JOHN A. VARGAS v. MARIA E. COLON (FM-12-1425-19, MIDDLESEX COUNTY AND STATEWIDE) ( 2022 )

NOT FOR PUBLICATION WITHOUT THE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-0674-20
JOHN A. VARGAS,
Plaintiff-Respondent,
v.
MARIA E. COLON,
Defendant-Appellant.
__________________________
Submitted February 28, 2022 – Decided March 10, 2022
Before Judges Sabatino and Mayer.
On appeal from the Superior Court of New Jersey,
Chancery Division, Family Part, Middlesex County,
Docket No. FM-12-1425-19.
Keith, Winters, Wenning & Harris, LLC, attorneys for
appellant (Brian D. Winters and Marie-Christine Aziz,
on the briefs).
Almasy LaMountain, LLC, attorneys for respondent
(Kimberley Almasy LaMountain, on the brief).
PER CURIAM
Defendant Marie E. Colon appeals from an October 5, 2020 final judgment
of divorce (FJOD) limited to whether the family part judge abused her discretion
in rejecting a claim for equitable distribution of a pension held by plaintiff John
A. Vargas. We reverse and remand.
After nearly twenty years of marriage, the parties decided to divorce. The
family part judge conducted a one-day trial in June 2020. Plaintiff and defendant
testified at the divorce trial. At the conclusion of the testimony, the judge
permitted counsel to present written summations. After considering the
testimony, documentary evidence, and summations, on October 5, 2020, the
judge issued a FJOD and attached a ten-page written decision, including
rejection of defendant's claim for equitable distribution of plaintiff's pension.
In denying defendant's request for equitable distribution of plaintiff's
pension, the judge reviewed the factors under the equitable distribution statute,
N.J.S.A. 2A:34-23.1, and made the following findings.
Plaintiff was sixty-five years old and disabled after suffering a stroke in
2012. Before his stroke, plaintiff worked for the United States Postal Service
and earned between $40,000 and $45,000 per year. He received a pension from
his service as a postal worker and started collecting that pension in 2015. At the
time of trial, plaintiff's monthly income consisted of $1908 in Social Security
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benefits, $139 in Veteran's Administration benefits, and $1095 in United States
Postal Service pension benefits. According to plaintiff, his monthly expenses
exceeded $2805, leaving him with about $300 each month after paying expenses.
Defendant was fifty-six years old at the time of the divorce action.
Defendant cared for plaintiff following his stroke until 2016 when she was
declared disabled due to various health conditions. Defendant earned more than
plaintiff during the marriage with an income between $58,000 and $62,000
annually. She had no pension. At the time of trial, defendant received $1022
monthly in Social Security disability benefits. She supplemented her monthly
income by babysitting and selling crafts.
During the marriage, defendant had owned a two-family home that she
acquired in 2006. However, plaintiff executed a written waiver of any interest
in the home and was never listed on the deed. In 2014, defendant lost the home
in a foreclosure action.
The parties intermittently lived in separate residences for nearly half their
marriage. At times throughout the marriage, plaintiff lived in defendant's house
prior to the foreclosure, and defendant lived in plaintiff's rented apartment.
When the parties lived together, defendant paid rent, utilities, insurance, and
other necessities. During the entire marriage, plaintiff paid the utilities only
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twice and purchased groceries only three times. According to defendant, she
relied predominantly on her own earnings rather than plaintiff's income to pay
the couple's expenses. The parties did not have a joint bank account and did not
file joint tax returns.
Based on the testimony, the judge concluded the standard of living during
the marriage "only slightly exceeded mere existence." The parties "purcha sed
no items of luxury, took no vacations, and did not eat out." She further found
the parties had minimal savings. Because both parties were disabled, the judge
determined neither party could earn an income or become gainfully employed
in the future.
Plaintiff's pension was the only asset available for equitable distribution.
According to the undisputed testimony, plaintiff worked for the post office for
ten years prior to the couple marrying in 1999. Defendant contended she was
entitled to equitable distribution of a percentage of plaintiff's pension accruing
during the marriage and requested the judge sign a qualified domestic relations
order (QDRO) to effectuate that distribution. 1 Plaintiff asserted defendant had
no entitlement to any portion of his pension because defendant did not share
1
Because the pension involved a federal employee, the document for
distributing such pension funds is known as a court order acceptable for
processing (COAP), rather than a QDRO.
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certain marital proceeds, including $16,000 in retroactive Social Security
benefits. He also claimed he required the entire pension amount to pay his
expenses.
In applying the statutory factors governing equitable distribution, the
judge found "the only property capable of equitable distribution is the
[p]laintiff's pension, as to which there was no testimony regarding [the] present
value or that portion of that pension accrued during [the] marriage." Thus, the
judge declined to order any equitable distribution of the pension.
On appeal, defendant contends the family part judge abused her discretion
in denying her right to a share of that portion of plaintiff's pension accruing
during the marriage. She argues a QDRO could be presented to the pension
administrator, allocating a court-ordered percentage of plaintiff's pension
payable to her monthly. Defendant asserts requiring expert testimony to
establish a present value is an unduly burdensome expense and unnecessary
because she did not seek a lump sum payment from plaintiff's pension. We
agree.
N.J.S.A. 2A:34-23.1 governs equitable distribution of marital assets. A
marital asset "is that which was earned, or otherwise acquired, during the period
in which the parties acted in pursuit of the shared enterprise of a marriage . . . ."
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Thieme v. Aucoin-Thieme, 227 N.J. 269, 285 (2016). We review equitable
distributions awards for abuse of discretion. Slutsky v. Slutsky, 451 N.J. Super.
332, 356 (App. Div. 2017).
N.J.S.A. 2A:34-23(h) authorizes the trial court to divide marital assets by
"mak[ing] such award or awards to the parties, . . . to effectuate an equitable
distribution of the property . . . ." Under the equitable distribution statute, "[i]t
shall be 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. Thus, "all property, regardless of its
source, in which a spouse acquires an interest during the marriage shall be
eligible for distribution in the event of divorce." Winer v. Winer, 241 N.J.
Super. 510, 525 (App. Div. 1990) (quoting Painter v. Painter, 65 N.J. 196, 217
(1974)).
When divorcing parties cannot agree on how to distribute property, the
family part judge should use his or her discretion to effectuate a fair and just
division of marital assets. Steneken v. Steneken, 183 N.J. 290, 302-04 (2005).
In reviewing an asset subject to equitable distribution, the court must identify
the marital property, determine its value, and equitably distribute the property.
See Painter, 65 N.J. at 217.
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In reviewing an equitable distribution determination by a family part
judge, we are mindful that our review "pertaining to the division of marital assets
is narrow." Sauro v. Sauro, 425 N.J. Super 555, 573 (App. Div. 2012) (citing
Valentino v. Valentino, 309 N.J. Super. 334, 339 (App. Div. 1998)). We must
decide whether the court "mistakenly exercised its 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." Ibid. (citing
Genovese v. Genovese, 392 N.J. Super. 215, 223 (App. Div. 2007)). Generally,
a family part judge's determination as to assets available for distribution, as well
as the valuation of those assets, are given deference so long as they are amply
supported by the record. La Sala v. La Sala, 335 N.J. Super. 1, 6 (App. Div.
2000). We will affirm an equitable distribution determination if "the trial court
could reasonably have reached its result from the evidence presented, and the
award is not distorted by legal or factual mistake." Ibid. (citing Perkins v.
Perkins, 159 N.J. Super. 243, 247-48 (App. Div. 1978)).
However, we will reverse an equitable distribution decision if the court
"failed to consider all of the controlling legal . . . principles," M.G. v. S.M., 457
N.J. Super. 286, 294 (App. Div. 2018) (quoting Gonzalez-Posse v. Ricciardulli,
410 N.J. Super. 340, 354 (App. Div. 2009)), or when its analysis was "clearly
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unfair or unjustly distorted by a misconception of law." Ibid. (quoting Perkins,
159 N.J. Super. at 247).
The present value method for distribution of a pension applies where there
are sufficient marital assets to be divided. See Menake v. Menake, 348 N.J.
Super. 442, 448 (App. Div. 2002). However, where marital assets are
insufficient, or the parties are unable to afford an expert to address present
valuation, as in this case, the better approach for evaluating equitable
distribution of an asset is the deferred distribution method. Ibid. Under this
method, the court considers the coverture facture of the pension over the course
of the marriage. Claffey v. Claffey, 360 N.J. Super. 240, 256 (App. Div. 2003).
(holding the coverture fraction is the number of years during the marriage the
pensioner spouse was a member of the pension plan, divided by the total number
of years that the pensioner spouse was a member of the pension plan to arrive at
the portion of the pension subject to equitable distribution). Once the court
"determines the non-pensioner spouse's equitable distribution percentage
interest in that coverture fraction, then a QDRO [or COAP here] is used to
distribute that interest to the non-pensioner spouse at the time of the retirement
of the pensioner spouse." Ibid. "[T]he amount distributed is not determined in
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present dollars, but is paid in future dollars at the time of retirement in an amount
determined by application of the [above] formula." Id. at 257.
Here, the judge declined to equitably distribute plaintiff's pension because
"there was no testimony regarding the present value or that portion of that
pension accrued during marriage." However, defendant testified at trial the
parties discussed her receiving a forty percent share of plaintiff's pension,
equaling about $423 per month. Defendant also told the judge she paid for a
QDRO to process receipt of her portion of plaintiff's pension and the draft
QDRO was admitted as evidence during the trial.
Defendant further explained plaintiff started working at the post office in
1989 but her entitlement to a portion of his future pension only accrued after the
parties married in 1999. Plaintiff started collecting from his pension in 2015.
Thus, determining the coverture fraction for division of plaintiff's pension is a
simple mathematical calculation. Defendant's testimony and the draft QDRO
demonstrated plaintiff's pension could be equitably distributed absent present
value testimony from an expert.
Having reviewed the record, we are satisfied the judge abused her
discretion by requiring testimony as to the present value of plaintiff's pension to
enter an equitable distribution award. Here, defendant paid for preparation of a
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QDRO in anticipation of receiving a deferred distribution from plaintiff's
pension, payable monthly by the pension plan administrator. Moreover, the
judge recognized the parties were limited financially and unlikely to be able to
afford an expert.
The judge heard the parties' testimony regarding the marital lifestyle and
finances. Therefore, the judge had sufficient information to divide plaintiff's
pension in a percentage relative to the period the parties were married and living
under the same roof, giving due consideration to the parties' testimony regarding
payment of expenses during the marriage and disposition of other marital assets
prior to the divorce action. Because plaintiff's pension was the couple's only
asset at the time of the divorce proceeding, the judge should have considered
distribution of that asset without expert testimony, allocated a percentage share
of the pension to defendant, and signed a COAP to effectuate deferred
distribution of plaintiff's pension.
For these reasons, we are constrained to vacate the portion of the FJOD
addressing equitable distribution and remand the issue to the family part judge
to consider distribution of a percentage of plaintiff's pension as would be
equitable under the circumstances without the necessity of retaining an expert
to perform a present value calculation. On remand, the judge may consider the
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premarital portion of the pension acquired by plaintiff, the period the marriage
the parties lived separate and apart, and any other issues that would factor into
a fair determination of defendant's entitlement to a portion of plaintiff's pension.
Vacated in part and remanded as to the issue of equitable distribution. We
do not retain jurisdiction.
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