Opinion
DOCKET NO. A-0451-12T2
02-04-2014
JEFFREY BORRELL, Plaintiff-Respondent, v. JOANNE BORRELL, Defendant-Appellant.
Goldstein and Bachman, P.A., attorneys for appellant (Howard A. Bachman, of counsel; David R. Cardamone, on the briefs). Jeffrey Borrell, respondent pro se.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Espinosa and Koblitz.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-1380-11.
Goldstein and Bachman, P.A., attorneys for appellant (Howard A. Bachman, of counsel; David R. Cardamone, on the briefs).
Jeffrey Borrell, respondent pro se. PER CURIAM
Defendant Joanne Borrell (wife) appeals from the provision of the June 21, 2012 final judgment of divorce awarding her $4000 per month in permanent alimony after a six-day trial. She also appeals from the August 10, 2012 denial of her motion for reconsideration. After review of the facts in light of the issues raised by wife, we affirm.
The parties were married in June 1985 and had three children. Plaintiff Jeffrey Borrell (husband) is an attorney who owns a fifty-percent interest as a partner in his own law firm, which operates in both New York and New Jersey, with a focus on personal injury and medical malpractice matters. Throughout the marriage, he earned substantial additional money from various investments, such as "interest, dividends, municipal bond interest, and real estate."
The parties hired a joint expert to provide a cash flow analysis of husband's income. They stipulated to the expert's finding that husband had a three-year average income of $224,595 before taxes and $198,358 after taxes.
The trial judge determined permanent alimony was appropriate, stating, "This is a 25-year marriage, the wife has been a stay-at-home Mom. She's of limited education. She has some health issues, though it's never been established that she's in any way disabled. There's been no proof she's readily employable . . . ."
The judge then made some adjustments to wife's expenses as reflected on her case information statement. First, he refused to consider her claimed $2500 for a mortgage, reasoning that she didn't have a mortgage on any property at the time. She was still living in the marital home mortgage-free. Husband paid the real estate taxes. While she may well acquire a mortgage in the future, the judge found that to be too speculative to be considered in an alimony award. He specifically permitted her to file a motion for changed circumstances when she acquired a mortgage or rental expense.
The judge cut wife's food cost of $860 to $500 per month. The $1000 wife claimed to spend on private school was eliminated because that child's parochial-school tuition was paid for by husband's law practice. Wife's debt service payments, which she claimed amounted to $1,036, were reduced to $637 per month. In all, her individual monthly budget was reduced to $5,048 from $11,681 by these adjustments.
The judge then awarded wife $4,000 a month in permanent alimony, or $48,000 a year, taxable to her and deductible to husband. When added to the income from the equitable distribution award, which the judge determined would generate approximately $52,000 a year, wife would receive $100,000 a year, or $8,333.33 a month. Assuming a ten-percent tax rate, which the judge deemed appropriate in light of the fact that many of her assets were tax exempt, the tax consequences of this award were determined to be $800 a month.
The judge then analyzed husband's income after taxes and the alimony award were deducted, determining it to be approximately $139,000, compared to wife's $100,000. The judge reasoned that this was an appropriate outcome, in light of the fact that the goal of alimony is to be able to maintain both parties at the marital lifestyle.
Appellate review "of the amount of an alimony award is limited." Gordon v. Rozenwald, 380 N.J. Super. 55, 76 (App. Div. 2005). The trial court has discretion to set alimony based upon the evidence before it and its rulings "in such matters [should not be] overturned unless the court abused its discretion, failed to consider controlling legal principles or made findings inconsistent with or unsupported by competent evidence." Ibid. See also J.E.V. v. K.V., 426 N.J. Super. 475, 485 (App. Div. 2012).
I
Wife argues that the trial judge failed to consider all of the required statutory factors in awarding alimony. N.J.S.A. 2A:34-23(b) provides that "[i]n all actions brought for divorce . . . the court may award . . . permanent alimony[.]" "When awarding alimony, the court shall consider, but not be limited to" the factors enumerated in the statute. Ibid. N.J.S.A. 2A:34-23(c) provides that in "any cases in which there is a request for an award of permanent alimony, the court shall consider and make specific findings on the evidence about the above factors."
The trial judge made the necessary findings, although some were made in the context of his equitable distribution determination. See N.J.S.A. 2A:34-23.1. He made the following findings as to each statutory factor:
(1) The actual need and ability of the parties to pay
The judge observed that wife had never earned significant income and would likely have a difficult time gaining substantial employment. He stated that husband was able to pay the alimony and that each party would be responsible for their own debts because the equitable distribution left them with ample resources to do so.
(2) The duration of the marriage or civil union
The judge noted that the parties were married for twenty-five years, a long-term marriage.
(3) The age, physical and emotional health of the parties
The judge stated that the parties were then fifty-four or fifty-five years old with some tangible, but not disabling health issues.
(4) The standard of living established in the marriage and the likelihood that each party can maintain a reasonably comparable standard of living
During his equitable distribution analysis, the judge determined the marital standard of living to be "modest," "upper middle class," and "suburban." The family of five lived in a three-bedroom home valued at $425,000 in Old Bridge Township. The youngest child attended parochial school at the reported cost of $10,000 a year for tuition and books. The judge further stated that the parties "invested wisely. . . . They didn't deprive themselves of anything. They took modest vacations, they had some time shares." The judge observed that "this is the rare case where there's actually enough money to maintain both lifestyles."
(5) The earning capacities, educational levels, vocational skills, and employability of the parties
The trial court found that husband had been the primary earner during the marriage, earning an average of $198,358 after taxes, while wife was not employed nor was she likely to find employment.
(6) The length of absence from the job market of the party seeking maintenance
In his equitable distribution findings, the judge observed that wife had not worked "in many, many years." While she had worked in the past, "that ceased basically at the time of or shortly after the marriage."
(7) The parental responsibilities for the children
Of the parties' three children, two are emancipated and the parties have joint custody of the third child, who resides with husband.
(8) The time and expense necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, the availability of the training and employment, and the opportunity for future acquisitions of capital assets and income
In performing equitable distribution, the court observed that it had insufficient evidence to determine "what it would take to render wife employable, if in fact that could be done." "[S]he hasn't work[ed] basically the extent of the marriage . . . she has significant health problems, and she has a relatively limited education. . . . I can't reasonably draw a conclusion that she is employable." Wife does not seek rehabilitative alimony. See Cox v. Cox, 335 N.J. Super. 465, 474-75 (App. Div. 2000) (explaining that rehabilitative alimony is a short-term award meant to support a former spouse until she becomes economically self-sufficient).
(9) The history of the financial or non-financial contributions to the marriage or civil union by each party including contributions to the care and education of the children and the interruption of personal careers or educational opportunities
As part of equitable distribution, the judge observed that this was a "traditional marriage. Mr. Borrell worked outside the home [and] was the primary financial provider. Mrs. Borrell maintained the family house [and was the primary] care giver because Mr. Borrell was at work. She kept the house." The children had college funds established for them and no careers were interrupted because of the marriage. Husband voluntarily paid the car insurance for the two emancipated children and private high school cost of the third child for her remaining year of high school.
(10) The equitable distribution of the property ordered and any payouts on equitable distribution, directly or indirectly, out of current income, to the extent this consideration is reasonable, just and fair
The equitable distribution award provided wife with over $1 million, with income from investment returns on that principal estimated to be approximately $52,000 annually.
(11) The income available to either party through investment of any assets held by that party
The judge detailed the income wife could receive on the equitable distribution award at an assumed four-percent rate of return and advised her to seek professional guidance on how to increase that return. In addition to the alimony award of $48,000, this afforded wife with income of $100,000 a year.
(12) The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a non-taxable payment
The trial court determined that the alimony award was taxable to wife and deductible to husband. The judge "looked at the tax tables," and observed that wife's "effective tax rate [would not exceed] ten-percent." The judge concluded that wife could weather the tax consequences of the award based on the income she would receive. Neither party provided information concerning other tax consequences.
(13) Any other factors the court may deem relevant
Finally, the judge specifically stated that "there may be a need for an application [to modify the alimony award]" if and when wife acquired a mortgage, but for now, "that should be more than adequate income to sustain her."
In sum, every factor in N.J.S.A. 2A:34-23(b) was considered. Although some of the alimony factors were discussed in the context of equitable determination, which requires an analysis of many of the same factors, all alimony factors were considered in the judge's decision.
Wife also argues that the trial court made three errors in calculating the permanent alimony award. First, that the judge used husband's post-tax income, but wife's pre-tax income when comparing each party's final income after consideration of the alimony awarded. Second, that the judge found the husband's investment earnings to be $36,532, but attributed to the wife an income of $52,000 a year based upon a four-percent rate of return on the same principal. Third, she argues that the judge failed to appreciate that he had ordered the marital home sold, which would force wife to pay a housing cost, which was not considered in the alimony award.
II
Wife argues that the judge compared husband's post-tax cash-flow but wife's pre-tax cash-flow. The judge first determined husband's cash-flow to be $198,000, the number both parties stipulated to as his income after taxes. After deducting housing and alimony, the husband's cash-flow was reduced to $139,000. The judge stated that this would leave husband with "a cushion for taxes," even though the court used the post-tax figure. Had the judge used the pre-tax figure with the same deductions, the resultant figure would be $165,966.
For wife, the alimony award was to be taxable to her and deductible to the husband. The judge noted that, assuming a ten-percent tax rate of her combined income of alimony and equitable distribution wife's taxes would approximately be $800 a month. Thus, the judge compared the parties' respective cashflows under different standards — one before tax, one after tax.
This differential treatment does not constitute reversible error because "[a]limony has to do with support and standard of living" not what each party earns. Mahoney v. Mahoney, 91 N.J. 488, 502 (1982). "[T]he goal of a proper alimony award is to assist the supported spouse in achieving a lifestyle that is reasonably comparable to the one enjoyed while living with the supporting spouse during the marriage." Steneken v. Steneken, 183 N.J. 290, 299 (2005) (internal quotation marks and citation omitted). "'The supporting spouse's obligation is set at a level that will maintain that standard.'" Tannen v. Tannen, 416 N.J. Super. 248, 260 (App. Div. 2010) (quoting Innes v. Innes, 117 N.J. 496, 503 (1990)), aff'd, 208 N.J. 409 (2011).
The judge determined the standard of living during equitable distribution and found that the alimony award would allow the supported spouse to continue to enjoy that standard.
III
Wife does not attack the amount of income imputed to her based upon investment returns, $52,000, rather, she maintains that husband's investment earnings should have been imputed to be the same. She argues that had husband been imputed investment returns of $52,000 instead of $36,000, his net income would have been higher, and therefore she would have received a higher alimony award.
Wife, however, stipulated to husband's investment earnings. And "[a]part from rare instances . . . stipulations of fact are binding on the parties." Kurak v. A.P. Green Refractories Co., 298 N.J. Super. 304, 325 (App. Div. 1997). Indeed, "trial courts [should not] sidestep the binding nature of factual stipulations. Quite to the contrary, it is important for attorneys to have confidence in stipulations as a tool to avoid the expense, trouble, and delay of coming forward with proofs when certain otherwise-contestable facts are admitted. The basic thought is that generally litigants should be held to their stipulations and the consequences thereof." Negrotti v. Negrotti, 98 N.J. 428, 432 (1985).
Also, as we noted above, husband's income is not dispositive of a proper alimony award. If wife receives sufficient support to maintain the marital lifestyle, the fact that husband earns more is not relevant.
IV
Wife's final claim is that the trial court committed reversible error when it refused to consider wife's hypothetical $2,500 mortgage expense. However, N.J.S.A. 2A:34-23(b)(1) requires a trial court to consider the parties "actual need" when fashioning an alimony award.
Wife's mortgage expense is not "actual" yet. To be sure, a mortgage expense was part of the parties' marital standard of living, but that was to maintain the marital home, where wife is currently allowed to reside rent-free until the youngest child graduates high school. Wife presented no evidence of a move or having a mortgage of $2,500 per month, only that she was thinking of moving to Florida. When the judge denied wife's mortgage expense claim, he instructed her that once she has moved and incurred mortgage or rent payments, she may make a motion for a change in circumstances.
Because the trial judge carefully considered all of the appropriate statutory factors and did not abuse his discretion in awarding permanent annual alimony of $48,000, we affirm.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION