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Does Marital Fault Play a Role in Alimony Determinations?

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.

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Paid Leave: New Jersey’s Family Leave Conundrum

Article

Paid Leave: New Jersey’s Family Leave Conundrum

In addition to the federal Family and Medical Leave Act (“FMLA”), several states have their own family leave laws. New Jersey is one of those states. With some relatively minor differences, the New Jersey Family Leave Act mirrors the FMLA. The provisions of the two laws could sharply diverge in the near future as the New Jersey legislature is expected to consider the issue of providing a monetary benefit to those taking family leave. In the paragraphs below, we shall examine this issue.

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Workers’ Compensation Newsletter — Volume 18

Newsletter

Employers Brace For New Ergonomics Rule

On November 13, 2000 the Occupational Safety and Health Administration (OSHA) implemented the much debated ergonomics rule. How will this affect workers’ compensation programs and what should employers, carriers, and third party administrators know? This article will summarize the key provisions of the rule as they relate to workers’ compensation.

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A Recent Development in the Collection of Alimony and Child Support Arrears: Execution Against a Former Spouse’s Minority Interest in an LLC

New Jersey Courts have always had broad powers to enforce alimony and child support obligations. Unfortunately, when arrearages accrue over time, many such Orders cannot be enforced because there are insufficient assets and/or income to pay those arrearages. On the other hand, if any assets and/or income can be located, then the Courts will use whatever authority is available to them to collect the unpaid support. Taking this concept one step further, in the first published case of its kind in the State of New Jersey, an Ocean County trial court recently granted a former wife priority status to collect unpaid child support and alimony arrearages from a minority interest held by her former husband in a limited liability company (LLC).

In the Ocean County case, the parties were divorced in 2004 after twenty-one years of marriage. Under the parties’ Marital Settlement Agreement, the former husband agreed to pay the former wife alimony and child support. By 2012, he had accrued more than $110,000 in unpaid support. The former wife applied to the Court seeking a judgment against the former husband for the support arrearages. The former husband had no significant assets other than a ten percent interest in a company which owned a valuable piece of commercial real estate. The commercial property generated a substantial amount of rental income and was allegedly about to be sold. As a result, the former wife not only asked the Court for a judgment representing the support arrearages but she also asked to be issued a writ of execution that would allow her to intercept the former husband’s receipt of income and/or sale proceeds in the event that the property was sold. Citing both general creditor-debtor and family law statutes and Court Rules, the Court granted the former wife’s request for a writ of execution to the extent of her former husband’s ten percent interest in the LLC. In its decision, the Court emphasized that the writ of execution would place the former wife before other creditors of the former husband by giving her priority status. This, in turn, was justified by the public policy of the State of New Jersey to enforce support orders.

In summary, by giving the former wife priority status, this case re-emphasized the rights of those who are owed support and by affirming the former wife’s right to execute against a mere ten percent interest in the LLC, it broadened the field of potential sources from which a former spouse who is owed support can collect arrearages.