On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Hunterdon County, Docket No. FM-10-272-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 31, 2012 -
Before Judges Payne, Reisner and Hayden.
Defendant, the Estate of Carl J. Massaro, appeals that part of an order of judgment awarding plaintiff, Maria Harrison, palimony in the amount of $2,273,031, payable within thirty days of the entry of the judgment; the trial court's determination not to impute income to Harrison; and the trial court's refusal to retroactively apply, as a bar to the palimony award, N.J.S.A. 25:1-5(h), a statute requiring palimony agreements to be in writing and created with the advice of counsel. The Estate also appeals the denial of its post-trial motions seeking, on the basis of alleged evidence of plaintiff's unclean hands, a dismissal of her suit and an award of attorney's fees, as well as motions for reconsideration of the court's requirement that the palimony judgment be paid within thirty days of its entry and its determination not to impute income to Harrison. In her cross-appeal, plaintiff claims that the trial court erred in failing to order an escrow of funds for payment of potential taxes on the palimony award.
We affirm on the issues raised by the Estate and require a formal motion in the trial court and hearing with respect to the escrow issue, if Harrison wishes to maintain that claim.
A fourteen-day trial was held in this matter before Judge Ann Bartlett in the Family Part. The trial disclosed the following evidence: In 1992, Harrison, a Peruvian attorney who practiced business and governmental relations law in that country, married an Oklahoma rancher named Harrison and moved to the United States. The marriage was not a success, and after several months, Harrison left her husband and moved to New Jersey, where she had friends.*fn1 She enrolled in vocational classes and obtained employment preparing tax returns. Additionally, she worked at a travel agency. In 1993, Harrison met Carl Massaro, a man thirty years older than she was. The relationship flourished and, at Massaro's request, in September 2004, Harrison moved into Massaro's Belle Mead home. In early 1995, Harrison left her employment to be at home with Massaro. At the time, Massaro, who was very conservative, did not want Harrison to work. He called Harrison his "queen" and promised to provide for her.
At the time that Harrison and Massaro met, Massaro, a self-made successful businessman, owned Ajax, a profitable company that manufactured truck trailers. However, in approximately 1996, Massaro determined to sell Ajax to a company known as Standard Automotive for approximately $24,000,000. During that time period, Harrison assisted him with the legal considerations involved in the sale.
Shortly after the sale took place, Massaro and Harrison moved to Punta Gorda, Florida, where Massaro purchased a home on the inland waterway with a pool. At Massaro's request, Harrison took accounting courses at a local college so she could assist him in his business interests. At the time, Massaro was providing consulting services to Standard Automotive's Ajax business, which was opening a plant in Mexico. Massaro thought that Harrison could be of assistance in that endeavor as the result of her fluency in Spanish and legal background. In February 1999, Standard Automotive offered Harrison a position as an import-export specialist at a salary of $60,000 per year, and the couple returned to New Jersey so she could take that job. She maintained a salaried position, working in Standard Automotive's Ajax operations from 1999 to 2002, and thereafter, worked solely for Massaro without taking a salary.
Especially during the early years of their relationship, Massaro and Harrison lived a lavish lifestyle. They traveled extensively in Europe, Canada and the United States, and Harrison frequently visited Peru. In 1996, Massaro purchased an apartment in Cannes, France that the two used, particularly during the Cannes film festival. When home, Harrison would cook during the week. However, on the weekends, they would eat at fine restaurants. Harrison testified that, as a matter of custom, Massaro would give her a check in the amount of $16,000 per month for household expenses, which she paid. Harrison kept the couple's accounts. However, the two filed separate income tax returns.
In July 1999, Massaro bought a four-bedroom house for Harrison at a purchase price of $330,000. Following the purchase, both Harrison and Massaro resided in that house, although Massaro retained ties to Florida for tax purposes. In 2000, he purchased two horse farms in Florida.
Additionally, in 2000, Massaro purchased a struggling truck trailer manufacturing company called Vanco, located in South Jersey, that he thought he could turn around and sell at a profit. Thereafter, much of his and Harrison's time was spent in an effort to revive Vanco's business. In later years, Harrison testified, she worked up to sixty hours per week for Vanco. Although Massaro had previously assured Harrison that he would buy her a business or commercial property that would generate $20,000 monthly in income, after the purchase of Vanco, those plans were placed on hold. The purchase of Vanco also led to Massaro's estrangement from his daughter Lisa when, in assembling money for that purchase, he requested the repayment of money he had loaned her, and she refused.
In 2002, Automotive Standard filed for bankruptcy. Following the bankruptcy, Massaro repurchased Ajax and changed its name to Hercules Enterprises, Inc. Many members of Massaro's family worked at Hercules, including Massaro's son Kurt (K.M.), who managed the business; K.M.'s son Carl Mark; and Massaro's brother, Frank. Ill feelings arose between Massaro and K.M. after Massaro became convinced that his son was padding Hercules' payroll with unnecessary employees and stealing from it to pay personal expenses.
Harrison testified that, after the bankruptcy, she considered obtaining an outside job. However, at Massaro's urging, she declined an offer by one of Ajax's clients so that she could continue to work with Massaro in his businesses. In 2004, to make her services more valuable, at Massaro's urging, she entered an L.L.M. program at Dickinson School of Law in Carlyle, Pennsylvania, living near there during the week and returning home only on weekends. However, she later learned that she would have to complete a three-year J.D. program in order to sit for the bar. Although Harrison completed her L.L.M. in May 2005, she did not enroll in Dickinson's J.D. program, because decedent didn't want to be separated from her or lose her assistance for that length of time. Massaro paid the $25,000 in tuition costs for the L.L.M.
At the end of 2006, Massaro's health declined. He was hospitalized after a fall on January 14, 2007, and shortly thereafter, he suffered a severe stroke that significantly impaired his ability to communicate. He died on February 15, 2007.
Throughout their relationship, Harrison sought marriage with Massaro. But despite the fact that they lived in a marital-type relationship from 1994 to Massaro's death, he declined marriage, stating that it would be opposed by his children, K.M. and Lisa, who sought to protect their inheritances.*fn2 Nonetheless, plaintiff testified, with significant corroboration from other witnesses, that Massaro assured her that he would take care of her for life. Initially, Massaro took the position that he would not include Harrison in his will and would leave his estate to his children, K.M. and Lisa. As we stated, he proposed that, instead, he would buy her a business or commercial property that would generate her ...