NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 24, 2012 - Before Judges Payne, Reisner and Simonelli.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-2208-09.
In this matrimonial matter, defendant Jesse Sadej appeals from that part of the December 2, 2010 final judgment of divorce (JOD), which awarded permanent alimony to plaintiff Carla Sadej, and equitably distributed the parties' marital assets. We affirm the equitable distribution award, and reverse and remand for further proceedings with respect to the alimony award.
Plaintiff and defendant were married for twenty-one years, and divorced in December 2010. They have three children who were seventeen, fourteen, and eleven at the time plaintiff filed the divorce complaint in 2008. Defendant was employed by United Parcel Service at the time of the marriage. He left that employment in 1994, and became self-employed as a real estate developer and manager. With financial assistance from plaintiff's parents, the parties purchased real estate, which defendant renovated, rented, or sold.
Properties Subject to Equitable Distribution
In 1994, the parties purchased property located in Upper Saddle River for $217,500 (the marital home). They paid $32,500 and borrowed $185,000 from plaintiff's parents. They later obtained financing for extensive renovations. At the time of trial, the property had a mortgage balance of approximately $1.8 million, and it was in foreclosure. At trial, Kenneth Baker, a licensed real estate broker, testified that the parties should list the property for sale at no more than $1.6 million. Defendant testified that the property "should not be listed for anything less than [$2.5 or $2.6] million."
2. The Edgewater Property
Plaintiff's father owned two separate but adjoining lots located in Edgewater (the Edgewater property). In 1996, defendant entered into an agreement with plaintiff's father to improve the property, and thereafter constructed six townhouses and five stores. Plaintiff's father eventually gifted the entire property to the parties. The parties received monthly rental income of $7000 from one lot, and $6000 from the other lot. After paying the monthly carrying charges, there was a monthly net rental income of $10,500, $10,000 of which was to be used to pay a "wrap around" mortgage the parties had later obtained. The parties stipulated that one lot had an "as is" market value of $1.54 million, with an approximately $826,670 mortgage balance, and the other lot had an "as is" market value of $1.4 million, with an approximately $674,386 mortgage balance.
3. The Seaside Park Property
In 1998, plaintiff, defendant, and plaintiff's parents jointly purchased property in Seaside Park for $305,000 (the Seaside Park property). Plaintiff and defendant paid $10,000, and plaintiff's parents paid $305,000. In 2002, defendant began and major construction on the property, but it remained unfinished due to litigation with the Borough of Seaside Park.
The property had occasionally been rented during the summer season, at approximately $6000 per week. There was a mortgage balance of $1,273,962, which plaintiff and defendant conceded was solely their responsibility. The parties stipulated that the property's "as is" market value was $1.9 million, and $2.6 million if finished. Because the property was unfinished, and plaintiff's parents had a fifty percent ownership interest, its fifty percent net value to the parties was $950,000. The property was in foreclosure, and was listed for sale at $1.6 million.
4. The Bergenfield Property
In 2000, the parties purchased property in Bergenfield for $185,000 (the Bergenfield property). They paid $10,000 and obtained a $175,000 mortgage. At the time of purchase, the property was a subdivided lot containing a single-family house. Defendant demolished the house and constructed two houses. The parties re-financed the property for $1.2 million. One of the houses sold for $865,000 in 2008, and the parties used the sale proceeds to pay attorney's fees, mortgages, and bills. The other house was not sold. There was a mortgage balance of $774,000, and the property was in foreclosure.
5. The Upper Saddle River Lot
In June 2006, the parties purchased a three-acre lot in Upper Saddle River for approximately $1 million (the Upper Saddle River lot). The lot is adjacent to the marital home, and is not encumbered by any mortgage. At trial, Baker testified that the lot's highest and best use was to subdivide it into two lots that could sell for $750,000 each. Defendant testified that based on his expertise as a property developer, the lot's best use was to construct low income affordable housing units, which he could develop. He claimed he had already received preliminary approval for $158 million for the construction, and could secure the necessary financing for the project.
In May 2008, plaintiff and defendant purchased commercial property in Ramsey for $660,000 (the Ramsey property). They paid $25,000 and obtained a $1 million mortgage from Penn Business Credit (the Penn mortgage). They secured this mortgage with their other properties, creating a "wrap around" mortgage. As a result of a dispute between defendant and Township of Ramsey officials,*fn1 the renovations were only ninety percent complete, and it will cost approximately $120,275 to complete them. The parties stipulated that the property's "as is" market value was $950,000. They listed it for sale at $1.2 ...