A.J.V. VS. M.M.V. (FM-14-1402-14, MORRIS COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3990-18
A.J.V.,
Plaintiff-Appellant,
v.
M.M.V.,
Defendant-Respondent.
________________________
Argued April 27, 2021 – Decided May 14, 2021
Before Judges Fisher, Gilson and Gummer.
On appeal from the Superior Court of New Jersey,
Chancery Division, Family Part, Morris County,
Docket No. FM-14-1402-14.
Karin Duchin Haber argued the cause for appellant
(Haber Silver & Simpson, attorneys; Karin Duchin
Haber and Jane B. Simpson, of counsel; Jani Wase
Vinick, on the brief).
Mark H. Sobel argued the cause for respondent
(Greenbaum, Rowe, Smith and Davis LLP, attorneys;
Mark H. Sobel, of counsel and on the brief; Lisa B.
DiPasqua, on the brief).
PER CURIAM
The parties to this matrimonial action were married in October 1996 and
have one child. Both plaintiff A.J.V. (Alan 1) and defendant M.M.V. (Martha)
have college degrees and have worked in the pharmaceutical industry. After a
twenty-two-day trial, Judge Noah Franzblau rendered a 117-page written
decision, which included twenty pages of thorough and thoughtful credibility
findings, and entered a judgment of divorce.
In this appeal, Alan seeks review of certain portions of the judgment of
divorce, arguing the trial judge erred or abused his discretion: (1) in including
a $5,000 monthly savings component in his eleven-year obligation to pay Martha
$11,500 per month in limited durational alimony; (2) by imposing a Mallamo2
adjustment – based on the alimony savings component – because that component
was absent from the pendente lite support order; (3) in the manner in which he
distributed restricted stock units Alan received as part of his compensation from
his employer; and (4) in allowing Alan less parenting time than he enjoyed
during the pendente lite stage. Because the trial judge's extensive factual
1
We use fictitious names to avoid any unnecessary invasion of the parties'
privacy and because of the child-related issues.
2
Mallamo v. Mallamo, 280 N.J. Super. 8 (App. Div. 1995).
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findings are supported by substantial credible evidence and because his legal
conclusions comport with applicable law, we affirm the judgment of divorce in
all respects.
I
The following general circumstances inform the trial judge's alimony
rulings.
Alan worked at the same pharmaceutical company throughout most of the
marriage; he has been the company's head of global pricing for its oncology unit
since 2006. Martha worked at three different pharmaceutical companies during
part of the marriage but left her job in 2006 to care full time for their newly-
born and only child, Stephen.
After they married, the parties initially lived in a condominium unit owned
by Alan, but they later purchased a home in Flanders for $312,000. In 2004,
after Alan received a promotion, the parties sold their Flanders home and
purchased a home in Montreal. Another promotion two years later necessitated
their move back to New Jersey; they then purchased a $1.3 million-dollar, 5,000-
square-foot home in Chester.
Alan was the primary wage earner during the marriage. His W-2 wages
for the years 2012 through 2018 were: $1,022,923 in 2012; $962,465.81 in
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2013; $784,786.84 in 2014; $832,694.32 in 2015; $971,793.45 in 2016;
$841,562.01 in 2017; and $633,606.20 in 2018. Alan also received short-term
cash incentives in the form of annual bonuses and long-term incentives awarded
yearly in the form of restricted stock units (RSUs). According to Alan, his
employer calculated employee compensation differently depending on whether
the employee's position was part of the Corporate Executive Group (CEG). He
testified that in or around 2010, his position was considered part of the CEG,
resulting in the employer's calculation of his short-term and long-term incentives
so that he received greater compensation.
In 2011 or 2012, Alan was working as the head of a particular operation
that was not part of the CEG, but his compensation in that role was
"grandfathered" under the CEG framework through 2012. From 2013 forward,
the employer calculated Alan's short-term and long-term incentives outside of
the CEG framework so that his compensation generally decreased. But in 2017,
Alan received a supplemental, one-time cash payment of $158,800, which he
claimed represented "three years of transition payments" for 2014, 2015, and
2016 that were supposed to have been paid to him during those years.
Martha earned substantially less than Alan during the marriage and, as
noted, left the workforce after Stephen was born. She began working as a
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pharmaceutical sales representative just before the parties married, earning
between $40,000-$50,000 per year plus bonuses. In 1999, Martha obtained
employment as a market researcher earning around $60,000 per year, and she
later worked for another pharmaceutical company until 2004, when the parties
moved to Canada due to Alan's promotion. She had some difficulty obtaining
employment in Canada.
When the parties moved back to New Jersey in 2006, Martha returned to
work at a pharmaceutical company that had previously employed her; she was
then earning approximately $140,000 per year and received multiple one-time
bonuses in 2007 that increased her earnings to approximately $187,000. She
left that position in November 2007.
In February 2014, on learning Alan had engaged in adulterous affairs,
Martha moved out of the marital home with Stephen to an extended-stay hotel
and later to an apartment in Somerset. She put most of the marital home's
furniture into storage and removed $22,000 in cash from Alan's gun safe, leaving
behind a letter from her attorney advising she wanted a divorce.
In November 2014, about five months after Alan filed for divorce, Martha
and Stephen returned to the marital home pursuant to a pendente lite order and
Alan moved to a rental home, also in Chester.
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Based on these and many other facts unnecessary to recount in full here,
the trial judge ordered Alan to pay Martha limited durational alimony – for a
period of eleven years – in the amount of $11,500 per month. Alan argues the
trial judge abused his discretion by including in that amount a $5,000 monthly
component for savings. Alan, in fact, asks this court "to exercise its original
jurisdiction and determine that no savings component is needed."
"[A]limony is neither a punishment for the payor nor a reward for the
payee," Mani v. Mani, 183 N.J. 70, 80 (2005), but instead constitutes an
economic right arising from the marital partnership, providing the dependent
spouse with "a level of support and standard of living generally commensurate
with the quality of economic life that existed during the marriage," Koelble v.
Koelble, 261 N.J. Super. 190, 192-93 (App. Div. 1992).
The fixing of a spousal support award is "broadly discretionary."
Steneken v. Steneken, 367 N.J. Super. 427, 434 (App. Div. 2004), aff'd, 183 N.J.
290 (2005). A court may order alimony "as the circumstances of the parties and
the nature of the case shall render fit, reasonable and just." N.J.S.A. 2A:34 -23.
"Whether alimony should be awarded is governed by [the fourteen] distinct,
objective standards" – not one of which is "elevated in importance over any
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other" – listed by the Legislature in N.J.S.A. 2A:34-23(b). Gnall v. Gnall, 222
N.J. 414, 429 (2015).
A matrimonial judge must "make specific findings on the evidence about
all of the statutory factors." N.J.S.A. 2A:34-23(c); see also Crews v. Crews, 164
N.J. 11, 26 (2000). Overall, "[t]he goal of alimony is to assist the supported
spouse in achieving a lifestyle 'reasonably comparable' to the one enjoyed during
the marriage." Lombardi v. Lombardi, 447 N.J. Super. 26, 37 (App. Div. 2016)
(quoting Steneken, 183 N.J. at 299). Establishing the standard of living
experienced during the marriage "serves as the touchstone" in the analysis.
Crews, 164 N.J. at 16. Marital lifestyle is ascertained by considering "the
marital residence, vacation home, cars owned or leased, typical travel and
vacations for each year, schools, special lessons, and camps for [the] children,
entertainment . . ., household help, and other personal services." Weishaus v.
Weishaus, 360 N.J. Super. 281, 290-91 (App. Div. 2003), rev'd in part on other
grounds, 180 N.J. 131 (2004). A marital lifestyle finding must be based not just
on the amounts expended but ultimately what is equitable. Glass v. Glass, 366
N.J. Super. 357, 372 (App. Div. 2004).
At trial, the judge learned that the parties had their own credit cards and
maintained separate checking, savings, and money market accounts during the
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marriage. Martha testified that Alan "didn't want . . . anything joint," although
the testimony revealed there were exceptions to this general approach. For
example, even before they married, the parties deposited their incomes into
Alan's checking and money market accounts, which Martha could not access.
Alan used his money market account to, among other things, assist with
purchasing their homes and other large marital expenses, and he used his
checking account to pay household bills. They also garnered significant annual
income from several investment accounts, and plaintiff paid the credit card bills
in full each month.
Because Martha did not have access to Alan's bank accounts, she mostly
used her American Express card for day-to-day expenses, acknowledging as
well that Alan would give her cash "[a]t times" if she needed it. Although Alan
paid Martha's credit card bill each month, he required her to itemize the
statement.
They owned a million-dollar home in Chester and a $285,000 vacation
home on a farm in Pennsylvania where they spent their weekends between April
and September, and they had already paid off both mortgages by the time of the
separation because they were "debt adverse." The parties also vacationed
elsewhere – between 2010 and 2014, they traveled with Stephen to Disney
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World during the off-season, the Bahamas, the U.S. Virgin Islands, Cape Cod,
and once to Hawaii on "an award trip" – but the employer bore most of the
expenses for those trips.
They did not own any luxury cars. Up until around 2017, Alan used his
company car as his primary vehicle; later, when the company no longer provided
him with a car, he purchased a 2017 Ford Explorer. At the time of the trial,
which started in September 2018 and ended in March 2019, Martha drove a 2014
Ford Explorer and, prior to that, either a 2002 or 2003 Mercury Mountaineer or
her company car when employed. They drove Fords, according to Martha,
because they were able to utilize Alan's father's executive discount to purchase
them. Their only debts were the automobile loans for the Ford Explorers. They
also owned several recreational vehicles, including a 2012 Spyder motorcycle,
a 2004 Suzuki ATV, a Polaris RZR ATV, and a Kubota tractor.
The parties accumulated more than $7 million in marital assets due to their
focus on saving and investing as much money as possible. Martha testified
"[s]avings was always a big part" of the marital lifestyle; they "always saved
regularly, on a month to month basis, year to year," in "a continuous pattern . .
. based on saving for [their] future." Alan agreed that savings was "by far the
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largest component" of the marital lifestyle, acknowledging they saved $12,800
per month in 2012 and $21,250 per month in 2013.
As part of their frugal lifestyle, Martha sewed the drapes for their living
room and dining room, purchased clothing for herself at the Salvation Army at
Alan's suggestion, and made use of hand-me-down clothing for Stephen from
friends until he was in second grade, although Martha also acknowledged she
sometimes shopped at other clothing stores for herself and Stephen. The parties
did not hire outside help to clean the home or to assist with childcare.
In an assessment of a marital lifestyle, courts must give due consideration
to evidence of regular savings during the marriage, even if there is no concern
about protecting an alimony award from future modification or cessation on the
death of the supporting spouse. "The most 'appropriate case' in which to include
a savings component is where the parties' lifestyle included regular savings . . .
[b]ecause it is the manner in which the parties use their income that is
determinative when establishing a martial lifestyle." Lombardi, 447 N.J. Super.
at 39. The fact that "the payment of the support ultimately is protected by life
insurance or other financial tools, does not make the consideration of the savings
component any less appropriate." Ibid. Indeed, "[t]he Supreme Court has
recognized the need to consider regular savings in determining a marital lifestyle
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by including a line item for monthly savings in Schedule C of the case
information statement parties must file in family matters." Id. at 40-41.
Based on the evidence found credible, the judge included in the limited
durational alimony award a $5,000 per month savings component. We focus on
this aspect because it is hotly contested and because the balance of the alimony
determinations are sound and reasonable beyond question.
As noted above, a matrimonial court must give consideration to all
fourteen statutory factors. Under the first – the "actual need and ability of the
parties to pay," N.J.S.A. 2A:34-23(b)(1) – the judge found "the net assets subject
to equitable distribution are in excess of $8 million" and that "following the sale
of the parties' real estate," it was anticipated "both parties will each receive in
excess of $3 million, which includes pension and retirement assets ." The judge
further found that "[w]hile it is expected that the equitable distribution will
enable the parties to acquire separate residences, the potential interest earned on
the parties' remaining equitable distribution (especially following [the] payment
of legal fees) will not be sufficient to enable the parties to live a lifestyle
reasonably comparable to the marital lifestyle."
As for the parties' earnings, the court found that Martha's potential future
earnings, based upon an imputed gross income of $76,415 that Alan does not
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challenge on appeal, "will be insufficient to enable her to meet the marital
lifestyle." That said, Alan's "significant annual earnings . . . will enable him [to]
maintain a lifestyle similar to that which existed during the marriage and to pay
alimony in order to supplement [Martha's] lifestyle to provide her with a lifestyle
similar to that which existed during the marriage."
In considering the second and third factors – the "duration of the
marriage," N.J.S.A. 2A:34-23(b)(2), and the "age, physical and emotional health
of the parties," N.J.S.A. 2A:34-23(b)(3) – the judge found the parties were
married for seventeen-and-a-half years and were in good health.
As for the fourth factor – the standard of living established during the
marital partnership, N.J.S.A. 2A:34-23(b)(4), which we have already discussed
– the judge concluded that while the parties "did not live an extravagant lifestyle
during the marriage," they "accumulated material assets and maintained a high
standard of living." He observed that they owned a $1.3 million-dollar home in
Chester, a $285,000 Pennsylvania vacation home, "furniture, including antiques,
[and Alan] purchased a multitude of guns, and the parties acquired a motorcycle
and recreational vehicles." They "periodically vacationed, although they
preferred to vacation when it coincided with [Alan's] business travel so that the
cost would be subsidized" by his employer.
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The judge also found that Alan "earned significant annual income during
the entirety of the parties' marriage, which was supplemented by [Martha's]
more modest income during the early years of the marriage." The judge found
the parties' "focus on savings, as opposed to consumption, allowed them to
accelerate the pay-down of their mortgages," so that by the time this action was
commenced they "owned the[ir] homes without any mortgage debt"; they had,
in essence, "accumulated approximately $7.02 million of assets during the
course of their marriage, and their only debt was approximately $40,000 relating
to an automobile loan"; they "voluntarily elected to focus on saving for their
future."
Considering the next five statutory factors, N.J.S.A. 2A:34-23(b)(5) to
(9), the judge found Alan had "acquired sufficient education, training, skills and
work experience to have held numerous high-level positions, including
executive level jobs" and during the prior ten years, his total compensation
"ranged from a high of approximately $1,691,871 in 2007 to a low of
approximately $639,947.45 in 2009." He fixed Alan's average annual gross
compensation from 2007 through 2018 at $750,147.89, which "would certainly
enable him to maintain a marital lifestyle reasonably comparable to that which
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he enjoyed during the marriage," and that "he will continue in his [present] job
. . ., which will continue to pay him significant annual income."
In contrast, the judge found Martha's average annual gross earnings were
$76,401 between 1994 and 2008 and that "even assuming [she] could earn this
amount annually upon returning to the workforce, she would not be able to
sustain a lifestyle remotely comparable to the marital lifestyle on her salary."
Even though Martha was college-educated, the judge found she had been absent
from the workforce for more than eleven years, and it was "unknown what, if
any, additional training would be required to enable [her] to re-enter the
workforce"; indeed, the judge found it was "unclear whether [Martha] can return
to the pharmaceutical industry in a similar capacity or at a similar salary ." In
essence, the judge found Martha "sacrificed her career advancement in order to
promote [Alan's] career advancement" during the marriage, as most notably
evidenced by the impact on her employment due to their relocation to Canada.
The judge also recognized Martha's continuous "service as a homemaker during
the entirety of the parties' marriage (cooking, cleaning and maintaining the
home), even when she was working full-time, and her subsequent dedication as
a full-time stay-at-home mother and home-maker following [Stephen's] birth,"
which permitted Alan "to dedicate long hours to his career advancement." While
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the judge recognized both parties will have responsibility for Stephen going
forward, Martha will have greater responsibility under the parenting time
schedule, which grants her nine overnights during every fourteen-day period.
As for the tenth factor – requiring the consideration of "[t]he equitable
distribution of property ordered and any payouts on equitable distribution,
directly or indirectly, out of current income, to the extent this consideration is
reasonable, just and fair," N.J.S.A. 2A:34-23(b)(10) – the judge determined the
parties would "receive significant assets" as part of equitable distribution. He
"anticipated that equitable distribution will be paid from the sale of the parties'
two residences and other liquid assets" and that because "[p]laintiff's income
will not be materially required as a source to pay equitable distribution . . . his
net income will be available to pay alimony."
The judge analyzed and weighed the eleventh factor – "[t]he income
available to either party through investment of any assets held by that party,"
N.J.S.A. 2A:34-23(b)(11) – and anticipated that while "the equitable distribution
will enable the parties to acquire separate residences and pay counsel fees, the
potential interest earned on the parties' remaining equitable distribution will not
be sufficient to enable the parties to live a lifestyle reasonably comparable to
the marital lifestyle."
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The judge lastly weighed the twelfth factor, which requires consideration
of the "tax treatment and consequences" for both parties of the alimony award,
N.J.S.A. 2A:34-23(b)(12), and the thirteenth, which requires consideration of
the "nature, amount, and length of pendente lite support paid, if any," N.J.S.A.
2A:34-23(b)(13). The judge determined that the alimony award was not tax-
deductible for Alan, would not be taxable to Alan, and that Alan had paid
pendente lite support for over four years at the rate of $4,500 monthly plus
defendant's Schedule A and B expenses (except automobile maintenance, fuel,
and oil).
Based on his findings regarding these thirteen factors 3 that we have only
briefly summarized, the judge concluded that the parties' monthly marital
lifestyle was approximately $10,588, and they had an additional monthly
savings component of $19,087. In fixing the alimony award, the judge reviewed
Alan's earnings history, utilized $700,000 as Alan's "reasonable annual income"
from employment (taxed at 38 percent), and estimated his available net income
will be approximately $36,166 per month. The judge also imputed $76,415 in
annual gross employment income to Martha based in part on her prior average
3
N.J.S.A. 2A:34-23(b)(14) isn't a factor per se; it simply allows a court to
consider "[a]ny other factors" that may be found "relevant." The judge found
none here.
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income and the average salary of a secondary school teacher, since she testified
about looking for work as a substitute teacher. Based on the marital lifestyle of
$10,588 monthly plus a $19,087 savings component, the judge reasoned that "it
will not be possible for both parties to maintain the marital lifestyle base d upon
their combined annual gross income of $776,415."
The judge explained that he reached the $11,500 per month alimony award
by considering "the parties' respective incomes, income derived from interest on
equitable distribution, and the need for each party to downsize their lifestyles,
and further considering [Alan's] alimony obligation will not be tax deductible."
He concluded that $6,500 per month in alimony as supplemented by Martha's
imputed net income of approximately $4,000 per month "equates to and
reasonably supports the prior $10,588 per month" marital lifestyle.
The judge also found that the $5,000 monthly savings component was
"reasonable and appropriate based upon the history of the parties' marriage"
during which they saved approximately $19,087 per month. He recognized that
"[w]hile 50 percent of the monthly marital savings component would be
$9543.50 for each party . . . the savings component must decrease dramatically
as a result of [Alan's] alimony obligation and his having to maintain two
households."
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In so ruling, the judge relied on Lombardi, 447 N.J. Super. at 39-40, for
the proposition that "the most 'appropriate case' in which to include a savings
component is where the parties' lifestyle included regular savings," as well as
our rejection in Lombardi of the argument that a party receives the "savings
component through equitable distribution of the parties' accounts." That
contention, the judge held, "runs afoul of the rule that 'equitable distribution
determinations are intended to be in addition to, and not as substitutes for,
alimony awards,' which are awarded to provide for the maintenance of the
marital lifestyle post-dissolution."
Alan does not dispute those findings pertaining to the marital lifestyle
(including the finding that the parties saved approximately $19,087 per month
during the marriage), his employment income, or the employment income
imputed to Martha. Rather, he asserts "the court never quantified or counted the
passive income [Martha] could be expected to earn from investment of the non-
retirement assets she received in equitable distribution, as required by N.J.S.A.
2A:34-23(b)(11)" prior to setting the alimony award.4 He presents a number of
4
Although Alan argues that the retirement assets Martha received in equitable
distribution should factor into this analysis, consideration of those assets in
fixing alimony is contrary to law. See N.J.S.A. 2A:34-23(b) (stating that
"[w]hen a share of a retirement benefit is treated as an asset for purposes of
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hypothetical scenarios to suggest Martha "has her own ability to save from
$6000 to $10,000 per month herself" if one assumes she could obtain annual
investment earnings on those assets at a rate of five percent.
Neither the alimony statute nor case law requires application of a five-
percent annual return on investment income when calculating alimony, as Alan
urges. The plain language of N.J.S.A. 2A:34-23(b)(11) requires a consideration
of "[t]he income available to either party through investment of any assets held
by that party." See Tannen v. Tannen, 416 N.J. Super. 248, 261 (App. Div.
2010), aff'd, 208 N.J. 409 (2011).
In any event, the trial judge's decision establishes that he "consider[ed]"
and "assess[ed] evidence" pertaining to available investment income when
calculating the alimony award, as was required. N.J.S.A. 2A:34-23(b). In
ordering Alan to pay $5,000 per month as a savings component (substantially
less than what was part of the marital lifestyle), the judge explained that he
considered, among other factors, Martha's imputed employment income and her
ability to derive income "from interest on equitable distribution." Indeed, the
judge stated at various points throughout his written decision that Martha's
equitable distribution, the court shall not consider income generated thereafter
by that share for purposes of determining alimony").
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ability to derive investment income from the interest on equitable distribution
would be affected by her need to use part of the non-retirement, liquid assets to
secure housing and to pay more than $700,000 in outstanding counsel fees.
These findings are supported by the record.
In short, we agree with the trial judge and conclude that the $5,000
monthly savings component is reasonable under the circumstances – particularly
given the couple's joint emphasis on regular savings as part of the marit al
lifestyle. Moreover, the judge's fixing of that amount certainly does not
constitute an abuse of discretion because he explained the ruling in great detail
and his explanation constitutes a more than reasonable or rational interpretation
and analysis of all the alimony factors. The end result achieved is, in our view,
"fair under the circumstances and congruent with the standards set forth in
N.J.S.A. 2A:34-23." Steneken, 183 N.J. at 302.
II
Alan argues that the trial judge abused his discretion in granting Martha a
Mallamo credit of $5,000 per month to make up for the absence of a savings
component in the support Alan paid during the pendente lite stage. He claims
the judge "arbitrarily applied the same savings rate ordered post-divorce to the
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pendente lite period, without any real consideration of the parties' financial
circumstances and ability to save during that time."
Pendente lite support orders are subject to modification at any time prior
to entry of final judgment and credits may be awarded to adjust the support paid
prior to final judgment. As we explained in Mallamo, 280 N.J. Super. at 16,
pendente lite support is most often the end product of a motion without an
evidentiary hearing, when the judge "is presented reams of conflicting and, at
times, incomplete information concerning the income, assets and lifestyles of
the litigants" and must impose an interim award that does not always reflect "a
reasonably complete picture of the financial status of the parties until a full trial
is conducted." Thus, later, when all the evidence is presented and weighed at
trial, the judge is in a better position to fix a proper amount of support and may
craft an award that is either higher or lower than the prior interim order. When,
as here, it is the latter, a judge may consider awarding the supported spouse a
credit to equalize the fact that the supported spouse was short-changed during
the pendente lite stage; these rulings are reviewed under an abuse of discretion
standard. Slutsky v. Slutsky, 451 N.J. Super. 332, 368 (App. Div. 2017).
The judge found that, while Alan's payment of Martha's Schedule A and
Schedule B expenses plus $4,500 per month (approximately $9,202 in total
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monthly pendente lite support) "reasonably enabled" Martha to maintain the
marital lifestyle during the pendente lite stage, that award did not provide her
"with any monthly savings component." In contrast, as the judge also found,
Alan was able "during this same time . . . to continue saving whatever was left
over" once he paid the pendente lite support each month.
To achieve an equitable result, the judge concluded that Alan owed
Martha "$5000 per month from November 2014 through March 2019 (52
months), which amounts to $260,000." He also reasonably declined to apply the
Mallamo credit prior to November 2014 because Martha admittedly benefited
from removing cash from the parties' safe when she moved out of the marital
home.
Alan's contention that the judge "arbitrarily applied the same savings rate
ordered post-divorce to the pendente lite period" is simply not true. The judge
gave a thorough reasoned explanation for his ruling.
It suffices to observe that Alan did not contest the judge's finding that the
couple saved approximately $19,087 per month during the marriage, and there
is no doubt the pendente lite award did not include a savings component. It was
entirely consistent with the marital lifestyle and not unreasonable for the judge
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to order a Mallamo credit in the amount of $5,000 per month, less the $22,000
Martha removed from the parties' safe when they separated.
Alan's assertion that he would not have had the ability to pay the extra
$5,000 per month "without any access to his RSUs for the entire period of time
in question," is also unavailing given his substantial employment income and
lack of debt. Further, he testified that he continued to save each month by
contributing toward his 401(k) during the pendente lite period, and he agreed
that Martha was "equally entitled to the marital lifestyle," as our jurisprudence
recognizes.
Finally, Alan claims the judge made a factual error in finding Alan was
"sustaining two households" during the pendente lite period, and not three, by
failing to recognize he was also required to pay expenses for the Pennsylvania
home during the pendente lite period. His case information statement, however,
reveals those expenses were relatively minimal, totaling, along with real estate
taxes, homeowner's insurance, and utilities, $615 per month. Even assuming the
judge overlooked these expenses rather than implicitly deeming them
inconsequential, any error in that regard is harmless and should be disregarded;
in short, Alan has not demonstrated such an alleged error was "clearly capable
of producing an unjust result." R. 2:10-2.
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III
Regarding equitable distribution, the parties were able to stipulate the
disposition of the majority of their marital assets, including their homes. But
they left to the trial judge their disputed issues concerning the RSUs provided
to Alan by his employer in 2012, 2013 and 2014. Alan argues the judge abused
his discretion in the manner in which he distributed those RSUs. We disagree.
Prior to 2018, the employer awarded RSUs annually in January based on
the prior year's performance but with a three-year vesting period at the end of
which the employer deposited a net amount of shares into an investment account
in Alan's name after withholding certain minimum amounts for federal and state
income taxes.
The record reveals that Alan sold the 2,465 net shares that vested in 2015
and deposited the cash obtained in the money-market portion of the Fidelity
RSU account. He did not sell the net shares that vested in 2016 and 2017; they
remained in the Fidelity RSU account as stock shares at the time of trial.
On February 21, 2019, the last day of trial testimony, Alan's attorney told
the trial judge that
in terms of the RSUs . . . we have an agreement except
for one small issue just related to taxes. Otherwise, we
are completely in agreement about the RSUs.
A-3990-18
24
Martha's attorney later said they "tentatively . . . reached agreement as to the
methodology of the calculation of what we call the coverture fraction" that
would ultimately determine what portion of the tranches at issue were marital
assets subject to equitable distribution and what portions were not. 5
Their agreement to use a coverture fraction would suggest the parties
presumed Martha was entitled only to a portion of the RSUs that vested post-
complaint. Although not explained in the trial record, Alan's brief defines the
numerator of the coverture fraction as the "number of months worked from the
grant date to the date of [the divorce] [c]omplaint" and the denominator as thirty-
six, representing "the total number of working months necessary from grant date
to vesting date."6
5
Generally, the use of a coverture fraction ensures that "the equitable
distribution pot includes only that portion of the working spouse's labor which
constitutes a 'shared enterprise'" and "also assures the employee spouse the
benefits of his or her pre and post coverture labors." Eisenhardt v. Eisenhardt,
325 N.J. Super. 576, 581 (App. Div. 1999).
6
See Sandra R. Klevan, Beyond Salary and Bonus: The Where, What and How
of Complex Executive Compensation from a Divorce Perspective, 41 Fam.
Advoc. 12, 12-16 (2018) (explaining that, in the context of RSUs that vest after
the filing of the divorce complaint, "[t]he coverture fraction allocates the award
as marital and nonmarital based on the vesting schedule, with the numerat or
being the time period from the date the award was granted to the cutoff date and
the denominator being the period from the date of grant to the vesting date").
A-3990-18
25
Martha's counsel represented to the trial judge that based on this coverture
fraction, the parties agreed Martha should receive thirty-nine percent of the net
shares in the tranche that vested in 2015, twenty-two percent of the net shares
in the tranche that vested in 2016, and six percent of the net shares in the tranche
that vested in 2017. He also confirmed that the parties disagreed about the tax
rate to be utilized in determining the net value of each year's tranche. He
presented the tax rates that Martha favored; Alan's attorney replied that she
needed time to review those numbers to see whether they "may be in agreement"
on that issue. The trial judge instructed the parties to thereafter "advise" him if
they resolved that part of the case.
Immediately prior to the parties' summations in March 2019, the parties
still had not agreed on a tax rate to be utilized in determining the net value of
each year's tranche. On the record, Alan's attorney said that Martha's attorney
had not responded to a letter sent about the RSUs and asked if there was an
agreement. The reply was: "The issue is . . . the tax [rate], everything else we
agree upon."
During his summation, Martha's attorney told the trial judge: "I believe
we have resolved the issue of the tranches and the amount of the RSUs, and the
division utilizing a coverture fraction," and the parties have "agreed . . . as to
A-3990-18
26
the percentages that [Martha] is entitled to, percentages of RSUs" but they still
had not agreed on the tax rate. Martha's attorney asserted the tax rates proposed
by Alan would result in Martha unfairly "bear[ing] the burden of the highest
progressive rate"; she preferred utilizing an average tax rate for each tranche.
Similarly, during summation, Alan's attorney stated that while the parties
agreed Martha was to receive thirty-nine percent, twenty-two percent, and six
percent of the net shares of the tranches that vested in 2015, 2016, and 2017,
respectively, they had not agreed on the tax rate needed to determine the net
value of each year's tranche.
In his decision, the judge came to the conclusion that the parties' inability
to agree on the tax rates meant they had no agreement at all. The judge then
went on to make detailed findings as to the sixteen statutory factors in N.J.S.A.
2A:34-23.1 and concluded that Martha was "entitled to 50% of all net RSU[s]
granted to [Alan] prior to May 8, 2014" – the date Alan filed his divorce
complaint – and "50% of the net remaining shares after tax withholding related
to the 1/19/2012 grant (2133 shares), the 1/17/2013 grant (3049 shares), and the
1/22/2014 grant (1782 shares), which are the subject of the current dispute"; he
also made Alan "solely responsible for all remaining and unpaid taxes on the
RSUs to be transferred to" Martha. In considering the tax obligation, the judge
A-3990-18
27
considered the fact that he had awarded Alan "all outstanding [tax] refunds"
from 2014 to 2017.
Alan initially argues that the judge erroneously disregarded the parties'
agreement about the percentage of the three tranches of RSUs expressed on the
record and, as a result, his award of fifty percent of those tranches to Martha
was an abuse of discretion. Alan alternatively argues that the judge's division
of the RSUs was premised on an error as to how and when they vested, and the
division was inconsistent with applicable legal principles. We disagree in both
respects.
A
The judge reasonably determined from what had been presented during
the trial – and in light of the parties' last-minute description of their negotiations
but incomplete agreement about these RSUs during their closing arguments –
that in failing to resolve all aspects of that particular equitable distribution item,
he was entitled to divide those RSUs and allocate the tax consequences in the
manner he found most equitable. We agree.
As Judge Jayne said for this court in Kupper v. Barger, 33 N.J. Super. 491,
494 (App. Div. 1955) (emphasis added), while the enforcement of a stipulation
is always subject to the trial court's "sound discretion and control," a stipulation
A-3990-18
28
of settlement should not be enforced "where there appears to have been an
absence of mutuality of accord between the parties or their attorneys in some
substantial particulars, or the stipulated agreement is incomplete in some of its
material and essential terms." See also DeVries v. Evening J. Ass'n, 9 N.J. 117,
120 (1952) (holding that "[s]o long as negotiations are pending over matters
relating to the contract, and which the parties regard as material to it, and until
they are settled and their minds meet upon them, it is not a contract, although as
to some matters they may be agreed"); Bistricer v. Bistricer, 231 N.J. Super.
143, 147 (Ch. Div. 1987). Considering that the parties did not present to the
judge a full resolution of their dispute about the RSUs, the judge was free to
conclude there was no binding agreement on any aspects of the dispute. We find
no abuse of discretion in this determination.
B
We also find no abuse of discretion in how the judge divided the RSUs in
question. "The goal of equitable distribution . . . is to effect a fair and just
division of marital assets." Steneken, 367 N.J. Super. at 434. "Every case turns
on its own facts and requires a case[-]by[-]case analysis." Barr v. Barr, 418 N.J.
Super. 18, 44 (App. Div. 2011). A matrimonial judge must engage in a three-
step process, which includes determinations of each spouse's eligibility for
A-3990-18
29
distribution, the property's value, and the most equitable allocation of the
property. See Rothman v. Rothman, 65 N.J. 219, 232 (1974); see also Thieme
v. Aucoin-Thieme, 227 N.J. 269, 284 n.4 (2016); Pascale v. Pascale, 140 N.J.
583, 609 (1995).
A judge must also recognize the presence of "a rebuttable presumption
that each party made a substantial financial or nonfinancial contribution to the
acquisition of income and property while the party was married," N.J.S.A.
2A:34-23.1, and apply the sixteen factors set forth in that statute. In engaging
this process, the judge "has broad discretionary authority to equitably distribute
marital property." Sauro v. Sauro, 425 N.J. Super. 555, 572 (App. Div. 2012).
As a result, our review of an "order pertaining to the division of marital assets
is narrow," id. at 573, entailing a determination of whether the judge "mistakenly
exercised [the] broad authority to divide the parties' property or whether the
result reached was bottomed on a misconception of law or findings of fact that
are contrary to the evidence." Genovese v. Genovese, 392 N.J. Super. 215, 223
(App. Div. 2007). Reversal is warranted only when the judge "clearly abused"
this discretion. Clark v. Clark, 429 N.J. Super. 61, 72 (App. Div. 2012).
After determining the parties had not reached a binding agreement on this
issue, the judge made detailed factual findings about each of the sixteen statutory
A-3990-18
30
factors, N.J.S.A. 2A:34-23.1, some of which are repetitive of the findings made
regarding alimony already discussed.
To briefly repeat, the judge found that, during the parties' seventeen-year
marriage, they maintained a high standard of living and accumulated
approximately $7.02 million in assets with just $40,000 in debt due to their
"focus on savings." He recognized Alan's employment generated a "significant
annual income" during the entire marriage, as compared to Martha's "more
modest income during the early years of the marriage." The judge properly
assumed that after the divorce Alan would continue in his current job and earn
at least $700,000 annually, while Martha would be expected to earn only
$76,401 on average on returning to the workforce. The judge also recognized
the parties would both receive "significant assets" in equitable distribution that
would provide each "a lifestyle reasonably comparable to . . . the marital
lifestyle."
In addition, the judge found Martha's "service as a homemaker during the
entirety of the parties' marriage . . . even when she was working full-time, and
her subsequent dedication as a full-time stay-at-home mother and home-maker
following [Stephen's] birth" allowed Alan "to dedicate long hours to his career
advancement." By comparison, the judge found "no evidence" to suggest Alan
A-3990-18
31
had "contributed in any material way" to Martha's career advancement. In
essence, he found Martha "sacrificed her career advancement" to promote and
allow for Alan's career advancement, citing the fact that she repeatedly left jobs
in favor of Alan's "better" jobs and his need to relocate.
In his specific findings about the RSUs in dispute, the judge found they
"vested in equal tranches on the anniversary date of the initial grant" and "over
the proximate three years from each grant date." The judge relied on and quoted
from M.G. v. S.M., 457 N.J. Super. 286, 302 (App. Div. 2018), in holding that:
(1) "[w]here an award is made [by an employer] during the marriage for work
performed during the marriage, but becomes vested after the date of complaint,
it too is subject to equitable distribution"; (2) "there is a rebuttable presumption
the award is subject to equitable distribution unless there is a material dispute
of fact regarding whether the stock, either in whole or in part, is for future
performance"; and (3) "[t]he party seeking to exclude such assets . . . bears the
burden to prove the stock award was made for services performed outside the
marriage."
Applying these principles, the judge found the RSUs at issue were subject
to equitable distribution because they were awarded for Alan's "pre-complaint
work performance" as "compensation" during times when he was working and
A-3990-18
32
traveling extensively and Martha was supporting those efforts by caring for their
home and child. The judge also found that, "[u]nlike the plaintiff in M.G.," Alan
"provided no material, objective or credible testimony or evidence, including
stock plan information or testimony from corporate representatives, that the
RSUs were compensation for or contingent upon future work performance." The
judge, therefore, found Alan "failed to meet his burden of proof to exclude the
RSUs from equitable distribution." The judge added that he "generally did not
find [Alan] to be credible," and so rejected his "unsupported position that the
RSUs are contingent or related to future performance."
In appealing, Alan argues the judge's disposition of these assets was based
on a factual misconception that each RSU award vested gradually over three
years, in three equal amounts per year – an interpretation of the evidence that
was contrary to his own testimony, asserting that the RSUs vested after the end
of three years, not gradually over three years. But the judge never specifically
stated there was a gradual vesting of the RSUs. He instead held that the RSUs
"vested in equal tranches over the proximate three years from each grant date,"
giving the example that the RSUs granted to Alan "in March 2011 were for 2010
performance, and they vested in equal tranches on the anniversary date of the
initial grant in each 2012, 2013 and 2014." This holding was later repeated in
A-3990-18
33
the judge's opinion, while he never said, as Alan argues, that "each RSU award
vested gradually over three years, in three equal amount per year." Regardless
of how they vested, the judge was entitled to reach the conclusion that Martha
was "entitled to 50% of all net RSU[s] granted to [Alan] prior to May 8, 2014"
including half of "the net remaining shares after tax withholding related to"
earlier RSU grants. The judge also held Alan "solely responsible for all
remaining and unpaid taxes on the RSUs to be transferred to" Martha. In
calculating the number of net shares in each tranche, the judge utilized the
"actual effective federal income tax rates" Alan proposed as shown on a chart
marked in evidence. In holding Alan responsible for all the unpaid taxes, the
judge considered that he had awarded Alan "all outstanding tax refunds" from
2014 to 2017 that had been held by Martha's counsel or otherwise.
The conclusions reached by the judge based on his factual findings are
soundly rooted in the legal principles followed by our courts at least since
Rothman and should not be second-guessed by an appellate court. The trial
judge sat through a lengthy trial and had a far better "feel of the case" as to what
was a fair, just, and equitable distribution of the parties' property.
A-3990-18
34
IV
Alan also argues that the judge abused his discretion by reducing his
parenting time from the extent permitted during the pendente lite stage with, in
Alan's words, "no explanation and no support in the record." In particular, Alan
argues the judge should not have eliminated his alternate Monday non-overnight
parenting time with Stephen because the court-appointed custody expert
recommended the alternate Monday parenting time be expanded to an overnight
and because Martha had not objected to the July 2015 pendente lite parenting
time schedule, which included the alternate Monday non-overnight parenting
time. While Alan is not now seeking the expanded overnight parenting time that
the expert recommended, he asks that we exercise original jurisdiction to
reinstate his alternate Monday non-overnight parenting time.
Decisions concerning custody are left to a matrimonial judge's "sound
discretion." Pascale, 140 N.J. at 611; Nufrio v. Nufrio, 341 N.J. Super. 548, 555
(App. Div. 2001). This discretion "connotes conscientious judgment," Higgins
v. Polk, 14 N.J. 490, 493 (1954), requiring consideration of "the public policy
of this State to assure minor children of frequent and continuing contact with
both parents after the parents separated or dissolved their marriage," N.J.S.A.
9:2-4. The "primary consideration is the best interests" of the child, Hand v.
A-3990-18
35
Hand, 391 N.J. Super. 102, 105 (App. Div. 2007), which includes consideration
of
the parents’ ability to agree, communicate and
cooperate in matters relating to the child; the parents’
willingness to accept custody and any history of
unwillingness to allow parenting time not based on
substantiated abuse; the interaction and relationship of
the child with its parents and siblings; the history of
domestic violence, if any; the safety of the child and the
safety of either parent from physical abuse by the other
parent; the preference of the child when of sufficient
age and capacity to reason so as to form an intelligent
decision; the needs of the child; the stability of the
home environment offered; the quality and continuity
of the child’s education; the fitness of the parents; the
geographical proximity of the parents’ homes; the
extent and quality of the time spent with the child prior
to or subsequent to the separation; the parents’
employment responsibilities; and the age and number
of the children.
[N.J.S.A. 9:2-4(c).]
When departing from the parents' agreement, a judge "must identify on
the record the specific factors that justify [a different] arrangement." Bisbing v.
Bisbing, 230 N.J. 309, 322 (2017). In his thorough written opinion, the judge
explained that while the parties consented to joint legal custody, they dis agreed
on physical or residential custody. Alan sought a shared residential custody
arrangement with each party having seven overnights during every fourteen -day
period; Martha sought designation as the parent of primary residence with Alan
A-3990-18
36
continuing to exercise his pendente lite parenting time schedule, which had been
in place since July 2015, of five overnights during every fourteen-day period.
In relying on the court-appointed expert's unrebutted opinion, the judge
concluded it was in Stephen's best interests for Martha to "be awarded primary
physical (residential) custody." He cited as "important" Alan's "lack of
credibility, his refusal to consent to a parenting coordinator during the course of
the litigation, his general lack of involvement in [Stephen's] life prior to the
parties' physical separation," and "the consistency of [Martha's] presence in [the
child's] life from birth through the present time," as well as the child's "greater
affinity and preference to spend more time" with Martha.
In reaching this decision, the judge considered all the factors delineated
in N.J.S.A. 9:2-4 and found certain factors to be especially relevant, including:
the parties "do not possess a material ability to agree, communicate or
cooperate" in matters relating to the child; the child has a good relationship with,
and is bonded with, both parents; the child's relationship with Alan "deepened
following the parties' separation," but Stephen "continues to have a greater
affinity for his mother" and an "increased comfort level" with her; Stephen, who
appeared to the judge "intelligent, honest, and capable of expressing a rational
opinion of desire regarding the custody issue," "expressed a consistent
A-3990-18
37
preference to spend more time" with Martha7; Stephen has no special
educational or medical needs; and, prior to the separation, Martha "was the
[child's] primary caretaker . . . in all respects," although Alan became more
involved after the separation and was managing his work schedule "to
accommodate his parenting time."
The key difference between the schedule during the pendente lite stage
and the schedule contained in the judgment of divorce is that the latter omitted
the "alternate Mondays following [Martha's] weekend with [Stephen] from after
school until 7:30 p.m." The judge did, however, add a Monday daytime visit for
Alan until 6:00 p.m. on school holidays following a weekend when he had
parenting time (which had not been previously ordered during the pendente lite
period), provided Martha does not have parenting time for that holiday. And
instead of ordering generally that the parties alternate holidays and school
vacations, as the court-appointed expert recommended, the judge created a more
detailed holiday schedule. He also adopted the expert's recommendation that
each party have at least three weeks of summer vacation with Stephen
(consisting of two consecutive weeks and one additional non-consecutive week).
7
See Wilke v. Culp, 196 N.J. Super. 487, 498 (App. Div. 1984) (explaining that
"the desires of older children may be entitled to stronger consideration than that
afforded to younger children" on the issue of parenting time).
A-3990-18
38
The judge characterized this new parenting plan as "essentially the same
as the current schedule with the addition of defined holiday and vacation time ."
He explained that he declined to expand Alan's parenting time to include six
overnights in each fourteen-day period as recommended by the court-appointed
expert, citing, among many other things, the importance of a need for
"consistency of the parenting schedule," Martha's "credible" testimony that
Stephen "has adjusted well to the existing parenting schedule," and Stephen's
expressed desire "to spend more time with his mother."
The judge's extensive factual findings are adequately supported by
sufficient credible evidence, and his thorough written opinion reveals that the
judge fully discharged his duty to "identify . . . the specific factors" that justified
his disposition. Bisbing, 230 N.J. at 322. Alan, in arguing that the judge erred
in denying him the overnight Mondays that were previously allowed during the
pendente lite stage, particularly relies on the court-appointed expert's opinion
that favored his position and Martha's amenability to the preexisting schedule.
But even though family courts often "rely heavily" on the opinions of experts,
Kinsella v. Kinsella, 150 N.J. 276, 318 (1997), the judge is always "free to
accept or reject . . . and need not adopt the opinion of" an expert, Brown v.
Brown, 348 N.J. Super. 466, 478 (App. Div. 2002); see also D.A. v. R.C., 438
A-3990-18
39
N.J. Super. 431, 454 (App. Div. 2014). Similarly, the parties cannot by
agreement or acquiescence "relieve the court of its obligation to safeguard the
best interests of the child." P.T. v. M.S., 325 N.J. Super. 193, 215 (App. Div.
1999). "The burden of making and explaining that decision remains at all times
the exclusive obligation of the trial judge and can never be delegated to any
other party." D.A., 438 N.J. Super. at 454.
The judge reached a decision based on his assessment of the testimony
and his interview of the child, thereby gaining a better "feel of the case" and a
more informed view of what was fair and just in this situation than an appellate
court can obtain by reviewing a transcript. We, therefore, defer to the judge's
findings of fact and, after careful review, find no reason to second guess his
exercise of discretion in adopting the parenting schedule.
***
In addition to those arguments discussed at length above, Alan argues that
the trial judge abused his discretion in allocating their responsibility for
Stephen's unreimbursed medical expenses and in his rulings about future college
education contributions; he also argues that the judge erred in denying his
motion to seal the record. We find these arguments have insufficient merit to
warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
A-3990-18
40
Alan lastly argues that if our decision necessitates any further trial court
proceedings we should direct the assignment of a different trial judge or take
that step notwithstanding because there may be post-judgment motions in the
future. This argument is frivolous. The judge may not have viewed the facts
and circumstances as does Alan but that does not mean he exceeded his authority
or acted with bias toward any party. To the contrary, the judge could not have
more thoroughly, carefully, and fairly considered all the issues put before him.
We find no reason to question the able judge's impartiality in this hotly-
contested case.
Affirmed.
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41