New Jersey Family Law

NEW JERSEY FAMILY LAW MEDIATION

In a ruling bearing on New Jersey divorce cases and the equitable distribution of closely-held businesses, the Internal Revenue Service recently released a new version of its Business Valuation Standards. These standards are a product of the Valuation Policy Council and are aimed to improve compliance and utilization of resources. Specific attention is given to assist examiners with respect to assignment planning, analyzing documentation, work paper preparation, and the review of third-party valuations. Internal Revenue Service, IRM 4.48.4, November 20, 2006

MILLBURN DIVORCE MEDIATOR

It was error for the New Jersey divorce judge to ignore the parties' New Jersey settlement agreement by questioning the ex-husband's judgment in selling his interest in his business, since this decision was reached while the parties were still married. There was nothing to suggest it was made to evade or minimize his obligations or prejudice the ex-wife. However, because the record of plaintiff’s income is incomplete, a plenary hearing is required to resolve the questions presented by the modification application as to his current income and his ability to earn commensurate with his education and professional background. Burg v. Burg, New Jersey App. Div., November 16, 2006.

MORRISTOWN DIVORCE

Whitney Houston's New Jersey mansion will be sold by the Morris County Sheriff's office because she's more than $1 million behind on the mortgage. In addition, Mendham Township is owed $83,000 in property taxes. The property will be advertised in newspapers for 4 weeks before the January 4, 2007 sale in Morristown. Houston's estate comprises two lots, and the sale would be of the lot assessed at $889,300. The adjacent lot is valued at more than $5.6 million. Houston, 43, bought the properties in 1987 for $2.7 million. In September, Houston  filed for divorce from singer Bobby Brown after a 14-year marriage.  Associated Press, November 13, 2006

SOUTH ORANGE DIVORCE

The New Jersey judgment of divorce is affirmed in part and reversed in part. The ex-husband challenged the equitable distribution and alimony awards. As to equitable distribution, (1) the trial court's use of the ex-husband's bee-keeping activities as a factor in calculating the parties' equitable shares in the marital home was error, (2) the determination of "liquid cash value" of ex-husband's construction business was correct, (3) remand was required to reassess whether the ex-husband had withdrawn a portion of his IRAs, and (4) the trial court failed to give ex-husband credit for $6,000 in pendent lite support. As to alimony, the New Jersey divorce judge correctly ruled that the ex-husband's annual income was not less than $100,000, even though his tax returns indicated his income was less than $40,000.    Coppola v. Coppola, New Jersey App. Div., October 20, 2006

BERGEN COUNTY DIVORCE LAWYER

Summary judgment dismissing husband’s complaint affirmed. He and his wife were involved in "contentious divorce proceedings," in which the New Jersey divorce court ordered an appraisal of the marital home. An accident allegedly occurred when a vehicle operated by defendant real estate agent, who was present at the wife’s request, twice struck the husband, who was blocking the real estate agent from leaving. The husband alleged injury and sued the real estate agent, as well as his wife, the New Jersey divorce attorney who represented her in the matrimonial action and the defendant real estate agency, based on their alleged agency relationships. However, the real estate agent’s interaction with the husband "went well beyond the bounds" of any agency relationship that she might have had with the other defendants.    Cushman v. Wells et al., New Jersey App. Div., September 26, 2006

BERGEN COUNTY DIVORCE : HOUSE VALUATION AND SALE

The real-estate bubble appears to be bursting, or at least deflating, for Eddie Murphy's "Bubble Hill" property in New Jersey. The comedian originally listed the Englewood Cliffs property for $30 million, making it New Jersey's most expensive home. More recently, the price was whittled down to $22 million for the 32-room, 25,000-square-foot Colonial on 5 gated acres, just after his wife, Nicole, filed for a New Jersey divorce.   New York Post, September 7, 2006

NEW JERSEY DIVORCE MEDIATION

Certain restricted stock units were subject to equitable distribution in the New Jersey divorce. Although the New Jersey divorce judge was correct in ruling that the date of filing of the New Jersey divorce complaint was the appropriate cut-off date for identifying the restricted stock units eligible for equitable distribution, he erred in excluding certain ones based upon considerations of vesting.    Walsh v. Walsh, New Jersey App. Div., August 25, 2006

NEW JERSEY DIVORCE MEDIATOR : SELL THE HOUSE

After their New Jersey divorce, the ex-wife was to buy out the ex-husband's interest in the marital home for half of $167,000, less the mortgage balance as of 2003. Their New Jersey divorce agreement provided the home be sold after their youngest child turned 19. He moved to sell the home after their youngest child turned 19 in 2003. The New Jersey divorce agreement gave her the first option to purchase his interest, but the parties disputed whether she had to pay half of $167,000 (the value according to a 1996 broker's market analysis) or half of the current market value. The earlier value was proper and the trial court's interpretation was correct.   Pacifico v. Pacifico, New Jersey App. Div., June 9, 2006

NEW JERSEY DIVORCE : BUSINESS VALUATION

A frequent issue in New Jersey divorce cases is the valuation of a closely held business. Here, the Court deals with the buyout of an interest in a LLC [Limited Liability Company]. Plaintiff asserts he is entitled to a figure determined by his expert accountant pursuant to the Operating Agreement, while defendants contend plaintiff's interest is subject to a rate swap, yielding a lower valuation. They also allege he acted in bad faith in setting up a competing company. Because the parties agree on the minimum amount due, the Court enters judgment for that amount. As to the balance, the court denies summary judgment, concluding additional discovery is necessary. Gerber, Jr. v. Gerber, et al., New Jersey Ch. Div., June 2, 2006

NEW JERSEY DIVORCE MEDIATOR : DIVIDING THE BUSINESS

This was the second appellate trip for this New Jersey divorce couple. This time, rather than remanding again, the Appellate Division exercises its original jurisdiction and rectifies the division of a 9.81% equity interest in a closely-held corporation. The Court addresses the correct amount to be distributed to each party, including whether a minority discount should have been applied in the equitable distribution valuation process.    Thalmann v. Thalmann, Jr., New Jersey App. Div., May 16, 2006