Appellate Division Affirms Equitable Distribution After Third Appeal

May 01, 2017

This is the husband’s third attack on the equitable distribution award.  The wife originally received $1,268,819 as her equitable distribution, which was reduced slightly to $1,200,152 on remand from the Appellate Division following the first appeal.  Despite the reduction, the husband moved for reconsideration of the equitable distribution award.  On April 30, 2010, the trial court denied the husband’s motion, explaining that all the issues raised in the motion had previously been addressed, and found there was no good reason “to redo the divorce.”  The Appellate Division affirmed on February 22, 2012, finding no basis in the record to modify the equitable distribution decision.  On April 2, 2012, the Appellate Division denied the husband’s motion for reconsideration and awarded the wife $10,000 in counsel fees for the appeal.

In the meantime, the husband filed for bankruptcy, which temporarily stayed the wife’s efforts to collect her equitable distribution.  After the stay was lifted on January 19, 2011, a sheriff’s sale of three of the husband’s commercial properties was scheduled over the husband’s objections.  On February 4, 2011, the trial court found the husband’s objection meritless, and ordered the Atlantic County Sheriff to transfer ownership of those properties to the wife.  The Appellate Division denied the husband’s request to file an emergent appeal on February 7, 2011.

On April 8, 2011, the judge denied the husband’s application for a credit against the equitable distribution judgment and authorized the wife to remove the husband from the properties the Sheriff had transferred to her.  On July 1, 2011, the court declined to decide the husband’s motion to vacate the sheriff’s sale because of the pending appeal.  After that appeal was decided, the husband again moved for a “fair market value” credit or, alternatively, a plenary hearing on the credit issue.  The Family Part judge denied the motion on November 9, 2012, because the relief sought was inappropriate at that time, but indicated that it would consider equitable credits in the future and, if necessary, hold a plenary hearing.  The court also gave the husband 20 days to pay the wife $10,000 in counsel fees as ordered by the Appellate Division, and enjoined him from interfering with the sale of the properties.

On February 22, 2013, the Family Part judge granted the husband’s request to compel the wife to provide copies of the listing agreement and contract for the sale of one of the properties, which had already been sold.  The court also ordered the wife to keep the husband informed as to the status of all three properties.  However, the order denied the husband’s request to place the proceeds of the sales in escrow.  On December 6, 2013, the judge denied the husband’s request to set a discovery schedule and hearing date to resolve the value of his credit.  The court explained that a plenary hearing was inappropriate until all three properties were sold and, at that point, only one had been sold and another was under contract.

Instead of appealing the December 6 order, the husband filed a motion to vacate the JOD and any orders enforcing the JOD in October 2014.  The husband argued that the wife received a windfall from the court’s decision to award her cash payment of her equitable distribution share instead of distributing the assets in kind.  The JOD intended to award 61% of the assets to the husband and 39% to the wife, but because of an economic downturn, the husband alleged that the wife ultimately received 90% of the assets.  The husband essentially argued that the change in economic circumstances since the 2007 divorce rendered the JOD unfair and inequitable.

Without holding a plenary hearing, the Family Part judge denied the husband’s motion on April 10, 2015, finding “no compelling or truly exceptional circumstances that would warrant vacating a judgment that has received careful and thorough review by multiple courts.”  The court concluded a hearing was unnecessary because those reviewing courts had created an extensive factual record, and because no genuine issue of material fact existed.  Additionally, the court found that the husband was simply trying to attack the equitable distribution award again, that he was “the architect of his own problems,” and that reopening the JOD would be unfair and prejudicial to the wife.  On April 24, 2015, the Family Part judge ordered the husband to pay the wife $4,405 in counsel fees.  The husband appealed both orders.

The Appellate Division explained that it will only reverse a trial court’s decision on a Rule 4:50-1 motion for relief from a judgment if that decision: (1) was made without a rational explanation; (2) inexplicably departed from established policies; or (3) rested on an impermissible basis.  Only truly exceptional circumstances warrant relief under that Rule, and the Appellate Division cases have held that a change in financial circumstances alone does not satisfy that standard.  Specifically, the Appellate Division has explained that while alimony is directly connected to a spouse’s ability to pay, equitable distribution is merely the allocation of assets the couple amassed in the past and is thus unaffected by subsequent financial changes.  The Family Part judge’s conclusion that the circumstances did not warrant the extraordinary relief requested was consistent with Appellate Division precedent, and the Appellate Division accordingly affirmed the lower court’s denial of the husband’s motion to vacate the JOD.

The Appellate Division also rejected the husband’s argument that the lower court erred in failing to hold a plenary hearing because its November 9, 2012 order indicated that it would consider the credits against the equitable distribution award in the future.  The Appellate Division explained that this contention related to prior orders not within the scope of the appeal, and was thus unreviewable.  However, the Appellate Division did note that none of the orders mandated a hearing on the credit issue, and that the December 6, 2013 order specified that it would only be appropriate to consider the credit after all three properties were sold.  Since all the properties were not yet sold, the Appellate Division affirmed.

However, the Appellate Division did agree that the counsel fees awarded in the April 24, 2015 order should be vacated because the Family Part judge failed to consider the necessary factors for a fee award, and failed to make appropriate factual findings and legal conclusions.  The order stated only that the court “ha[d] considered the factors” without further explanation.  Thus, the Appellate Division reversed the fee award and remanded to the Family Part to make appropriate findings of fact and conclusions of law.

If you have an issue with an equitable distribution award, contact the skilled matrimonial attorneys at Sarno da Costa D’Aniello Maceri LLC.  Call us today at (973) 274-5200.