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Kathleen Troy v. Thomas Troy

April 10, 2012

KATHLEEN TROY, PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
v.
THOMAS TROY, DEFENDANT-RESPONDENT/ CROSS-APPELLANT.



On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-1449-09.

The opinion of the court was delivered by: Per Curium

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 2, 2011

Before Judges Lihotz, Waugh and St. John.

In this matrimonial matter, plaintiff Kathleen Troy appeals from provisions in a May 7, 2010 Dual Final Judgment of Divorce (JOD), challenging the trial court's award of alimony and denial of her request for counsel fees. Defendant Thomas Troy filed a cross-appeal also challenging the amount of awarded alimony. Following our review of the arguments presented on appeal, in light of the record and applicable law, we affirm.

In January 2009, following over twenty-one years of marriage, plaintiff filed a complaint and defendant filed a counterclaim seeking divorce. The parties have one child who will be nineteen shortly.

During the ten-day bench trial, the parties presented proofs supporting their respective requests for dissolution of the marriage and the attendant collateral issues. This appeal, however, is limited to their respective challenges to the amount of support paid to plaintiff in the form of alimony and counsel fees. Consequently, our factual recitation will be limited to these challenges, which requires analysis of the parties' incomes, earning potential, and marital lifestyle.

Plaintiff, who is now age sixty-two, is a high school graduate with limited college coursework, who was employed from 1987 to 1994 as a sales associate and then a real estate agent. She ceased outside employment to provide care for the parties' child. During trial, both parties presented expert testimony on the level of income to be imputed to plaintiff. After considering all of the evidence, the trial judge found plaintiff could earn $21,000 per year.

Defendant, now age fifty-five, worked for Sharbell Development Corporation (Sharbell), which is involved in the purchase and development of land for residential housing. Sharbell is owned by Glenside Holding (Glenside), an off-shore entity located in England, which is equally owned by Hanan Kalish, of Israel, and Christopher Weatherhill, of Bermuda.

Defendant began his employment with Sharbell as a construction manager in 1986. By 2002, he was named Sharbell's Senior Vice President. A related entity, Hawthorne Inc. (Hawthorne), was formed on March 19, 1997. Hawthorne, a Sub-Chapter S corporation, provided "day-to-day management of the operating aspects of Sharbell and its subsidiary companies." Initially, Kalish owned 100% of Hawthorne. Defendant was a Hawthorne director and, as of May 23, 1997, Hawthorne's Senior Vice President. Hawthorne's services were limited to two contracts: one with a Dutch company and the other with Sharbell. At the time of trial, under the terms of their service contract, Sharbell paid Hawthorne $50,000 per month.

In 2002, defendant entered into a Shareholder Agreement (Agreement) to become a minority owner of Hawthorne. The Agreement allocated Hawthorne's stock: twenty-eight percent to defendant and seventy-two percent to Kalish. Defendant's compensation from Hawthorne was $70,000 per year plus his percentage of distributable income, amounting to $38,000 every two months. His total income from Sharbell and Hawthorne was approximately $300,000 per year, plus a monthly car allowance.

On May 23, 2002, amendments were drafted to the Sharbell-Hawthorne service contract, adding contractual "milestone" payments awarded upon completion of stages of a 900-unit residential housing project, which included single and multi-family units along with retail stores and professional office space in Robbinsville (the Robbinsville project). There were a series of five amendments executed, each providing for a milestone payment from Sharbell to Hawthorne once specified units of the Robbinsville project closed. Defendant, as a twenty-eight percent owner of Hawthorne, received his share of these milestone payments between 2006 and 2008.

The parties' joint income tax returns reported defendant's income as: $599,335*fn1 in 2004; $592,594 in 2005; $753,406 in 2006; $999,715 in 2007; $594,181 in 2008 and $330,000 in 2009. It is agreed that the increases resulting from the milestone payments received during these years, were: $270,049 in 2004; $269,794 in 2005, $411,604 in 2006; $415,472 in 2007; $280,490 in 2008 and $5,071 in 2009. Also, defendant's 2007 income included profits from the one-time sale of a liquor license.

Plaintiff argued defendant's decrease in income in 2009 was purposely designed to affect her alimony claim. She alleged defendant, as the de facto head of Hawthorne, controlled day-today operations and made all business decisions, including whether to make distributions and the level of his salary. Defendant disputed these claims, and advocated the court must use his $330,000 salary when determining alimony because no outstanding or contemplated milestone agreements remained.

Judge Andrea G. Carter "recognize[d] the decline in the economy and [its] effect on . . . real estate development[.]" However, she found "the decrease in the milestone[s] [were] notably significant and somewhat suspect." The judge computed the average annual additional income above defendant's salary for the years 2004, 2005, and 2008 as $273,444. She excluded the increases above salary defendant received in 2006 and 2007 because the sums "appear[ed] to be out of the ordinary."*fn2 The judge then added this sum to defendant's ...


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