June 27, 2012
JOHN M. DALESSIO, PLAINTIFF-RESPONDENT/CROSS-APPELLANT,
FLORENCE DALESSIO, DEFENDANT-APPELLANT/ CROSS-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Atlantic County, Docket No. FM-01-1008-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: March 28, 2012 -
Before Judges Cuff, Lihotz and St. John.
In this appeal, both parties seek review of various provisions of a judgment of divorce entered following a five day trial. We reverse and remand for further proceedings consistent with this opinion.
Plaintiff John M. Dalessio and defendant Florence Dalessio married in July 2003. Plaintiff was sixty-five; this was his fourth marriage. Defendant was sixty-two; this was her third marriage. Plaintiff filed a complaint for divorce on May 15, 2009.
Although the marriage is a relatively short-term marriage, the parties had been a couple for thirteen years. They commenced a dating relationship in 1996, purchased a home together in 1999, and plaintiff paid all household expenses and many of defendant's expenses throughout their cohabitation and marriage. Defendant paid only for her personal beauty supplies, clothing and transportation expenses.
Plaintiff had substantially more financial resources than defendant. At the time of the marriage, he estimated his net worth at $3,000,000. Defendant held a real estate license and found the house the parties bought in 1999. The purchase price of the house was $486,049. Defendant insisted she contributed $50,000, while plaintiff contributed the balance. Plaintiff alleged he paid the entire cost of the house from pre-marital funds. The parties also renovated the house in 2000, using plaintiff's funds. The parties held title to the house as joint tenants with a right to survivorship to permit defendant to receive the house upon his death. The parties resided in the house during the marital litigation.
During their pre-marital relationship and marriage, defendant also operated a beauty salon in a casino in Atlantic City. According to Schedule C of defendant's federal income tax returns and W-2s issued to her between 2003 and 2007, defendant earned wages and profits from an entity known as Salon International. From 2008 to 2009, she earned wages and profits from an entity known as Ventnor Beauty Supply.
In her oral opinion, the trial judge awarded defendant $3500 monthly limited duration alimony for three years. She found that both parties had an interest in the house. The judge awarded the house to plaintiff, subject to payment of $343,727 to defendant. The judge also awarded the boat to plaintiff, subject to payment of half the value of the boat, $48,750, to defendant. The judge awarded a wave runner to plaintiff, and required defendant to pay $8550 to plaintiff representing 50% of the shelter expenses incurred by plaintiff pendente lite. Defendant was also required to pay $1340 in counsel fees awarded to plaintiff in October 2009, in relation to her application to remove plaintiff's weapons from the marital home. After reimbursing plaintiff for the payments made pending the litigation, the net equitable distribution award to defendant was $383,928.
Both parties appeal from the February 16, 2011 dual judgment of divorce. Defendant argues the equitable distribution award, specifically the distribution of the marital home, is founded on legal error. She also argues that contribution by her to pendente lite shelter expenses is contrary to the marital custom for payment of expenses. Defendant also contends the judge should not have ordered her to pay any counsel fees to plaintiff.
In his cross-appeal, plaintiff argues the judge did not address his claim that the money earned by defendant during the marriage and deposited in her investment accounts is a marital asset subject to distribution. He also contends that the judge should have imputed more income to defendant from her investment accounts and awarded $12,467, not $8550, as reimbursement of shelter expenses.
N.J.S.A. 2A:34-23h authorizes a judge to grant an "award or awards to the parties, in addition to alimony and maintenance, to effectuate an equitable distribution of the property, both real and personal, which was legally and beneficially acquired by them or either of them during the marriage." The statute codifies public policy that acknowledges "'marriage is a shared enterprise, a joint undertaking, that in many ways is akin to a partnership.'" Smith v. Smith, 72 N.J. 350, 361 (1977) (quoting Rothman v. Rothman, 65 N.J. 219, 229 (1974)).
To fashion an equitable distribution award, the trial judge must identify the marital assets, determine the value of each asset, and then decide how the property should be distributed. Rothman, supra, 65 N.J. at 232. To effectuate the equitable distribution of the parties' assets, the judge must consider, but is not limited to, the sixteen factors identified in N.J.S.A. 2A:34-23.1. If the parties dispute whether the asset is a marital or pre-marital asset, or dispute the amount contributed to acquire an asset, the judge must resolve that dispute.
In this case, plaintiff never disputed that the house was subject to equitable distribution. Both parties, however, disputed the amount contributed by each to acquire the house. Plaintiff also sought a greater share of the house than defendant because of the extent of his financial contribution to acquire, renovate, improve and maintain the house. Defendant also contends that the judge misapplied the law in fashioning her award of the house.
The judge found the value of the marital home was $1,173,500. She also found the purchase price of the house was $486,049. Subtracting the purchase price of the house from its current value, the judge found "the distributable value" of the house was $687,454 and found defendant was entitled to 50% of the distributable value or $343,727. The methodology used by the judge, however, is not in accordance with established principles of law.
It is well-established that the value of the marital home for purposes of equitable distribution is the present fair market value of the house less any outstanding encumbrances. Pascarella v. Pascarella, 165 N.J. Super. 558, 564 (App. Div. 1979). The trial judge should not give "[plaintiff] credit for, . . . his original investment in the property[.]" Ibid. Yet, that is precisely what the judge did in this case.
The use of the wrong methodology dramatically affects the result. Here, having found that the marital home has a present market value of $1,173,500, the distributable value of the house is $1,173,500, because no encumbrances, such as a mortgage, burdened the asset. To determine what share each party should receive, the judge should have started with the distributable value of $1,173,500, then applied the applicable statutory factors, and any other factor deemed relevant to achieve an equitable award. By subtracting the purchase price of the house from the present market value, plaintiff received 70.71% of this asset and defendant received 29.29%. The judge may have intended this spread but she did not expressly inform the parties or this court that it was her intention to award a disproportionate share of the house to defendant.
We, therefore, reverse and remand this portion of the equitable distribution award of the marital home. On remand, the judge shall expressly resolve the disputed issues of fact, such as defendant's alleged $50,000 contribution to the purchase price of the house and plaintiff's position that he should receive a greater share of the house than defendant. The judge shall also expressly determine the percentage of the value of the house distributed to each party.*fn1
The trial judge also required defendant to reimburse plaintiff a sum representing one-half of the shelter expenses he solely paid pendente lite. Defendant argues this is counter to the marital lifestyle in which plaintiff paid all expenses associated with the house and is also contrary to the pendente lite order. In his cross-appeal, plaintiff argues the judge overlooked another $4000 in shelter expenses.
A pendente lite order is designed to maintain the status quo until the merits of the case are resolved. Rose v. Csapo, 359 N.J. Super. 53, 60 (Ch. Div. 2002). A matrimonial pendente lite award is designed to be a temporary order. Mallamo v. Mallamo, 280 N.J. Super. 8, 12 (App. Div. 1995). It is crafted by an examination of certifications and case information statements. Ibid. It is not designed to and does not survive a judgment of divorce, unless expressly preserved or reduced to judgment prior to entry of the final judgment. Ibid. See Bauza v. Bauza, 201 N.J. Super. 540, 542-43 (App. Div. 1985) (pendente lite counsel fee award not expressly preserved merges in final judgment); Kuloszewski v. Kuloszewski, 235 N.J. Super. 399, 400 (Ch. Div. 1989) (pendente lite counsel fee reduced to judgment survives entry of final judgment of divorce).
Although the pendente lite award is temporary and does not bar requiring defendant to contribute to her share of the shelter expenses actually paid by plaintiff prior to judgment, the judge simply stated that it was "reasonable" for defendant to do so without any explanation. We, therefore, remand this portion of the award for further fact-finding. In doing so, the judge should address plaintiff's argument that he submitted evidence that defendant's share of pendente lite shelter expenses should have been $12,500 not $8,550, and should consider the significant difference in assets and income of the parties.
Plaintiff also argued at trial that a portion of the funds in investment accounts maintained by defendant was a marital asset and subject to equitable distribution. The parties do not dispute that defendant maintained investment accounts prior to their marriage and the pre-marital portion of the accounts is not a marital asset. The judge did not address plaintiff's position that the deposits to and earnings from these accounts during the marriage were subject to equitable distribution. On remand, the judge shall address this issue.
The remaining issue presented by defendant, the counsel fee incurred on a pre-trial motion, and the remaining issue presented by plaintiff in his cross-appeal, the rate of return on defendant's investment accounts, are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Reversed and remanded for further proceedings consistent with the terms of this opinion. We do not retain jurisdiction.