New Jersey Case Law Update: Equitable Distribution

SCHLEIFFER v. SCHLEIFFER

Docket No. A-1880-11T4

Facts

The parties were married in 1986 and divorced pursuant to a judgment of divorce.  Cross-appeals were filed from that judgment, and substantial portions of it were affirmed.  However, the court reversed in part, and remanded for further consideration on issues relating to:

1. the allocation of the balance of plaintiff’s 401(k) account,
2. the imposition of a penalty for plaintiff’s early withdrawal of proceeds from his 401(k) account,
3. the credit, if any to be awarded plaintiff for his alleged payment of defendant’s post-complaint credit card expense,
4. the apportionment of responsibility for unreimbursed medical expenses, and
5. the imposition of a lien upon defendant’s estate pending the purchase of a $100,000 life insurance policy.

Issues

Plaintiff appeals from the Family Part’s written opinion on remand.

1. It is an abuse for the court’s discretion to award defendant $18,500 representing ½ of the federal taxes paid by the parties in 2006 as a penalty for an early withdrawal of the plaintiff’s 401(k).
2. The trial court abused its discretion by failing to award Mallamo credits to husband to wife’s failure to contribute to the marital expenses during the parties’ divorce litigation and through trial and by failing to award credits to husband and/or paying wife’s post complaint credit card debt.

Holding

Affirmed.

Rules

• Milne v. Goldberg, 428 N.J. Super. 184, 197-98 (App. Div. 2012) (quoting Cesare v. Cesare, 154 N.J.394, 413 (1998); Platt v. Platt, 384 N.J. Super.418, 425 (App. Div. 2006))
  • “Generally, the special jurisdiction and expertise of the family court requires that we defer factual determination if they are supported by adequate, substantial, and credible evidence in the record.”
  • “It is well settled that Family Part factfinding receives particular deference because of “the family courts’ special jurisdiction and expertise in family matters…which will be disturbed only upon a showing that the findings are “’manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence’” to ensure that there is no denial of justice.
  • “An abuse of discretion “arises when a decision is ‘made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.” Milne (quoting Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002) (quoting Achacoso-Sanchez v. Immigration & Naturalization Serv., 779 F.2d 1260, 1265 (7^th Cir. 1985)).

Analysis

In this case, the remand judge’s factual findings were well-tethered to the evidence, his legal conclusions comported with applicable precedent, and his discretionary decisions were rationally explained.

In fashioning an equitable allocation to account for the federal income taxes paid in 2006 due in large measure to plaintiff’s unilateral withdrawal of proceeds from his 401(k) account, the remand court reviewed and analyzed the trial evidence and post-trial submissions of the parties.  From that, the court recognized that some portion of the tax obligation might have been an early withdrawal “penalty,” and it ultimately concluded that the evidence strongly suggested that the components of the overall tax obligation were mainly due to the machinations of plaintiff.  Accordingly, it was within the bounds of reason for the court the call the entire tax obligation a “penalty” in allocating responsibility for its creation to plaintiff.

Further the court concluded that the Family Part did not err in refusing to award Plaintiff credits in the nature of those contemplated by Mallamo v. Mallamo, 280 N.J. Super. 8, 12 (App. Div. 1995).  The Family Part judge examined the paucity of documentary evidence from both parties regarding their payment of expenses pendente lite.  The judge concluded that in the testimonial battle between plaintiff and defendant on this issue, defendant’s credibility trumped plaintiff’s.  Since the judge believed defendant’s contention that her income was used for household and child-related expenses, we have no occasion to disturb the determination that a credit in plaintiff’s favor was neither necessary nor appropriate.