On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Warren County, Docket No. FM-10-129-04.
The opinion of the court was delivered by: Fuentes, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Fuentes, Ashrafi and Nugent.
The opinion of the court was delivered by FUENTES, J.A.D.
The law firm of Budd Larner, P.C. (Budd Larner) was one of three firms that represented plaintiff Edie Britman Sauro during this protracted matrimonial case. Budd Larner now appeals the Family Part's equitable distribution award, arguing that the manner in which the court allocated the parties' marital assets negatively affected the firm's attorney charging lien pursuant to N.J.S.A. 2A:13-5. Specifically, Budd Larner challenges the court's decision to establish a $200,000 education trust fund to cover the cost of college education for the parties' three children; to release $12,000 to pay the cost of plaintiff's paralegal studies; and to issue two pendente lite orders that directed the payment of support to plaintiff and the children.
The tortured procedural history of this divorce action reveals how the emotional wrangling of the parties spiraled out of control, resulting in a remarkably expensive and legally unwieldy process that left this family financially devastated. Under these circumstances, the Family Part was forced to devote an inordinate amount of time and effort addressing a barrage of pretrial motions that enforced and, when necessary, modified pendente lite relief. The court also adjudicated plaintiff's application for leave to relocate and remove the children to another state; and ultimately determined the value and composition of the marital estate that would be subject to equitable distribution.
The parties' penchant for aggressively litigating all of the issues arising from the dissolution of their marriage, combined with the high cost of legal representation, quickly led to a financial meltdown. All of the law firms involved, including Budd Larner, eventually sought and obtained leave from the court to withdraw as counsel of record. Each firm that withdrew from the case petitioned the court to impose an attorney charging lien in the amount of the outstanding fee the particular party owed at the time of withdrawal. In some cases, the lien attached to escrow accounts established by the court to fund pendente lite relief; other liens, including the one obtained by Budd Larner, would attach to the potential equitable distribution award the party would receive at the conclusion of the case.
When the case concluded, both sides were without legal representation. Invoking its parens patriae responsibility to protect the children of this dissolving union, the Family Part stepped into the breach and established "The Sauro Children College Trust Account" by allocating $200,000 that would have otherwise been subject to equitable distribution. The court also took other action in the course of the litigation to ensure that defendant honored his support obligation to plaintiff and the children, and set aside a relatively modest amount of funds to permit plaintiff to acquire skills to enter the labor force independent of defendant's support.
Mindful of our deferential standard of review, we affirm the Family Part's actions. These actions were well within its discretionary authority and in keeping with its obligation to take appropriate action to safeguard the interests of the children.
The parties married in 1986, and had three children - two boys and a girl. Although all of the children are now over the age of majority, the matrimonial action involved issues of custody and support because, at the time the complaint for divorce was filed in 2003, the children were minors and resided with plaintiff. When this case began, plaintiff was represented by the firm of Rylak & Gianos (the Rylak firm); defendant Frank Sauro was represented by Wilentz, Goldman & Spitzer, P.A. (the Wilentz firm).
On September 28, 2004, the court ordered unallocated pendente lite support, requiring defendant to pay plaintiff $9,000 per month in spousal and child support. This support obligation was amended by the court on December 22, 2004, directing defendant to pay the support obligation, including arrearages, through the probation department.
Shortly thereafter the parties entered into a consent order through which they agreed to "immediately take a mortgage or home equity loan from the equity in the marital home in the amount of $220,000." The order provided that "out of said $220,000, the sum of $100,000 shall be paid to [the Rylak firm] for counsel fees incurred by Plaintiff and the sum of $100,000 shall be paid to [the Wilentz firm] for counsel fees incurred by Defendant." A final handwritten provision directed the remaining $20,000 to be placed in an interest-bearing escrow account for the purpose of paying the home equity loan.
On February 1, 2005, the Wilentz firm sought leave to withdraw as defendant's counsel, and to permit defendant to proceed pro se. The court denied the application "as to the custody, parenting time and removal issues," but permitted the Wilentz firm to withdraw "as attorney of record on all economic issues not yet scheduled for trial."
On March 14, 2005, the court granted the Rylak firm's motion to serve plaintiff with notice of a petition for an attorney lien in the amount of $100,000, in accordance with N.J.S.A. 2A:13-5, "so that a lien may be entered at the time of the final disposition and attach to the final judgment, and so that said judgment may include escrow of said funds in the event of fee arbitration." (Emphasis added.) The court granted similar relief to the Wilentz firm against defendant for an attorney lien in the amount of $130,000.*fn1
On June 13, 2005, the court adjudged defendant in violation of litigant's rights for failing to pay the $9,000 monthly support obligation. By order dated July 28, 2005, the court fixed defendant's arrears at $34,000.
Although not directly disclosed in the record, we infer that sometime after July 28, 2005, the probation department received an infusion of funds payable to defendant. On September 2, 2005, the court ordered the probation department to pay plaintiff the support due for August 2005, and thereafter transfer the balance of these funds to plaintiff's counsel's trust account. The court directed plaintiff's counsel to set aside $100,000 to secure the payment of future support to plaintiff; $193,000 was to be set aside for the payment of taxes due on the "approximately $500,000 that was received from [defendant's real estate development partnership] Capital Realty & Development in July 2005"; and the balance was to be held in escrow pending further order of the court.
Plaintiff petitioned the court for leave to relocate to the State of
Maryland with the three children. The custody and removal proceedings
took place over eighteen days between December 2004 and August 2005.
On September 23, 2005, the court granted plaintiff leave to relocate
to Maryland with the two boys; the girl would continue to live in New
Jersey with defendant. At the completion of this phase of the
litigation, the court permitted the Wilentz firm to withdraw entirely
as defendant's counsel. On December 20, 2005, the court granted the
Wilentz firm a temporary charging lien against defendant.*fn2
Plaintiff filed for bankruptcy on September 14, 2005.
By order dated September 7, 2006, the court directed that $75,000 be released from the approximately $325,000 held in escrow by Mark Phillips, an attorney from the Rylak firm, to pay support due to plaintiff and the children and "to retain counsel and . . . expert assistance." Starting October 1, 2006, the court directed Phillips to pay plaintiff the $9,000 monthly support award "until further order of the court or the depletion of the escrow." The court thereafter declared that the funds held in escrow for the support of plaintiff and the children had been depleted.
On September 11, 2006, plaintiff retained the Budd Larner firm to represent her in connection with the remaining economic issues associated with the divorce proceedings. On October 3, 2006, the court entered a case management order in which it: (1) directed Capital Realty to distribute $170,000 directly to defendant; (2) discharged attorney Mark Phillips as escrow agent and appointed Drew Hurley*fn3 as the new escrow agent; (3) directed Capital Realty to turn over to Hurley a distribution due defendant in the approximate amount of $500,000; and (4) directed Hurley to "hold these funds in trust ...