree in communications but was unemployed.

The parties participated in mediation and were represented by counsel throughout the process. Among the issues raised was defendant's expected inheritance. By letter dated May 4, 2006, plaintiff's counsel set forth her client's positions following the Early Settlement Panel and stated:

[M]y client advises that Mrs. Rains has the potential of receiving a substantial inheritance. Upon receipt of the inheritance, it is expected that my client will be provided a statement of same as it may impact on the quantum of alimony. Defendant's counsel responded,

With regard to your issue about any inheritance my client might receive, while she does not anticipate any significant inheritance, I am sure that you are aware that an inheritance can be utilized for purposes of adjusting her alimony only to the extent that we could impute income to her.

The parties reached an agreement, memorialized in a property settlement agreement (PSA), and were divorced in July 2006. For purposes of this opinion, it is unnecessary to discuss provisions other than alimony and plaintiff's obligation to maintain life insurance. Plaintiff agreed to pay defendant alimony of $50,000 for the period from June 1, 2006, through May 31, 2007. Thereafter, defendant would receive permanent alimony of $40,000 per year. Beginning in 2007, defendant would also receive 50% of plaintiff's annual bonus from AT&T, with a cap of $10,000 net after taxes. The PSA required plaintiff to maintain a life insurance policy with defendant named as beneficiary as long as plaintiff had an alimony obligation. Plaintiff was required to maintain $500,000 worth of life insurance in years one through five; $400,000 in years six through ten; $300,000 in years eleven through fifteen; and $150,000 in years sixteen through eighteen.

In 2007, defendant's parents passed away within months of each other. In December 2009, plaintiff filed a motion seeking termination or modification of his alimony and life insurance obligations based on defendant's inheritance. Sam Stein, Esq., a tax attorney retained by plaintiff, calculated the inheritance to be $1,455,451.97. Plaintiff requested an employment evaluation of defendant or the imputation of $45,000 in income.

Defendant opposed plaintiff's motion and filed a cross-motion to direct plaintiff to continue to pay alimony and maintain life insurance as required by the PSA.*fn1 Each motion included a current case information statement (CIS). Both parties requested an award of counsel fees in their motions.

The parties presented different pictures of their marital lifestyle. In his certification, plaintiff stated the parties lived "a conservative marital life style," taking annual one-week vacations at Ocean City, Maryland, rather than extravagant vacations, and buying the majority of family clothing at Kohl's. In the CIS he submitted in conjunction with his motion, plaintiff claimed the monthly marital expenses were $6,300 per month. In contrast, defendant reported $9,558 in total monthly marital lifestyle expenses. While defendant's CIS almost invariably gave higher expense numbers for each category, the differences for certain expenses most closely associated with lifestyle were notable. Defendant reported a monthly vacation expense of $535, more than twice the $170 listed by plaintiff. She listed monthly expenses of $375 in gifts and $230 in contributions, while plaintiff listed only $50 per month for gifts and a monthly expense of $150 for contributions.

Defendant reported a monthly marital clothing expense that was double that reported by plaintiff. Her expense for entertainment was 50% higher than plaintiff's. Finally, there were sharp contrasts for the expenses reported for domestic help and savings. Defendant claimed $184 for domestic help while plaintiff only listed $15 per month. ...

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