Michael J. Thieme v. Bernice F. Aucoin-Thieme(076683) , 227 N.J. 269 ( 2016 )

SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)
Michael J. Thieme v. Bernice F. Aucoin-Thieme (A-51-15) (076683)
Argued September 26, 2016 -- Decided December 12, 2016
Patterson, J., writing for a unanimous Court.
In this appeal, the Court construes New Jersey’s equitable distribution statute, N.J.S.A. 2A:34-23(h) and
-23.1, and considers the equitable remedy of a constructive trust, in the setting of a post-judgment dispute with
respect to deferred compensation.
In 1999, plaintiff Michael J. Thieme (Thieme) began employment at a biometrics consulting firm. He
worked over ninety hours a week and frequently traveled for his job. In late 2000 or early 2001, Thieme met
defendant Bernice F. Aucoin-Thieme (Aucoin-Thieme). In May 2002, Aucoin-Thieme discovered that she was
pregnant, and she and Thieme began to cohabitate. Their daughter was born in January 2003.
Although Thieme held no ownership interest in the firm, the firm’s principals offered to compensate him
for his contributions to the firm’s success, in the event that they sold the firm. Thieme and Aucoin-Thieme
determined that, given the demanding nature of Thieme’s schedule, Aucoin-Thieme would not pursue employment,
but rather would care for their daughter, maintain their residence, and manage their rental properties.
The couple’s relationship was volatile from its inception, and Thieme and Aucoin-Thieme would
frequently exchange angry emails. At the end of one such exchange in 2010, Thieme explicitly acknowledged in an
email that Aucoin-Thieme had given up her own career and educational aspirations so that Thieme could pursue
his—which Thieme described as a “great sacrifice”—and noted that “it is appropriate that I support you fully in
recognition of this sacrifice.” Later that year, Thieme and Aucoin-Thieme wed. They filed for divorce fourteen
months later. In the course of negotiations about the division of their assets, Thieme reiterated his view that Aucoin-
Thieme would be entitled to a portion of any bonus he received upon the sale of the firm.
In April 2012, Thieme and Aucoin-Thieme executed their Property Settlement Agreement. Three months
after the entry of their judgment of divorce, the firm was sold and Thieme was offered a one-time Closing Bonus of
$2,250,000. Thieme did not inform Aucoin-Thieme of the Closing Bonus. She first learned of the Bonus when
Thieme deposited $200,000 into a bank account that, unbeknownst to Thieme, remained a joint account despite the
divorce. With no notice to Thieme, Aucoin-Thieme withdrew the deposited funds. Thieme filed a complaint.
After a three-day bench trial, a Family Part judge determined that Thieme earned the Closing Bonus over
his entire employment with the firm and that Aucoin-Thieme was entitled to thirty percent of the post-tax portion of
the Bonus earned during their fourteen-month marriage. The court awarded $30,288, to Aucoin-Thieme and ordered
her to return the remaining amount that she had withdrawn from the joint account, totaling $169,712, to Thieme.
Aucoin-Thieme appealed, asserting that she was also entitled to a share of the Closing Bonus for the period
during which she cohabitated with Thieme prior to marriage under both the equitable distribution statute and
equitable theories including unjust enrichment and constructive trust. In an unpublished opinion, an Appellate
Division panel affirmed the trial court’s judgment, substantially for the reasons stated by the trial judge.
The Court granted Aucoin-Thieme’s petition for certification. 224 N.J. 245 (2016).
HELD: N.J.S.A. 2A:34-23(h) authorizes the equitable distribution of Thieme’s Closing Bonus only to the extent that
the compensation was earned during the parties’ marriage because, under that statute, the property to be divided is that
which was earned, or otherwise acquired, during a marriage or civil union. The Court holds, however, that the
extraordinary circumstances of this case warrant the imposition of a constructive trust as a remedy for Aucoin-Thieme’s
1
claim of unjust enrichment and that Aucoin-Thieme is entitled to a percentage of the portion of the Closing Bonus
earned during the parties’ cohabitation.
1. The equitable distribution statute authorizes the Family Part to distribute assets “in all actions where a judgment
of divorce, dissolution of civil union, divorce from bed and board or legal separation from a partner in a civil union
couple is entered.” N.J.S.A. 2A:34-23(h). The statute reflects the public policy recognition that marriages and civil
unions are joint undertakings similar to partnerships. (pp. 17-18)
2. The equitable distribution statute does not govern disputes over property between parties who have cohabited but
have never entered into a marriage or civil union, nor does it treat property acquired during a period of cohabitation
prior to a marriage or civil union as equivalent to property acquired during that marriage or civil union. (pp. 19-22)
3. The Court agrees with the trial court and Appellate Division that if the portion of Thieme’s Closing Bonus that
was earned prior to the marriage were held to be a marital asset, such a ruling would contravene the plain language
of N.J.S.A. 2A:34-23(h). The Court holds that the trial court correctly allocated the distribution of Thieme’s
Closing Bonus to premarital and marital periods, and properly deemed only the portion of the compensation that was
earned during the parties’ marriage to be a marital asset subject to equitable distribution. (pp. 22-23)
4. Having rejected Aucoin-Thieme’s claim for equitable distribution of the portion of the Closing Bonus allocated
to the period prior to the parties’ marriage, the Court turns to her claims based on equitable principles. The Court
notes that the Family Part is a court of equity, and that “[e]quities arise and stem from facts which call for relief
from the strict legal effects of given situations.” Carr v. Carr, 120 N.J. 336, 351 (1990). (pp. 23-24)
5. To prove a claim for unjust enrichment, a plaintiff must demonstrate that the defendant received a benefit and
that it would be unjust for the defendant to retain that benefit without compensating the plaintiff. In the event that a
court finds unjust enrichment, it may impose a constructive trust. (pp. 24-25)
6. In Carr, the plaintiff’s statutory claim that she was entitled to the equitable distribution of assets owned by her
husband failed because the husband died during their protracted divorce proceedings, such that no judgment of
divorce was entered. Notwithstanding this failure, the Court affirmed the imposition of the equitable remedy of
constructive trust because the estate’s retention of “the share beneficially belonging to Mrs. Carr” could give rise to
unjust enrichment. Carr, supra, 120 N.J. at 353-54. (pp. 25-27)
7. The principles expressed in Carr apply with equal force to this appeal and warrant the imposition of a
constructive trust governing a portion of Thieme’s Closing Bonus in the unusual circumstances of this case. The
firm’s acknowledgment that Thieme would be generously compensated upon the sale of the company was a
significant factor in the parties’ personal and financial planning from the early stages of their relationship. Thieme
firmly opposed any suggestion that he pursue less demanding employment and take on a more active role in their
daughter’s care so that Aucoin-Thieme could seek a job. Aucoin-Thieme’s efforts enabled Thieme to focus almost
exclusively on the firm, and thus supported his career. Indeed, Thieme himself explicitly recognized that Aucoin-
Thieme’s contributions to their family should be rewarded and that his obligation to financially support Aucoin-
Thieme implicated, to some extent, any compensation that he would receive if the company were sold. (pp. 27-30)
8. Under these facts, a decision constraining Aucoin-Thieme to the nominal share of the Closing Bonus that is
authorized by the equitable distribution statute would result in unjust enrichment. As a remedy, a percentage of the
portion of the Closing Bonus that was earned by Thieme during the period in which the parties cohabited prior to
their marriage should be deemed to be held by Thieme in constructive trust for Aucoin-Thieme. The Court directs
the trial court on remand to determine the specifics of that constructive trust. (pp 30-31)
The judgment of the Appellate Division is AFFIRMED IN PART and REVERSED IN PART, and the
matter is REMANDED to the Family Part for proceedings consistent with this opinion.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-VINA,
SOLOMON, and TIMPONE join in JUSTICE PATTERSON’s opinion.
2
SUPREME COURT OF NEW JERSEY
A-51 September Term 2015
076683
MICHAEL J. THIEME,
Plaintiff-Respondent,
v.
BERNICE F. AUCOIN-THIEME,
Defendant-Appellant.
Argued September 26, 2016 – Decided December 12, 2016
On Certification to the Superior Court,
Appellate Division.
Michael J. Confusione argued the cause for
appellant (Hegge & Confusione, attorneys).
Linda M. Coronato argued the cause for
respondent.
JUSTICE PATTERSON delivered the opinion of the Court.
In this appeal, the Court construes New Jersey’s equitable
distribution statute, N.J.S.A. 2A:34-23(h) and -23.1, and
considers the equitable remedy of a constructive trust, in the
setting of a post-judgment dispute over deferred compensation.
Plaintiff Michael J. Thieme (Thieme) and defendant Bernice
F. Aucoin-Thieme (Aucoin-Thieme) were briefly married after an
eight-year cohabitation. Before and during the marriage, Thieme
was a salaried employee of a biotechnology consulting business,
International Biometrics Group (IBG). Although Thieme had no
1
ownership interest in IBG, its principals committed in writing
to compensate him for his contributions to IBG’s success, in the
event that they sold their company. Thieme and Aucoin-Thieme
made personal and financial decisions with the expectation that
if IBG were sold, Thieme would receive substantial compensation.
Thieme worked long hours and traveled extensively on IBG’s
behalf; Aucoin-Thieme devoted her attention to their child and
home and did not seek employment. IBG, however, was not sold
during the parties’ marriage.
When Thieme and Aucoin-Thieme divorced, they agreed upon
the terms of a Property Settlement Agreement (PSA), and their
assets were divided in accordance with its terms. Three months
after the Family Part’s entry of a judgment of divorce, IBG was
sold. IBG paid Thieme $2.25 million, characterized as a
“Closing Bonus” (the Closing Bonus or the Bonus), granted in
compensation for his contributions to the business for more than
a decade of service.
In post-judgment proceedings before a Family Part judge,
Aucoin-Thieme sought a share of the Closing Bonus. After a
bench trial, the trial judge ruled that Aucoin-Thieme was
entitled to equitable distribution; however, the equitable
distribution was limited to the portion of Thieme’s Closing
Bonus that was attributable to his work during the parties’
marriage and excluded any share of the remainder of that
2
compensation. The Appellate Division affirmed the trial court’s
determination.
We affirm in part and reverse in part the Appellate
Division’s judgment. We concur with the trial judge and the
Appellate Division that N.J.S.A. 2A:34-23(h) authorizes the
equitable distribution of Thieme’s Closing Bonus only to the
extent that the compensation was earned during the parties’
marriage. We hold, however, that the extraordinary
circumstances of this case warrant the imposition of a
constructive trust as a remedy for Aucoin-Thieme’s claim of
unjust enrichment, and that Aucoin-Thieme is entitled to a
percentage of the portion of the Closing Bonus that Thieme
earned during the parties’ cohabitation. We remand this case to
the trial judge for an allocation of the deferred compensation.
I.
We derive our summary of the facts from the trial record.
In 1999, Thieme was hired by a longtime friend, Raj
Nanavati, to be the first employee of IBG, a company that Raj
Nanavati founded with his brother, Samir Nanavati. IBG was a
start-up biometrics consulting firm. It provided security
services, including fingerprinting and facial identification
technology, to businesses. Thieme began his employment with IBG
as a consultant and later was assigned the title “Director of
Special Projects.”
3
From the inception of his employment at IBG, Thieme worked
“non-stop” for the company; he devoted between ninety and one
hundred hours per week to his job. He traveled to sixty
countries in the course of his employment and was away from home
for extended periods. Thieme was not given stock or any other
ownership interest in the company. He was initially paid a
salary of approximately $40,000 per year, and his salary
eventually reached $180,000 per year.
Aucoin-Thieme was a resident of Mississippi, working for a
rental car company, when she was introduced to Thieme by his
sister in late 2000 or early 2001. A few months later, Aucoin-
Thieme moved to Jersey City, where she temporarily lived in an
apartment that Thieme shared with his sister. Aucoin-Thieme and
Thieme began dating. During that period, Aucoin-Thieme held a
series of jobs in retail businesses.
In May 2002, Aucoin-Thieme discovered that she was
pregnant. According to Aucoin-Thieme, she and Thieme put money
aside for a wedding that would follow their child’s birth, but
delayed their marriage because they needed to spend the money on
other priorities. Thieme testified that they discussed marriage
only “in the abstract” at that time, and made no definite plans.
They moved into an apartment in Jersey City shortly after they
learned of Aucoin-Thieme’s pregnancy.
4
That month, Thieme approached IBG’s owners about his
position and compensation at the company. He drafted and sent
to IBG’s owners a document entitled “Statement of
Understanding,” which provided:
It is the intention of Raj Nanavati and Samir
Nanavati, partners of International Biometric
Group, LLC, that Michael Thieme, Director of
Special Projects, be provided with
remuneration and compensation commensurate
with his past and present role in the execution
and delivery of IBG products and services,
enabling company revenue and employee growth,
and enhancing IBG’s position as the industry’s
leading provider of biometric consulting and
integration services.
Such remuneration and compensation will be
above and beyond monies already paid in the
form of regular salary and bonus.
The form and relative amount of remuneration
and compensation are to be determined at a
later date, and are anticipated to be
commensurate with Mr. Thieme’s relative value
to IBG since his employment in November 1999,
reflective of the unwritten and non-explicit
agreement between Mr. Thieme and Raj Nanavati
and Samir Nanavati to this effect.
This remuneration and compensation may take the
form of an equity position in IBG, or in a
company or venture principally formed through,
with, or by IBG, prior or subsequent to
acquisition, liquidation, major partnership,
or substantive change in ownership or corporate
structure. In lieu of any such development,
this remuneration and compensation may also
take the form of salary or other tangible
method of compensation.
5
A copy of this statement will be placed in Mr.
Thieme’s permanent employee file.1
Raj Nanavati testified that he and his brother executed the
Statement of Understanding with the “understanding if we sell
the company, or cash out, we will take care of [Thieme]. We
will give [Thieme] something extra.” Thieme, however, testified
that he considered the Statement of Understanding to be
unenforceable because it did not quantify the proposed
compensation. Thieme and Aucoin-Thieme dispute whether Aucoin-
Thieme was aware of the Statement of Understanding during that
period; he contends that he informed her about it, and she
denies that he did so.
Shortly thereafter, Aucoin-Thieme left her retail position.
She testified that she did so because she was concerned about
the impact of her job and long commute on her pregnancy. The
parties’ daughter was born in January 2003.
Before and after their child’s birth, the parties discussed
the division of responsibilities in their personal and
professional lives. Although Aucoin-Thieme hoped to pursue a
career, Thieme and Aucoin-Thieme agreed that she would not seek
a job outside the home, but would take care of their daughter
1 The record contains only an unsigned copy of the “Statement of
Understanding.” Thieme testified that he did not know whether
the document was signed; Raj Nanavati testified that he recalled
“signing a document in around . . . 2000, early 2000.” No
signed version was presented to the trial judge.
6
and maintain their residence, as he continued to work on a
demanding schedule. Thieme characterized this agreement as a
“trade off” that enabled the parties to live on his salary, in
light of their shared view that his earning capacity
substantially exceeded hers. He recalled that the parties
agreed that a return to work would not be cost-effective for
Aucoin-Thieme because, if she obtained a job, they would incur
significant expenses for child care. With the exception of a
brief per diem job as a substitute teacher at her daughter’s
preschool, Aucoin-Thieme was not employed outside the home after
the birth of the child.
According to Aucoin-Thieme, in addition to caring for her
daughter and performing nearly all of the household tasks, she
conducted minor repairs on the home, paid the bills, and managed
the parties’ rental properties. The parties dispute the extent
of Aucoin-Thieme’s assistance in the advancement of Thieme’s
career. She contends that she actively participated in social
activities connected with his job, and he denies that his
employment involved significant social obligations.
In 2006, IBG’s owners conducted what Thieme characterized
as “very preliminary discussions” with a biometric vendor about
the potential sale of the business. According to Aucoin-Thieme,
Thieme told her at that time that he had a contract that would
entitle him to share in the proceeds of any sale, and the
7
parties bought a new home in anticipation of that compensation.
The discussions, however, did not lead to a sale of IBG.
Shortly thereafter, Thieme, Aucoin-Thieme, and their daughter
moved to Virginia so that Thieme could oversee an important
government contract for IBG. They remained in Virginia for
approximately three years and moved back to New Jersey in 2009.
The parties’ relationship, volatile from its inception,
deteriorated following their return to New Jersey. The primary
focus of their dispute was Thieme’s employment at IBG. Aucoin-
Thieme resented Thieme’s work hours and disliked the owners of
the company. At various times, Thieme and Aucoin-Thieme accused
one another of verbal and physical abuse, often using e-mail to
exchange angry communications.
At the conclusion of a series of acrimonious e-mails
written in July 2010, Thieme wrote:
This email is an acknowledgment that you have
had to give up your career and educational
aspirations in order to stay at home with [our
daughter] while I worked and pursued my career.
You have put your career aside so I could
advance mine. I understand that this has been
a great sacrifice for me and for our family.
I also understand that in the future,
regardless of our circumstances, it is
appropriate that I support you fully in
recognition of this sacrifice.
In an e-mail discussion about a potential settlement of
their dispute with the assistance of legal counsel, written
after Aucoin-Thieme threatened to move to Mississippi with their
8
daughter, Thieme advised Aucoin-Thieme that her counsel would
“be shocked as to how much money I will give you,” but that he
needed “to have the situation with my daughter resolved.”
Notwithstanding their frequent discord and vitriolic e-mail
exchanges, Thieme and Aucoin-Thieme married in August 2010.
Although the parties agree that their marriage began on a
positive note, their relationship worsened shortly after their
wedding. According to Thieme, Aucoin-Thieme’s demands that he
shorten his hours and respond immediately to e-mail messages
that she sent to him during the workday imperiled his job at
IBG.
The parties’ conflict reached a critical point in October
2011. In the wake of a dispute over e-mails that Thieme
exchanged with a co-worker, Aucoin-Thieme sent a series of
inflammatory e-mails about Thieme to IBG’s owners and employees.
In the e-mails, Aucoin-Thieme contended that she had a video of
an altercation between the two in the presence of their
daughter. She called the company’s owners disparaging names and
demanded that they pay her money that she insisted was owed to
her. Aucoin-Thieme then sent an e-mail to Thieme, asking
whether he was “ready to give [her] a divorce” in the wake of
that episode.2
2 At trial, Aucoin-Thieme testified that when she sent that e-
mail, she was under the mistaken impression that New Jersey law
9
Only fourteen months after the parties’ wedding, Thieme
filed a complaint for divorce in the Family Part. With the
assistance of counsel, Thieme and Aucoin-Thieme negotiated the
equitable distribution of their assets, alimony, child support,
and the custody of their child.
During their negotiations, the parties communicated by e-
mail about the prospect that IBG would pay deferred compensation
to Thieme. Thieme advised Aucoin-Thieme that he did not “expect
to get any large lump-sum bonuses,” but that “if some magical
$50K bonus appeared, then I’d wind up clearing $30K, and we can
make some arrangement - e.g. split it 50/50?” A week later,
Thieme confirmed to Aucoin-Thieme that, notwithstanding their
“discussions . . . about me someday getting an ownership stake
[in IBG],” he had “no idea if it will ever happen, or how it
will be structured, or the value.” He added that IBG’s grant of
an ownership interest “may never happen. It will certainly not
happen anytime soon.” In another e-mail, Thieme added that any
stake in IBG awarded to him “would be defined, probably, as
stocks,” and that he did not anticipate “a big cash payment.”
Thieme also asked Aucoin-Thieme to identify what she
considered to be her fair percentage share of any “potential
income/assets I make if I ever accept a buyout[.]” Aucoin-
authorized one spouse to bar another spouse from obtaining a
divorce.
10
Thieme did not commit to any specific percentage. Again by e-
mail, Thieme stated that although there had been no discussions
of a sale of IBG since 2006, he viewed Aucoin-Thieme’s claim to
his assets to date back to the time of their daughter’s birth.
He reiterated his view that IBG would not be sold “soon,” but
again asked her to quantify her claim to “a future ownership
stake” in the company. She did not do so.
A month later, Thieme urged Aucoin-Thieme not to delay the
settlement of their dispute “based on something that may never
happen.” He reassured her that if he were awarded “ownership in
IBG” in the future, “we are going to need to revisit” the issue.
Thieme reiterated that he had no contract with IBG; he
represented that there was “absolutely nothing at all stating
that I am going to ever get any part of” the company. He
suggested that the parties discuss the issue later, in the event
that he acquired an interest in IBG.
In April 2012, Thieme and Aucoin-Thieme executed their PSA.
Pursuant to its terms, the parties evenly divided their
identified assets -- whether those assets were acquired during
their lengthy period of cohabitation or their brief marriage --
and resolved issues of alimony, child support, and visitation.
The PSA provided that neither party owned “any businesses or any
interests whatsoever in any businesses which are subject to
equitable distribution” and that the agreement had no binding
11
effect on undisclosed assets. The PSA did not address any
deferred compensation anticipated by the parties.
Shortly after the trial court entered a final judgment of
divorce on June 20, 2012, Aucoin-Thieme moved to Mississippi
with the parties’ daughter. Thieme rented an apartment near
Aucoin-Thieme’s Mississippi home and spent time with the child
in accordance with the visitation schedule set forth in the PSA.
Three months after the entry of the parties’ judgment of
divorce, IBG’s owners entered into an agreement to sell IBG to
another company. Shortly before the closing, Raj and Samir
Nanavati executed a document offering Thieme the Closing Bonus,
described as “a one-time bonus in the amount of $2,250,000”
contingent on the closing of the sale. The document referenced
the “Statement of Understanding” that was executed in 2002.
IBG’s owners represented that the Closing Bonus was offered
pursuant to the Statement of Understanding, “to show our
appreciation for [Thieme’s] contributions in helping [IBG] grow
into the successful organization that it is today.”
In a deposition taken in this action, Raj Nanavati
testified that IBG offered Thieme the Closing Bonus in
accordance with the Statement of Understanding. He stated that
the Closing Bonus was “[b]ased upon [Thieme’s] contribution to
the company over the 13 years[.]” He testified that Thieme was
not told about the sale of IBG until the sale was completed.
12
It is undisputed that Thieme did not inform Aucoin-Thieme
that IBG had awarded him the Closing Bonus. She first learned
of the Bonus when Thieme deposited $200,000 into a bank account
that, unbeknownst to Thieme, remained a joint account despite
the divorce. With no notice to Thieme, Aucoin-Thieme withdrew
the deposited funds from the joint account.
II.
Thieme filed a complaint in the Chancery Court of Harrison
County, Mississippi, Second Judicial Circuit. In addition to
seeking the Mississippi court’s intervention in a visitation
dispute, Thieme asked the court to hold Aucoin-Thieme in
contempt for withdrawing the contested funds from the bank
account. Aucoin-Thieme filed a counterclaim. Among other
claims, she alleged that Thieme committed fraud by failing to
inform her, prior to the parties’ divorce, that he would be
receiving a substantial amount of money by virtue of IBG’s sale.
Aucoin-Thieme then relocated to New Jersey, and the Mississippi
matter was transferred to the Family Part.
After discovery, a Family Part judge conducted a three-day
bench trial addressing two related issues: whether Aucoin-
Thieme was entitled to a share of Thieme’s Closing Bonus, and
whether she would be permitted to retain, or ordered to return,
the $200,000 that she withdrew from the parties’ joint account.
13
At the conclusion of the trial, the court determined that
the Closing Bonus was earned by Thieme throughout his entire
employment with IBG. The trial court found that Aucoin-Thieme
was entitled to a share of that portion of the Closing Bonus
that was earned by Thieme during the parties’ fourteen-month
marriage. It concluded, however, that Aucoin-Thieme was not
entitled to equitable distribution of any portion of the Closing
Bonus that was earned by Thieme during the period in which the
parties cohabited prior to their marriage, because of N.J.S.A.
2A:34-23(h)’s limitation of equitable distribution to marital
assets.
In accordance with its ruling, the trial court allocated
the $2,250,000 Closing Bonus. It concluded that in the course
of his employment, Thieme earned the Closing Bonus at a rate of
$14,423 per month. Multiplying that amount by a factor of
fourteen, the court ruled that during the parties’ marriage,
Thieme earned deferred compensation in the amount of $201,923.
The trial court then determined that Thieme’s net income from
the allocated portion of his Bonus, after the deduction of
taxes, was $100,961. It subjected that amount to equitable
distribution under N.J.S.A. 2A:34-23.1, awarding thirty percent
of that amount, or $30,288, to Aucoin-Thieme. The court ordered
Aucoin-Thieme to return the remaining amount that she had
14
withdrawn from the joint account, totaling $169,712, to Thieme.
It denied the parties’ applications for attorneys’ fees.
Aucoin-Thieme appealed the trial court’s judgment. She
contended that she was entitled to a share of the portion of the
Closing Bonus that the trial court allocated to the years in
which the parties cohabited prior to their marriage. She
premised that claim on alternative theories: equitable
distribution under N.J.S.A. 2A:34-23(h), and several common law
claims seeking equitable relief, including unjust enrichment and
constructive trust. In an unpublished opinion, an Appellate
Division panel affirmed the trial court’s judgment,
substantially for the reasons stated by the trial judge.
We granted Aucoin-Thieme’s petition for certification. 224
N.J. 245 (2016).
III.
Aucoin-Thieme argues that the trial court improperly
construed the equitable distribution statute, N.J.S.A. 2A:34-
23.1, to authorize the distribution of only the portion of the
Closing Bonus that was attributed to Thieme’s work for IBG
during the parties’ marriage. Relying on the Appellate
Division’s opinions in Weiss v. Weiss, 226 N.J. Super. 281, 287
(App. Div.), certif. denied, 114 N.J. 287 (1988), and Berrie v.
Berrie, 252 N.J. Super. 635, 646 (App. Div. 1991), Aucoin-Thieme
argues that when cohabiting parties express their intention to
15
create a marital partnership prior to the marriage ceremony,
premarital property acquired in “contemplation of marriage”
should be subject to equitable distribution. In the
alternative, Aucoin-Thieme contends that she is entitled to a
portion of the Closing Bonus under one or more quasi-contractual
and equitable theories, such as quantum meruit, breach of
implied contract, breach of joint venture, breach of
partnership, unjust enrichment, and detrimental reliance.
Citing Carr v. Carr, 120 N.J. 336, 351 (1990), Aucoin-Thieme
argues that her unjust enrichment claim warrants the remedy of a
constructive trust.
Thieme counters that the trial court correctly concluded
that N.J.S.A. 2A:34-23.1 authorizes equitable distribution based
upon a marital relationship, and that any extension of the
statute to cohabiting partners should be made by the
Legislature, not by a court. He contends that Weiss, supra, 226
N.J. Super. at 287-90, and Berrie, supra, 252 N.J. Super. at
644-48, are factually distinguishable from this matter. Thieme
argues that Aucoin-Thieme failed to prove the elements of her
claims for equitable relief.
IV.
A.
We review the Family Part judge’s findings in accordance
with a deferential standard of review, recognizing the court’s
16
“special jurisdiction and expertise in family matters.” Cesare
v. Cesare, 154 N.J. 394, 413 (1998). Thus, “findings by the
trial court are binding on appeal when supported by adequate,
substantial, credible evidence.” Id. at 411-12 (citing Rova
Farms Resort, Inc. v. Inv’rs Ins. Co., 65 N.J. 474, 484 (1974)).
A more exacting standard governs our review of the trial
court’s legal conclusions. “Although a family court’s factual
findings are entitled to considerable deference, we do not pay
special deference to its interpretation of the law . . . . [T]he
trial court is in no better position than we are when
interpreting a statute or divining the meaning of the law.”
D.W. v. R.W., 212 N.J. 232, 245 (2012) (citations omitted).
Accordingly, we review the trial court’s legal conclusions de
novo. Id. at 245-46; see also N.J. Div. of Youth & Family
Servs. v. I.S., 202 N.J. 145, 183 (2010) (citations omitted).
B.
We first review the trial court’s determination that only
the portion of Thieme’s Closing Bonus attributed to the work
that he performed during the parties’ fourteen-month marriage
was subject to equitable distribution, and that the remainder of
the Bonus, earned prior to the marriage, was exempt from
equitable distribution.3
3 In light of the trial court’s finding, undisputed on appeal,
that the Closing Bonus compensated Thieme for his work during
17
The equitable distribution statute authorizes the Family
Part to distribute assets “in all actions where a judgment of
divorce, dissolution of civil union, divorce from bed and board
or legal separation from a partner in a civil union couple is
entered.” N.J.S.A. 2A:34-23(h).4 It reflects a public policy
that is “at least in part an acknowledgment ‘that 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)).
The statute clearly addresses the distribution of property only
in the context of an action for divorce or the dissolution of a
civil union. N.J.S.A. 2A:34-23(h); see also Crowe v. De Gioia,
90 N.J. 126, 132 (1982) (finding that N.J.S.A. 2A:34-23 “does
not embrace an action on a contract between unmarried
cohabitants,” and “[t]he Legislature has proscribed common law
the period in which the parties cohabited and during their
marriage, neither party contends that the provision of their PSA
precluding claims to after-acquired property bars any
distribution of a portion of the Closing Bonus to Aucoin-Thieme.
4 Applying the equitable distribution statute, a Family Part
judge undertakes a three-step analysis. Rothman v. Rothman, 65
N.J. 219, 232 (1974). First, the court must “decide what
specific property of each spouse is eligible for distribution”;
second, it “must determine [the property’s] value for purposes
of such distribution”; and finally, it “must decide how such
allocation can most equitably be made.” Ibid. The statute sets
forth a non-exhaustive list of factors for the court’s
consideration as it divides the parties’ marital assets.
N.J.S.A. 2A:34-23.1.
18
marriages”); Kozlowski v. Kozlowski, 80 N.J. 378, 383 (1979)
(noting that equitable distribution statute then in effect
authorized award “only in actions for divorce”).5 Thus, the
equitable distribution statute does not govern disputes over
property between parties who have cohabited but have never
entered into a marriage or civil union. Crowe, supra, 90 N.J.
at 132; Kozlowski, supra, 80 N.J. at 383.
The Legislature has limited the property that is subject to
equitable distribution to “property, both real and personal,
which was legally and beneficially acquired by them or either of
them during the marriage or civil union.” N.J.S.A. 2A:34-23(h).
Although the language “during the marriage or civil union” is
not defined in the statute, it is unambiguous. It is evident
that the Legislature did not intend to treat property acquired
during a period of cohabitation prior to a marriage or civil
union as the equivalent of property acquired during that
marriage or civil union, for purposes of equitable distribution.
N.J.S.A. 2A:34-23(h).
5 In January 2010, the Legislature amended the Statute of Frauds
to include “[a] promise by one party to a non-marital personal
relationship to provide support or other consideration for the
other party, either during the course of such relationship or
after its termination,” and to require that both parties have
the benefit of legal counsel in arriving at such an agreement.
N.J.S.A. 25:1-5(h). See generally Maeker v. Ross, 219 N.J. 565,
580-82 (2014). No claim governed by that provision has been
made in this case.
19
“[T]he sole function of the courts is to enforce [the
statute] according to its terms.” Velazquez v. Jiminez, 172
N.J. 240, 256 (2002) (quoting Hubbard ex rel. Hubbard v. Reed,
168 N.J. 387, 392 (2001)). Accordingly, the property to be
divided 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 or civil union. See Smith, supra, 72
N.J. at 361.
Aucoin-Thieme relies on two Appellate Division decisions,
Weiss, supra, 226 N.J. Super. at 287-90, and Berrie, supra, 252
N.J. Super. at 644-648, for the proposition that property
acquired or earned prior to marriage may be subject to equitable
distribution. In Weiss, supra, the divorcing spouses disputed
the status of their marital home. 226 N.J. Super. at 284-85.
The husband had purchased the home in his own name as the
parties planned their wedding, and both parties remodeled the
home prior to and after their marriage. Ibid. An Appellate
Division panel affirmed the trial court’s determination that the
house was a marital asset, even though it was purchased prior to
the parties’ wedding. Id. at 289. The panel held that property
acquired prior to marriage may be included in equitable
distribution “where the parties have adequately expressed that
intention and have acquired assets in specific contemplation of
their marriage.” Id. at 287. The panel applied the same logic
20
to the husband’s business and remanded for an evaluation of any
enhancement of the value in the husband’s business, but only to
the extent that the value increased during the parties’
marriage. Id. at 290.
In Berrie, supra, the contested asset was the increase in
the value of the husband’s stock in his business during the
several years prior to the parties’ marriage. 252 N.J. Super.
at 637-38. Before the parties married, the wife went to work
for the business as a liaison to foreign trading partners. Id.
at 639-40. The Appellate Division panel found that “[i]f the
parties by their combined efforts work as part of [a marital]
‘partnership’ to increase the value of an asset held by one of
them, such increase in value under established principles also
might be subject to treatment as a partnership interest, which
in turn might be subject to equitable distribution.” Id. at
646. The panel determined that the increased value of the stock
might constitute an asset “acquired [or, as here, enhanced] in
specific contemplation of [the] marriage,” and therefore be
treated as a partnership interest. Id. at 647 (alteration in
original) (quoting Weiss, supra, 226 N.J. Super. at 287). It
remanded for the trial court’s consideration of the nature and
terms of the wife’s premarital employment in the husband’s
business and other issues. Id. at 648-49.
21
Neither Weiss nor Berrie supports Aucoin-Thieme’s argument
that the portion of Thieme’s Closing Bonus that he earned prior
to their marriage is subject to equitable distribution under
N.J.S.A. 2A:34-23(h). Nothing in Weiss suggests that premarital
compensation earned by a spouse is subject to equitable
distribution; indeed, the Appellate Division panel in that case
limited the wife’s claim for equitable distribution of the
increased value of the husband’s business to the period during
which the parties were married. Weiss, supra, 226 N.J. Super.
at 289-90. In Berrie, supra, the Appellate Division heavily
relied on the wife’s direct contribution to the business as a
key employee -– a contribution recognized as a “tremendous
asset[]” in a certification executed by the husband. 252 N.J.
Super. at 639. Neither Appellate Division opinion generally
construes the equitable distribution statute to treat assets
acquired prior to marriage as the equivalent of assets acquired
during a marriage or civil union. Id. at 645-48; Weiss, supra,
226 N.J. Super. at 287-90. Any such construction would run
afoul of the statute’s terms.
We agree with the trial court and Appellate Division that
if the portion of Thieme’s Closing Bonus that was earned prior
to the marriage were held to be a marital asset, such a ruling
would contravene the plain language of N.J.S.A. 2A:34-23(h). We
hold that the trial court correctly allocated the distribution
22
of Thieme’s Closing Bonus to premarital and marital periods and
properly deemed only the portion of the compensation that was
earned during the parties’ marriage to be a marital asset
subject to equitable distribution.
C.
Our rejection of Aucoin-Thieme’s claim for equitable
distribution of the portion of the Closing Bonus allocated to
the period prior to the parties’ marriage does not end the
inquiry. Aucoin-Thieme has also asserted claims based on
equitable principles. As a remedy for alleged unjust
enrichment, Aucoin-Thieme seeks a constructive trust and an
allocation of a percentage of the Closing Bonus that was earned
by Thieme while they cohabited prior to their marriage.
“The Family Part is a court of equity.” Randazzo v.
Randazzo, 184 N.J. 101, 113 (2005); see also Carr, supra, 120
N.J. at 351 (noting that “[t]he Legislature has recognized that
courts’ equitable powers are particularly appropriate in the
context of domestic relations”); A.W. v. T.D., 433 N.J. Super.
365, 370-71 (Ch. Div. 2013). A “court [of equity] must exercise
its inherent equitable jurisdiction and decide the case based
upon equitable considerations.” Kingsdorf ex rel. Kingsdorf v.
Kingsdorf, 351 N.J. Super. 144, 157 (App. Div. 2002). As an
Appellate Division panel observed,
23
cases must ultimately be decided on facts. Our
law is not to be applied in the abstract, but
must be considered in light of the factual
circumstances in an individual
case. Depending on such facts, an adjustment
of the rights of the parties may vary from one
case to another. This is particularly true in
a court of equity, where a family court may
give full range to equitable doctrines in
dealing with matrimonial controversies.
[A.W., supra, 433 N.J. Super. at 370
(citations omitted).]
As this Court has noted, “[e]quities arise and stem from
facts which call for relief from the strict legal effects of
given situations.” Carr, supra, 120 N.J. at 351 (quoting
Untermann v. Untermann, 19 N.J. 507, 518 (1955)).
To prove a claim for unjust enrichment, a party must
demonstrate that the opposing party “received a benefit and that
retention of that benefit without payment would be unjust.”
Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 110 (2007)
(quoting VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554
(1994)). “That quasi-contract doctrine also ‘requires that
plaintiff show that it expected remuneration from the defendant
at the time it performed or conferred a benefit on defendant and
that the failure of remuneration enriched defendant beyond its
contractual rights.’” Ibid. (quoting VGR Corp., supra, 135 N.J.
at 554).
In the event that a court finds unjust enrichment, it may
impose a constructive trust. That remedy has been described as
24
“the formula through which the conscience of equity finds
expression. When property has been acquired in such
circumstances that the holder of the legal title may not in good
conscience retain the beneficial interest, equity converts him
into a trustee.” Carr, supra, 120 N.J. at 351 (quoting Beatty
v. Guggenheim Expl. Co., 122 N.E. 378, 380 (N.Y. 1919)); see
also Hill v. Warner, Berman & Spitz, P.A., 197 N.J. Super. 152,
168 (App. Div. 1984) (defining constructive trust). Equitable
remedies such as constructive trusts “are not based on the
actual intent of the parties, but ‘are arbitrarily imposed by
the court to prevent an unjust enrichment.’” Carr, supra, 120
N.J. at 352 (quoting Coney v. Coney, 207 N.J. Super. 63, 75 (Ch.
Div. 1985)). As this Court has observed, “[g]enerally all that
is required to impose a constructive trust is a finding that
there was some wrongful act, usually, though not limited to,
fraud, mistake, undue influence, or breach of a confidential
relationship, which has resulted in a transfer of property.”
D’Ippolito v. Castoro, 51 N.J. 584, 589 (1968).
In Carr, supra, the trial court considered the plaintiff
wife’s claims that she was entitled to equitable distribution or
an elective share of assets owned by her husband, who died
during their protracted divorce proceedings. 120 N.J. at 339-
40. Citing the plain language of the equitable distribution
statute, the Court noted that the statute afforded relief to a
25
party only upon the entry of “a judgment of divorce” and that
its remedy was accordingly unavailable to the plaintiff. Id. at
341 (citing N.J.S.A. 2A:34-23). The Court held that an elective
share under the probate code was similarly barred by virtue of
the plaintiff’s separation from her husband and the pendency of
divorce proceedings prior to his death. Id. at 344-46. The
Appellate Division and this Court affirmed the trial court’s
rejection of both statutory claims. Id. at 354.
Notwithstanding the failure of the plaintiff’s statutory
claims in Carr, the trial court imposed a constructive trust,
awarding to the plaintiff a share of the marital assets
controlled by the husband’s estate. Id. at 350-51. The
Appellate Division concurred with the trial court that a
constructive trust was an appropriate remedy, and this Court
affirmed that determination. Id. at 351-54.
The Court observed that judges can “[‘]presume that the
parties []intended to deal fairly with [each other’] [and will]
[‘]employ the doctrine of quantum meruit, or equitable remedies
such as constructive or resulting trusts[] in order to [i]nsure
that one party has not been unjustly enriched, and the other
unjustly impoverished, on account of their dealings.’” Id. at
352 (fourth alteration in original) (quoting Kozlowski, supra,
80 N.J. at 390-91) (Pashman, J., concurring). It concluded that
equitable relief in the setting of Carr was consistent with the
26
protective policies advanced by the Legislature in the equitable
distribution and probate laws. Id. at 352-54. The Court agreed
with the trial court that in the setting of that case, the
estate’s retention of “the share beneficially belonging to Mrs.
Carr” could give rise to unjust enrichment. Id. at 353-54. It
held that “if warranted by the evidence, the equitable remedy of
constructive trust should be invoked and imposed on the marital
property under the control of the executor of [the deceased
husband’s] estate.” Id. at 353.
The principles expressed in Carr apply with equal force to
this appeal, and warrant the imposition of a constructive trust
governing a portion of Thieme’s Closing Bonus in the unusual
circumstances of this case. As the evidence presented at trial
made clear, the prospect that Thieme would be generously
compensated was a significant factor in the parties’ personal
and financial planning from the early stages of their
relationship. Thieme and Aucoin-Thieme each relied on the
expectation of deferred compensation if IBG were sold as they
made important decisions for themselves and their family.
The parties’ shared anticipation that Thieme would be paid
deferred compensation was more than wishful thinking. Given
IBG’s written commitment to Thieme, and its owners’ genuine
desire to reward their valued employee, both parties had reason
to anticipate a significant payment in the event of a sale.
27
Whether the Statement of Understanding constituted a legally
binding contract or an unenforceable expression of IBG’s plan,
it conveyed an important message. IBG’s owners acknowledged
their intention to compensate their key employee and longtime
friend in a manner commensurate with his pivotal role in the
success of their business. That confirmation occurred early in
the relationship between the parties. Although the parties
dispute the timing and content of their discussions about the
Statement of Understanding, it is clear that on multiple
occasions Thieme advised Aucoin-Thieme about his expectation
that any sale of IBG could generate a substantial financial
reward for their family.
Although the prospects for IBG’s sale were for many years
uncertain, and the company’s owners were not in a position to
quantify Thieme’s compensation until the September 2012 sale,
IBG’s commitment to reward him was an important consideration in
the decisions made by the parties throughout their cohabitation
and marriage. Despite his grueling schedule and its impact on
his family, Thieme was determined to retain his job. Although
he understood Aucoin-Thieme’s desire to work outside of the
home, Thieme firmly opposed any suggestion that he pursue less
demanding employment and take on a more active role in their
daughter’s care so that she could seek work outside the home.
He reasoned that his work at IBG was crucial to the family’s
28
future. In short, as they planned their finances and personal
lives, Thieme and Aucoin-Thieme anticipated that they might
someday share in the proceeds of the company’s sale.
During the parties’ eight years of cohabitation, and for
most of their brief marriage, Aucoin-Thieme undertook
significant efforts to support Thieme’s challenging career. As
Thieme acknowledged, Aucoin-Thieme ably shouldered almost all of
the responsibility for caring for their daughter. She
maintained and repaired their homes, managed their rental
properties, and paid the bills. With the exception of a brief
per diem job substitute teaching at her child’s preschool,
Aucoin-Thieme did not pursue a career or return to school. She
moved with Thieme and their daughter to Virginia to accommodate
IBG’s need to assign Thieme to an important contract. There is
no doubt that Aucoin-Thieme was at times disruptive and abusive
when Thieme was working, and the series of inflammatory e-mails
that she sent to his employer and co-workers in October 2011
could have derailed his career. Thieme was not without fault
either, as he admitted.6 Despite their disputes, for most of
their time together, Aucoin-Thieme’s efforts enabled Thieme to
6 We do not find the conduct of either party to be sufficiently
egregious to constitute an appropriate factor on the allocation
of the Closing Bonus on remand.
29
focus almost exclusively on IBG, and thus supported his
professional development.
Indeed, Thieme himself recognized that Aucoin-Thieme’s
contributions to their family should be rewarded. He
acknowledged Aucoin-Thieme’s “great sacrifice” of her “career
and educational aspirations” to care for their daughter. He
committed to support her “fully.” Thieme expressly recognized
that his obligation to financially support Aucoin-Thieme
implicated, to some extent, any compensation that he would
receive in the event that IBG were sold. He assured Aucoin-
Thieme that if he received an unexpected bonus, they would split
that bonus, after the deduction of taxes. Thieme represented
that he viewed Aucoin-Thieme’s claim to share in his assets to
date back to 2003, when their child was born.
Accordingly, the record supports the conclusion that
Aucoin-Thieme’s decision not to seek further education and
employment was made, at least in part, in reliance on Thieme’s
financial commitment to her. Aucoin-Thieme clearly made
decisions regarding her future in light of IBG’s unequivocal
expression of its intent to fairly compensate Thieme if it had
the opportunity to do so, and Thieme’s repeated representations
that he would generously support her in return for her efforts
on the family’s behalf. Even as the parties negotiated the
terms of their divorce, Thieme suggested to Aucoin-Thieme that
30
if IBG were sold and he were afforded a portion of the proceeds,
that payment would be shared with her.
Thieme’s Closing Bonus, however, materialized three months
after the parties’ divorce was finalized -- too late to be
divided, along with other assets, in the PSA.7 By virtue of the
trial court’s proper application of N.J.S.A. 2A:34-23(h) to the
Closing Bonus, Aucoin-Thieme was awarded less than two percent
of the Bonus by equitable distribution. As the husband’s death
in Carr deprived the wife of relief under the equitable
distribution and probate statutes, by virtue of the timing of
the critical events in this case, only a limited statutory
remedy was available to Aucoin-Thieme. We conclude that a
decision constraining Aucoin-Thieme to the nominal share of the
Closing Bonus that is authorized by the equitable distribution
statute would result in unjust enrichment, and that Aucoin-
Thieme has proven the elements of that equitable claim.
As a remedy, a percentage of the portion of the Closing
Bonus that Thieme earned during the period in which the parties
cohabited prior to their marriage should be deemed to be held by
7 Like the trial court, we do not find that Thieme defrauded
Aucoin-Thieme with respect to the Closing Bonus; no evidence
rebuts his assertion that IBG’s owners did not inform him of
IBG’s sale until it was concluded, and the testimony of Raj
Nanavati supports Thieme’s contention.
31
Thieme in constructive trust for Aucoin-Thieme.8 We make no
determination as to the precise time period for which the
Closing Bonus should be shared by the parties, the percentage of
the Closing Bonus that should be allocated to Aucoin-Thieme to
avoid unjust enrichment, or the impact of taxes imposed on
Thieme by virtue of the Closing Bonus.
On remand, the court should make those determinations based
on the comprehensive record presented at trial.9 That record
includes evidence of the contributions made by each party to
their home and family, Aucoin-Thieme’s impact on Thieme’s
employment at IBG, and the parties’ financial status at the time
of trial. The court may, in its discretion, permit the parties
to supplement the record as appropriate.
V.
The judgment of the Appellate Division is affirmed in part
and reversed in part, and the matter is remanded to the Family
Part for proceedings consistent with this opinion.
8 We do not reach Aucoin-Thieme’s claims for quantum meruit,
breach of implied contract, breach of joint venture or breach of
partnership.
9 Although the equitable distribution statute does not govern
the allocation of the Closing Bonus, some of the factors
identified in N.J.S.A. 2A:34-23.1(a) to –(p) may be relevant to
the trial court’s allocation of a portion of the Closing Bonus
on remand. See N.J.S.A. 2A:34-23.1(a) to –(p).
32
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN,
FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE PATTERSON’s
opinion.
33