Article by Capehart Scatchard

In an unusual decision published last week, the New Jersey State Appellate Division called for a hearing on the question of whether or not the “egregious” conduct of an otherwise-qualified alimony recipient should bar her claim to alimony.

In the recently published case, the parties were married for twenty-eight years. They were equal shareholders in a pharmacy in which the husband was the pharmacist and the wife was the bookkeeper.

During the divorce, the husband learned that the wife held a savings account and safe deposit boxes titled solely in her name. The savings account records showed large deposits, prompting further investigation. The Court entered an order requiring the parties to retain experts to review the pharmacy financial records. The husband retained an expert who examined the pharmacy’s financial records and reported “a pattern of consistent removal of significant cash receipts from the pharmacy” by the wife. The expert computed a total discrepancy between sales and deposits of approximately $400,000. Although the trial court ordered the wife to repay one-half of the missing funds, it denied the husband’s request that alimony either be denied altogether as a result of the wife’s behavior or that any alimony awarded be offset against the money that the wife owed the husband as repayment for the missing funds.

On appeal, the trial court was reversed. The Appellate Court first noted that, generally, “marital fault” is irrelevant to an alimony calculation. However, it went on to state that there are two narrow exceptions to the general rule. The first exception is comprised of those cases in which “the fault has affected the parties’ economic life” and the second exception is comprised of those cases in which “the fault so violates societal norms that continuing the economic bonds between the parties would confound simple justice.” The remedy for misbehavior in the first category is to measure the impact of the fault upon the parties’ economic life and to calculate a commensurate reduction in the amount of alimony to be paid. The remedy for the “egregious behavior” in the second category is to deny the alimony altogether. In the case published last week, the Appellate Court held that the behavior of the wife may very well constitute “egregious behavior” within the second category and remanded to the trial court for further proceedings.

Prior cases that considered the impact of “egregious behavior” upon alimony were rare and specified acts such as a dependent spouse who “attempted to murder the supporting spouse” or a dependent spouse who “deliberately infected the supporting spouse with a loathsome disease.” If the trial court finds that the financial misbehavior of the dependent spouse in this case constitutes “egregious behavior,” then the door will be open to more cases in which alimony is denied altogether based upon fault.