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Francis Nathaniel Clark v. Denise Lockwood Clark

October 19, 2012


On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Hunterdon County, Docket No. FM-10-435-08.

The opinion of the court was delivered by: Lihotz, J.A.D.



Argued September 19, 2012

Before Judges Messano, Lihotz, and Kennedy.

The opinion of the court was delivered by LIHOTZ, J.A.D.

In this matter, the parties' twenty-eight-year marriage ended in divorce on September 21, 2011. Plaintiff Francis Nathaniel Clark appeals from a provision contained in the final judgment of divorce requiring him to pay $600 per month as alimony to defendant Denise Lockwood Clark. At trial, plaintiff proved defendant secreted $345,690 from their closely held business during their marriage. Consequently, the trial judge ordered defendant to repay half the amount taken, in satisfaction of plaintiff's equitable distribution interest. The trial judge declined to offset these obligations, and an execution to secure payment of alimony was entered against plaintiff's wages. On appeal, plaintiff argues the trial judge erred in applying the law. He maintains defendant's conduct led to divorce and demonstrates egregious fault obviating any alimony award. In the alternative, he asserts his monthly alimony obligation must be reduced because of the economic impact of defendant's marital fault, and he should be permitted to reduce his alimony payments by the debt defendant owes him. Finally, plaintiff challenges the amount representing his interest in the former business asset awarded as equitable distribution, and another limited aspect of the trial court's equitable distribution award regarding his repayment resulting from his alienation of a marital asset.

Following our review, we reverse the alimony provision of the final judgment of divorce, concluding the facts support a finding defendant engaged in conduct rising to the level of egregious fault. We remand to the trial court for consideration of whether, in light of the showing of egregious marital fault, alimony should be denied.


In the divorce proceeding, the parties resolved certain matters. The areas of disagreement focused on alimony and equitable distribution. Because these issues remain the concerns on appeal, we limit our factual recitation to those matters.

Plaintiff and defendant were married on February 19, 1983, and have four children. Plaintiff, the residential custodial parent, lives in the former marital home with the three youngest unemancipated children,*fn1 and defendant lives in Florida.

During the marriage, the parties were equal shareholders in DeFranc, Inc., which owned and operated Grayrock Pharmacy (Grayrock). Plaintiff was Grayrock's founder and pharmacist. Since 1995, defendant was Grayrock's bookkeeper, a job requiring her to "overs[ee] the administration of all the bookkeeping, the staff maintenance, payroll, making deposits, all the reconciliations, interfacing with the vendors and the lenders . . ., [and also] taking care of financials [and] preparing everything for the accountant."

The parties frequently squabbled over money. Plaintiff believed defendant spent too much and defendant suggested plaintiff was too cautious. In 2006, defendant initiated divorce discussions and hired counsel, paying a $2500 cash retainer. She filed a complaint on April 3, 2007, which she later withdrew to avoid the possibility of the parties' personal problems suggesting Grayrock could be purchased cheaply. Plaintiff filed his complaint for divorce on April 9, 2008.

In June 2008, Grayrock's accountant, Ron Zuckerman, warned that Grayrock was facing failure due to a cash flow shortage. Plaintiff commenced discussions to sell the business. He secured an $800,000 purchase offer from Drug Fair and also entertained discussions with Hank Incognito to sell the business for $1,000,000. Defendant's objections to these proposals generated plaintiff's motion to compel her cooperation with a sale of Grayrock. A Family Part judge denied plaintiff's motion, finding he failed to prove the financial necessity of a sale and because the asset provided a substantial source of income for the family. However, the motion judge determined the parties were draining cash from the business for their personal use, which created distrust between them and adversely affected operations. Consequently, she appointed a custodial receiver and approved the use of joint funds to "obtain experts to review [Grayrock's] financials . . . to determine its value and the advisability of a sale[.]" Notwithstanding this intervention, Grayrock ultimately filed for bankruptcy and its assets were sold to Roseville Pharmacy, L.L.C., for $114,000.

During discovery in the matrimonial proceeding, plaintiff learned defendant held a savings account and safe deposit boxes titled solely in her name. The savings account records reflected large deposits, prompting further inspection. He also ...

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