Edward R. Weinstein, Esq.Edward R. Weinstein, Esq.

Being Untruthful During A New Jersey Divorce Can Cost You

It may sound cliché, but honestly truly is the best policy. During my many years as a divorce attorney if have seen numerous litigants be dishonest when testifying to a judge of the Family Part of The Superior Court of New Jersey (or act in bad fait. New Jersey lawyers and family court judges are proficient at determining who is being honest and who is not.  Moreover, we can usually see through a litigant acting in bad faith. To correct this wrong I request Family Part judges to order the party acting in bad faith to pay the other parties counsel fees. To seek counsel fees for bad faith requires that the actions of the person against whom the fees are requested must show an improper motive. This requires more than a mere showing of an unreasonable, mistaken, or frivolous position, even though the level of unreasonable could very well be used to infer an improper motive. Bad faith requires that person must have had a malicious motive, and used the court system to inappropriately force a concession that would not otherwise be available to them.

In Manger v. Manger, ex-wife, Lorraine Manger, appealed from an order dated February 5, 2015, that denied her motion to make Henry Manger submit financial discover, and schedule a plenary hearing to determine if she was entitled to any alimony. The New Jersey Appellate Division affirmed the order.

Lorraine and Henry divorced on May 20, 2008. They ended their marriage after almost forty-four years. Their Dual Judgment of Divorce ended the marriage and required the former couple to solve all financial problems via binding arbitration. The judgement of divorce also ordered that the arbitrator’s final award would be incorporated into a consent judgment. Arbitration is the private, judicial determination of a dispute, by an independent third party. Arbitration is an alternative to litigation, and is usually, just as final and binding as litigation.

Loraine’s request for alimony was denied by the arbitration award. Even though the arbitrator noted that Henry made more money than Loraine throughout the marriage by running a hair salon, he explained that the business started during the marriage with money gained during the marriage. According to the arbitrator, the specific financial circumstances of the parties did not warrant an alimony award. At the time of the divorce, Henry was sixty-eight, and Loraine was sixty-seven, and both their incomes were just about the same. Henry go the hair salon in the arbitration award, but Loraine was found to have a fixed marital interest in the hair salon at $ 650 a week in the form of non-taxable equitable distribution. This amount would be paid to Loraine every week as long as Henry continued to own the business and operate it.

Loraine filed a motion to vacate the arbitration award after it was issued. In response, Henry filed a cross motion to confirm the award. Loraine’s motion was denied, and Henry’s motion was granted. The arbitration award was consequently incorporated into a supplemental judgment of divorce dated January 29, 2010.

Henry retired and sold the salon on September 29, 2014, after turning seventy-four. As such Loraine filed a motion to “modify alimony.” She requested discovery and a plenary hearing in her notice of motion so that she could present evidence showing a change of circumstance. She argued that the sale of the hair salon was a sham transaction and that Henry unlawfully stopped paying her the weekly “alimony” payments. Henry opposed the motion and filed a cross-motion. In his cross motion he wanted to confirm the end of equitable distribution payments, as per the arbitration award. He further sought legal fees and costs.

Loraine’s motion was denied by the Family Part judge, and Henry’s cross-motion was granted. In the statement of reasons, the trial judge explained that Loraine did not establish a change in financial circumstances that warranted an alimony award. The judge did not find any merit to the claim that hair salon was transferred fraudulently. The judge relied on several documents that included a commission statement, brokerage listings, the asset purchase agreement, letters from the respective attorneys, the bill of sale, and other various closing documents of the sale. Furthermore, the Family Part judge found that Henry was well past the retirement age, according to New Jersey Statute 2A:34-23(j).

Loraine appealed the order and argued that the Family Part judge incorrectly: (1) failed to require Henry to file a case information statement, (2) failed to hold a plenary hearing; (3) awarded Henry counsel fees. The New Jersey Appellate Division stated that Loraine was ignoring the fundamental fact that she never once received alimony, and she failed to meet her burden of proof to prove a substantial change of circumstances that warranted an alimony award. According to the paramount New Jersey Supreme Court case of Lepis v. Lepis, when some wants a modification of alimony, they must prove the existence of a substantial change in economic circumstance. The person who wants the modification has the burden of proving that these change circumstances, and they warrant relief. Until such time that the moving party can meet the burden of proof, the defending party does not have to provide any discovery. A court will only order an ex-spouse to submit financial discovery after, a prima facie case of changed circumstance must be made. “Prima facie” is a Latin term that literally means “on its face.” It means a fact presumed to be true unless it is disproved. Prima facie proof is based on first impression, and accepted as correct until proved otherwise. Thus, an ex-spouse opposing such a motion does not have to submit a case information statement, until the other spouse can demonstrate a valid change of circumstances.

The New Jersey Appellate Division also found that there was no merit to Loraine’s claims that Henry committed fraud in regards to the sale of the hair salon, and she completely lacked any evidence to support her claims. Loraine also challenged the award of counsel fees after the Family Part judge found she acted in bad faith, because the clear language of the arbitration award did not award her any alimony. The arbitration award also clearly permitted Henry to sell the hair salon. When a Family Part judge awards attorney’s fees, the judge must if the person requested the counsel fees in financial need, if the party that would have to pay is actually able to pay the amount, the reasonableness of the fees, and the good or bad faith of either person in seeking or defending the motion for counsel fees.

 To seek counsel fees for bad faith requires that the actions of the person against whom the fees are requested must suggest an improper motive. This requires more than a mere showing of an unreasonable, mistaken, or frivolous position, even though the level of unreasonable could very well be used to infer an improper motive. Bad faith requires that person must have had a malicious motive, and used the court system to inappropriately force a concession that they would not otherwise be available too. This provides a sort of protection for the innocent person, while punishing the guilty person.

When someone acts in bad faith, counsel fees could be used to stop a maliciously motivated person from imposing financial damage on another person. The New Jersey Appellate Division found that there was substantial evidence in the factual record that supported the finding of bad faith. First, she claimed to be receiving alimony, when the arbitration award clearly stated that the $ 650 a week Henry paid her was part of her equitable distribution from the hair salon. Furthermore, she accused Henry of a fraudulent sale of the hair salon without even the semblance of proof. Finally, she failed to address the change of circumstances, or even attach a required past case information statement to illustrate her financial situation at the time of the divorce. The New Jersey Appellate Division deferred to the Family Part’s findings, and affirmed the order and counsel fees.

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