Similar to 2008, this year resulted in a startling low number of reported family law decisions. This may be a function of the current economic times and the costs involved in taking a case to final hearing and then up on appeal. It may also be a function of the rise of alternate dispute resolution in that cases resolved through mediation or arbitration do not advance the case law. Finally, it may simply be that family law has matured to the point where fewer novel issues arise which warrant a reported opinion.
The following is an outline of what I consider to be the ten (10) most important reported cases decided in 2009. These cases addressed significant issues relevant to the practice of divorce and family law. This presentation will review each opinion and the impact that it will have upon our practice and future Family Court matters. Practice tips will also be discussed as to how matrimonial attorneys can best utilize these decisions.
Fawzy v. Fawzy, 199 N.J. 456 (2009)
Fawzy—A Triumph for Parents and Judicial Efficiency
By: John P. Paone, Jr.* and Megan S. Murray**
In recent years, arbitration has become an increasingly popular litigation alternative for matrimonial practitioners and their clients. Arbitration gives the parties control to choose the individual who will decide their case and cuts down significantly on the time and expense of litigating a case from start to finish. Especially today, where courts in nearly every vicinage have backed up trial calendars and judges have no time to accommodate continuous trials, arbitration frees up the court docket and gives parties an expedited resolution to their case.
Twenty-five years ago, the Supreme Court in Faherty v. Faherty, 97 N.J. 99 (1984) approved arbitration of family law matters, including alimony and child support. Recently, in Fawzy v. Fawzy 199 N.J. 456 (2009), the Court expanded the holding in Faherty to provide that arbitration may also be utilized to resolve issues of child custody and parenting time. In a unanimous opinion (written by Justice Long), the Court held that the constitutionally protected right of parental autonomy includes the right of parents to choose the forum in which to resolve their disputes over child custody and parenting time. In those cases where the parties agree to arbitrate custody and parenting time, the court will confirm the arbitrator’s award unless either party proves that harm would result to the child as a result of implementation of the arbitrator’s decision.
The facts of the Fawzy case are relatively straight forward. Mrs. Fawzy filed a Complaint for Divorce in 2005, and during the course of the litigation, a guardian ad litem was appointed for the parties’ two (2) children, ages eight (8) and nine (9). In 2007, the parties agreed to submit their case to binding arbitration, including financial issues as well as the issues of child custody and parenting time. The parties further agreed that the guardian ad litem would serve as the arbitrator. To memorialize their Agreement, the parties testified, on the record before the trial judge, that they agreed to binding arbitration and that they understood that the arbitrator would be making a binding decision with regard to the issues in dispute, including the issue of custody and parenting time.
While binding arbitration was still in progress, Mr. Fawzy filed an Order to Show Cause to stop the arbitration. Mr. Fawzy argued that the issue of custody could not be submitted to arbitration as a matter of law and, alternatively, the agreement to arbitrate was not binding, as he was forced to sign it under duress. Mr. Fawzy’s Order to Show Cause was denied. Subsequently, the arbitrator issued a custody and parenting time award, granting the parties joint legal custody, with Mrs. Fawzy having primary physical custody subject to the parenting time of Mr. Fawzy. While arbitration on the financial issues was still in progress, Mr. Fawzy filed a second Order to Show Cause, seeking both to vacate the arbitration award and to disqualify the arbitrator from further participation in the case.
Mr. Fawzy’s Order to Show Cause was again denied, and Mr. Fawzy appealed, arguing that custody issues cannot be submitted to binding arbitration because it deprives the court of is parens patriae obligation to assure the best interests of the child. The Appellate Division, despite acknowledging Mr. Fawzy’s failure to prove that the arbitrator’s award would harm the children, held that child custody issues cannot be submitted to binding arbitration. The case was therefore remanded to the trial court for a hearing on custody and parenting time issues. Mrs. Fawzy filed a Petition of Certification to the New Jersey Supreme Court, and Mr. Fawzy filed a Cross-Petition as to the issue of whether a guardian ad litem could serve as an arbitrator in a child-custody proceeding. The Supreme Court granted both the Petition and Cross-Petition.
The issue in Fawzy was one of first impression in New Jersey. While the Faherty decision did not go so far as to allow for arbitration of custody and parenting time issues, the Court suggested that arbitration would be a favorable alternative to litigation:
We do not reach the question of whether arbitration of child custody and visitation rights is enforceable since that issue is not before us. However, we note that the development of a fair and workable mediation or arbitration process to resolve these issues may be more beneficial to the children of this state than the present system of courtroom confrontation.
Faherty, 97 N.J. at 100.
The Fawzy Court acknowledged that in the twenty-five years since Faherty, judicial support for arbitration has increased across the nation. Indeed, the majority of jurisdictions that have addressed whether arbitration of custody and parenting time issues is appropriate have concluded that parents are empowered to submit these issues to arbitration in the exercise of their parental autonomy. Moreover, scholarly reports on this subject have emphasized the benefits of arbitration as a means to minimize the harmful effects of divorce litigation on both children and parents. In contrast to the win/lose framework of custody litigation, “arbitration conducted in a less formal atmosphere, often in a shorter time span than a trial, and always with a fact-finder of the parties’ own choosing, is often far less antagonistic and nasty than typical courthouse litigation.” Fawzy at 472 (quoting Joan F. Kessler et al, Why Arbitrate Family Law Matters?, 14 J. Am. Acad. Matrimonial Law. 333 (1997)).
Despite the Court’s emphasis on the public policy arguments in favor of arbitration, Fawzy was ultimately a case turning on constitutional interpretation and “the intersection between parents’ fundamental liberty interest in the care, custody, and control of their children, and the state’s interest in the protection of those children.” The Court held that because parental autonomy includes the right of parents to make decisions regarding custody, parenting time, health, education and welfare of their children, the right to parental autonomy must therefore include the right to submit issues of child custody and parenting time to an arbitrator for disposition. So long as the parties agree to arbitrate issues of custody and parenting time, courts have no power to superimpose their decision as to what is in the best interests of the children:
…[t]he bundle of rights that the notion of parental autonomy sweeps in includes the right to decide how issues of custody and parenting time will be resolved. Indeed, we have no hesitation in concluding that, just as parents “choose” to decide issues of custody and parenting time among themselves without court intervention, they may opt to sidestep the judicial process and submit their dispute to an arbitrator whom they have chosen.
Fawzy, 199 N.J. at 477.
Because the agreement of parents to arbitrate custody and parenting time is a fundamental liberty interest, the standard of review of an arbitration decision is significantly more limited than the best interests standard utilized in litigating a custody case. The Court held that a parent seeking to overturn the decision of the arbitrator must show that the arbitrator’s decision would result in harm to the child. In the absence of a claim of harm, the parties are limited to review of the arbitrator’s award under the Arbitration Act of 2003. Moreover, even in those cases where a parent makes a prima facie showing that harm will result to the child as a result of the arbitrator’s decision, the trial court must first address the claim of harm before making any further inquiry as to the best interests of the child. Only in the event that the court finds evidential proof that harm will result to the child, will the presumption in favor of the parents’ choice of arbitration be overcome. In those cases, the court will set aside the arbitrator’s award and decide custody and parenting time de novo based on the best interests of the child.
The Fawzy Court made clear that the harm standard is not easily satisfied and that it is a significantly higher burden than a best interests analysis. An arbitrator’s decision will not be overturned because one parent claims that he or she is the better parent or because one parent is unsatisfied with the amount of parenting time he or she received. Rather, only evidence, such as proof that the custodial parent has a substance abuse issue or debilitating mental illness, which would substantiate a claim that actual harm will result to the child in that parent’s care will be sufficient.
In an effort to ensure that courts will have the ability to properly review an arbitrator’s award of custody and parenting time, Fawzy held that additional procedural requirements are mandated. Specifically, in addition to the general rules governing arbitration under N.J.S.A. 2A:23B-1 to 32, child custody arbitration requires that a record of all documentary evidence by kept; that all testimony be recorded verbatim; and that the arbitrator state in writing or otherwise record his or her findings of fact and conclusions of law with a focus on the best interests standard. If these procedural guidelines are not met, the arbitrator’s award is likely to be vacated with the potential for an entirely new trial on the issue of custody and parenting time.
In addition to the procedural requirements set forth above, parents who choose to arbitrate custody and parenting time must enter into a written or recorded agreement pursuant to the requirements under N.J.S.A. 2A:23B-1. The agreement must state in clear language: 1) that the parties understand their entitlement to a judicial adjudication of their dispute and are willing to waive that right; 2) that the parties are aware of the limited circumstances under which a challenge to the arbitration award may be advanced and agree to those limitations; 3) that the parties have had sufficient time to consider the implications of their decision to arbitrate; and 4) that the parties have entered into the arbitration agreement freely and voluntarily, after due consideration of the consequences of their doing so.  Additionally, in the event the parties are not submitting all issues to arbitration, the arbitration agreement should state with specificity the issues which are to be decided by the arbitrator.
Despite upholding the submission of custody and parenting time issues to binding arbitration, the Court held that it could not uphold the award of the arbitrator in Fawzy. The Court held that the agreement entered into by the parties was insufficient, as without a written agreement to arbitrate, the oral record of the parties’ agreement had to reflect that the parties understood their rights, knew what they were waiving, and that they were aware of what review was available. The Court held that based on the agreement placed on the record before the trial court, it could not find that this standard had been met.
After addressing the right to submit custody and parenting time issues to binding arbitration, the Court turned to the issue of whether parents have full discretion over the selection of the arbitrator. Mr. Fawzy contended that the arbitration award could not be upheld based on the conflict of interest which existed by having the guardian ad litem serve as arbitrator. The Court agreed with Mr. Fawzy, holding that a guardian ad litem cannot be chosen to serve as arbitrator due to the inherent conflicts which could arise as a result of this situation. The Court reasoned that the arbitrator’s role is to make an award based solely on the evidence adduced during arbitration. However, if the arbitrator previously served or is serving as guardian ad litem and has investigated the matter, he is likely privy to facts unknown to both parties and which are outside of the record. Moreover, to the extent the arbitrator has interacted with the parties during his investigation or made preliminary reports, he could be exposed to a claim of partiality under the Arbitration Act. Finally, the Court pointed out that an individual serving in this dual role could be forced to testify as guardian ad litem if the case goes back to court.
The Fawzy decision is a victory for divorcing parents and our justice system. The case recognizes that the onset of matrimonial proceedings does not limit the ability of parents to make voluntary choices relative to their children without judicial interference. It also promotes binding arbitration, a less litigious alternative to trial, which often expedites a resolution and diminishes the already overbooked docket of the courts.
*John P. Paone, Jr. is a past chair of the New Jersey State Bar Association Family Law Section and is currently 2nd Vice President of the New Jersey Chapter of the American Academy of Matrimonial Lawyers. He is a Certified Matrimonial Law Attorney and serves by appointment of the New Jersey Supreme Court as a member of the Matrimonial Committee of the Board on Attorney Certification and member of the Board on Continuing Legal Education. He is currently the First Vice President of the Middlesex County Bar Association. He is the senior partner of Paone & Zaleski in Woodbridge where he limits his practice to divorce and family law.
**Megan S. Murray is an associate with the Law Offices of Paone & Zaleski in Woodbridge, New Jersey. Before joining the firm, she served as clerk to the Honorable Judge Paul Kapalko, Presiding Judge, Family Part, Monmouth County. Ms. Murray is the co-chair of the Young Lawyer’s Subcommittee of the Family Law Section of the New Jersey State Bar Association for the 2009-2010 year. Ms. Murray also serves as an editor for Dictum, the newsletter for the Young Lawyer’s Division of the New Jersey State Bar Association.
Donnelly v. Donnelly, 405 N.J. Super. 117 (App. Div. 2009)
Issue: Did the trial court err in denying the defendant’s application for a decrease in alimony when the defendant’s income had allegedly decreased substantially since the divorce?
Holding: No. The trial judge properly measured the alleged change in the defendant’s income from the filing of his prior Lepis application nine (9) months earlier and found that it was too soon to determine whether the defendant’s alleged decrease in income was permanent. The trial judge also properly analyzed other circumstances, including the defendant’s voluntary increase in expenses and the defendant’s lavish lifestyle in concluding that the defendant’s alleged decrease in income was unsubstantiated.
Issue: Did the trial err in relying on facts established at a plenary hearing with regard to the defendant’s first Lepis Motion to decrease alimony when the defendant filed a second Lepis Motion only nine (9) months thereafter?
Holding: No. The defendant did not appeal the trial court’s decision as to his first first Lepis Motion. Therefore, the trial court, as well as the Appellate Division, was entitled to rely upon the findings of fact established in connection with the defendant’s first Lepis Motion in deciding an identical Lepis Motion filed by the defendant only nine (9) months later.
Issue: Did the trial court err in failing to require the plaintiff to submit an updated Case Information Statement in response to the defendant’s application to decrease his support obligation?
Holding: No. As the defendant failed to make out a prima facie case of changed circumstances, the plaintiff was not required to submit a Case Information Statement.
Discussion: The parties were married in 1984 and had three (3) children, ages nine (9), eight (8), and six (6). A divorce action was commenced in 2003 and a property settlement agreement was executed on December 10, 2003. The parties stipulated in the PSA that defendant, an attorney, would pay the plaintiff $1,000 per week in permanent alimony and $350 per week in child support for the three (3) children. The PSA indicates that support was based on income to the plaintiff of $20,000.00 per year and income of $185,000.00 per year to the defendant, based on the defendant’s average income from 1998-2002 as determined by a joint expert as follows:
In 2005, the defendant filed a Notice of Motion for a reduction in his support obligations, claiming he was not earning at the $185,000 level. In his certification, the defendant criticized the expert utilized in connection with the divorce for not taking into account the steady decrease in his income from 1999 through 2002, arguing that 1998 and 1999 were banner years and represented the highest income he ever achieved. The defendant argued that his income continued to decrease each year after 1999 and continuing after the divorce due to increased competition; rising office expenses and a decrease in gross income. The defendant claimed that the decrease in gross income was due to a marked decline in the personal injury and real estate practice. The defendant argued that by 2004, his income had decreased to $97,983.00 and that after paying alimony and child support, he was running a significant deficit. The defendant claimed he borrowed in excess of $130,000 to meet his obligations.
The trial judge ordered a plenary hearing, giving the parties an opportunity to first engage in pre-trial discovery. At the conclusion of the hearing in December 2006, the judge denied the defendant’s Motion for a decrease in support. In his written decision, the judge held the following:
During this period of time that [the defendant] claims that his income has drastically reduced, he within a very short period of time after the [j]udgment of [d]ivorce, traded in a 2003 Lexus automobile for a 2004 model at a cost of $58,000.00. He also sold a property in Pines Lake, and used part of the proceeds to pay down a *123 line of credit by $90,000.00 and then bought a new home for $785,000.00 also in Wayne. In doing so he took a mortgage in excess of $600,000.00, all at the same time he claims that he was earning approximately $80,000.00 for the year. Just before this hearing, [the defendant] remarried and spent approximately $15,000.00 between his wedding and honeymoon.
In light of these circumstances and the information contained in the defendant’s September 2006 case information statement, the judge viewed the defendant’s income as being in the range of $140,000.00 for the year. The judge also rejected the defendant’s claim that he was indebted to the Internal Revenue Service in the amount of $55,000 because the defendant failed to provide any documentation to support that assertion. In addition, the judge found no proof to support the defendant’s claims about his practice’s deteriorating case load. The judge held that the defendant’s testimony, which was the only evidence provided to establish the law firm’s performance, was “unconvincing” and the defendant’s testimony that he was unable to support the marital standard of living was “incredulous.” The judge also referred to Larbig v. Larbig, 384 N.J. Super. 17 (App. Div. 2006), and held he was “not convinced” that the defendant’s alleged decline in business “is of [a] permanent nature which inhibits his ability to sustain himself as well as child support and alimony payments” in the amount stipulated in the PSA. An Order denying the defendant’s Motion was entered on January 10, 2007.
The defendant did not appeal the January 10, 2007 Order. Instead, the defendant filed another Motion for downward modification of his support obligations approximately nine (9) months later. In that Motion, the defendant again asserted that his law practice was not doing well. The defendant also argued that he had earned only $38,700.00 through September 2007 and predicted that he would earn no more than $50,000.00 for the year. The defendant also indicated he had sold his interest in the law firm’s building to his partner for $175,000. Although the defendant suggested the sale evidenced his deteriorating ability to pay support, this transaction actually improved the defendant’s financial situation, as it eliminated the substantial annual costs to maintain the building and freed up cash flow for the defendant. Moreover, the defendant’s Case Information Statement reflected that the defendant spent $11,354 per month on his shelter, transportation and personal needs, revealing no effort to modify his lifestyle.
After oral argument on the defendant’s Motion, the trial judge again denied the defendant’s Motion. In denying the defendant’s Motion, the trial judge noted that he was particularly troubled by the fact that since the filing of the defendant’s original motion in 2004, the defendant had chosen to take on greater financial obligations than would be reasonable if his earnings were steadily dwindling. The defendant appealed, arguing that the trial court erred in 1) failing to find that the defendant had made out a prima facie showing of changed circumstances; 2) measuring the change in the defendant’s income against his income from the year prior to the divorce, as opposed to the $185,000.00 utilized to establish support; 3) failing to recognize the impossibility of performance by the defendant based on his current earnings; 4) failing to require plaintiff to submit an updated CIS; 5) failing to impute additional income to the plaintiff based on her prior work experience.
The Appellate Division rejected all of the defendant’s arguments and affirmed the trial court’s decision. The Appellate Court first held that the trial court properly followed the proper procedure, as provided under court rules, in determining Lepis applications. The court also held that the court, while it undoubtedly held a commitment to its prior findings of fact, was provided no reason by the defendant not to rely upon those findings. Indeed, the court held that because those earlier findings were based upon the judge’s examination of the evidence and assessment of the witnesses’ credibility-and were not challenged on appeal-they were entitled to continued weight in the trial court in subsequent proceedings and by the Appellate Division on appeal. Additionally, the court held that the trial court properly determined that defendant’s application to a decrease in support as a result of alleged decrease income was subject to the analysis set forth under Larbig and that such an analysis mandated a denial of the motion:
As we have already indicated, the judge was not required to wipe the slate clean and consider a similar contention regarding [the defendant’s] earnings less than one year after the prior order as if the earlier hearing had never occurred. To the contrary, the judge was required to consider not whether there was a substantial change since the 2003 PSA but whether there was a substantial change since he rendered his fact findings in December 2006.
The court reasoned that in this case, the trial judge had a full understanding of the past circumstances, having not only presided over the divorce trial but also having heard the defendant’s earlier Lepis motion, conducting a multi-day hearing on that issue and making findings of fact which had on the allegations made in the defendant’s second Lepis Motion. The court also agreed with the trial judge that the defendant’s income was only part of the overall circumstances he was required to consider in determining whether the defendant met the burden of demonstrating a prima facie case of changed circumstances. Specifically, the court found that the trial judge had correctly recognized that despite the defendant’s alleged decrease in income, he had nonetheless taken on considerable additional debt and had adopted a lavish lifestyle inconsistent with the way his law practice was allegedly trending. The court also noted that the trial court found that the defendant failed to explain what he had done to better his allegedly deteriorating law practice. Moreover, the court agreed with the trial court’s determination that the plaintiff was not required to file a Case Information Statement because the defendant failed to make out a prima facie case of changed circumstances.
Observation: The behavior of the litigant must be congruent with the application before the tribunal. Regardless of how legitimate your client’s decrease in income is professed to be, an application to reduce support will lose any chance of success if the applicant cannot show that his or her own lifestyle has been affected by the alleged change in circumstances. Cries of poverty will fall on deaf ears when the professed pauper recently purchased a new Mercedes, continues to spend thousands of dollars each week at the country club, and is scheduled for a two (2) week cruise of the Mediterranean. Practitioners must ensure that their client’s Certification for a reduction in support provides as much detail as possible regarding negative changes to the applicant’s own lifestyle, which would go hand in hand with a reduction in income. Has the applicant had to list his home for sale? Give up family vacations? Pack lunch, as opposed to eating out? Forgo household repairs and regular automobile maintenance? Increase deficit spending and credit card debt? Payors must demonstrate with specificity that they will be sharing in the burden occasioned by economic hardship.
The litigant went at this procedurally in the wrong way. Keep in mind this application was filed only months after the litigant lost a plenary hearing for changed circumstances – and did not appeal. The answer may have been to appeal the plenary hearing result or in the alternative, put the Wife on notice of his continued financial downturn and wait for sufficient time to pass before renewing his application.
Would the case have been decided differently – notwithstanding the litigant’s behavior – had he been a W-2 wage earner? Here the litigant was self- employed and so his true income was disputed. Therefore, his conduct undercut his claims of reduced income. Keep in mind that persons who are self-employed face greater scrutiny as to their income.
This litigant had a declining income in each of the five (5) years which preceded his divorce. Therefore, he was not earning $185,000.00 (the five (5) year average of his income) at the time the Agreement was made. Perhaps this was a bad Agreement which doomed this litigant’s later application. Or perhaps the numbers recited in the Agreement were not reliable.
Kennedy v. Plan Administrator for DuPont Savings and
Investment Plan, et. al., 129 S. Ct. 865 (2009)
Issue: Did a wife effectively waive her interest in her deceased husband’s ERISA governed retirement plan if the husband named the wife as beneficiary during the marriage, the wife waived her interest in the plan pursuant to the parties’ divorce decree, but the husband never thereafter changed the beneficiary of the plan?
Holding: No. As the beneficiary designation was never changed by the husband prior to his death, the plan administrator properly released the retirement plan funds to the wife pursuant to the terms of ERISA, which do not allow for interpretation of the plan holder’s intent.
Discussion: In 1971, the husband and wife were married, and in 1974, the husband signed a form designating the wife to take benefits under his savings and investment retirement plan (SIP), a retirement plan governed by ERISA. No contingent beneficiary was named. In 1994, the parties divorced, and the wife waived all interest and claim to any “retirement plan, pension plan, or life benefit program existing by reason of [the husband’s] past or present or future employment.” The husband did not, however, execute any documents to remove the wife as beneficiary of his SIP.
In 2001, the husband died, and the husband’s daughter, Executrix of his Estate, sought to have the husband’s SIP distributed to the Estate. The company, however, paid the balance of the SIP, $400,000.00, to the wife, pursuant to the terms of the designation of beneficiary form signed by the husband. The estate sued the company and the SIP plan administrator, claiming that the divorce decree served as a waiver of the wife’s interest in the SIP and that the company had violated ERISA by paying the benefits to the wife.
The district court entered summary judgment for the estate and ordered the company to pay the value of the SIP benefits. The court relied on Fifth Circuit precedent establishing that a beneficiary can waive his or her rights to the proceeds of a ERISA plan. On appeal, however, the Fifth Circuit Court of Appeals reversed, distinguishing prior decisions as those that date with waivers in life insurance policies which do not contain provisions prohibiting the assignment or alienation of one’s interest. The Court of Appeals held that the wife’s waiver in the SIP at the time of the divorce constituted an assignment or alienation of her interest in the SIP and, therefore, could not be honored. The Court of Appeals relied heavily on the requirement under ERISA for entry of a Qualified Domestic Relations Order to effectuate the transfer or alienation of an interest in a ERISA governed retirement plan. As the Kennedy’s divorce decree was not a QDRO, it did not validly give effect to the wife’s waiver in the SIP.
The Supreme Court affirmed the Court of Appeals decision, but on different grounds. Contrary to the holding of the Court of Appeals, the Court held that the wife’s waiver of her interest in the SIP in the divorce decree did not constitute an assignment or alienation of the wife’s interest in the SIP because the wife did not attempt to direct her interest in the SIP benefits to the Estate or any other potential beneficiary. However, the Court held that the plan administrator nonetheless acted appropriately by releasing the SIP funds to the wife because ERISA provides no exception to the plan administrator’s duty to act in accordance with plan documents. The Court held that ERISA forecloses any justification for inquiries into expressions of intent in favor of adhering to an uncomplicated rule. The Court reasoned that less certain rules would force plan administrators to examine numerous external documents purporting to be waivers and draw them into litigation over those waivers’ meanings and enforceability. While the Court recognized that a QDRO’s enforceability may require an administrator to look for beneficiaries outside of the plan, a QDRO inquiry is limited, given its specific and objective criteria. Under the circumstances, the Court held that the plan administrator properly released the funds to the designated beneficiary, the wife.
Observation: The Kennedy case makes clear that a spouse’s waiver of a pension in a Final Judgment of Divorce will not trump the beneficiary designation. Rather, the employed spouse must take the appropriate steps to change the beneficiary. Practitioners beware. In cases with pensions, life insurance policies, and other financial vehicles–wherein a spouse may be named as a beneficiary–the client must be advised to take precautionary measures after the divorce to ensure that the situation which occurred in Kennedy does not happen to them.
In the event a spouse is waiving his or her right to an interest in the other spouse’s pension, the Settlement Agreement should make clear that the waiving spouse will cooperate in signing any and all documentation necessary to effectuate a change in beneficiary. If possible, any documents necessary to effectuate a change in beneficiary should be prepared and executed at the same time as the Settlement Agreement to prevent problems with compliance in the future.
Gonzalez-Posse v. Ricciardulli, 410 N.J. Super. 340 (App. Div. 2009)
Issue: Did the trial court err in decreasing the husband’s weekly limited duration alimony amount but expanding the term from five (5) years to 17 years when the record suggested that the wife was earning substantially in excess of what she was earning at the time of the divorce and that the husband was involuntarily terminated from his employment, forced to relocate to Argentina and was earning income insufficient to cover his own needs?
Holding: Yes. Pursuant to N.J.S.A. 2A:34-23, limited duration alimony terms should not be modified absent a showing of “unusual circumstances”. In this case, the husband’s decreased income was typical of the usual Lepis case where a modification of support is warranted. Moreover, the husband’s decreased income and the wife’s increased ability to support herself could suggest that a termination of alimony was warranted.
Discussion: The parties, Argentinean citizens, married in Argentina in 1995 and had three (3) children, all born in Argentina. After the birth of their youngest daughter in 1998, the parties moved to New Jersey after the husband, a lawyer, obtained his work visa. The husband obtained employment as an associate at a New York law firm. At the time of the parties’ separation in 2005, the husband was working for DirecTV Latin America.
In April 2005, the wife filed for divorce, and on January 23, 2006, the parties entered into a Property Settlement Agreement (PSA). Pursuant to the PSA, the husband agreed to pay limited duration alimony to the wife in the amount of $500.00 per week for three (3) years and, thereafter, to pay $442.40 for the next two (2) years. The husband also agreed to pay child support in the amount of $446.00 per week. The husband’s support obligations were based on the husband’s 2005 salary of $150,000.00 and the wife’s 2005 salary of $21,000.00. The parties were divorced on January 25, 2006.
Only ten (10) days before the parties entered into the PSA, the husband received a lay-off notice from DirecTV, advising him of his termination effective January 27, 2006. As a result of this layoff notice, DirecTV also withdrew its petition for a Labor Certification resulting in the immediate invalidation of the husband’s work visa. The husband was therefore required to leave the United States and return to Argentina.
Upon his return to Argentina, the husband obtained part-time employment as in-house counsel in various Argentinean companies. In 2006, the husband earned total income of $9,378.00 in US dollars. The husband obtained full-time employment in December 2006, where his salary increased to $26,000.00 per year in US dollars.
In October 2006, the husband filed an application with the Family Part to terminate alimony and to reduce his child support obligation based on his forced departure from the United States and his decreased income. The wife opposed the motion, arguing that the husband orchestrated his return to Argentina to avoid support payments. After a 13 day plenary hearing, the trial judge found that “there was no evidence to support [wife’s] contention that [husband’s] termination from DirecTV was voluntary, or that he had deliberately orchestrated his return to Argentina in order to evade his financial responsibilities as set forth in the parties’ [PSA].” The judge also determined that the husband’s income equaled approximately $2,295.00 US dollars per month. The judge reduced the husband’s child support obligation, pursuant to the Child Support Guidelines, to $144.00 per week. As to alimony, the judge reduced the husband’s weekly alimony obligation to $100.00 per week. However, the judge extended the alimony term to 17 years so as to leave the aggregate amount of alimony paid by the husband to the wife the same amount bargained for under the PSA. In modifying the alimony term, the trial judge found “unusual circumstances” as required under N.J.S.A. 2A:34-23, warranting the modification of the alimony term.
The husband appealed the trial court’s decision, arguing that the trial court erred in failing to terminate alimony and by effectively converting his limited spousal support obligation into a permanent one. The wife appealed the reduction in child support and alimony.
The Appellate Division, giving deference to the trial court’s findings of fact as to the involuntariness of the husband’s termination from DirecTV and his relocation back to Argentina, held that there was “ample support for the judge’s determination of an involuntary and substantial change in circumstances.” As to the reduction in child support, the Appellate Division held that the trial judge based its determination of the husband’s current income on substantial and credible evidence. The trial judge thereafter properly recalculated child support based on the Child Support Guidelines. Under the circumstances, the trial court’s decision in this regard should not be disturbed.
As to alimony, the Appellate Division held that the trial court erred in its decision as follows: 1) in denying the husband’s request for termination, the judge miscalculated both the wife’s increased income and the husband’s legitimate living expenses; 2) in extending the durational time, the judge failed to articulate why the heightened statutory standard of “unusual circumstances” had been satisfied or why the purpose of the original arrangement could not be fulfilled.
The Appellate Division noted that the trial judge failed to reconcile inconsistencies in the record with regard to the wife’s actual income. Specifically, the trial judge determined the wife’s income to be $530.00 per week ($27,560.00 per year). However, evidence suggested she earned in excess of $36,000.00 in 2005. Additionally, the wife claimed over $53,000.00 in wages, exclusive of alimony in 2007, and over $58,000.00 in total income. Under the circumstances, the Appellate Division held that the $530.00 utilized by the trial court in determining whether to terminate alimony lacked sufficient support in the record. Additionally, the Appellate Division held that the trial court failed to explain its estimate of the husband’s living expenses at under 2000 pesos per month, when his CIS represented that his expenses were 3500 pesos per month, which, when added to his support obligations, exceeded 8700 pesos per month. The court noted that the husband’s expenses of over 8700 per month, exceeded his income of 7000 pesos per month. The Appellate Division held that the trial court’s failure to reconcile its finding as to the husband’s expenses with the record was reversible error.
The Appellate Division also held that the trial court erred in misapplying the principles of limited duration alimony. The Appellate Division held that there is a presumption that the temporal aspect of a limited duration alimony award is to be preserved. Thus, pursuant to N.J.S.A. 2A:34-23(c) before modifying the length of the term of a limited duration alimony award, a heightened statutory standard of “unusual circumstances” must be met.
The Appellate Division held that the trial court’s decision to lower the husband’s alimony payment but to extend the term to 17 years “contravene[d] the specific need for, and purpose of, limited duration alimony.” Moreover, the Appellate Division held that the trial court’s decision to expand the term of alimony was not supported “by any articulated, sustainable reason, much less ‘unusual circumstances.’” Rather, the Appellate Division found that the husband’s changed circumstances were no more than the usual case of diminished earning capacity and, therefore, fell short of the heightened statutory standard required to expand the agreed upon term.
The Appellate Division reversed the trial court’s decision as to alimony and remanded the case, with specific directions that the trial judge consider the continuing need for limited duration alimony, or its modification, applying the unusual circumstances standard. The Appellate Division also held that in the event limited duration alimony was continued, the trial judge must base the amount of alimony on all relevant statutory factors, including the husband’s ability to pay and the wife’s need.
Observation: This case reminds practitioners that the standard for modifying the amount of limited duration alimony is far less stringent than the standard for modifying the duration of limited duration alimony. While the amount of alimony may be modified upon a showing of “changed circumstances”, the term of alimony will not be modified except in the case of “unusual circumstance.” This heightened standard comes from the statute. Practitioners should be mindful that the intention of limited duration alimony is to provide the dependent spouse—generally in short to mid-length marriages—with support in recognition of his or her contributions to the marriage over a fixed period of time.
The trial court converted a five (5) year limited duration award to an alimony award of nearly two (2) decades in an effort to give the husband immediate relief while, at the same time, ensuring that the wife would be made whole overtime. The Appellate Division found this to be an inappropriate extension of the alimony term. In this case, the length of the marriage was ten (10) years. Some courts have considered that duration sufficient for an award of permanent alimony. Hughes v. Hughes, 311 N.J. Super. 15 (App. Div. 1998). Here, the parties consented to limited duration alimony. Perhaps these facts led the trial judge to look at the limited duration alimony award in a contractual context, thereby reducing the annual payment but extending the term.
Kay v. Kay, 405 N.J. Super. 278 ( App. Div. 2009),
aff’d ___ N.J. ___ (2010) (per curiam)
Issue: In the event a spouse dies during the pendency of a divorce action, is the estate of that spouse barred from filing an application for equitable remedies against the surviving spouse relating to the distribution of property which would otherwise have been subject to equitable distribution?
Holding: No. The estate of a spouse who died while an action for divorce is pending is entitled to file a claim against the surviving spouse for equitable relief under principles of constructive trust and quasi-contract, so as to prevent unjust enrichment to the surviving spouse.
Discussion: The parties were married in 1973. This was a second marriage for both parties. No children were born of the marriage, but both parties had children from their prior marriages. In July 2006, the plaintiff-wife filed a complaint for divorce, and the husband filed an answer and counterclaim in October 2006. At that time, the wife was 70 years old, and the husband was 83 years of age.
On May 9, 2007, the court entered an order prohibiting the dissipation of marital assets and setting discovery deadlines. In the course of discovery, the husband disclosed that the parties had joint assets totaling $99,000.00; assets of $50,000.00 in his sole name; and assets of $650,000.00 in the wife’s sole name. The contention was that the wife had systematically diverted marital accounts into her sole name.
On August 30, 2007, the husband died. His Will included specific bequests to his grandchildren and his nephew and devised the remainder of his estate to his brother. On September 27, 2007, the wife submitted a stipulation dismissing the divorce, which was not signed by the husband’s attorney. The wife then transferred the joint accounts into her name. The estate of the deceased spouse sought to file an action for equitable claims against the surviving spouse and the marital estate to recover assets.
The court started its analysis with the premise, established in the case of Carr v. Carr, 120 N.J. 336 (1990), that when one spouse dies during the pendency of an action for divorce, the action is abated and statutory equitable distribution under N.J.S.A. 2A:24-23.1 is unavailable. Notwithstanding this fact, the court held that the equitable distribution statute does not reflect a legislative intent to extinguish property entitlements in the event of one spouse’s death. Moreover, quoting Carr, the court held that “marital property does not lose its essential and distinctive nature as property arising from the joint contributions of both spouses during the marriage because of the death of one spouse during the pendency of divorce proceedings.” Carr at 349-50. The court relied upon the Supreme Court’s holding in Carr that “upon a sufficient evidentiary showing,” courts should invoke equitable remedies “to avoid the unjust enrichment that would occur if the marital property devolving to [a decedent-spouses’ estate] included the share beneficially belonging to the surviving spouse.” Id. at 353-354.
The Kay court distinguished the facts of this case from Carr. In Carr, the husband died with all the assets and the surviving wife had to sue the estate under equitable remedies. Here, the estate is suing the surviving spouse-wife, as she retained most of the assets of the marriage. Is an estate entitled to the same equitable remedies as a surviving spouse? The court held that the same principles of equitable remedy should apply so that the estate can assert equitable claims against the surviving spouse. The court held that “nothing about the nature of the equitable remedies applied in Carr warrants automatic rejection of claims asserted by the estate of a decedent spouse.”
The court held that public policy would be disserved if courts were to automatically foreclose equitable claims concerning marital property presented by the estate of a deceased spouse. Under the circumstances, the court held that “when the estate of a spouse who died while an action for divorce is pending presents a claim for equitable relief related to marital property, the court may not refuse to consider the equities arising from the facts of that case solely on the ground that the estate may not assert equitable claims against the marital estate sounding in constructive trust, resulting trust, quasi-contract or unjust enrichment.” The court did not, however, establish the extent of the equitable remedies available to the estate if it was able to establish the facts alleged. The Appellate Division reversed and remanded the matter for further proceedings consistent with its opinion.
Observation: Think of Kay as the flip side of Carr. Carr made clear that equitable remedies are available for a surviving spouse against the estate of a spouse who dies during the pendency of a divorce action. In Carr, the estate took most of the assets under probate law and the Supreme Court found that despite the death, the surviving spouse had equitable remedies to go after the estate. Kay makes clear that these same equitable remedies are available in claims by the estate against the surviving spouse wherein the surviving spouse will retain an inequitable portion of the marital estate.
We often think of pre-nuptial agreements in the context of a divorce alone. But originally (when divorce was rare), pre-nuptial agreements were primarily designed to address the rights of the parties in the event of death. Especially, here when “May marries December” and each has separate families from a prior relationship, a pre-nuptial agreement would appear to be advisable.
Some practitioners will tell you that title is not relevant when it comes to divorce law. If the asset is acquired during the marriage, it will be subject to equitable distribution regardless of title. Not true. Title represents control, which can often be very important. In the event of death (such as in Carr and Kay), title can result in ultimate ownership.
Is it fair to afford the estate and heirs who are complete strangers to the marriage the same equitable rights as a surviving spouse who contributed to the acquisition of marital assets? One jurist (Judge Kraft) that considered this issue came to a different conclusion than Kay. See Krudzlo v. Krudzlo, 251 N.J. Super. 70 (Ch. Div. 1990).
In a per curiam opinion, the Supreme Court recently affirmed Kay for substantially the reasons expressed by Judge Grall, who authored the Appellate Division’s decision. In doing so, the Supreme Court again invited the legislature to weigh in regarding these “black hole” cases and the intersection of estate law and family law.
Crespo v. Crespo, 408 N.J. Super. 25 (App. Div.),
appeal granted 200 N.J. 468 (2009)
Issue: Is the Prevention of Domestic Violence Act unconstitutional because it allows for the legislature to intrude upon the exclusive power of the courts to make rules governing the court system?
Holding: No. Although the legislature has promulgated certain guidelines for the courts to follow in administrating the Prevention of Domestic Violence Act, the Supreme Court has adopted and implemented those guidelines and promulgated a Domestic Violence Manual embracing and enhancing those Guidelines.
Issue: Is the Prevention of Domestic Violence Act unconstitutional because it calls for a preponderance of the evidence standard as opposed to a clear and convincing standard?
Holding: No. In Roe v. Roe, 253 N.J. Super. 418 (App. Div.1992), the Appellate Division previously determined that the preponderance standard passed constitutional muster. The preponderance standard “better serves the purpose of the Act in protecting victims of domestic violence” because allegations of domestic violence are often “difficult to prove due to the[ir] private nature,” and there are “usually few, if any, eyewitnesses to marital discord or domestic violence.”
Issue: Is the Prevention of Domestic Violence Act unconstitutional because it allows for the seizure of a defendant’s firearms upon a finding of domestic violence?
Holding: No. The Supreme Court in Presser v. Illinois, 116 U.S. 252 (1886) held that the Second Amendment is “a limitation only upon the power of Congress and the National government, and not upon that of the States.” The decision in District of Columbia v. Heller, 128 S. Ct. 2783 (2008) did not alter the view expressed in Presser and other decisions that the Second Amendment poses no limits on the states. Moreover, Heller should not be taken ‘“to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms.”’
Issue: Is the Prevention of Domestic Violence Act unconstitutional because it requires a final hearing within ten (10) days of the filing of the complaint?
Holding: No. the Supreme Court in H.E.S. v. J.C.S. 175 N.J. 309 (2003) already found that the ten (10) day provision comports with the requirements of due process. Where in this case, the final hearing did not take place until twenty-three (23) days after the complaint was filed, the defendant was provided with more than sufficient time to respond to the complaint. Moreover, the defendant was not prejudiced by his inability to depose plaintiff or obtain other discovery, as domestic violence actions are “summary actions,” a fact that inherently precludes the right to discovery.
Issue: Is the Prevention of Domestic Violence Act unconstitutional because it fails to guarantee a right to counsel?
Holding: Maybe. However, in this case, where the defendant never sought the appointment of counsel, the issue is not properly before the court.
Issue: Is the Prevention of Domestic Violence Act unconstitutional because it fails to allow for a jury trial?
Holding: No. The right to a jury trial in New Jersey is constitutionally required only if expressly permitted by the Legislature or if the right existed at common law when the constitution was adopted. The Act does not grant a right to counsel. Moreover, because the nature of the relief sought is an injunction—an equitable remedy— the right to a trial by jury would not have existed at common law.
Discussion: The parties were married in 1984 and divorced in 2001. Despite the divorce, they continued to inhabit the same two-family house, with the plaintiff residing on the first floor with the children, and the defendant living on the second floor with his parents. In 2004, after a dispute over child support, plaintiff obtained a temporary restraining order (TRO) against the defendant. Subsequently after a two-day trial, the judge entered a final restraining order (FRO) in the plaintiff’s favor. The defendant appealed, and the Appellate Division affirmed.
In June 2007 the defendant moved before a different judge to vacate the FRO, asserting the unconstitutionality of the Prevention of Domestic Violence Act (the Act). The defendant argued that the Act converted what ought to be a criminal prosecution into a civil proceeding, thus depriving the parties of their right to a jury trial. Additionally, defendant argued that the Act denied him due process by failing to provide sufficient notice prior to the final hearing, by applying a preponderance standard instead of a clear-and-convincing standard, and by failing to permit discovery or a right to counsel. By way of his written opinion of June 18, 2008, the trial judge found the Act unconstitutional and vacated the FRO. The Appellate Division agreed that, despite the defendant waiting two (2) years to attack the Act’s constitutionality, his arguments could still be considered because he remained subject to the FRO.
The Appellate Division first addressed separation of powers and the scope of the court’s rulemaking power. The court held that pursuant to the New Jersey Constitution, “[t]he Supreme Court shall make rules governing the administration of all courts in the State and, subject to the law, the practice and procedure in all such courts.” However, the court held that the separation of powers doctrine is not intended to create completely exclusive spheres of authority. Rather, “separation of powers denotes not only independence but also interdependence among the branches of government.” Under the circumstances, the court held that in determining the constitutionality of procedures proposed implemented by the legislature, “the question is not whether the Legislature has created procedures to be applied in our courts but whether those procedures contradict or inhibit the functioning of the courts.”
The court held that New Jersey courts utilize the following two-pronged test to determine whether to tolerate intrusions on its exclusive power to define court procedures: 1) First, the court determines whether the Judiciary “has fully exercised its power with respect to the matter at issue”; and 2) If not, the court then considers “whether the statute serves a legitimate legislative goal, and, ‘concomitantly, does not interfere with judicial prerogatives or only indirectly or incidentally touches upon the judicial domain.’’’ (citations omitted).
The court noted that the Act has certain procedural guidelines, providing direction for, among other things, a) the setting and reducing of bail; b) the manner in which a court order shall be recorded and who must receive the order; c) the requirements imposed upon a party seeking relief from an order; d) the particular part of the superior court to hear such cases; and e) the period within which a final hearing must occur. The court held that the Court, as opposed to finding these procedural guidelines as an intrusion upon the Court’s power, adopted these rules under R. 5:7A and through the issuance of the State’s Domestic Violence Procedures Manual. Indeed, the Appellate Division found that the Supreme Court has embraced and enhanced the procedural components promulgated by the legislature. Under the circumstances, the Appellate Division rejected the defendant’s argument that the procedural aspects of the Act are unconstitutional.
The Appellate Division also rejected the defendant’s argument that the Prevention of Domestic Violence Act violated his due process rights in providing for a preponderance of evidence standard. The court held that in considering whether the adoption of a particular burden of persuasion adheres to state constitutional due process principles, the Supreme Court has followed a balancing test (as set forth in Mathews v. Eldridge, 424 U.S. 319 (1976)), which requires consideration of three (3) factors: a) first, the private interest that will be affected by the official action; b) second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; 3) and the government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.
In rejecting the trial court’s holding of the Act’s preponderance of evidence standard as unconstitutional, the court noted that the trial judge wrongly ignored the precedent of Roe v. Roe, 253 N.J.Super. 418 (App. Div. 1992), at which time the court held that the Act was not required to impose a reasonable-doubt standard. The court held that although Roe dealt with whether a reasonable-doubt standard is required, Roe was nonetheless binding in this case, as the court in Roe found that that the preponderance standard, which was attacked in this case met constitutional muster. The court quoted the court’s holding in Roe, wherein it held that the preponderance standard “better serves the purpose of the Act in protecting victims of domestic violence” because allegations of domestic violence are often “difficult to prove due to the[ir] private nature,” and there are “usually few, if any, eyewitnesses to marital discord or domestic violence.” The court held that in Roe the court recognized the “vindication of the Act’s important goals often depends upon the ability of a victim to obtain relief in situations where proof is scarce, parties’ contentions are in sharp contrast, and a judge may often be relegated to deciding the case based solely on credibility findings.”
The court held that the trial judge was bound by the Roe decision. However, notwithstanding the binding effect of Roe, the court went on to hold that regardless of Roe, it would still conclude that the preponderance of evidence standard conforms with the requirements of due process as analyzed under the Mathews three (3) part test. The court noted that domestic violence actions naturally pit the first and third Mathews factors, that is, victims’ interests in being protected from domestic violence against defendants’ liberty interests in being free to say what they wish and go where they please. The court reasoned that a review of the Act and its purpose in deterring domestic violence makes clear that the Legislature viewed the victims’ interests as highly important and of far greater weight than defendants’ interests. Under the circumstances, the court held that there was a “strong societal interest in protecting persons victimized by domestic violence [which] greatly favors utilization of the preponderance standard.” The court held that the defendant’s interest in not being barred from the victim’s residence is of far less importance than the societal interest in preventing domestic violence and the victim’s interest in remaining safe from harm.
As to the second Mathews factor, the court held that the preponderance of evidence standard would not lead to erroneous adjudications, nor would it erode public confidence in the ability of the courts to produce fair determinations. Relying on Roe, the court recognized that “[t]here are usually few, if any, eyewitnesses to marital discord or domestic violence.” Under the circumstances, “[m]ost of the events complained of in such matters happen behind closed doors or during private communications; as a result, most cases turn only on the trial judge’s assessment of the credibility of only two witnesses-the plaintiff and the defendant.” The court held that the legislature understood that a clear-and-convincing standard would saddle victims of domestic violence with a burden that would often foreclose relief in many deserving cases, as with no evidence to corroborate his or her testimony, the plaintiff would great difficulty sustaining the clear and convincing evidence standard, which requires the plaintiff to provide evidence which is ‘“so clear, direct and weighty and convincing as to enable [the factfinder] to come to a clear conviction, without hesitancy, of the precise facts in issue.”’ (citations omitted). Moreover, the court held that the fact-finding required of Family Part judges in Domestic Violence cases, where no specialized knowledge is required, is far different than those matters in which the issues are so unusual that the clear and convincing standard is required.
The court next rejected the defendant’s argument that the Act interfered with his right to speak freely with his children. The court held that the Act allows the court to fix a visitation schedule, but in no way takes away his right to communicate with his children.
The court next rejected the defendant’s argument that by allowing the seizure of a defendant’s firearms upon a finding of domestic violence, the Act permits a deprivation of an individual’s Second Amendment right to bear arms. The court noted that the Supreme Court has held that the Second Amendment is “a limitation only upon the power of Congress and the National government, and not upon that of the States.” Presser v. Illinois, 116 U.S. 252 (1886). The court held that the decision in District of Columbia v. Heller, 128 S. Ct. 2783 (2008) did not alter the view expressed in Presser and other decisions that the Second Amendment poses no limits on the states. Moreover, the court held that even assuming otherwise, Heller in no way holds that the individual rights guaranteed by the Second Amendment are absolute or unlimited. Rather, the Heller majority emphasized that the Heller should not be taken “to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms.” Id. The court in this case held that in light of the Heller majority’s express description of the limitations on its holding, it had no cause to assume that Heller in any way interferes with the Legislature’s declaration that a person found to have committed an act of domestic violence may be subjected to a weapons seizure. The court stated that absent a clear and binding announcement from the Supreme Court of the United States to the contrary, the Act’s prohibition on the possession of firearms by a person found to have committed domestic violence is a valid, appropriate and sensible limitation on an individual’s Second Amendment rights.
The court next rejected the defendant’s argument that the Act’s requirement that a final hearing be held within ten days of the filing of the complaint deprived him of due process. The court held that this argument was “utterly without merit,” as the Supreme Court in H.E.S. v. J.C.S. 175 N.J. 309 (2003) already found that the ten-day provision comports with the requirements of due process. The court went on to find that in this case, where the final hearing did not take place until twenty-three (23) days after the complaint was filed, the defendant was provided with more than sufficient time to respond to the complaint. Moreover, the court held that the defendant was not prejudiced by his inability to depose plaintiff or obtain other discovery, as domestic violence actions are “summary actions,” a fact that inherently precludes the right to discovery.
The court next rejected the defendant’s argument that the Act violates due process rights by failing to guarantee a right to counsel. The court held that there was no cause to consider the right to counsel in this case, as the defendant in this case never sought the appointment of counsel prior to or during the adjudication of this domestic violence matter.
Finally, the court rejected the defendant’s argument that he was entitled to a trial by jury in this matter. The court held that the right to a jury trial in this State is constitutionally required only if expressly permitted by the Legislature or if the right existed at common law when the constitution was adopted. The court noted that the Act does not grant a right to counsel. The court therefore had to look to whether a domestic violence action would carry the right to a jury at common law, noting that at common law, actions at law generally carried the right to a trial by jury, whereas actions in equity did not. The court held that because the nature of the relief sought is an injunction—an equitable remedy— the right to a trial by jury would not attach.
Observation: Stay tuned, the Supreme Court has taken this case up on appeal. While nothing is ever certain, it seems highly unlikely that the Court would jeopardize the tens of thousands of FRO’s in effect by finding any portion of this Act unconstitutional.
J.S. v. J.F., 410 N.J. Super. 611 (App. Div. 2009)
Issue: Did the trial court err in finding that the parties were engaged in a “dating relationship” so as to qualify the plaintiff as a victim under the Prevention of Domestic Violence Act when the defendant utilized the plaintiff as a paid escort, but offered contradictory testimony as to the reason for these payments and did not deny that he made these payments to the plaintiff while “dating” her.
Holding: No, “dating” is a loose term, which is defined differently by members of different socio-economic groups and from one generation to the next. Courts should not adhere to a strict formula as to what constitutes a “dating relationship,” and must consider the parties’ own understanding of their relationship as colored by socio-economic and generational influences. In this case, the trial court had ample evidence to support a finding that a dating relationship existed.
Discussion: Plaintiff obtained a Temporary Restraining Order against the defendant and, after a final hearing, a Final Restraining Order was entered against the defendant. The defendant appealed, arguing that 1) the parties were not in a dating relationship; 2) there was no evidence of harassment or terroristic threats; 3) there was no need for a restraining order; 4) and the judge erred by employing a preponderance-of-the-evidence standard of proof.
The defendant testified at the final hearing that he and the plaintiff had a “professional” relationship. The defendant testified that his only interactions with the plaintiff occurred when the defendant frequented local clubs where the plaintiff worked as a dancer. The defendant argued that a paid escort does not meet the Act’s definition of “a victim of domestic violence.” The Appellate Division, however, rejected the defendant’s argument and “the contention that a relationship which includes a payment of consideration for the other’s time precludes the finding of a dating relationship.”
The Appellate Division referred to the 2003 case of Andrews v. Rutherford, 363 N.J. Super. 252 (Ch. Div. 2003), wherein the court suggested various factors to be evaluated in defining what constitutes a dating relationship for purposes of the Act. While not adopting the Andrews factors as a comprehensive test to be applied in determining whether a dating relationship exists, the court agreed with Andrews insofar as it held that the facts should be liberally construed in favor of finding a dating relationship. The court held that a determination as to whether a dating relationship exists turn on what the particular parties would view as a “date.” The court reasoned that “dating” is a loose term, which is defined differently by members of different socio-economic groups and from one generation to the next. The Appellate Division held that “courts should vigilantly guard against slavish adherence to any formula that does not consider the parties’ own understanding of their relationship as colored by socio-economic and generational influences.”
The court noted that in this case, the defendant testified that the monetary payments to her were made to help her out financially, not necessarily in exchange for her services as an escort. Also, upon being questioned by the trial judge as to whether these payments occurred “during the time you were dating,” the defendant answered in the affirmative without qualification. Moreover, the defendant’s testimony with regard to the nature of the parties’ relationship was conflicting, while the trial judge found the plaintiff’s testimony as to the parties’ dating relationship to be credible. Under the circumstances, the court held that the trial judge was justified in his determination that the parties were in a dating relationship, and that the plaintiff qualified as a victim under the Act.
The court further held that the trial judge had ample evidence from which to base his determination that the defendant engaged in multiple acts of domestic violence. Specifically, the defendant sent numerous text messages to the plaintiff, in which he threatened physical harm to the plaintiff and her boyfriend. The defendant also threatened to bring about the plaintiff’s removal from the country.
The Appellate Division found no merit to the defendant’s argument that that the trial judge erred by using the preponderance of evidence standard, as opposed to the clear and convincing evidence standard. The Appellate Division noted that the defendant relied on the unpublished opinion of Crespo v. Crespo—wherein the Act was held unconstitutional for its application of the preponderance standard—however, the trial court’s decision in Crespo was reversed by the Appellate Division (Crespo v. Crespo, 408 N.J. Super. 25 (App. Div, 2009), wherein the court held that the Legislature is not constitutionally required to impose a clear-and-convincing standard for the adjudication of domestic violence matters.
Observation: The Appellate Division adopts an extremely liberal definition of a “dating relationship” under the theory that public policy favors an expansive interpretation of the Prevention of Domestic Violence Act. In other words, better to err on the side of giving a potential victim an avenue for relief—even at the risk of creating additional litigation—than to exclude a person from relief under the Act altogether.
In this case, the court does not describe in detail the facts upon which the trial court found that a “dating relationship” existed. However, the facts do suggest that the relationship was based, at least in part, on the defendant paying the plaintiff to be his escort. The Appellate Division finds that the fact that the plaintiff was paid did not exclude the possibility that a dating relationship existed.
Recently, in an editorial entitled “The Girlfriend Experience”, the New Jersey Law Journal observed that escort services charge for “some plausible simulation of an actual social relationship with the customer.” If that is true, could an internet simulated relationship (in which the parties never have any physical contact) qualify as a dating relationship for domestic violence purposes?
Houseman v. Dare, 405 N.J. Super. 538 (App. Div. 2009)
Issue: Is an oral agreement between separating individuals as to ownership of a jointly owned pet subject to specific performance?
Holding: Yes. An oral agreement between separating individuals regarding ownership of their pet may be subject to specific performance upon a finding that the pet had a “special sentimental value” to the owner, such that monetary damages would be inadequate.
Discussion: The plaintiff and defendant had a 13 year relationship. In 1999, they purchased a residence together, and the following year they were engaged to be married. In 2003, they purchased a pedigree dog for $1,500.00, which they registered with the American Kettle Club as joint owners of the dog. In 2006, the defendant ended the relationship. The parties agreed that the defendant would buy out the plaintiff’s interest in their home, and in June 2006, the plaintiff moved out of the residence, taking with her the dog (and the animal’s paraphernalia). Plaintiff would periodically permit the defendant to have the dog for visitation. However, in February 2007, after the plaintiff left the dog with the defendant while she went on vacation, the defendant refused to return the dog to the plaintiff upon the plaintiff’s return.
The plaintiff filed a Complaint against the defendant, alleging that she and the defendant had an oral agreement giving her possession of the dog and that the defendant breached this agreement by wrongfully retaining the dog. Prior to trial, the court determined that pets are personal property which lack the unique value essential to an award of specific performance and limited presentation of evidence about the parties’ dog in accordance with its pretrial ruling, foreclosing the plaintiff’s claim for specific performance.
The plaintiff testified that from the minute the defendant told her they were breaking up, he told her she could keep the dog. She also testified that her primary concern during negotiations with the defendant as to how to divide their property was possession of the dog and that her retaining the dog was a consideration in her agreeing to accept $45,000.00 as her share of the equity in the parties’ residence. Additionally, the plaintiff testified that she asked the defendant to put their agreement with regard to the dog in writing, but he told her that she could “trust him and he would not keep the dog from her.” In his Answer to the plaintiff’s Complaint, the defendant did not deny making this promise.
At the conclusion of trial, the court found the plaintiff’s testimony to be “extremely” and “particularly credible.” The court noted that the plaintiff testified “without guile,” “was truthful” and answered even the “hard questions … in a way that would not have been advantageous to her.” On those grounds, the court accepted her testimony and the trial court therefore held that because the defendant retained the dog, he must pay the sum of $1,500.00 to the plaintiff for the value of the dog. The plaintiff appealed, arguing that the trial court’s determination that pets are personal property which lack unique value was erroneous as a matter of law.
The Appellate Division overturned the trial court’s decision, holding that the trial court’s conclusion that specific performance is not, as a matter of law, available to remedy a breach of an oral agreement about possession of a dog reached by its joint owners is not sustainable. The court held that specific performance is the appropriate remedy in cases when money damages are not adequate to protect the expectation interest of the injured party and an order requiring performance of the contract will not result in inequity to the offending party. The court held that based on the same reasoning, when personal property has special subjective value, courts have determined that an award of possession of personalty is the only adequate remedy for tortious acquisition and wrongful detention of property. Moreover, the court held that consideration of special subjective value is also appropriate when a court is called upon to exercise its equitable jurisdiction to resolve a dispute between joint owners of property that cannot be partitioned or sold without hardship or violation of public policy.
The court defined this “special subjective value” as sentiment explained by facts and circumstances-such as the party’s relationship with the donor or prior associations with the property-that give rise to the special affection. The court noted that New Jersey courts had previously recognized that pets have this “special subjective value” and that courts of other jurisdictions have considered the special subjective value of pets in resolving questions about possession.
The court held that when a separating couple is unable to agree about who will keep jointly held property with special subjective value, and the trial court deems division by forced sale an inappropriate or inadequate remedy given the nature of the property, the trial court must determine whether the assertion of a special interest in possession is sincere and grounded in “facts and circumstances which endow the chattel with a special … value” or based upon a “sentiment assumed for the purpose of litigation out of greed, ill-will or other sentiment or motive similarly unworthy of protection in a court of equity.” In this case, the court held that the trial court erred by declining to consider the relevance of the oral agreement between the parties as to possession of the pet and by holding that a pet is not subject to specific performance. The court remanded the case to the trial court for further proceedings on the existence of an oral agreement about ownership and possession of the dog and the propriety of specific performance.
Observation: This is not a dog custody case – it is a breach of contract case. In this case, the trial court concluded that there was an oral agreement that was breached and the remedy was to award the plaintiff $1,500.00 in damages. What if there was no agreement and the parties each demonstrated a “special subjective value” in the pet. Would the court then award custody to one (1) party and dog parenting time to the other?
Certain property is so unique that monetary damages are not sufficient – with a dog you are dealing with a life – and the emotional attachment that comes with it. Nevertheless, the Appellate Division rejected the request that we should consider the best interests of the pet in determining these cases. Rather, we look at the parties and their special attachment to the animal.
Practitioners should warn clients who wish to assert this “special interest” that while they may not be able to put a price tag on the object’s sentimental value, they will be able to put a price tag on the counsel fees associated with proving sentimental value.
Martin v. Martin, 410 N.J. Super. 1 (Ch. Div. 2009)
Issue: Are child support orders subject to an automatic three (3) year review, regardless of any showing of changed circumstances pursuant to N.J.S.A. 2A:17-56.9a. and Doring v. Doring, 285 N.J. Super. 369 (Ch. Div. 1995)?
Holding: No. As the Supreme Court has established an automatic two (2) year cost of living adjustment for child support orders under R. 5:6B, there is no longer a statutory right under N.J.S.A. 2A:17-56.9a to a three (3) year review based on the passage of time.
Discussion: The parties were divorced on January 22, 2004, and a dual final judgment of divorce, with a property settlement agreement, was filed on that same date. The parties had two (2) children, ages 17 and 15. Under their agreement, the parties shared joint custody of the children and they equally shared parenting time. The parties agreed that neither would pay child support to the other so long as they continued to equally share parenting time.
After the divorce, the plaintiff began having less parenting time with the children and defendant filed a post-judgment motion to establish child support. A Title IV-D support order was entered on June 24, 2005, ordering the plaintiff to pay child support to the defendant in the amount of $98.00 per week. In May of 2007, the defendant received a cost-of-living adjustment, increasing the plaintiff’s child support obligation to $104.00 per week.
In 2009, the defendant filed a Motion for increased support based on the passage of three (3) years since entry of the June 2005 support order. The defendant argued that he did not need to prove a change in circumstances, as the court in Doring v. Doring, 285 N.J. Super. 369 (Ch. Div.1995) held that child support orders are subject to review by a court every three (3) years regardless of whether there has been a change of circumstances since the time of the prior order.
The court rejected the defendant’s argument. The court held that the statute upon which the Doring decision was based, N.J.S.A. 2A:17-56.9a, was amended in 1998 to eliminate the automatic three-year court review provision. However, because the 1998 amendment has not been addressed in a subsequent published decision, parties continue to seek the three-year court review of child support orders discussed in Doring.
The court noted that at the time Doring was decided in 1995, federal law required that, in order for a state to receive federal funding for its Title IV-D child support program, “the state must have in effect laws requiring the periodic review of all Title IV-D child support orders.” Id. at 372, 666 A.2d 1388, citing 42 U.S.C.A. § 666. Accordingly, our Legislature had enacted N.J.S.A. 2A:17-56.9a., which provided for a review of all IV-D child support orders at least every three (3) years. The Doring court, relying upon the clear language of this statute, found that all child support orders are subject to a triennial review by a court, regardless of whether there has been a change of circumstances since the time of the prior order. However, the court held that Doring is no longer applicable, as after the Doring decision was issued, the Legislature amended the statute. As written, N.J.S.A. 2A:17-56.9a now provides for a three (3) year review only if the State has not developed an automated cost-of-living adjustment program for child support payments. The court held that in New Jersey, the Supreme Court has adopted Rule 5:6B, which provides for a cost of living adjustment to child support orders every two (2) years.
In light of the above, the court concluded that child support orders are no longer subject to automatic court reviews every three (3) years. Instead, the child support amount is automatically adjusted every two (2) years to reflect the cost of living, with each party having an opportunity to contest the adjustment. The court held that pursuant to Rule 5:6B, such contests are limited to situations (1) where an obligor’s income has not increased at a rate at least equal to the rate of inflation or (2) where the order itself provides for an alternative periodic cost-of-living adjustment. Otherwise, parties may contest a cost-of-living adjustment or seek a modification of a prior child support order only by showing that such a modification is warranted based upon changed circumstances. The mere passage of time since the entry of the child support order is not a sufficient reason to request that a court review the order or require that the parties exchange financial information. Under the circumstances, the court denied the defendant’s application for an increase in child support.
Observation: Keep in mind that both Martin and Doring are Chancery Division opinions. Moreover, this decision fails to address what happens in cases where child support is paid directly and the automatic two (2) year COLA review does not occur. Although a Divorce Settlement Agreement in direct pay cases may provide for a bi-annual cost of living review, without a mechanism for this review to take place, in most cases, it simply does not happen. Most parties will not file a motion to obtain this COLA review, as it is not cost effective. If a party entitled to a cost of living review does not enforce that right, should they be prohibited from filing an application for a three (3) year review under Doring?
A COLA review is not the equivalent of a review such as was contemplated by Doring. The bi-annual COLA review does not require the exchange of Case Information Statements and is limited merely to the cost of living. In cases where child support is paid through Probation, but the payor is successful in appealing the bi-annual cost of living increase in year two (2), should the payee be prohibited from an automatic review of child support in year three (3)? If Doring is no longer good law, haven’t the children lost out by being precluded from an automatic comprehensive three (3) year review simply because they received a COLA review.
Wunsch-Deffler v. Deffler, 406 N.J. Super. 505 (Ch. Div. 2009)
Issue: Is a straight application of the Child Support Guidelines appropriate in a case where the mother and father share equal parenting time (50/50) with the unemancipated children.
Holding: No. When parents share a truly joint physical custody situation, wherein they each have 50% of the time with the children, the Child Support Guidelines must be adjusted to take into account the fact that both parents are responsible for paying the children’s “controlled expenses” as they are defined under the Child Support Guidelines.
Discussion: The parties had two (2) children, ages eight (8) and two (2) at the time of the divorce. Pursuant to the Property Settlement Agreement, each parent had custody of one (1) child, and the parties agreed that neither parent would pay child support to the other. However, at such time as one (1) child emancipated, either party could apply for child support for the remaining child.
The eldest child was emancipated in February 2008. After that date, the parties shared equal parenting time with the younger child. Pursuant to the Property Settlement Agreement, the plaintiff-mother filed an application to require the defendant-father to pay her child support. There was no dispute as to the mother’s income of $800.00 gross per week or the father’s income of $1,047.00. There was also no dispute that the father had the child overnight for 182 nights per year. Additionally, there was no dispute that a straight forward application of the Child Support Guidelines, utilizing these facts, would yield a child support obligation from the father to the mother in the amount of $56.00 per week.
The trial court held that a straight forward application of the child support guidelines was not proper in this case, where the parties shared parenting time with the child on a 50/50 basis. Rather, the court held that in cases where the parents have a true joint physical custody arrangement, and they each have equal overnights with the children, the payor must be given credits against the basic child support obligation under the Guidelines to take into account his contribution toward “controlled expenses,” including items like clothing, personal care and entertainment. This adjustment must be made because “the Guidelines assume that controlled expenses are only incurred by the parent of primary residence.” Id. at 508.
Relying on Benisch v. Benish, 347 N.J. Super. 393 (App. Div. 2002), wherein the court found that in a 50/50 time sharing situation a mechanical application of the Child Support Guidelines is inequitable, the court in Wunsch-
Deffler developed the following three (3) step formula to properly adjust child support in true shared parenting arrangements:
When the parties share an equal number of overnights with the child, the following three-step procedure should be used to adjust the paying parent’s child support obligation to account for the fact that both parties are responsible for paying the child’s “controlled expenses” during their parenting time. This procedure will “back out” the 25% in “assumed” controlled expenses from the paying parent’s child support obligation. The first step is to multiply the Basic Child Support Amount determined in Line 9 of the Child Support Guidelines-Shared Parenting Worksheet by the payor’s income share. Second, this figure should be multiplied by 25%, which represents the controlled expenses assumed by the Guidelines. Third, the product of this calculation is then subtracted from the paying parent’s “Adjusted Basic CS Amount,” as reflected on Line 15 of the Worksheet. The result reached is the payor’s child support obligation and takes into account that both parties, and not just the party receiving child support, pay controlled expenses for the child during their equally shared parenting time.
Wunsch-Deffler at 509.
Applying the above-referenced formula in Wensch, the court determined that the father should pay child support to the mother in the amount of $14.05 per week as follows:
Basic Child Support (Line 9) $311.00
X Payor’s Income Share 53.95%
$167.78 X 25% (for controlled expenses) = $41.95
Adjusted Basic Child Support Amount (Line 15) $56.00
— Product of Steps One and Two $41.95
Observation: Wunsch-Deffler is a trial court decision and, therefore, is not binding precedent. However, it provides a methodology for calculating child support in those cases where the parties each have the children for 50% of the time. However, does the methodology pass the smell test (i.e. – here the husband earns $247.00 per week gross more than the wife but only pays $14.05 per week in child support).
Wunsch-Deffler emphasizes the problem with a formula-based approach to fixing support. While applying a formula may be easy and predictable, it often fails to take into account the nuances which make each case unique and which make application of a formula inequitable and impractical. For example, just because the parties are equally sharing the parenting time, does this mean that they are also equally sharing the expenses of the child? Wouldn’t the correct result be to toss the Child Support Guidelines in those rare cases of 50/50 split custody and determine child support the old fashioned way under N.J.S.A. 2A:34-23?
* I wish to thank my associate, Megan S. Murray, Esq., for her assistance in the preparation of this article.
 Pursuant to this Act, an arbitration award will only be set aside under the following conditions: (1) the award was procured by corruption, fraud, or other undue means; (2) the court finds evident partiality by an arbitrator; corruption by an arbitrator; or misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding; (3) an arbitrator refused to postpone the hearing upon showing of sufficient cause for postponement, refused to consider evidence material to the controversy, or otherwise conducted the hearing contrary to section 15 of this act, so as to substantially prejudice the rights of a party to the arbitration proceeding; (4) an arbitrator exceeded the arbitrator’s powers; (5) there was no agreement to arbitrate, unless the person participated in the arbitration proceeding without raising the objection pursuant to subsection c. of section 15 of this act not later than the beginning of the arbitration hearing; or (6) the arbitration was conducted without proper notice of the initiation of an arbitration as required in section 9 of this act so as to substantially prejudice the rights of a party to the arbitration proceeding. N.J.S.A. 2A:23B-23(a).
 The Fawzy Court directed the Supreme Court Committee on Family Practice to develop a form agreement to be used by attorneys and judges in cases where the parties wish to submit custody and parenting time to binding arbitration.
 On December 21, 2009, the Appellate Division, in the matter of Johnson v. Johnson, ____ N.J. Super. _____ (App. Div. 2009) held that the Fawzy decision should be applied retroactively to arbitration matters regarding custody and parenting time which have not reached final judgment.
 In fairness to the trial judge, the Court noted that the trial judge did not have the benefit of this opinion and the standards set forth therein and, moreover, may have believed that all the details of the arbitration had been worked out and explained by the lawyers.
 However, the Court did note that one trial court has determined that, in accordance with Rule 5:5-1(d), a defendant may seek leave to obtain discovery in such a matter upon a showing of good cause. Depos v. Depos, 307 N.J.Super. 396 (Ch.Div.1997).
 These factors were as follows: 1) Was there a minimal social interpersonal bonding of the parties over and above a mere casual fraternization? 2) How long did the alleged dating activities continue prior to the acts of domestic violence alleged? 3) What were the nature and frequency of the parties’ interactions? 4) What were the parties’ ongoing expectations with respect to the relationship, either individually or jointly; 5) Did the parties demonstrate an affirmation of their relationship before others by statement or other conduct? 6) Are there any other reasons unique to the case that support or detract from a finding that a “dating relationship” exists?
 In dicta the court states that “an au pair or live-in housekeeper would undoubtedly qualify as a person who is a present or former household member”.