Articles Posted in Divorce Cases

Although generally property a spouse purchases before marriage is not subject to equitable distribution, some assets purchased before the marriage are still subject to equitable distribution. A New Jersey appeals court recently issued a decision in a New Jersey divorce case in which it found that rental properties the wife purchased before the marriage may still have been considered as part of the marital estate.

In that case, the husband and wife were married in 1999, and the husband filed for divorce in 2018. Before they were married, the wife bought six residential properties in New Jersey with her own money. The husband later renovated the properties and maintained them. The couple bought many other properties together after they married. They earned rental income from the properties, and the wife eventually managed the properties full time. The husband maintained and repaired the properties, at least to some extent. The parties did not keep separate accounts for premarital and marital properties. At the time of trial, the rental properties were generating a rental income of about $12,000 per month.

The family court divided the properties purchased after the marriage evenly and equitably distributed two of the six premarital properties, which the court found were purchased in contemplation of the marriage. The court assigned the remaining four premarital properties to the wife. The husband appealed several issues, including that he was entitled to an equitable share of the premarital properties.

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A New Jersey appeals court recently considered a case regarding the modification of child support and alimony based on alleged changed circumstances. In that case, the husband and wife had married in 1993 and later had three children. They divorced in 2007 and agreed to a Matrimonial Settlement Agreement. In the agreement, the husband agreed to pay the wife $15,500 per month in alimony and $5,500 per month in child support. The Agreement was based on the husband’s earnings at the time, which were around $778,000 per year. In 2007, his business began to decline and by 2015, his income had reduced to about $120,000 per year. As a result, the parties amended the agreement in 2015 to reduce the alimony payment to $5,500 per month and the child support payment to $1,408 per month.

The husband then negotiated to leave his employment with a severance package of $100,000 and opened a restaurant. The husband fell into arrears on his child support and alimony payments. Two of the children had been emancipated and the youngest was in college. The husband’s restaurant closed and the husband began selling life and health insurance, allowing him to make about $100,000 to $140,000 per year. The wife filed a motion to enforce the husband’s obligations and the husband argued that the obligations should be modified based on a change in circumstances.

Modifications to Alimony and Child Support

New Jersey family court judges can modify alimony and child support orders based on the parties’ circumstances and the nature of the case. The party seeking to modify a child support or alimony obligation must demonstrate changed circumstances.

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A recent decision from the New Jersey Appellate Division centered on the decision that a child attend the public school where the father lives in a contentious child custody case. In that case, the mother had filed for divorce, and the husband and wife agreed to temporarily share joint legal custody and to designate the mother as the parent of primary residence (PPR) and the husband as the parent of alternative residence (PAR). They worked out an alternating weekly parenting schedule. However, the parents had numerous issues in co-parenting the child, including deciding the child’s medical care, agreeing on how to share holidays and birthdays, and deciding on the method of communication between the parents. The parents also could not agree on where the child should attend preschool, and ended up having the child attend one preschool on Tuesdays and Thursdays (in the mother’s town of Moorestown) and another preschool (in the father’s town of Mount Laurel) on Fridays.

Three years after the mother filed for divorce, the court held a custody trial that lasted six days. The child was four years old at the time. The mother, the father, the mother’s parents, the director of one preschool, the father’s employer, and a police officer who was involved in a domestic dispute testified during the trial. At the conclusion of the trial, the judge decided to grant joint physical and legal custody to the parties. He declined to designate either parent as the PPR, finding it was not in the child’s best interests to do so. He also ordered that when the child was to begin kindergarten, that she be enrolled in the public school district where the father lived and where he worked as a guidance counselor. He noted that both Mount Laurel and Moorestown had good school districts. He also noted that the father planned to continue living in his town long-term, whereas the mother was not sure about her future living arrangements. The mother appealed the decision.

The appeals court upheld the decision of the family court. The court found that the judge’s decision was supported by the evidence in the record and the decision was within the court’s discretion. The court also noted that the father’s town had a full-day kindergarten program, whereas the mother’s town provided full-day kindergarten only at a significant cost. The court reasoned that the child spent “considerable time” with each parent and went to preschool in two different towns so that she was not so rooted in one community that the decision would uproot her life. Although the mother was the child’s primary caretaker up until the custody trial, both parents had spent significant time with the child.

The Appellate Division of New Jersey recently issued a decision ruling that an attorney’s fees award arising from a custody case is not dischargeable in a bankruptcy proceeding—meaning that the debtor still owes the debt despite declaring bankruptcy. The case arose from a New Jersey custody dispute after a divorce. The mother and father divorced in 2014 when their twins were seven years old. The mother, who lived in New Jersey, wanted to relocate with her children to Utah. A family court judge held a hearing and found that, under New Jersey standards, relocation was not in the best interests of the children. The judge also awarded the father $425,000 in attorneys’ fees. The father later moved to enforce the attorneys’ fees award and the court later ruled the attorneys’ fees award was non-dischargeable under section 5 and under section 15. The mother appealed.

Bankruptcy generally allows a debtor to rehabilitate themselves by discharging their debts. However, there are certain debts that are non-dischargeable and remain as debts of the debtor. Here, the judge found the debt was non-dischargeable under 11 U.S.C. § 523(a)(15) (section 15) as a debt “to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit.” The judge also found the debt non-dischargeable under 11 U.S.C. § 523(a)(5) (Section 5), as a debt “for a domestic support obligation, finding the attorneys’ fees award was a debt for a domestic support obligation because it is “of the nature and substance of a domestic support obligation.”

The appeals court upheld the judge’s decision. Specifically, concerning Section 5, the court found that attorneys’ fees awards in matrimonial actions were “domestic support obligations” and were therefore non-dischargeable under Section 5. Considering relevant New Jersey case law, the appeals court found that it was non-dischargeable under Section 5 because it was a domestic support obligation and was “in the nature of support.” The court reasoned that the award arose out of a custody dispute concerning the father’s ability to see his daughters regularly and the funds could have been used to provide financial support to his daughters.

A New Jersey appeals court recently dismissed a case after the defendant claimed the parties did not have a valid marriage. In that case, the plaintiff had filed a complaint about divorce in Middlesex County, and the complaint was subsequently dismissed. The plaintiff filed a second complaint for divorce in Essex County, and the defendant moved to dismiss, arguing that there was no valid marriage between the plaintiff and the defendant. The claim was dismissed without prejudice pursuant to a stipulation of voluntary dismissal executed by the parties’ attorneys.

After the second dismissal, the parties entered into a Settlement Agreement, which addressed the distribution of assets as well as custody and child support. Over two years after the Agreement was signed, the plaintiff filed a motion to reopen the divorce case and enforce the signed Agreement. The defendant argued that the case could not be reopened because there was no underlying divorce case.

The appeals court found that the plaintiff could not enforce the Settlement Agreement by reopening the divorce case, as the case had been dismissed. The court noted that the divorce complaint was dismissed without prejudice—meaning that another complaint could be filed—and thus the complaint could be refiled if a valid marriage existed. In addition, if the parties never had a valid marriage, the plaintiff could enforce the Agreement by filing a complaint in the non-dissolution docket. Therefore, the plaintiff’s motion to reopen his matrimonial case was dismissed.

An appellate court recently issued a per curiam opinion in a defendant’s appeal of a decision regarding his alimony obligation. During the parties’ New Jersey divorce proceedings, the parties agreed that the defendant must pay permanent alimony. The agreements did not contain an anti-Lepis provision, or any provisions addressing modifications because of a change in circumstances. The parties agreed that the plaintiff maintain a 29.25% interest in the defendant’s business.

About two years after the alimony agreement, the defendant argued that the plaintiff was cohabitating with her partner and asked the court to terminate his alimony obligation. The parties agreed to place a time limit on the defendant’s alimony obligations. Further, the negotiations addressed whether the court may terminate the defendant’s obligations because of disability. In addition, the order contained an anti-Lepis provision and barred any modification during 2019-2026, for any reason, except catastrophic physical disability.

Starting in 2019, the defendant failed to make alimony payments, explaining that he was experiencing financial difficulties. In response, the plaintiff filed a motion to enforce the alimony order. The defendant cross-motioned to vacate the order. In the alternative, he motioned to rescind the anti-Lepis provision, modify the obligation based on impossibility, and schedule a hearing regarding his capacity to consent.

Alimony, otherwise known as financial support that a person must pay to their spouse following a separation or divorce, is a common part of many divorce settlements. However, when things change, and the party responsible for paying the alimony is no longer able to because of extenuating circumstances, what does the law say? If you are experiencing significant hardships or obstacles in meeting your New Jersey alimony obligations, are you able to terminate or modify your obligations?

In a recent Superior Court of New Jersey opinion, the court considered a case involving termination of alimony obligations in light of extenuating circumstances. In the case at hand, the parties divorced in 2006 after a 26-year marriage and negotiated a Property Settlement Agreement (the “Agreement”). Based on the Agreement, the wife agreed to pay her husband $300 per week in alimony. Several years after the divorce, the wife experienced many significant health and medical issues, including a brain tumor, which forced her to retire from her job. She ceased making alimony payments to her husband and moved to terminate her alimony obligation. The husband opposed the motion. Following oral arguments, the trial court terminated the wife’s alimony obligations, and the husband appealed.

On appeal, the court sided with the wife and affirmed the trial court’s decision. Because of the wife’s extenuating circumstances, such as her retirement and significant health issues, the court held that in light of her retirement and poor health, along with sufficient financial documents from the parties, the trial court had properly analyzed the dispute. Further, the wife was 66 years old, was at a good-faith retirement age, and her health was proof of further changed circumstances that would warrant a modification or termination of her alimony responsibilities.

An appeals court recently issued a decision in a New Jersey custody case concerning the appeal of a sole custody award to a mother, despite the parents’ agreement to the contrary. According to the court’s opinion, the parties were married for 11 years and had one child together who was 11 years old at the time of the trial. The husband filed for divorce and sought joint legal custody of the child and to be designated the parent of primary residence.

The parties attended mediation and prepared a custody agreement through mediation in which the wife was designated the parent of primary residence. The wife then filed a domestic violence complaint against the husband, and a judge found the husband had harassed the wife. The court later held a divorce trial, which focused on economic issues in the divorce and had little to do with custody. The wife advocated for primary residential custody and joint legal custody and the husband stated that he was fine with the shared custody agreement, though he would have liked full custody. Despite the parties’ agreement, the court awarded sole legal and physical custody to the wife, based in part on the domestic violence proceeding, a claim by the wife that the husband had improper conversations with the child, and the husband’s long work hours. The husband appealed the decision, arguing the award of sole legal custody was an abuse of discretion because it was contrary to the parties’ positions at trial and uncontested.

New Jersey Policy on Physical and Legal Custody

Under N.J.S.A. 9:2-4, New Jersey has a stated policy of allowing children to have frequent and continuing contact with both parents. The statute explicitly states that “it is in the public interest to encourage parents to share the rights and responsibilities of child-rearing in order to effect this policy.” The law further states that a court will respect custody arrangements agreed upon by the parents unless it is not in the best interests of the child. Physical custody refers to where the child physically resides. Legal custody refers to the authority to make major decisions in the child’s life and is often shared by both parents. Based on the state’s policy, courts often favor custody arrangements that provide for joint legal custody and joint physical custody.

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During a divorce, coming to an agreement about custodial arrangements is often one of the most hotly contested issues between parties. Moreover, when subsequent changes need to be made to custodial arrangements because of changes in circumstances, things can get just as messy as they were when the arrangements were made in the first place. Before pursuing such changes, it is always important to consult with an experienced New Jersey family law attorney to ensure that you know your rights.

In a recent Superior Court of New Jersey Appellate Division decision, the court had to consider whether the defendant (Mother) would be allowed to take her children to visit extended family given their original custodial agreement. In the case at hand, the Mother moved to change her parenting time schedule so that she could bring their children to see their paternal grandparents. The plaintiff (Father) sought to restrain the Mother from doing this. The lower court sided with Father and denied Mother’s motion for reconsideration.

On appeal, the court stated that a party seeking to modify custody must demonstrate that the changed circumstances affect the welfare of the children. Furthermore, the appellate court found that the lower court erred in denying Mother an opportunity for reconsideration because she had met all of the requirements necessary for requesting a change by demonstrating a change in circumstances that would affect the welfare of her children. Because Mother demonstrated a change in circumstances, and Father failed to put forward credible reasons to bar his children from seeing their grandparents, the appellate court reversed the lower court’s decision.

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In a recent case before a New Jersey appeals court, the court considered whether the wife was entitled to the gains and losses on her share of the husband’s 401(k) from the date of the filing of the complaint until the date of distribution. In this New Jersey divorce case, the parties had been married for twenty-seven years before the wife filed for divorce. The parties agreed to have their disputed issues resolved through arbitration and mediation.

Through mediation, the parties reached an agreement on their disputed issues, and the arbitrator prepared a memorandum of understanding, which both parties signed. In the agreement, the parties agreed that the wife would receive half of the husband’s 401(k) balance, which was approximately $340,000. The parties agreed that the $170,000 would be applied to the husband’s equitable distribution obligation.

The wife later argued that she was entitled to the gains and losses on her share of the 401(k) account from the filing of the complaint until the date of distribution. The trial court disagreed, finding she was not entitled to the gains and losses, and she appealed. The appeals court agreed with the trial court, finding that the memorandum of understanding was clear regarding the distribution of the 401(k) account. It clearly stated that the wife was entitled to half of the account—$170,000. It also said that the sum would be paid by the husband towards the plaintiff’s share of the equitable distribution. There was no reference to the wife’s entitlement to credits or debits for any market fluctuations. It was also unnecessary to establish a formula to allocate shares because the parties had agreed on the amount of the wife’s share. Thus, the court found that the wife was not entitled to the gains and losses after the filing of the divorce complaint.

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