NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-1563-15T2
DONNA S. SECK,
Plaintiff-Respondent,
v.
THEODORE R. SHALACK,
Defendant-Appellant.
____________________________________________
Submitted May 2, 2017 – Decided May 31, 2017
Before Judges Yannotti and Gilson.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-1303-11.
Law Office of Edward Fradkin, LLC, attorneys for appellant (Edward P. Fradkin, of counsel and on the briefs).
George G. Gussis, PA, attorneys for respondent (George G. Gussis, of counsel and on the brief; Puya Joseph Nili, on the brief).
PER CURIAM
Defendant appeals from provisions of an order entered by the
Family Part on June 16, 2015, which determined defendant's share of plaintiff's retirement account, and gave plaintiff credits for
the value of a discarded household rug, and her share of
defendant's retirement accounts. Defendant also appeals from an
order entered by the court on November 16, 2015, which awarded
plaintiff attorney's fees. We affirm in part, reverse in part, and
remand the matter to the trial court for further proceedings.
I.
The parties were married on October 6, 1996, and no children
were born of the marriage or legally adopted. On December 20,
2010, plaintiff filed a complaint for divorce. The trial court
entered a dual final judgment of divorce dated October 25, 2011,
which dissolved the marriage and incorporated the parties'
matrimonial settlement agreement (MSA).
Article VII of the MSA addresses equitable distribution.
Section 7.4 of the MSA states in pertinent part that the parties
had certain pension, retirement, or deferred-income accounts,
which would be distributed or retained solely by one party in the
manner specified. The MSA provides that the marital portion of
plaintiff's TIAA/CREF account would be split on a fifty-fifty
basis.1 Section 7.4 states that the marital portion of this account
consists of the funds accumulated through the date upon which
1 "TIAA-CREF" is the Teachers Insurance and Annuity Association, College Retirement Equities Fund.
2 A-1563-15T2 plaintiff filed her complaint for divorce, plus or minus any
fluctuation in value due to the market, "less [plaintiff's]
premarital portion of $39,444.92 (plus/minus any fluctuation in
value attributable to the premarital portion)."
Section 7.4 of the MSA further provides that defendant had
an E-Trade Roth Individual Retirement Account (IRA) and a Wells
Fargo IRA. The MSA states that plaintiff was entitled to one-half
of the contributions to the E-Trade IRA made from the date of the
marriage to the date upon which the divorce complaint was filed,
"together with the market gains and losses thereon." In addition,
the MSA states that plaintiff is entitled to "the marital
coverture" portion of the Wells Fargo IRA "together with market
gains and losses thereon."
Section 7.4 also states that plaintiff's TIAA/CREF account,
and defendant's E-Trade and Wells Fargo IRAs each would be
distributed in accordance with a Qualified Domestic Relations
Order (QDRO). The MSA states that pension appraisers would prepare
the QDROs, and the parties would equally share the costs of
preparing the QDROs.
In addition, Section 7.3 of the MSA provides that the parties
would each keep the household furnishings and personalty in their
possession, but plaintiff would be entitled to certain items listed
on Exhibit A to the MSA. Exhibit A states that, among other items,
3 A-1563-15T2 plaintiff was to keep possession of a "multi-color rug" with a
size of approximately five-by-seven feet.
On March 17, 2014, plaintiff filed a motion in the trial
court which sought, among other relief, a determination that
defendant's share of plaintiff's TIAA/CREF account is $144,037.17;
application of plaintiff's portion of defendant's E-Trade and
Wells Fargo IRAs as an offset to defendant's share of the TIAA/CREF
account; a credit of $2395 for a "Persian Rug" defendant had
discarded; and the award of attorney's fees.
In support of her motion, plaintiff submitted a certification
in which she stated that a pension valuation had been performed,
which indicated that as of December 27, 2013, the value of the
TIAA/CREF account was $524,366.41, of which $327,519.26 was
eligible for distribution based upon application of a .6246
"reduction for marital coverture." Plaintiff asserted that the
equitable distribution amount of the TIAA/CREF account was
$327,519.26, less $39,444.92 for her premarital contributions, or
$288,074.34. Plaintiff stated that defendant's share of the
account was one-half of this amount, or $144,037.17.
Plaintiff noted that defendant had objected to this
calculation and stated that he believed plaintiff's premarital
portion of the account was limited to $39,444.92. Plaintiff stated
4 A-1563-15T2 that defendant claimed that he was entitled to $242,460.75, which
is one-half of $524,366.41, minus $39,444.92, or $484,921.49.
Plaintiff noted that she began her employment at a university
on April 4, 1988, and married defendant on October 6, 1996. She
stated that she had contributed to the TIAA/CREF account for eight
years before the marriage, and her premarital contributions were
"substantially more than $39,444.92." She asserted that defendant
would be unjustly enriched if he was entitled to $242,460.75, as
he claimed.
In addition, plaintiff stated that defendant's E-Trade IRA
was "all marital" and had a value of $7659.91. She asserted that
her share of the account was $3829.96. She also said that
defendant's Wells Fargo IRA was "all marital" and had a value of
$43,239.80. She stated that her share of this account was
$21,619.90.
Plaintiff further asserted that defendant had not turned over
the "Persian Rug" to her, as required by the MSA. She noted that
defendant had acknowledged he discarded the rug. Plaintiff stated
that she went to the department store where the rug was purchased
and obtained an estimate of "the approximate value of the rug."
According to plaintiff, the store had provided a note indicating
the rug "was worth" $2395.
5 A-1563-15T2 Defendant opposed plaintiff's motion, and filed a pro se
cross-motion seeking an order finding that he was entitled to
47.94 percent of plaintiff's TIAA/CREF account. In a certified
statement dated June 4, 2014, defendant asserted that plaintiff
was bound by the terms of the MSA, which stated that her premarital
portion of the TIAA-CREF account was $39,444.92. He stated that
this provision of the MSA had been negotiated, reviewed, and agreed
upon by the parties and their attorneys.
Defendant also stated that as of December 31, 2010, the
marital portion of the TIAA/CREF account was $484,921.49, which
was the balance of $524,366.41, less the agreed-upon premarital
portion of $39,444.92. He asserted that his share of the account
was one-half of the marital portion of the account, or $242,460.74.
Defendant asserted that he would be entitled to 46.24 percent of
the account.
He noted, however, that a QDRO had been prepared and submitted
to the TIAA/CREF using the "transfer percentage" of 46.24, but
this was "problematic." Defendant said plaintiff's account
consisted of a Transfer Payout Annuity (TPA) in the amount of
about $18,000, plus six other non-TPA certificates. Defendant
stated that the TPA had certain restrictions that affected its
division. Defendant therefore asserted that plaintiff should be
6 A-1563-15T2 permitted to retain 100 percent of the TPA, and he should be
awarded 47.94 percent of the other six certificates.
Defendant also asserted that market fluctuations had
increased the account balance by forty percent as of February 28,
2014. He asserted that this increase would apply to the marital
and premarital portions of the account. He said the increase in
value would not affect the percentage of his share of the TIAA/CREF
account as of the date of distribution.
The court entered an order dated July 8, 2014, which granted
plaintiff's motion and determined that defendant's share of
plaintiff's TIAA/CREF account was $144,037.17. The court deducted
plaintiff's premarital portion of $39,444.92 from the equitable
distribution amount of $327,519.26, leaving $288,074.34 to be
divided equally between the parties.
The court also gave plaintiff a credit of $2395 for the
"Persian Rug" that defendant had discarded, noting on the order
that plaintiff's application for this credit had been unopposed.
In addition, the court denied without prejudice plaintiff's motion
to apply her share of the E-Trade and Wells Fargo IRAs to
defendant's share of the TIAA/CREF account. The court ordered
defendant to prepare QDROs regarding these accounts within ten
days.
7 A-1563-15T2 Thereafter, defendant retained counsel, and on July 28, 2014,
defendant's attorney filed a motion for reconsideration of the
court's determination of defendant's share of the TIAA/CREF
account, and the decision to grant plaintiff a credit of $2395 for
the rug. In support of the motion, defendant submitted a statement
from TIAA/CREF, which indicated that as of September 30, 1996,
plaintiff's account had a value of $39,444.92.
Defendant also stated he did not know the rug that plaintiff
identified for the department store's salesperson. He pointed out
that the note provided to the court indicated that a five-by-
eight-foot rug had a price of $995. In response, defendant
submitted a certified hand-written note from the salesperson, who
wrote that when plaintiff came to the store, she did not have a
receipt for the rug. The salesperson wrote that plaintiff did not
have his permission to use the price quote in a court filing.
Plaintiff opposed the motion and filed a cross-motion
seeking, among other relief, attorney's fees for responding to the
motion. In her certification, plaintiff asserted that the
provision of the MSA regarding the TIAA/CREF account might be
ambiguous, but it could only be interpreted in one of two ways.
She asserted that
[t]he equitable distribution portion is either $327,519.26 minus $39,444.92 or $288,074.34, or merely [one-half] of $327,519.26. It is
8 A-1563-15T2 clearly not more than one-half of the marital share of $327,519.26. Therefore, [d]efendant's share is either $144,037.17 or $163,759.63. Either way, it is significantly less than what the [d]efendant is trying to receive.
Plaintiff further asserted that her premarital contributions
to the TIAA/CREF account had grown over twenty-two years, and
those contributions were worth substantially more than $39,444.92.
In addition, plaintiff noted that defendant had not submitted the
QDROs for the E-Trade and Wells Fargo IRAs, as required by the
court's order.
Plaintiff also addressed the court's decision giving her a
credit for the rug. She stated that the rug mentioned on the list
in the MSA was the rug she had previously referred to as a "Persian
Rug." Plaintiff said defendant had discarded the rug after the
divorce, and she went to the department store to find a similar
rug.
Plaintiff stated that the rug was on sale the day she went
to the store, but there was "no guarantee that it would be on sale
if [she] were to purchase it again in the future." She said the
rug that defendant discarded was in good condition. She stated
that the court should adhere to the prior decision, giving her a
credit of $2395 for the rug.
9 A-1563-15T2 The court entered an order dated June 16, 2015, which granted
defendant's motion in part. The order states that defendant's
share of the TIAA/CREF account was $163,759.63, less the credit
to plaintiff of $2395 for the "Persian Rug," or $161,364.63. The
court directed defendant to provide copies of statements related
to the E-Trade and Wells Fargo IRAs within five days after the
date of the order. The court reserved the decision on plaintiff's
application for attorney's fees.
The court entered another order dated July 27, 2015. The
order states that defendant had not provided the court with the
statements regarding the E-Trade and Wells Fargo IRAs, as required
by the prior order. The July 27, 2015 order authorized plaintiff's
counsel to obtain copies of the statements with a power of
attorney.
Defendant then filed a notice of appeal from the June 16,
2015 order. The clerk of this court advised defendant's attorney
that, because the trial court had not ruled on plaintiff's
application for attorney's fees, the order was not a final order
and not appealable as of right pursuant to Rule 2:2-3(a). Defendant
withdrew his appeal.
In October 2015, plaintiff's attorney provided the trial
court with copies of the statements he had obtained for the E-
Trade and Wells Fargo IRAs. The court then entered an order dated
10 A-1563-15T2 November 16, 2015, which granted plaintiff's motion for a fifty
percent share of the E-Trade and Wells Fargo accounts. The court
determined that plaintiff's share of these accounts totaled
$25,573.01, which would be deducted from defendant's share of the
TIAA/CREF account. The court also awarded plaintiff counsel fees.
This appeal followed.
On appeal, defendant argues that the trial court erred in the
equitable distribution of plaintiff's TIAA/CREF account. He argues
that the court should not have given plaintiff a credit for her
share of his IRAs because these accounts should have been divided
by QDROs. He further argues that the court erred by giving
plaintiff credit of $2395 for the rug. In addition, defendant
argues that the court erred by awarding plaintiff attorney's fees.
II.
We turn first to defendant's contention that the trial court
erred in the equitable distribution of plaintiff's TIAA/CREF
account and defendant's E-Trade and Wells Fargo IRAs. Defendant
contends the court erred by failing to enforce the relevant
provisions of the MSA with regard to these assets. We disagree
with these arguments.
Generally, decisions allocating marital assets in equitable
distribution are committed to the sound discretion of the trial
court. La Sala v. La Sala, 335 N.J. Super. 1, 6 (App. Div. 2000),
11 A-1563-15T2 certif. denied, 167 N.J. 630 (2001). We will not reverse a trial
court decision on equitable distribution unless shown to be a
mistaken exercise of discretion. Ibid. We will affirm the trial
court's decision if it "could reasonably have reached its result
from the evidence presented, and the award is not distorted by
legal or factual mistake." Ibid.
A. The TIAA/CREF Account
As we have explained, the record shows that as of December
27, 2013, plaintiff's TIAA/CREF account had a present value of
$524,366.41. The appraisal determined that the marital portion of
the account was $327,518.26. In its order of June 16, 2015, the
trial court found that defendant's share of the account was fifty
percent of $327,518.26, or $163,364.53. In reaching that decision,
the trial court accepted the calculation in the pension appraisal,
which determined the marital portion of the account using a
coverture percentage of .6246.
It is well established that a coverture fraction can be
employed to determine the portion of a marital asset that is
subject to equitable distribution. Barr v. Barr, 418 N.J. Super.
18, 34 (App. Div. 2011). The coverture fraction is
the proportion of years worked during the marriage to total number of years worked. The numerator represents that portion of the benefit, enhanced or not, that was "legally and beneficially acquired" during the
12 A-1563-15T2 marriage. The denominator is the total number of years worked up to retirement. The coverture fraction insures that the equitable distribution pot includes only that portion of the working spouse's labor which constitutes a "shared enterprise." It also assures the employee spouse the benefits of his or her pre and post coverture labors.
[Eisenhardt v. Eisenhardt, 325 N.J. Super. 576, 580-81 (App. Div. 1999) (citations omitted).]
On appeal, defendant contends the court erred by failing to
enforce the provision of the MSA pertaining to the distribution
of the TIAA/CREF account. He argues that under the MSA, plaintiff's
premarital contributions to the account are limited to $39,444.92,
plus or minus fluctuations due to the market.
The MSA states that the marital share of the TIAA/CREF account
would be subject to equitable distribution. The pension appraisal
reasonably determined the marital share of the account using a
coverture fraction. By using the coverture fraction, and applying
it to the present value of the account, the appraisal reasonably
determined the amount of plaintiff's premarital contributions and
amount by which those contributions had increased in value, due
to market fluctuations.
We reject defendant's contention that by using the coverture
fraction in the pension appraisal, the trial court erroneously
failed to enforce the relevant provision of the MSA. Defendant
13 A-1563-15T2 argues that plaintiff's contributions were limited to $39,444.92,
but he failed to give plaintiff any credit for any increase in
value attributable to market fluctuations. The court reasonably
based its analysis on the evidence before it, and defendant
provided the court with no credible evidence to determine the
marital portion of the account differently.
Accordingly, we affirm the trial court's finding that
defendant's share of the TIAA/CREF account is $163,759.63.
B. The E-Trade and Wells Fargo IRAs
We turn to defendant's contention that the trial court erred
by giving plaintiff a credit for her share of the E-Trade and
Wells Fargo IRAs, rather than having the parties prepare and submit
QDROs for later distribution of these assets. Defendant argues
that the court erred by departing from the distribution scheme
spelled out in the MSA.
We reject these arguments for several reasons. The record
shows that the trial court ordered defendant to prepare QDROs for
the distribution of these accounts, and he failed to comply with
the court's order. The court then ordered defendant to provide
statements for these accounts. Defendant again failed to comply
with the court's order. The court ultimately authorized
plaintiff's counsel to obtain the information about the accounts,
with a power of attorney.
14 A-1563-15T2 We conclude that, by repeatedly failing to comply with the
court's orders regarding these accounts, defendant waived any
right he may have had to enforce the provision of the MSA requiring
division of the IRAs using QDROs. Furthermore, granting plaintiff
a setoff for the present value of the accounts was appropriate
because it would eliminate further disagreements between the
parties concerning these accounts, and avoid the need for the
parties to return to court to address any issue that may arise.
Defendant argues that giving plaintiff a credit for her share
of the IRAs could have unintended tax consequences, but defendant
never raised that issue in the trial court. Defendant also asserts
that at the very least, the trial court should have conducted an
evidentiary hearing on this issue. However, defendant did not
request such a hearing, and he did not provide the trial court
with any evidence regarding the alleged adverse tax consequences
that may result by granting plaintiff the setoff.
We conclude that, in determining the amount of defendant's
share of the TIAA/CREF account, the trial court did not abuse its
discretion by granting plaintiff a credit for her share of the E-
Trade and Wells Fargo IRAs.
III.
We next consider defendant's contention that the trial court
erred by giving plaintiff a credit of $2395 for the so-called
15 A-1563-15T2 "Persian Rug." Defendant contends there was insufficient credible
evidence to support the court's finding that the rug had a value
of $2395. We note that, when plaintiff first sought compensation
for the rug, defendant did not oppose her application.
Indeed, the record shows that defendant did not raise this
issue until he filed a motion seeking reconsideration of the July
8, 2014 order, which granted plaintiff the $2395 credit. We
nevertheless conclude that the decision to grant plaintiff this
credit was erroneous.
The trial court's findings of fact "are binding on appeal
when supported by adequate, substantial credible evidence." Cesare
v. Cesare, 154 N.J. 394, 411-12 (1998) (citing Rova Farms Resort,
Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974)). The trial
court's finding that plaintiff was entitled to a credit of $2395
for the discarded rug is not supported by sufficient credible
evidence in the record.
It is undisputed that in the MSA, the parties agreed that
plaintiff could retain a household rug, which was described in the
MSA as a "multi-color rug" with a size of approximately five-by-
seven-feet. The parties agree that defendant was required to turn
over the rug to plaintiff, and he failed to do so. It is also
undisputed that defendant discarded the rug.
16 A-1563-15T2 In granting plaintiff the credit of $2395 for the rug, the
court relied upon a handwritten note prepared by a salesperson in
the store where the rug was purchased. There is no evidence showing
the date when the rug was purchased, or the price paid for the
rug. The salesperson's note indicates that some rug cost $2395,
but it was on sale at a sixty percent reduction, for $995. The
trial court erred by basing its finding on this submission.
First, there is no indication in this record that the rug
referred to in the salesperson's note is the same or similar to
the parties' household rug. Indeed, the note indicates that the
salesperson provided a price for a rug of a different size.
Moreover, the price that the salesperson provided apparently was
for the purchase of a new rug. Plaintiff did not establish that
she is entitled to the cost to replace the rug, rather than the
value of the household rug that was thrown out.
In addition, the salesperson's price quote indicates that a
new rug could have been purchased on sale for $995. Plaintiff
asserted that there was no assurance the rug would have been on
sale when she went to purchase it, but the price quote makes clear
the that plaintiff could have acquired the rug in the store at a
price substantially less than $2395.
We therefore conclude that the trial court's finding that
plaintiff is entitled to a credit in the amount of $2395 for the
17 A-1563-15T2 discarded rug is not supported by sufficient credible evidence in
the record. We reverse the provision of the order granting
plaintiff the credit for the rug and remand the matter to the
trial court for reconsideration of this determination.
On remand, the court should afford the parties the opportunity
to present further evidence regarding the value of the discarded
rug. If plaintiff fails to present additional evidence on this
issue, her claim should be denied. If the parties present further
evidence that raises a genuine issue of material fact, the court
should conduct a plenary hearing to determine the amount, if any,
that should be awarded to plaintiff for the discarded rug.
IV.
Defendant also argues that the trial court erred by awarding
plaintiff attorney's fees. Defendant contends the trial court
failed to consider the factors enumerated in N.J.S.A. 2A:34-23 and
Rule 5:3-5(1)(c), and did not make adequate findings of fact.
In its order of November 16, 2015, the court awarded plaintiff
a total of $3795, which represents the award of $2153 to Veronica
Norgaard, and $1642 to Kostantin Feldman and George G. Gussis. In
March 2014, Ms. Norgaard submitted a certification of services
seeking $4425 for plaintiff's initial motion. In August 2014, Ms.
Norgaard sought an additional $4223.50 for responding to
defendant's motion for reconsideration. It appears that Mr.
18 A-1563-15T2 Feldman and Mr. Gussis later substituted for Ms. Norgaard, and in
October 2015, sought attorney's fees and costs in the amount of
$3284.50 for the time they devoted to the case.
The court did not award plaintiff all of the fees sought, and
did not explain the reasons for the award. Furthermore, the court
did not relate the award to specific tasks or results, and did not
make the necessary findings required by N.J.S.A. 2A:34-23 and Rule
5:3-5(c). In view of our decision reversing the court's order in
part, we are convinced that the award of counsel fees must be
reversed as well. On remand, the trial court should reconsider the
award.
Affirmed in part, reversed in part, and remanded to the trial
court for further proceedings in conformity with this opinion. We
do not retain jurisdiction.
19 A-1563-15T2