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Shashi K. Agarwal v. Poonam Agarwal

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


December 12, 2011

SHASHI K. AGARWAL, PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
v.
POONAM AGARWAL, DEFENDANT-RESPONDENT/ CROSS-APPELLANT.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-557-99.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Telephonically argued May 12, 2009 -Remanded June 15, 2009

Telephonically argued November 16, 2011

Before Judges A. A. Rodriguez, Payne and Newman.

On June 15, 2009, we issued our opinion in husband Shashi K. Agarwal's appeal and wife Poonam Agarwal's cross-appeal, affirming the provisions of the final judgment of divorce that "award[ed] fifty percent of equitable distribution to wife" and "determin[ed] that income may be imputed to wife." Agarwal v. Agarwal, No. A-0581-06 (App. Div. June 15, 2009) (slip op. at 1, 38-40).

We reversed the specific award of equitable distribution to wife, as well as the award of counsel fees and expert fees to her, remanding those matters so that the trial court "could consider the effect of husband's sizable federal and state tax liabilities on those issues." Id. at 38. We further reversed and remanded for reconsideration those provisions that concerned the valuation and distribution of husband's medical practice, the valuation of the Richard Road property, the equitable distribution of the Midland Bank account, and the imputation of $50,000 in annual income to wife. Id. at 39. Additionally, we reversed and remanded for initial consideration of the provision that imposed restraints on husband's ability to transfer his property following the divorce, and we also directed the trial court to determine the values of the Indus property and the Las Vegas condominium for equitable distribution purposes. Ibid.

We retained jurisdiction and "le[ft] it to the trial court's discretion to determine what issues may require additional or supplemental testimony and/or documents." Ibid.

On remand, the trial judge allowed the parties to file "written submissions" on the issues that were being reconsidered.

On January 19, 2011, the trial court issued an oral decision, addressing and deciding most of the remanded issues. That same day, the judge entered an order, directing that: (1) the award of equitable distribution and counsel/expert fees to wife would remain the same, (2) the value of husband's medical practice was fixed at $1,001,463.10, as of the trial date, (3) the value of the Richard Road property was fixed at $420,000,

(4) the Midland Bank account was not subject to equitable distribution, and (5) the values of the Indus property and the Las Vegas condominium were fixed at $67,000 and $50,000, respectively, with each party entitled to receive one-half of those amounts.

The order further provided that wife had thirty days to submit documentation in support of her claim that she was entitled to an additional $25,384.25 in equitable distribution from the proceeds of the sale of the Richard Road property. Ibid. The order also provided that husband had thirty days to submit documentation in support of his claim that the net proceeds from the sale of the Las Vegas condominium were less than the $50,000 valuation fixed by the judge and that wife was thus not entitled to $25,000 as her one-half share. Ibid.

On April 6, 2011, the judge entered a supplemental order, noting that wife had submitted "appropriate documentation" concerning the monies still owed her from the sale of the Richard Road property and that husband had not submitted any documents to show that he received less than $50,000 in net proceeds from the sale of the condominium. Accordingly, the order stated that wife was entitled to an additional $25,384.25 in equitable distribution for the Richard Road property, as well as $25,000 for her share in the condominium. Ibid.

The matter has now returned to this court and the parties have raised the following issues in their respective briefs: The husband asserts:

Point One

THE TRIAL COURT'S CONCLUSION THAT THE TAX DEBT DID NOT EXIST AT THE TIME OF TRIAL WAS WITHOUT ANY BASIS AND AN ABUSE OF DISCRETION.

Point Two

THE REVISED VALUATION OF PLAINTIFF'S MEDICAL PRACTICE IS WITHOUT BASIS IN THE RECORD. Point Three

THE BROAD RESTRAINTS ON ASSETS IS WITHOUT BASIS.

Point Four

THE AWARD OF COUNSEL AND EXPERT FEES WAS AND REMAINS PUNITIVE.

In the wife's cross-appeal, she argues that (1) the valuation amount on the husband's medical practice was too low,

(2) that the Midland bank account should have been equitably distributed, and (3) that the court mistakenly imputed $37,500 in annual income to her.

Our review of the record in light of the briefs submitted and argument thereon satisfies us that the trial court's decision on remand has provided the necessary clarification of its original rulings and its findings are supported by adequate, substantial and credible evidence. Pascale v. Pascale, 113 N.J. 20, 33 (1988). We therefore reject the contentions on both the direct and cross-appeals and affirm, except to correct an arithmetical error. We address the issues in the order raised on the direct and cross-appeals.

I.

Husband contends in Point One that the "trial court's conclusion that the tax debt did not exist at the time of trial was without any basis and an abuse of discretion."

In our opinion, we noted that, "by March 18, 2003, husband and wife owed $1,612,330.26 in unpaid federal income taxes, penalties, and interest, and about $355,326.60 in New Jersey income taxes, penalties, and costs." Agarwal, supra, slip op. at 18. We further observed that the trial court had not explicitly considered or commented upon these tax liabilities in making its equitable distribution determination or in determining husband's ability to pay wife's counsel/expert fees. Id. at 20, 27. Consequently, we reversed those provisions of the divorce judgment and remanded the matter so that the trial court could consider how the tax liabilities affected those issues. Id. at 38.

On remand, the trial court determined that husband failed to show that the claimed tax liabilities existed at the time of trial and that, in contrast, wife submitted proofs showing that "most of the alleged tax debt was either paid or abated by the

I.R.S well before the trial in this case began." Accordingly, the trial court explicitly refused to find that husband "had in fact any substantial tax liability either owing to the I.R.S. or to the state."

Additionally, the court stated that, even if a significant tax liability had existed, that circumstance would not have affected the court's determinations concerning equitable distribution and counsel fees because "the court found that the existence of any liability was due solely to the acts of the plaintiff [husband] by not filing his tax returns and paying taxes on his income." Thus, the court took that circumstance "into consideration and determined that any liability, taX liability that is, should come from the plaintiff's share of the equitable distribution since it was his non-action that resulted in the liability." The court was "not going to penalize the defendant [wife] for the plaintiff's wrongdoings."

Husband now asserts that the trial court's findings were in error because the evidence he submitted on remand showed that the combined federal and State tax liabilities exceeded $1,555,000 as of September 11, 1998, when he filed the divorce complaint. That evidence included an affidavit dated March 18, 2003, from an Internal Revenue Service ("IRS") employee showing tax liabilities, interest and penalties totaling $1,612,330.26 accrued by the parties over the tax years 1989 to 2001, as well as a "one page summary attached to the court-appointed forensic accountant's report" dated March 19, 2004, showing a New Jersey tax, interest, penalty, and costs liability of $355,326.60 for an unspecified tax period. This was the same evidence that was submitted at trial.

In contrast, on remand, wife submitted a certification and IRS documents dated September 9, 2010, showing that a large amount of the federal tax liabilities that husband claimed was owed had been abated or paid before the divorce complaint was filed. For instance, those documents showed that, in 2005, the IRS released federal tax liens in the amount of $312,906.65 for the 1989 tax year, and that much of that reduction was made effective as of 1993.

Husband disputes wife's proofs, arguing that they were improper because they "supplement[ed] the record with facts that transpired post-judgment," that is, after the final divorce judgment was entered on September 15, 2006. Husband does not specify what those "facts" were, but, presumably, they are the IRS records dated September 9, 2010, that had been procured by wife.

Husband's objection rings hollow because, while retaining jurisdiction, we expressly left it to the "trial court's discretion to determine what issues may require additional or supplemental testimony and/or documents." Agarwal, supra, slip op. at 39-40. We invited the type of documentation that husband now challenges.

Husband also contests the efforts of wife's counsel to interpret and explain the IRS documents, asserting that counsel was incompetent to offer such technical interpretations. Notwithstanding this objection, husband's counsel then offered her own interpretation of the IRS documents. Husband's counsel explained that husband "discharged most of the marital tax debt in bankruptcy he filed after the trial" and that the "retroactive adjustments to the tax records is [sic] merely the manner in which the IRS records the discharged liability." Husband's counsel was essentially arguing that, even though the IRS documents showed that the penalty and interest abatements and tax-lien releases became effective prior to the September 1998 filing date of the divorce complaint, those liabilities had not really been addressed and satisfied until well after the filing date. This explanation suggests manipulation by the husband to dispose of tax liability post litigation and is in accordance with the type of deception he engaged in throughout as noted by the trial court.

The problem is that there is no expert proof showing that the IRS dealt with abatements and releases in the manner that either husband's or wife's counsel argue it did. Instead, all that can be said is that the IRS documents submitted by wife on remand showed a markedly lower pre-divorce-complaint federal tax liability than that set out in the IRS affidavit relied upon by husband.

Husband acknowledges that, for purposes of equitable distribution, he "had the burden of establishing the marital debt that existed as of the filing of the [divorce] complaint." Monte v. Monte, 212 N.J. Super. 557, 566-67 (App. Div. 1986) (recognizing that the spouse seeking to divide responsibility for the payment of a marital debt has the burden of establishing that debt). Husband failed to carry his proof burden. He has not countered the proofs submitted by wife and relied upon by the trial court that showed the reduced federal tax liabilities. Instead, he continues to rely upon an IRS affidavit from March 2003, even though the information set out in that affidavit has been undermined by the later-dated proofs presented by wife.

The situation is no better insofar as the New Jersey tax liabilities are concerned. At trial, the only proof of such liabilities came from the report of court-appointed forensic accountant, which stated that, as of December 31, 2003, the parties owed $355,326.60 to New Jersey for unpaid state taxes. However, the report did not specify the years in which the state taxes were not paid. Instead, the report's only detailed document concerning state taxes noted that interest accrued on the unpaid taxes from "1/6/00 to 9/4/03."

On remand, husband submitted proof of three judgments that the New Jersey tax authorities had against him. These judgments do not indicate when the underlying taxes became delinquent. They do, however, show docket dates of January 6, 2000, and August 17 and November 30, 2006.

The point is that the evidence did not show that the New Jersey tax liability set out in the court-appointed accountant's report involved any taxes that were unpaid prior to the filing of the divorce complaint on September 11, 1998. Instead, the earliest date suggested by the evidence for New Jersey tax debt liability is January 6, 2000. Thus, for purposes of equitable distribution, husband failed to carry his proof burden of showing that the New Jersey tax debt of $355,326.60 existed when he filed the divorce complaint.

The record discloses that husband failed to carry his burden of showing that the parties' New Jersey tax debt negatively affected his ability to pay wife's counsel/expert fees. While husband's proofs of the parties' New Jersey tax liability included judgments for sizable amounts that were docketed as late as August and November 2006, other proofs showed that husband had entered into an agreement with the State at some point prior to December 31, 2003, to pay "$500 every two weeks" against the New Jersey tax debt. Husband's brief suggests that these payments have been ongoing.

The most recent record concerning the New Jersey tax debt is from November 2006. Husband presented no proof on remand of the amount of tax debt that is currently owed to New Jersey or the amount of such debt that existed at any point between November 30, 2006, and the present time. Thus, there is no proof of what amount has been paid to the State or, as evidently occurred with the federal tax debt, what amount may have been abated, released, or forgiven by the State.

While the trial court recognized in May 2006 that the husband's financial circumstances and ability to pay were important factors to consider in making a counsel/expert fee award, the trial court cannot be faulted when, on remand, husband failed to show the amount of any tax debt currently owed to New Jersey that might have some bearing on those factors. As with the purported federal tax liabilities, husband failed to carry his burden of showing that the parties owed a substantial tax debt to the State.

Husband also attacks the trial court's second basis for not applying the federal and state tax liabilities when making its equitable distribution and counsel fee determinations: the court's conclusion that husband is responsible for paying any tax debt because the existence of any federal or state tax liability was solely the result of his failure to file tax returns and pay taxes.

First, husband asserts that the trial judge's conclusion that it was husband's "habit throughout the marriage to not pay his taxes is unsubstantiated by the record." This assertion is undermined by the proofs showing that a sizable federal and state tax debt approaching almost $2,000,000 existed at one time. Husband's assertions also run counter to his position where he indicated that "for the period from 1986 to 1991 the parties did not file tax returns," and that he did "not pay Federal taxes in 1996-1998" and "underpaid" taxes in several other years. Husband's assertion that the trial judge drew the wrong conclusion concerning his conduct as a taxpayer is baseless.

Second, husband asserts that wife should share responsibility for paying the tax liabilities because she was aware of the mounting tax debts "since her brother was their accountant." This assertion is undercut by testimony from wife's brother, accountant Sanjay Grover, who testified that he never did personal income tax returns for husband and who remembered doing accounting work for husband's medical corporation in 1983 only. According to Grover, he quit doing husband's corporate taxes after 1983 because he had "[q]uite a bit of difficulty getting information out of him." Husband points to no other evidence in the record suggesting that Grover did extensive accounting work for him or the parties.

Lastly, husband states that this court's opinion noted that wife "was subject to tax levies and this resulted in her application for innocent spouse status." Agarwal, supra, slip op. at 19. Husband then asserts that "[t]here was no evidence to sustain this, and indeed nothing was presented as to Defendant's application for innocent spouse [status] or the disposition of that claim." By way of this assertion, husband appears to argue that, because wife was not deemed by the IRS to be an innocent spouse, the trial court erred in finding her not to be responsible, along with husband, for the tax debt.

Husband testified at trial that he had received two letters from the IRS, the first of which stated that "they denied her innocent spouse" status and the second of which stated that "they were granting her innocent spouse" status. Asked whether the IRS considered wife to be "an innocent spouse as far as the debt that you owe to the IRS" was concerned, husband replied that "[i]f that is a final decision, yes." For her part, wife testified at trial that there was no longer an IRS levy against her bank accounts because "[a]bout a year ago they - they considered me as a - released me as a innocent spouse."

Accordingly, contrary to husband's assertion, there was evidence showing that wife had been subject to IRS levies and had been granted innocent spouse status by the IRS insofar as the parties' federal tax debt was concerned. In turn, that evidence supports the trial court's conclusion that husband alone was responsible for incurring the tax debt and that he alone should be responsible for paying it.

The result is that husband's contention that there was no basis for the "trial court's conclusion that the tax debt did not exist at the time of trial" is untenable. The trial court did not conclude that the federal and state tax debt was nonexistent. Rather, the court concluded that the evidence presented both at trial and on remand failed to show that there was "in fact any substantial tax liability either owing to the

I.R.S. or to the state."

The court's conclusion was sound and was supported by substantial credible evidence in the record. Pascale, supra, 113 N.J. at 33. The evidence before the trial court did not establish that any substantial federal or State tax debts existed on remand, at trial, or when the divorce complaint was filed.

Husband contends in Point Two that the trial court's revised valuation of his medical practice is not supported by evidence in the record.

In determining the value of husband's medical practice, the trial court had three expert reports at its disposal. The first report, dated March 19, 2004, was submitted by the court-appointed accounting expert, Rosenfarb Winters, LLC. Without explaining why it did not use the date on which the divorce complaint was filed as a valuation date,*fn1 the Rosenfarb report stated that the practice had no value (zero dollars) as of the end of 2002. The trial court implicitly rejected that valuation, finding that the report was "not useful to the court" because it was "lacking in detail and information."

The second report, dated February 5, 2005, was submitted by husband's accounting expert, DiGabriele, McNulty & Company, LLC. It set the value of husband's medical practice at $666,960 as of December 31, 2004, consisting of $263,066 in tangible net assets and $403,894 in goodwill. The report did not explain why it did not use the filing date of the divorce complaint as the valuation date.

The DiGabriele firm had issued two prior valuations of the practice. The first valuation set the value of the practice at zero dollars, while the second valuation, dated November 15, 2004, set the value at $96,050. The trial court gave "very little weight" to the DiGabriele firm's final valuation, finding that the amount "fluctuated" over a short period of time during the litigation from zero to $666,960 because husband failed to provide the accounting firm with the information necessary to provide a realistic valuation.

The third report, dated December 10, 2004, was submitted by wife's accounting expert, Wexler & Wexler, CPAs, P.A. It set the value of husband's practice at approximately $2,500,000 as of September 30, 2004, consisting of $728,414 in tangible assets and $1,817,794 in goodwill. The report did not explain why the valuation date was not the filing date of the divorce complaint.

In its oral decision of May 2, 2006, the trial court set the value of husband's medical practice at $1,000,000, consisting of $728,414 in tangible assets, with the remainder being goodwill. While the court obviously accepted and utilized Wexler's valuation of the practice's tangible assets ($728,414), it did not explicitly state that it valued the practice as of Wexler's valuation date of September 30, 2004. Nor did it expressly state why it was not valuing the practice as of the filing date of the divorce complaint. Nor did it explain its calculation of the practice's goodwill component, except to say that the amount of goodwill had been reduced by the roughly $1,500,000 that husband would no longer receive annually because of an ongoing Medicare fraud investigation.

We reversed the final judgment insofar as it concerned valuation of the medical practice and remanded for further consideration and clarification by the trial court. Agarwal, supra, slip op. at 4-12. We recognized that the trial court was effectively valuing the practice as of the date set in Wexler's report, but noted that the court did not explain why it chose that date and not the filing date of the divorce complaint, which was the usual and expected date for valuation of an active asset like the practice. Id. at 6, 9-12.

Furthermore, we rejected wife's assertion that the later valuation date was the result of husband's bad acts, stating that the trial court "did not expressly indicate that husband's bad acts had influenced its choice of a valuation date" Id. at

10. Nor did we accept wife's assertion that husband agreed to have his practice valued as of the date of trial, stating that the "trial court did not indicate that husband's purported agreement to a later valuation date provided the basis for its choice of such a valuation date." Id. at 11. We rejected the trial court's unexplained valuation of the medical practice's goodwill component, stating that "[w]hile we can appreciate 'goodwill' has an ephemeral aspect to it, the number used by the trial court appears to have been picked out of the air to round out the practice value to the $1,000,000 figure." Id. at 12.

On remand, the trial court addressed the issues presented by this court. First, the court noted that the reason it "selected the later date was because that was the date that was used by all the experts including the plaintiff's [husband's] when they performed their valuations of the business." The court explained that the experts used the later date because husband failed to provide relevant information or documents and "used every means to prevent discovery" concerning any earlier date, thus leaving the experts with "no choice" but to value the practice as of the later date, for which they had been provided information.

Next, the trial court noted husband's tacit agreement or, at least, his lack of disagreement with the later valuation date, stating that husband at no point objected to the later date and that husband's expert had utilized various dates other than the date of the filing of the divorce complaint when he prepared his three valuations.

Lastly, the trial court explained its calculation of the value of the medical practice at $1,000,000, noting that it had relied upon the information and expert opinion in Wexler's report in making that calculation. Wexler's $2,500,000 valuation of the practice included a $1,817,794 goodwill component. The trial court reasoned that Wexler's valuation of goodwill was "inflated" and "exceptionally high" because, during 2004, husband's practice had received $1,595,152 in Medicare payments, but those payments would not occur again because husband was being investigated for Medicare fraud.

Accordingly, the court reasoned that the practice's goodwill had been reduced by the loss of any further Medicare payments, and it determined the percentage of that reduction by dividing the amount of the Medicare payments received by the practice by the amount of Wexler's total goodwill component. That calculation reflects a reduction of 87.75% of the practice's total goodwill, which meant that the amount of goodwill remaining after the Medicare-based goodwill was eliminated was 12.25% of Wexler's total goodwill.

The trial court then increased the percentage of goodwill remaining after elimination of the Medicare payments from 12.25% to 15% of Wexler's total goodwill. Multiplying Wexler's total goodwill by 15%, the trial court concluded that the goodwill component of the value of husband's medical practice was $272,669.10.

The court then added the newly calculated goodwill component of $272,669.10 to Wexler's tangible assets of $728,414 and arrived at the erroneous sum of $1,001,463.10.*fn2 The court noted that it had "rounded off" this amount to an even $1,000,000 in its earlier opinion, but would not do so now. Accordingly, the court fixed the value of the husband's medical practice at $1,001,463.10 for purposes of equitable distribution and directed that said amount be divided equally between the parties.

Husband raises several arguments following the remand. First, he argues that the trial court erred in accepting wife's position that "the parties had agreed upon the trial date valuation" of the medical practice. The record on remand does not reflect precisely what wife's position on that topic was, much less that the trial court accepted that position. Instead, the record reveals that the trial court utilized the later valuation date because husband had thwarted the discovery of relevant information concerning any earlier valuation date, so that the parties' experts, including husband's DiGabriele, were limited to using a later date.

Moreover, the trial court did not explicitly state that the parties had "agreed upon" a later valuation date. Rather, the court said that a later valuation date was acceptable to it both because husband at no point objected to the accountants' use of a date later than the filing date of the divorce complaint and because, given husband's failure to cooperate in discovery, the accountants had been "left with no choice" except to use a later date. Husband's argument on the valuation date is rejected.

Second, husband argues that, valuation date aside, the trial court should have given more and even controlling weight to the report of Rosenfarb, the court-appointed accountant, which indicated that husband's medical practice had no value as of the end of 2002. However, according to the trial court, it was "the consensus of the attorneys as well as the court" in April 2004 that the Rosenfarb report was "not useful" because it was "lacking in detail and information." Husband's present argument concerning the Rosenfarb report is undermined by the circumstance that he earlier was part of that consensus.

Third, husband argues that wife's expert accountant, Wexler, admitted during his trial testimony that he had erred in his calculations and that this error "had a dramatic effect on his conclusions of value" for the medical practice. Concerning Wexler's calculation of the practice's tangible assets, husband asserts that "we had an admission that the $728,414 number was incorrect." Husband is mistaken.

On cross-examination at trial, Wexler seemed to recognize that there may have been an error in his calculation of the practice's value. However, Wexler did not explicitly testify that the error existed, stating instead that "you may be right.

I'm not saying you're wrong. But I - I really don't know right now." While he recognized that the error, if it existed, would have an impact on his valuation calculation, he did not concede that such impact would be "dramatic" or even significant, stating instead that any effect would "depend[] on how much the fourth quarter expenses were." The matter was thus left unresolved.

As is apparent, contrary to husband's argument, Wexler did not explicitly admit that an error existed that made his specific calculation of $728,414 in tangible assets incorrect. Instead, he essentially conceded that there might be an error that affected his overall valuation calculation.

In any event, Wexler's report shows that the $728,414 in tangible assets was arrived at independently of the income projection that contained a possible error. The possible error would thus not affect the tangible assets calculation and would only have an effect on the expense-adjustment component of the "Intangible Value of Capitalized Income" or goodwill projection of Wexler's calculations.

Husband's fourth argument is that the trial court "basically invented a number for goodwill." Husband is correct to a point that the trial court's determination of the dollar amount of goodwill, as explained by the court on remand, reflected the court's view of the matter, not an accountant's view. Nevertheless, the trial court grounded its goodwill calculation in the evidence, reducing the goodwill amount calculated by Wexler to reflect the future absence of the sizable Medicare payments to the practice.

It should be noted that husband does not develop his complaint concerning the court's goodwill determination. Indeed, the amount of the trial court's goodwill determination ($272,669.10), was less than the goodwill amount calculated by husband's accounting expert, DiGabriele ($403,894). Thus, husband benefited from the trial court's lower determination because wife was entitled to one-half of a lower amount of goodwill in equitable distribution. In any event, because the trial court's goodwill determination is logically anchored in the evidence and because there is no expert evidence explicitly showing that the determination was in error, husband's argument is rejected. Pascale, supra, 113 N.J. at 33.

Husband's final argument is that, in light of the trial court's $1,000,000 valuation of his medical practice, "we have the question as to what percentage of this value . . . is Defendant [wife] entitled to when this was an active asset and she contributed nothing to the accretion."

The issue of what percentage of the medical practice was to be awarded to wife in equitable distribution was not before the trial court on remand. This is apparent from our statement in our remand opinion that the trial court's award of one-half of the value of husband's medical practice to wife is both reasonable and without legal or factual mistake, based upon the trial court's express discussion of and reliance upon the statutory equitable distribution factors. Accordingly, husband's contention concerning the distribution of one-half of the practice's value to wife is rejected. [Agarwal, supra, slip op. at 7-8.]

Any issue concerning a party's percentage of the equitably distributed medical practice has already been decided and affirmed.

The trial court's valuation of husband's medical practice was supported by substantial credible evidence in the record, and should not be disturbed. Pascale, supra, 113 N.J. at 33. The arithmetic error the trial court made when calculating the value of the practice should be $1,001,083.10 and not $1,001,463.10, and we remand to amend the judgment for this limited purpose.

Husband contends in Point Three that the trial court erred in imposing restraints on his ability to transfer his assets. He asserts that the restraints imposed are "overly broad and unreasonable" because he has paid all of the support that he has been ordered to pay. His contention should fail because the trial court's reasons for imposing the restraints that it did enjoy the support of the evidence in the record. Ibid. However, husband contends further that there is a problem concerning the scope and duration of the reimposed financial restraints that requires correction.

This issue concerns the restraint provision contained in the initial divorce judgment, which states that husband: is hereby restrained from transferring, selling, encumbering by mortgage, liens, judgments, or otherwise, or in any other way disposing of any and all property or rights in real estate or personalty, as well as in cash, stocks, bonds, or equipment, in the United States, or India, or elsewhere, in which Plaintiff [husband] is the owner, or in which he may have a beneficial interest, or in which he may have a legal interest, or a possessory interest, or in which his medical practice or medical corporation may have an interest.

The trial court did not comment on this provision in its oral opinion. Nor did the trial court comment when it later rejected husband's attempt to amend the final judgment by deleting the provision. Instead, the provision was included in the final divorce judgment.

We reversed and remanded the matter because the trial court "provided no reasons for imposing the restraints and did not discuss whether a less all encompassing restraint provision could have been tailored to achieve whatever goal the court sought to achieve." Agarwal, supra, slip op. at 29. The reversal was intended to allow the trial court the opportunity to "address the restraint provisions anew and provide its reasoning if it elects to reimpose the same or similar provisions." Ibid.

On remand, the trial court comprehensively addressed the issue, stating that it had initially imposed the restraints because of husband's "questionable tactics and conduct in handling of assets and money both during the marriage and during the litigation of this case." Specifically, the court noted that husband had "moved assets," hidden money, and "funneled money through third parties" so that the

Court was concerned that if plaintiff [husband] was left unrestrained, that he in fact would secrete all his assets and money and then come to the Court and cry poverty and claim that he was not able to meet his financial obligations under the judgment of divorce.

Again, this was something that the plaintiff had often done during the course of this litigation. I can remember at times when plaintiff was ordered to pay the tuition and this time both of the children were in private high schools, and the tuition for the two of them was about $38,000 a year, and he would cry poverty and then when he was faced with the threat of an issuance of a bench warrant, he suddenly came up with the money. And often it was a check written on some other company other than his.

So because that was his standard practice, the Court allowed the restraints to be included to protect the defendant [wife] until she received the money to which she was entitled.

And so for that reason, the Court will allow those restraints to remain until the defendant is paid the money to which she is entitled.

But the restraint will only apply to assets which are not used by plaintiff to pay living expenses or business expenses.

Consistent with our direction, the trial court gave its reasons for initially imposing and later reimposing the restraints on husband: left unrestrained, he might "secrete all his assets and money." Such a concern, grounded as it was in the court's experience with husband during the course of this litigation, provides a sound basis for the restraints. The circumstance that husband may presently be current in his support obligations does not make such restraints unnecessary.

Moreover, the trial court addressed husband's assertion that the restraints were overly broad and unreasonable by excepting from their application those assets not used by husband to pay living and business expenses. Thus, the restraints will apply only to any attempt by husband to transfer assets unrelated to those purposes.

The trial court appears to have put a time limitation on the restraints, allowing them to remain until wife "is paid the money to which she is entitled." While plainly set out in the oral decision, the restraints presumably apply until husband satisfies his obligations to wife to pay equitable distribution, as well as her counsel and experts' fees. However, if the restraints are intended to apply to husband's obligation to pay wife permanent alimony, then there is no apparent express time limitation on them.

The trial court's imposition of financial restraints on husband is soundly grounded in substantial credible evidence in the record, Pascale, supra, 113 N.J. at 33. Should clarification be needed in the future, husband, of course, can move before the trial court who would be in the best position to adjust the financial restraints depending upon the circumstances presented. The need for clarification at this juncture is premature.

In Point Four, husband contends that the "award of counsel and expert fees was and remains punitive." Specifically, he argues that the trial court "failed to make any findings on the issue of counsel and expert fees pursuant to the remand instructions." He asserts that those awards were punitive and require reversal.

Following trial, the court ordered that husband pay almost all of wife's counsel and expert fees, basing that award on husband's "bad faith and deliberate obfuscation of the process of this litigation," "as set forth in the court's decision." On appeal, husband argued primarily that the trial court relied too much upon his bad-faith conduct in making its counsel/expert fee award. Husband also argued that the court failed to consider the impact of the purported $2,000,000 federal and state tax liability in gauging his ability to pay wife's counsel/expert fees.

We rejected husband's bad-faith-based argument, Agarwal, supra, slip op. at 24-27, holding that the "trial court did not abuse its discretion in making the counsel and expert fee award based chiefly upon husband's bad faith." Id. at 26. However, we accepted husband's tax-liability argument, stating that the trial court should have considered and addressed the effect of those liabilities on husband's ability to pay. Id. at 27. We "reverse[d] the provision of the final judgment awarding counsel fees and expert expenses to wife and remand[ed] the matter so that the trial court may address that issue and make a new determination." Ibid.

On remand, the trial court determined that husband failed to show that the tax liabilities existed, while wife presented proof showing that they did not. The trial court refused to find that the parties had any substantial federal or state tax liabilities and essentially determined that those non-existent liabilities could not have affected the equitable distribution or the counsel/expert fee awards. Accordingly, the court entered an order stating that "after having re-considered the issue of plaintiff's state and federal tax liabilities, the court's award of counsel fees and equitable distribution shall remain the same."

Husband's contention that the trial court failed to make any findings concerning the counsel/expert fee award "pursuant to the remand instructions" of this court is mistaken. We directed the trial court to consider and make a determination concerning the effect of the claimed tax liabilities on the counsel/expert fees issue. The trial court did so, albeit not in husband's favor. The trial court's decision was supported by the evidence in the record. Pascale, supra, 113 N.J. at 33.

Husband's broader contention based on the "reasons previously expressed" in his original brief likewise fails. We rejected his argument based on the trial court's finding of his bad faith, Agarwal, supra, slip op. at 26, and husband's attempt to raise it again fares no better.

II.

As part of Point II in her brief, wife contends that the $1,001,083.10 valuation amount fixed by the trial court for husband's medical practice "is too low." She asserts that, because the trial court accepted the valuation of $728,414 given the practice's tangible assets by her accounting expert, it should also have accepted Wexler's valuation of $1,817,794 for the practice's goodwill and, consequently, his $2,500,000 overall valuation for the practice. According to wife, Wexler's "opinion was based upon recognized valuation formulae . . . and was, thus, entitled to a much greater level of acceptance by the trial court." We disagree.

The trial court addressed this issue in its initial oral decision, stating that it did not accept Wexler's goodwill calculation. The problem was that the calculation was based upon husband's then-present income, the chief part of which included $1,595,152 in Medicare payments in the first nine months of 2004. However, the Medicare payments had abruptly ended and had "essentially dried up" as a result of a federal fraud investigation. The trial court thus reduced the valuation amount of the practice from Wexler's $2,500,000 to $1,000,000.

Pursuant to this court's directions, Agarwal, supra, slip op. at 12, the trial court explained its calculation of the goodwill component of the practice's valuation amount. Thus, the court detailed how it first determined that Wexler's goodwill valuation was "inflated" and "exceptionally high" because he had not taken the future loss of the Medicare payments into consideration. The trial court then determined the practice's goodwill valuation by way of its own calculation, which factored in the loss of the future Medicare payments.

Wife now contends that the trial court should have accepted Wexler's valuation of goodwill. As recognized by the trial court, however, Wexler's valuation was suspect because it failed to take into consideration the future loss of the Medicare payments, which comprised the bulk of the income for the reporting period on which the Wexler report was based. In contrast, the trial court's valuation of the practice's goodwill component accounted for the future loss of Medicare payments, was logically grounded in the evidence, and was not shown by any expert evidence to be in error. Accordingly, because the trial court's valuation is supported by the evidence, that valuation amount will not be disturbed. Pascale, supra, 113 N.J. at 33.

At Point V of her brief, wife contends that the trial court erred in declining to order the equitable distribution of the Midland Bank accounts.

The trial court had initially determined that there was evidence establishing that the accounts contained $97,000, and it ordered that the money be equitably distributed, with each party receiving half. We reversed that order, reasoning that the evidence did not show that the accounts were in existence at the time of trial, and remanded the matter for the trial court's reconsideration. Agarwal, supra, slip op. at 21-24.

On remand, the trial court modified its initial decision, reasoning that:

[i]n reconsidering the trial testimony and evidence, the Court finds that the monies in the Midland Bank account are not subject to equitable distribution on the grounds that it appears and the evidence shows that the accounts were closed during the marriage in 1994 and plaintiff [husband] in fact testified at trial that he used the monies to purchase marital property and to also prevent foreclosure.

So in light of the fact that the account was closed during the marriage pre-complaint, and the monies were used for marital interest[s] and assets, it is not subject to equitable distribution.

Wife now contends that, because the trial court has repeatedly determined that husband is an "obstinate prevaricator, who diligently secreted his assets, and who obstinately 'obfuscated' his finances," it was "unrealistic [for the trial court] to believe that . . . he was truthful when he claimed that he had closed this account, and used the funds for marital purposes." Wife acknowledges that only "bits and pieces" of evidence support her position, but asserts that "those bits and pieces should have been sufficient to overcome his incredulous [sic] testimony."

Wife's contention is at odds with the evidence in the record. The only tangible proof concerning the Midland Bank accounts consisted of three bank documents from 1993 and 1994. For his part, husband testified that he closed the accounts in the early 1990s and used the monies for a down payment on New Jersey property and for a business venture in India. Buttressing husband's position, his voluntary petition in bankruptcy in 1997 did not indicate that the Midland Bank accounts were in existence at that time.

There was no proof that the Midland Bank accounts were still open at the time of the trial, but there was proof that they had been closed at some time before. Wife presented no documents or other evidence on remand that suggested that the accounts were open at the time of trial. Under these circumstances, wife's contention is merely speculation and is, therefore, rejected.

Lastly, wife contends that the trial court erred when it imputed annual income of $37,500 to her on remand.

During trial, the parties introduced two "Employability Evaluation" reports into evidence; wife's report indicated that she could earn about $20,000 annually, while husband's report indicated that she could earn as much as $55,000. Following trial, the court imputed an annual income of $50,000 to wife, determining that wife made no efforts to "earn meaningful income or find a real job" in the more than seven years since the divorce complaint had been filed and that she could earn $50,000 per year beginning in May 2006, "given her background and skills." At the same time, in ordering permanent alimony, the trial court noted that wife "never really has been in the job market other than on a part time basis" and that she would require some training in order to seek employment.

We reversed the provision of the divorce judgment "that imputes $50,000 in annual income to wife and remand[ed] the matter so that the trial court may consider anew the amount of income that it should impute to her." Agarwal, supra, slip op. at 36. We did so because wife had never earned so much annually and because the court is requiring wife to do what even the court recognizes she simply is not capable of doing absent a defined period of time for her to obtain further education and training. The trial court has mistakenly exercised its discretion by imputing too much annual income to wife at the present time.

[Id. at 35-36.]

On remand, the trial court revised the divorce judgment, imputing $37,500 in annual income to wife, which was the "middle number between the range given by the plaintiff's [husband's] expert of [$]25,000 to $50,000" for an electrologist. The court stated that it did so because wife made no effort during the years of litigation to find a job or to obtain the education, training, or skills necessary to become an electrologist or secretary. The court stated that wife "refused in any way to become employable," and it found that wife was "purposely - -underemployed and unemployed and she's purposely remaining unemployed, making no effort to have gotten a job."

For her part, wife does not indicate that she has obtained any education, training, or employment, or that she sought any employment during the period from the entry of the divorce judgment in September 2006 to the present day. Nor does she point to any personal medical problems or parenting difficulties that might have impeded her search for employment.

In June 2009, we reversed and remanded the income-imputation matter because the trial court "was imputing too much annual income to wife at the present time." Id. at 36. More than two years have passed since our decision, but the wife's employability prospects have not improved because, as the trial court found, wife has continued to refuse "in any way [to] make any effort to become employable." Wife's lack of effort to become employed or employable supports the trial court's finding that she has purposely chosen to be unemployed.

The imputation of income to a party in a matrimonial case is within the trial court's discretion, and any such imputation of income will not be disturbed absent an abuse of that discretion. Robertson v. Robertson, 381 N.J. Super. 199, 206 (App. Div. 2005). In light of wife's continued refusal to become employed, the trial court did not abuse its discretion when it imputed the reduced amount of $37,500 in annual income to wife.

Affirmed on both the direct and cross-appeals. Remanded to amend the judgment to correct a mathematical error on valuation figure for husband's medical practice.


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