On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-1660-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Fisher and Grall.
In this appeal of a post-judgment matrimonial order, we conclude that N.J.S.A. 25:2-1(b), which generally protects certain trust funds from creditors, does not insulate an individual retirement account (IRA) from a family court's reach when the account holder has failed to comply with an order to pay counsel fees incurred by an adversary in defending a support order. As a result, we affirm the order under review insofar as it imposed a constructive trust on plaintiff's IRA but reverse, on the cross-appeal, because the family judge mistakenly concluded that N.J.S.A. 25:2-1(b) precluded liquidation of the IRA.
In a prior appeal, we outlined the circumstances that preceded the order in question:
The parties were married in 1995 and had two children. They were divorced by way of a dual judgment entered on January 29, 2008. The judgment incorporated their settlement agreement, which required that plaintiff pay defendant limited duration alimony for nine-and-one-half years; plaintiff was obligated to pay defendant $55,000 annually for the first three years, $50,000 annually for the following three years, and $45,000 annually for the remainder of the alimony term.
Within a year of the entry of judgment, plaintiff filed the first of a series of post-judgment motions seeking a modification of the monetary obligations imposed on him by the agreement based on his consulting firm's loss of its only client. Plaintiff asserted that his business of selling sports and entertainment tickets on line was a "non-issue" because he "had never made a profit nor had any income from the ticket business." In light of these contentions, the trial court temporarily reduced plain-tiff's annual alimony obligation from $55,000 to $40,000 pending a plenary hearing.
Based on discovery obtained from plaintiff, as well as information subpoenaed by defendant from PayPal, defendant's forensic accountant provided an initial report, which suggested plaintiff earned a considerable profit in selling sports and entertainment tickets. A supplemental report provided by defendant's accountant in December 2009 asserted that from April 1, 2008 to October 14, 2009, plaintiff's PayPal account received deposits of $392,693, and plaintiff had made ticket purchases during the same time frame of $126,776, suggesting income for that period of $265,917 or in excess of $14,000 per month.
Plaintiff's earlier sworn contention that he "had never made a profit nor had any income from the ticket business" was not only forcefully challenged by defendant's accountant, but was belied by plaintiff's own accountant, who reported plaintiff received income from his ticket business during 2008 and 2009 of approximately $3500 per month. Plaintiff's accountant based this determination on information obtained from PayPal, which suggested income to the ticket business, after deductions for ticket purchases, of slightly more than $6000 per month; the income attributed to plaintiff from that source was reduced by the accountant because plaintiff allegedly had a partner. On the eve of the plenary hearing, plaintiff's accountant adjusted his figures upon learning that plaintiff received additional receipts from sources other than PayPal.
[Gottbetter v. Gottbetter, No. A-3300-09 (App. Div. Feb. 14, 2011) (slip op. at 1-3)]
The plenary hearing never occurred. Plaintiff's attorney requested and was relieved as counsel, and plaintiff withdrew his motion for a reduction of his support obligations. The earlier order that temporarily reduced the awards was vacated, plaintiff was ordered to repay that part of the earlier award that had been reduced pendente lite, and the judge scheduled the date for the submission of defendant's request for fees and expenses incurred during those proceedings and the date for submission of plaintiff's opposition. Id. at 3-4.
Defendant sought an award of $125,528 in counsel fees, expert fees and other costs, which the judge granted in full for reasons set forth in a written opinion. Plaintiff appealed, arguing, among other things, that the judge did not take into account his ability to pay. We found insufficient merit in plaintiff's arguments to warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), and briefly summarized our holding with the following comments:
The record reveals that plaintiff's claim of an inability to pay alimony as originally agreed was based upon the allegation that he was without sufficient income and that his ticket business was a "non-issue" because it generated no income. After considerable discovery and expense, plaintiff's contentions unraveled; his own accountant demonstrated that plaintiff earned substantial income through his ticket business. That same evidence more than amply ...