On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-1478-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo, Grall and Hoffman.
Defendant Gail H. Mautner appeals and plaintiff Robert T. Goldman cross-appeals from an amended final judgment of divorce.
Mautner also appeals from the denial of her post-trial motion to enforce pendente lite support orders. On Mautner's prior interlocutory appeal following a trial on the custody of their two children, we affirmed an order providing for joint legal custody and a near equal sharing of residential custody - eight of every fourteen days with Mautner and six with Goldman. Goldman v. Mautner, No. A-4085-07 (App. Div. Dec. 17, 2008).*fn1
Thus, the questions before us involve only the financial matters that the Family Part resolved in dissolving this nine-year-and-four-month marriage.
The amended judgment provides for an equal division of property acquired during the marriage and identifies assets that are exempt because they were acquired before the marriage or after the complaint for divorce was filed. Goldman must pay $8500 monthly alimony for a four-year term and $1500 weekly child support. In addition, he must secure the children's health and dental insurance and pay seventy-five percent of costs not covered by that insurance. Tax exemptions for the children are to be shared. On the ground that the question was not ripe, the court denied Mautner's request to allocate responsibility for college expenses. The judgment also memorializes the court's denial of the parties' competing requests for credits on pendente lite support and Mautner's request for retroactive modification of pendente lite support.
In addition, the judgment allocates responsibility for the costs of litigating the custody and financial issues. The parties are to equally share the fees for a court-appointed financial mediator. With one exception, each party must pay all the fees and costs that party incurred. The lone exception is legal fees for the custody litigation; Mautner must pay two-thirds of Goldman's legal fees for the custody trial and all of his legal fees for the appeal of joint legal and shared residential custody.
Two issues raised at trial are not addressed in the amended judgment or the court's opinion. They are Mautner's counterclaim for divorce and her request for insurance to secure Goldman's alimony and support obligation. A third issue raised by Mautner - allocation of tax exemptions for the children - is addressed in the judgment. The court's written opinion, however, does not include any findings of fact or legal conclusions explaining its decision to have the parties share the tax exemptions, and its findings and legal conclusions on child support, alimony and counsel fees are infected by imputation of income in an amount not supported by the record and insufficient findings on other factors pertinent to those determinations.
On appeal, the parties claim numerous errors implicating nearly all of the court's rulings. We conclude that it is necessary to remand for reconsideration of the amount of child support, limited duration alimony, counsel fees and allocation of the tax exemptions for the children.
We reverse the court's decision to fix the value of Mautner's equitable share of Goldman's 401K at one-half of $223,077.88, which was the value of her share as of December 3, 2007, and to fix the value of her share of his Fidelity Investment Account at $245,371.80, which is the value of her share "at the time of trial." On remand, the judgment must be amended to correct this error by fixing value at time of distribution.
On remand, the court must also address Mautner's counterclaim for divorce and her claim for life insurance securing support.
There is a paragraph of the judgment providing for Goldman to receive a credit on his equitable distribution if the parties determine that Mautner received $10,000 more than Goldman received from the funds withdrawn from accounts pendente lite.
We remand for the court to make that determination. If the record does not permit the court to resolve the issue, the credit must be denied.
With the exceptions set forth above, we affirm the judgment, and we affirm the denial of Mautner's post-trial, prejudgment motion.
Mautner raises a preliminary question. Relying on this court's recent decision in Ducey v. Ducey, 424 N.J. Super. 68 (App. Div. 2012), she argues that the issuance of a final and amended judgment requires a new trial. Ducey involved entry of a final judgment of divorce that was followed by a written opinion stating findings and conclusions that materially differed from and abrogated, without explanation, substantive provisions of the judgment. Id. at 74, 77. While we do not approve of the course followed in this case, what happened in Ducey did not happen here.
The trial on financial issues was commenced and completed in August 2008, and the parties filed their written summations that October. The final judgment of divorce and the written opinion setting forth the court's findings and reasons for its determinations were issued on August 21, 2009.*fn2
In issuing the judgment, the court gave counsel thirty days to submit an amended judgment "incorporating the opinion and the standard language as to emancipation, cohabitation, etc." Goldman's attorney complied on November 18, 2009, and Mautner's attorney, not of the firm representing her on this appeal, filed objections on December 3. On December 11, the court entered an amended judgment and opinion.
While there are differences between the initial and amended final judgments and opinions, they are not, as Mautner suggests, comparable to those between the initial judgment and a subsequently issued contradictory opinion we addressed in Ducey.
Here, with one exception - Goldman's obligation to pay seventy-five percent of the children's extracurricular expenses which is stated in the initial judgment and not the amended judgment - these judgments and opinions are not contradictory. This inconsistency, however, is of no import, because we have concluded that a remand for reconsideration of child support is necessary based on the court's imputation of income in the amount of $450,000 to $500,000 to Mautner. In this context, there is no reason why allocation of expenses for extracurricular activities cannot be addressed along with the other expenses of the children on the record the parties made at the time of trial.
Apart from the inconsistency affecting child support, the judgments and opinions differ in two inconsequential respects. First, as the court directed and contemplated, the amended judgment incorporates determinations that the court set forth in the initial opinion but not in the initial judgment.*fn3 Second, the amended judgment and opinion differ from the initial ones in that they expressly address and reject the parties' competing requests for pendente lite credits and Mautner's request for retroactive modification of pendente lite support, matters that were litigated but not addressed in the initial opinion. The initial silence and subsequent denial are not contradictory; the initial judgment granted no relief and the amended judgment denied all relief. This difference is the nature of correction of an omission, not a substantive change.
We reject Mautner's claim that a new trial or hearing is warranted here as it was in Ducey. It is worth noting that this complaint for divorce was filed in January 2003 and that the duration of the litigation will soon exceed the duration of the marriage. A second trial will not serve the interests of justice.
For the benefit of the trial court and the parties, we have summarized the differences in the judgments in an endnote to this opinion.
In this section, we set forth the facts pertinent to the issues raised on appeal and the trial court's findings on disputed facts.
A. Contribution to the Marital Enterprise
Goldman and Mautner are both medical doctors licensed and practicing in this State. They lived together and shared expenses for about sixteen months while they were completing their respective residency programs, and they married in 1993. They have two children - a son born in 1996 and a daughter born in 1998. All members of the family are healthy, and none have special needs. When the complaint and counterclaim for divorce were filed in January 2003, the parties' son was seven and their daughter was about four-and-one-half; they are now sixteen and thirteen. Goldman was thirty-nine and Mautner was thirty-seven when this litigation commenced; they are now forty-nine and forty-six.
The parties had significant income during the marriage. Since the birth of their children, Mautner has practiced dermatology part-time, earning between $100,000 and $175,000 annually. Goldman, an orthopedic surgeon, has practiced full-time, established a practice, acquired an interest in a surgical center and annually earned close to or in excess of $1 million.
Joint tax returns filed for the five years starting with January 1998 and ending with December 2002, reflect combined total W-2 wages in the amount of $6,014,555 for that period. During those years, Goldman earned 7.3 times as much as Mautner. In tax years 1998 through 2002, he reported total W-2 earnings of $5,304,748 (1998, $828,188; 1999, $802,179; 2000, $1,031,964; 2001, $1,245,071; and 2002, $1,397,346). In the same years, Mautner reported total W-2 earnings of $709,807 (1998, $121,865; 1999, $156,674; 2000, $175,267; 2001, $143,708; and 2002, $112,293). In addition to these earnings, they had taxable and tax exempt interest, income from Goldman's business and the benefit of personal expenses paid by the business.
When the complaint was filed, the parties had assets with a value in excess of $5 million. The court determined that some of those assets were exempt from equitable distribution.
The parties had a home in Short Hills, and they stipulated that it had a value of $1,541,500 as of April 27, 2007. At the time of trial, the mortgage was $227,325. The parties' stipulation on value was qualified, however. Although they agreed not to submit additional evidence on the point, they "reserved the right to argue a different value as of the trial date." The court assigned a net value of $1,314,175.
The value of Goldman's interest in his practice was disputed. His expert assigned a value of $1,287,000, whereas Mautner's expert valued the practice at $1,970,000. The court found the opinion of Goldman's expert to be more reasonable because he derived the value by using an averaged cost of overhead, rather than the cost for a single year, and a more reasonable long-term growth rate, which the expert claimed was appropriate given the differential between growth while the practice was being established and after it was.
In addition to his practice, Goldman had an interest in a surgical center, which he sold for $75,000 during the pendente lite period. Accordingly, the value of that asset was not in dispute.
The parties also held banking and investment accounts and Goldman had a 401K plan and an IRA. The total value of those investments was approximately $2.5 million when the complaint was filed, and that total value, of course, was subject to fluctuation attributable to interest and market forces during the pendency of the litigation. In addition, the values of these accounts changed due to the parties' withdrawals of about $1.5 million prior to trial. Neither party claims any disparity or unfairness in the distribution of the funds that were withdrawn.
Included in the various accounts held on the date of the complaint were funds that Goldman claimed were exempt from equitable distribution. He sought to exempt funds he held on the date of the marriage (referenced as initial balances hereafter), money deposited in the accounts given to him by his parents, and the growth attributable to both. The court denied the exemptions sought for monetary gifts to Goldman during the marriage, finding that Goldman failed to establish that the gifts were to him rather than the family. The court granted exemptions for the initial balances and their growth as follows: the pre-marital balance $46,255.97, which the court found had grown to $122,577.91; the entire amount in a Fidelity IRA, which was solely attributable to pre-marital deposits and had a value of about $3495.81; the initial balance of a Merrill Lynch/Smith Barney account, $85,298.54, plus interest attributable to that money to be calculated by the parties in accordance with the method proposed by Goldman's accountant. According to an estimate prepared jointly by the parties' experts prior to 2007, the interest exceeded $300,000. Thus, the approximate value of these exemptions to Goldman is $426,000.
Goldman acquired additional exempt assets from post-complaint earnings. They include a residence in Short Hills he purchased for $1,850,000 with a mortgage of $1 million, and an interest in a surgical center he acquired for $60,000. In addition, he had added to his 401K plan and deposited post-complaint earnings in exempt accounts.
Taken together, Goldman's exempt pre-marital and post-complaint assets had a minimum value of $1,336,000.
C. Standard of Living During the Marriage
The parties both retained experts to quantify the annual cost of their standard of living during the last years of their marriage. The experts included taxes but excluded savings from their calculations. Mautner's expert fixed the annual cost, including taxes, at $385,850 per year, or $32,154 monthly, and Goldman's expert fixed the annual cost, including taxes, at $241,724, or $20,144 monthly.
In a joint report, the experts explained that the difference between their accountings was due to 1) Goldman's expert's exclusion and Mautner's expert's inclusion of costs of a home renovation, a landscaping project, a "one-time" purchase of art, costs of private school for the children, which they were no longer attending, the salary of a nanny, and legal fees paid in a lawsuit related to a kitchen renovation; and 2) Mautner's expert amortizing the cost of a new car over four years while Goldman's expert spread that cost over ten years. They further noted that Goldman's expert had determined the annual cost of the marital standard of living by deducting an additional $47,467 annually from shelter expense based on a refinancing of the mortgage at a lower interest rate.
By stipulation, the parties submitted supplemental certifications rather than testimony to state their respective positions on marital lifestyle. Mautner pointed out that neither of the parties' experts included in their respective calculations of the cost of the marital standard of living either expenses paid by Goldman's practice, of about $41,500 annually, or annual savings. Her expert concluded that annual savings averaged about $407,000 annually for the years 1999- 2003, a number derived by deducting expenses from net earned income. Goldman's expert calculated savings in 2003 at $200,191.
Mautner contended that to maintain the marital standard of living she would require a net monthly income of $32,391, without savings, and $59,891 if she were to save at one-half the rate the parties saved during the marriage. Her stated expenses included full-time child care in the home. Goldman challenged numerous expenses in Mautner's budget. Most significantly, he objected to her statement of child care expenses, which he deemed excessive given the custodial arrangement. He also challenged private school costs, on the ground that they were no longer incurred because the children were enrolled in public school.
In its initial opinion, the court concluded that the marital standard of living was "somewhere in the range of $25,000." That finding, however, is not included in the amended opinion or the judgment.
D. Mautner's Earning Capacity
The parties disputed Mautner's earning capacity at trial. It is ...