Opinion
DOCKET NO. A-4417-12T2
10-21-2014
THAMENA SYED, Plaintiff-Respondent, v. SADIQ SYED, Defendant-Appellant.
Michael S. Rothmel argued the cause for appellant. Respondent has not filed a brief.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Waugh, Maven and Carroll. On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Hudson County, Docket No. FM-09-1073-10. Michael S. Rothmel argued the cause for appellant. Respondent has not filed a brief. PER CURIAM
In this matrimonial litigation, defendant Sadiq Syed appeals from those portions of the judgment of divorce (JOD) distributing the parties' assets and awarding alimony to plaintiff Thamena Syed. Specifically, defendant contends that the trial court erred in valuing an investment account titled solely in his name as of the filing date of the complaint rather than the time of trial. Defendant also argues that the court erred in awarding plaintiff a forty-percent share of the investment account, rather than a thirteen-percent share. Finally, defendant argues that the court erred in enhancing the amount of alimony awarded plaintiff during the first three years following the divorce. Having carefully considered defendant's contentions in light of the applicable law, we affirm.
Defendant also argues that the court erred in finding that his $38,000 deposit into plaintiff's account gave her an enhanced share of equitable distribution. However we find this argument is without sufficient merit to warrant further discussion. R. 2:11-3(e)(1).
I.
The facts are taken from the trial record. Our limited recital is tailored to address only those issues raised on appeal, rather than all issues raised at trial, which spanned five non-consecutive trial days from July 26, 2011 through February 9, 2012.
The parties married in June 1992 as the result of an arranged marriage. They have one child, currently attending college. Plaintiff filed a divorce complaint on November 30, 2009. The ensuing trial primarily focused on defendant's investment account, which was comprised of both pre-marital and marital assets that experienced wide fluctuations in value. To a lesser extent, the parties also presented testimony aimed at establishing an appropriate alimony award.
Plaintiff was employed as a bank clerk in New York City from 1990 until she resigned in 2006. Since then she has worked various part-time jobs, earning $9500 in 2010. She testified that although she has been seeking full-time employment, her lack of proficiency in the English language impeded those efforts. Based on her income, she could not meet her monthly expenses without support from defendant. She stated that she could obtain full-time employment as a nursing assistant. However, she first needed to complete a nursing course at a cost of $2000 and then pass a licensing examination, which she had previously failed.
Plaintiff testified that at the time of the marriage she had savings of $15,000 to $20,000. In 1997, the parties purchased a two-family home that they occupied as their marital residence. The purchase price of the home was $215,000. According to plaintiff, the parties always maintained separate accounts, and she contributed $21,500 towards the $50,0 00 down payment. At trial, the parties stipulated that the house was appraised at $385,000. It was subject to a $76,051.50 mortgage balance, leaving a net equity of approximately $310,000. Plaintiff further testified that she had no knowledge of defendant's stock dealings and was never involved in the management of the investment account.
Plaintiff initially testified that she had pre-marital savings of $25,000 to $30,000 but subsequently changed her testimony.
Defendant testified, and the trial judge found, that prior to marriage he purchased twenty subdivided building lots in Pakistan for $50,000. He sold nineteen of the lots in 2004, yielding proceeds of some $320,000. Defendant retained the vast majority of those proceeds in his account, although $22,144 was deposited in plaintiff's account. Defendant then took that amount back from plaintiff, and used it along with the other sales proceeds to buy three properties in Jersey City for a combined purchase price of $2 62,000. Defendant then sold those properties in 2005-2006 for $383,000, which he deposited in his investment account. Ultimately, the court concluded that these funds were defendant's pre-marital property.
In 2000, defendant started an engraving business, investing $40,000 in it. He sold the business in 2004, realizing net proceeds of $122,500, which he deposited into the investment account. In September 2009, he deposited another $42,751.97 in the investment account. Additionally, defendant testified that his earnings during the marriage, coupled with the rents received from the second unit in the marital home, exceeded his monthly expenses. These excess savings, which defendant was unable to quantify, were also deposited into the investment account. The trial court concluded that these contributions to the investment account all constituted marital property.
As of July 31, 2006, the investment account was worth $570,088. Defendant admitted that he "probably . . . made deposits" into the account after 2006, but was uncertain as to dates and amounts. By May 2008, the account value had swelled to $1,384,245. Defendant had opened a margin account that allowed him to borrow and to trade stocks. The amount owed on the margin account exceeded $500,000, leaving a net portfolio value of $844,782.75.
According to defendant, drastic changes in the market then caused the investment account balance to fall precipitously to $101,293.54 as of October 2008. In September 2009, defendant deposited $42,751.97 into the account. He was unable to identify with any certainty the source of the funds used to make this contribution. By September 30, 2009, the account balance rebounded to $281,869.92. On December 31, 2009, the date closest to the filing of the complaint, the account had a $310,357.90 balance.
At various times the investment account was maintained in different financial institutions. When the complaint was filed and through the time of trial the account was with TD Ameritrade.
Defendant continued to trade the investment account after the complaint was filed. The account had decreased to approximately $144,000 when, on December 9, 2010, the court ordered that defendant transfer fifty percent of the balance to a certificate of deposit (CD). Defendant was further ordered to refrain from accessing the CD pendente lite. No similar restriction was placed on the remaining fifty percent of the investment account. Defendant testified that he continued to trade the account in an effort to preserve it. A December 31, 2011 statement reflected stocks worth $35,988.36, less a $14,559.65 margin loan, leaving a net account value of $21,428.71. At trial, defendant estimated the account value to be $25,000. $72,000 remained in the CD, less approximately $8,000 in court-authorized pendente lite withdrawals.
Defendant's testimony regarding the purchase of the marital home differed somewhat from plaintiff's account, specifically regarding each party's contribution toward the down payment. Defendant indicated that in 1996 he transferred $38,000 into plaintiff's account so that she could earn a higher interest rate on her savings. In 1997, she transferred that amount back to him as part of a $51,000 down payment made by the parties toward the home's $215,000 purchase price.
With the exception of the investment account, the judge concluded that each party was entitled to one-half of the marital assets. These included the marital home, along with some smaller bank and retirement accounts. The court also deemed the investment account to be a marital asset. However, while the investment account was comprised of commingled marital and pre-marital funds, the court recognized defendant's sizable pre-marital contribution and awarded him a sixty-percent share of the account. The judge valued the account at $310,357.90, using the account balance closest to the filing of the complaint. Subject to certain adjustments, plaintiff was awarded the marital home while defendant received the investment account and the CD. The court found that defendant was solely entitled to retain the remaining lot in Pakistan that he purchased prior to marriage. The judge also awarded alimony to plaintiff of $225 per week for three years, and thereafter $100 per week. A JOD incorporating the court's August 15, 2012, oral decision was entered on January 7, 2013. This appeal followed.
II.
Our review of a trial court's factual findings is limited. N.J. Div. of Youth & Family Servs. v. M.M., 189 N.J. 261, 278-79 (2007) (citation omitted). "The general rule is that findings by the trial court 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. of Am., 65 N.J. 474, 484 (1974)). We defer to credibility determinations because a trial court "'hears the case, sees and observes the witnesses, [and] hears them testify,'" affording it "'a better perspective than a reviewing court in evaluating the veracity of witnesses.'" Id. at 412 (quoting Pascale v. Pascale, 113 N.J. 20, 33 (1988) (internal quotation marks and citation omitted)).
Further, we recognize the "special expertise" of judges in addressing discretionary matters in the Family Part. Ibid. Therefore, if the trial judge's conclusions are evidentially supported, we are inclined to accept them. Ibid. Consequently, we do "not disturb the 'factual findings and legal conclusions of the trial judge unless . . . convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice.'" Ibid. (citation omitted). "Only when the trial court's conclusions are so 'clearly mistaken' or 'wide of the mark'" that the judge was obviously mistaken, should we interfere and make our own findings to "ensure that there is not a denial of justice." N.J. Div. of Youth & Family Servs. v. E.P. , 196 N.J. 88, 104 (2008) (quoting N.J. Div. of Youth & Family Servs. v. G.L., 191 N.J. 596, 605 (2007)).
On the other hand, our review of a trial court's legal conclusions is plenary. D.W. v. R.W. , 212 N.J. 232, 245-46 (2012) (citing Balsamides v. Protameen Chems., 160 N.J. 352, 372 (1999)). We are not bound by "[a] trial court's interpretation of the law and the legal consequences that flow from established facts[,]" which "are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
III.
A.
Defendant's principal challenge on appeal attacks as error the judge's equitable distribution of the investment account. Specifically, defendant contends that the court erred in: (1) valuing the account at the time of the complaint rather than the time of trial; and (2) concluding that plaintiff was entitled to a forty-percent share rather than some lesser percentage of the account.
We begin our analysis by recognizing that the goal of equitable distribution is to bring about a "fair and just division of marital assets." Steneken v. Steneken, 183 N.J. 290, 299 (2005) (internal quotation marks and citation omitted). When distributing marital assets, a court must: (1) identify the property subject to equitable distribution; (2) determine the value of each asset; and (3) decide how to allocate each asset most equitably. Rothman v. Rothman, 65 N.J. 219, 232 (1974). "In every case, . . . the court shall make specific findings of fact on the evidence relevant to all issues pertaining to asset eligibility or ineligibility, asset valuation, and equitable distribution[.]" N.J.S.A. 2A:34-23.1. A court should apply all the factors set forth in N.J.S.A. 2A:34-23.1, and distribute marital assets consistent with the parties' unique needs. DeVane v. DeVane, 280 N.J. Super. 488, 493 (App. Div. 1995). An appellate court will affirm an equitable distribution provided "the trial court could reasonably have reached its result from the evidence presented, and the award is not distorted by legal or factual mistake." La Sala v. La Sala, 335 N.J. Super. 1, 6 (App. Div. 2000).
"During the early years of the evolution of the concept of equitable distribution, it was held that the date for valuing assets should be the same as the termination date for determining eligible assets." Goldman v. Goldman (Goldman I), 248 N.J. Super. 10, 14 (Ch. Div. 1991), aff'd in part, 275 N.J. Super. 452 (App. Div.), certif. denied, 139 N.J. 185 (1994) (Goldman II) (citing Smith v. Smith, 72 N.J. 350, 362 (1977); Borodinsky v. Borodinsky, 162 N.J. Super. 437 (App. Div. 1978)). Absent extraordinary circumstances, assets should generally be valued at the time of the complaint. Bednar v. Bednar, 193 N.J. Super. 330, 332 (App. Div. 1984). Nonetheless, we have recognized that there is "no absolutely iron-clad rule" for determining the date of valuation, and we have at times taken a more equitable approach, finding that the valuation date should be based on the "nature of the asset and any compelling equitable considerations." Ibid.
A "separate" but related issue is the question of a change in an asset's value from the date of the complaint to the date of distribution. Id. at 333; see Goldman II, supra, 275 N.J. Super. at 457. Where an asset has not just decreased, but has become worthless after the date of the complaint but before the distribution, the court must consider that factor in its equitable distribution of that "asset." Scherzer v. Scherzer, 136 N.J. Super. 397, 400 (App. Div. 1975), certif. denied, 69 N.J. 391 (1976). In Scherzer, the court rejected the wife's claim that she was entitled to equitable distribution of the value of an asset as of the time of the complaint when the asset had become worthless before trial. Id. at 399-400.
At times, the appropriate valuation date has hinged on whether the subject asset is classified as active or passive. Passive assets are "defined as those assets whose value fluctuations are based exclusively on market conditions." Scavone v. Scavone (Scavone I), 230 N.J. Super. 482, 486 (Ch. Div. 1988), aff'd, Scavone v. Scavone (Scavone II), 243 N.J. Super. 134 (App. Div. 1990). In contrast, "[a]ctive assets involve contributions and efforts towards their growth and development which directly [affect] their value." Id. at 487.
In Platt v. Platt, 384 N.J. Super. 418, 427 (App. Div. 2006), we affirmed the trial court's decision to value the plaintiff's IRA as of the date of distribution in 2004, rather than the date of the complaint in 2001. Deeming the IRA a passive asset, we recognized that "[p]assive assets, the value of which fluctuate after the filing of the complaint by virtue of market forces, should be valued as of the date of trial or distribution, not the date of the filing of the divorce complaint." Ibid. (citing Scavone II, supra, 24 3 N.J. Super. at 137).
In the present case, the judge found that, to a certain extent, the decrease in the value of the investment account coincided with market forces. The judge "[took] notice of the fact that from April [] 2008 to March [] 2009 the stock market lost [sixty-percent] of its value," and that defendant "got caught like so many other people did in that stock market crash." However, the judge further found that the drastic decline in the account value was not due solely to market forces. Importantly, defendant admitted to actively trading the account during the period between the filing of the complaint and the time of trial. The judge concluded, in our view correctly, that defendant "lost more because he tried to trade against it and he had the margin calls at the high percentage rates."
We therefore reject any contention that the investment account, titled in defendant's name and actively traded only by him, was merely a passive asset, dependent solely on market forces. Rather,
[b]y its very nature, an active asset's increase or decrease in value is a direct result of the attention, time, and devotion of the sole owner. Therefore, . . . if one spouse labors or makes waste of an asset, it is that spouse who ought to reap any benefit or suffer any loss which occurs as a direct consequence of effort and time exerted.
[Scavone I, supra, 230 N.J. Super. at 492].
Recognizing that the account once had a value of $844,782, and then dropped precipitously to $101,293 before rebounding to $310,357 when the complaint was filed, defendant nonetheless continued to trade on margin. Defendant's awareness of the risk involved is borne out in his testimony:
[Plaintiff's counsel]: Mr. Syed, the type of trading you do, are there huge ups and downs in the value of the account?Consequently, defendant should suffer the loss as a result of his post-complaint investment activity. The court awarded defendant sole ownership of the investment account. If history is an accurate predictor, it is he who solely stands to gain from any stock market resurgence.
[Defendant]: Yeah.
Classification of the investment account as either an active or passive account does not, however, end our inquiry. Defendant testified that he continued to trade the account in order to preserve it. Relying on Goldman, he contends that he should not be punished as a result of those efforts.
In Goldman, the trial court restrained the parties pendente lite from "alienating or encumbering in any manner any of [their] assets." Goldman II, supra, 275 N.J. Super. at 456. However, plaintiff owned an imported car dealership and was allowed to conduct his business in the ordinary course. Ibid. Despite the court order, plaintiff advanced $350,000 of marital funds in an effort to save the failing dealership. Goldman I, supra, 248 N.J. Super. at 13. When the complaint was filed, the business was valued at $294,000. Id. at 16. However, by the time of trial, the business had virtually no value. Goldman II, supra, 275 N.J. Super. at 457.
On these facts, the trial court determined that if it applied the normal rule regarding active and passive assets, the plaintiff alone would suffer the loss of the business along with the funds he advanced, and the court would not be "carrying out the legislative mandate to distribute marital assets equitably." Goldman I, supra, 248 N.J. Super. at 16. The court held that under the special circumstances presented, it would be unfair to plaintiff to value the dealership at the time of the complaint. Ibid. Instead, it chose to value the dealership at the date of trial. Ibid.
In affirming, we found that the trial judge "was confronted with a unique situation and that application of a rigid categorical analysis would have only hindered him in fulfilling his ultimate obligation to effectuate a distribution of marital assets which, overall, was equitable to both parties." Goldman II, supra, 275 N.J. Super. at 457. Accordingly, we determined that the "consequence of value fluctuations for purposes of equitable distribution should not . . . turn wholly on whether an asset is properly classified as . . . active or passive." Ibid.
The "unique situation" confronting the court in Goldman simply does not exist here. Defendant was ostensibly seeking to preserve a monetary account, rather than an ongoing business. The testimony at trial established that defendant regularly transferred funds between his Valley National Bank account and his investment account. If defendant wished to preserve the funds in the investment account pending ultimate disposition, without running the risk of depletion, he simply could have retained the monies in his bank account until the stock market volatility subsided. Consequently, we conclude that the trial judge did not err in valuing the investment account as of the filing date of the complaint, as opposed to the time of trial when the account balance was at its lowest.
Defendant next argues that the court erred in awarding plaintiff a forty-percent share of the investment account. Defendant's contention is premised on his "significant" contribution of pre-marital assets to the account.
The record reveals that defendant utilized the monies received from the sale of his pre-marital property in Pakistan to purchase three Jersey City properties. Upon selling those properties, defendant received gross proceeds of $383,000, which he then deposited into the investment account. Along with those pre-marital funds, defendant also admittedly deposited $122,500 from the sale of his engraving business into the investment account, along with an additional $42,751.97 in September 2009, both of which constituted marital assets.
Defendant's argument ignores the trial court's finding that substantial marital savings derived from the parties' earnings and rental income were also placed in the investment account during the course of the marriage. Having examined the documentary evidence, the judge concluded that defendant "regularly added [$]10,000 sometimes up to [$]35,000 a year to his savings and stock accounts by way of not only his monies but by utilizing his wife's income to pay household expenses and occasionally to invest." Additionally the judge found that defendant "commingled much of the remaining money from the sale of the lots from his earnings, from the sale of the three homes and or lots in Jersey City, the sale of his engraving business, his earnings, [and] her earnings . . . ." Consequently, the court found it "truly difficult to follow the trail of income[,] assets and earnings into that account, although a larger portion must be attributable to him." Recognizing "the money that [defendant] invested in it and that were funded by his pre[-] marital efforts," the court awarded defendant a greater share of the investment account.
We conclude that defendant's argument that plaintiff should have only received a thirteen-percent share of the account is simply not borne out by the record and, as noted, ignores competent evidence of regular contributions of marital funds into the account. Additionally, the funds were undoubtedly commingled, regarding which defendant offered little explanation, thus rendering a precise determination of the respective percentages of marital and pre-marital funds virtually impossible. We find no mistaken exercise in the judge's broad discretion in concluding that the investment account was a marital asset, to which plaintiff was entitled to a forty-percent share.
B.
Finally, defendant argues that the trial court erred in granting plaintiff an enhanced alimony award of $225 per week for the first three years, followed by $100 per week thereafter. He contends that the judge determined that plaintiff need do nothing more than take a nursing assistant course and pass the State examination to earn $30,000 per year, and already possessed the ability to earn that amount based on her prior work experience.
Here, the trial judge considered the relevant factors under N.J.S.A. 2A:34-23(b) and concluded that before plaintiff could begin earning $30,000.00, she would need three years to be "able to get a job, get on her feet, [and her] child will be out of school so she can work all the hours that she wants." Therefore, the judge initially imputed to plaintiff an income of $14,000.00, or minimum wage, rather than the $30,000.00 urged by defendant.
N.J.S.A. 2A:34-23(b)(5) requires trial courts to consider, when determining an alimony award, the "earning capacities, educational levels, vocational skills, and employability of the parties." N.J.S.A. 2A:34-23(b)(8) also requires trial courts to consider 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." It is clear that the trial court considered plaintiff's earning capacity and vocational skills and imputed to her a $14,00 0 income. The court further considered that plaintiff could find a job as a nursing assistant and begin earning a steady income in about three years. Therefore, the two-tiered alimony award was "supported by adequate, substantial, credible evidence." Cesare, supra, 154 N.J. at 411-12.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office. CLERK OF APPELLATE DIVIDION