Berrie v. Berrie

• Decision Date: 31 December 1991
• Citation: 252 N.J.Super. 635,600 A.2d 512
• Parties: Uni BERRIE, Plaintiff-Appellant, v. Russell BERRIE, et al., Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 635

252 N.J.Super. 635

600 A.2d 512

Uni BERRIE, Plaintiff-Appellant, v. Russell BERRIE, et al., Defendants-Respondents.

Superior Court of New Jersey Appellate Division.

Argued Nov. 7, 1991.

Decided Dec. 31, 1991.

Joel D. Siegal, Newark, for plaintiff-appellant (Hellring, Lindeman, Goldstein & Siegal, attorneys; Joel D. Siegal, Ronny J.G. Siegal and Sheryl E. Koomer, on the brief).

Frederic K. Becker, Woodbridge, for defendants-respondents (Wilentz, Goldman & Spitzer, attorneys; Frederic K. Becker, David M. Wildstein, Frederick J. Dennehy, Christine D. Petruzzell, and Douglas K. Schoenberg, on the brief).

Before Judges DREIER, GRUCCIO and BROCHIN.

The opinion of the court was delivered by

DREIER, J.A.D.

Plaintiff, Uni Berrie, appeals by leave granted from interlocutory rulings in favor of her husband, Russell Berrie, by two trial judges. The orders were entered on December 20, 1990 and January 31, 1991. In response to defendant's successful in limine motion, the initial trial judge ruled in the December 20, 1990 order:

This court rules in limine that a premarital period of cohabitation does not extend coverture for equitable distribution purposes, and, any increase in the value of defendant's stock in Russ Berrie & Company, Inc. during any premarital period of cohabitation is not subject to equitable distribution.

This court rules in limine that defendant's stock in Russ Berrie & Company, Inc. is a passive premarital asset and is not subject to equitable distribution. This court further rules that any increase in value of that stock from the date of the marriage until the date of filing of the complaint is not subject to equitable distribution.

No evaluation of Russ Berrie & Company, Inc. is necessary to this litigation.

The order continued, stating that plaintiff was denied funds to retain an expert to value the corporate stock, and that no court-appointed expert would be designated to value the stock. ¹

The judge explained his reasoning in a nine page letter opinion dated October 3, 1990, which he incorporated by reference into the December order. In this opinion the judge traced the origin and growth of defendant's business. Defendant founded the business in 1963, twenty years prior to the parties' marriage. It was initially a one-man operation producing "impulse gift products" (stuffed animals and other small items marketed through card shops). After incorporation in 1966, the business grew and defendant developed his own product line, expanding in personnel and producing more income. By the time the parties met in 1979, while both were married to other individuals, the company, in the trial judge's words,

was a multinational, multimillion dollar corporation. It had decentralized into separate autonomous departments which were located in several areas within this country and also in other areas of the world including the Far East. The various departments included sales, distribution, product development, administration and finance. The company's basic product line had been fully established and the company had over 1,000 employees and over 100 managers.

The parties met by chance on a flight from Hong Kong to Seoul. Plaintiff is Korean by birth, but at that time she was a United States citizen who was separated from her first husband. After sporadic contacts during the initial months of their relationship, defendant requested that plaintiff leave her home and family in Korea and come to United States with him. Plaintiff alleges that there had been premarital promises made to her by defendant. In the words of the amended complaint:

defendant promised and declared to plaintiff that he would take care of her and support her for the rest of her life, that he would provide for her future financial security and that she would share in all the assets and property that was accumulated.

At the end of 1979 defendant purchased what was to be the marital home in Englewood. Some time between early 1980 and mid-1981 they lived together in the home. According to plaintiff, defendant insisted that plaintiff seek no financial settlement from her former husband and defendant retained the attorney and supervised the securing of her initial divorce.

Plaintiff was divorced from her former husband on December 3, 1981; defendant was divorced from his former wife on December 10, 1983. The parties were married on December 29, 1983. At that time they already had a daughter who was nearly two years old. Their premarital relationship can be expressed by quoting defendant's own words, taken from a certification dated April 7, 1983 filed in connection with his divorce from his former wife:

The defendant [Kathy Berrie, Russell Berrie's former wife] refers to my single 'girlfriend'. The fact of the matter is that this girlfriend is the woman whom I love, who is the mother of my child, whom I respect and to whom I am married morally and spiritually, and with whom I shall be married legally as soon as the litigation [defendant's divorce from Kathy Berrie] is terminated. We have lived together for the past three years, and she not only has been emotionally supportive of me, but has helped me in my work. Her assistance in my business has been tremendous, since we import a great deal of our merchandise from Korea, and her understanding of Korean commercial customs, as well as her fluency in that language, have been tremendous assets to me.

* * * * * *

[M]y present relationship is a significant one, ... in which we are the parents of a lovely child and which brings to us all the joys of honorable married life.

* * * * * *

I am, in every sense of the word, happily married to another woman and joyfully engaged in a truly honorable married life....

[M]y relationship with the woman I love is one which does not depend on material things for joy. We work together, shoulder to shoulder, both in the home and in our business, with a deep and abiding concern in the values of our marriage....

After March 1980 plaintiff began working for the company as a Korean liaison officer. ² At the time one-half of the company's products were manufactured in Korea; by 1989, 94% of the products were manufactured there or elsewhere in Asia.

In a 1981 deposition, defendant described the company's value in December 1980. Defendant stated: "I would have said to you if somebody came along and would give me $1,000,000, I'd take it and run." Ten months later, defendant stated that the company was still "trying to do well," but that the business could "fall by the wayside" if defendant did not continue his intensive involvement. In fact, he did not know whether he was going to "meet next months' bills."

However, the situation improved, and after the birth of the parties' daughter in March 1982, defendant changed his previously-expressed opposition to taking the company public. According to plaintiff, defendant changed his mind in order to provide their daughter with security. The ground work was performed, and the company elected to go public in the spring of 1984, three months after the parties' marriage.

One problem in this case, discussed in more detail later, is the value of approximately 8,000,000 shares (53.1%) of the corporation's stock retained by defendant. This stock was not registered in the public offering and is a control block. Between 1984 and 1989 defendant's ownership of the corporation was reduced from 86% to 53.1%. At the time defendant filed a Preliminary Disclosure Statement on August 29, 1983 in his prior divorce, he certified that the value of his company was $9,489,143. ³ The stock actually was first offered to the public on March 29, 1984, at a market price of $14 per share. As noted by the trial judge, the publicly held stock has fluctuated from $13.88 a share to $47.75 a share. When the complaint was filed, the market price of the stock was $18.12 a share, and in December 1989 it was $14.50 a share. At the time of the trial judge's letter opinion, defendant held the position of Chief Executive Officer of the company which employed 2,300 workers, 800 salespersons and 200 managers, with five subsidiaries, 12 distribution centers and a worldwide market.

The trial judge very properly noted that substantial assets of the parties are available for equitable distribution, such as their jointly-owned marital home valued at $17,000,000 and a condominium in Florida valued at $1,200,000. Also, plaintiff owned $760,000 worth of securities in her own name as well as $500,000 in jewelry and $100,000 in furs. In addition, certifications, including those of her own sister, averred that plaintiff maintained a sizeable cash reserve in at least one safety deposit box. The children are well protected with three inter vivos trusts.

Since we are here reviewing the results of an in limine order made prior to discovery and based upon conflicting allegations of fact, we must assume that the facts presented by plaintiff are accurate or would have been developed by the discovery she has sought. In limine motions have their place where issues can be eliminated as a matter of law prior to trial. See Evid.R. 8(1). Where, however, the decision on the in limine motion itself requires an analysis of evidence yet to be presented or credibility determinations, such motions should ordinarily be denied until a sufficient predicate is established. Bellardini v. Krikorian, 222 N.J.Super. 457, 464, 537 A.2d 700 (App.Div.1988); State v. Polito, 146 N.J.Super. 552, 558, 370 A.2d 478 (App.Div.1977). Our analysis here therefore is not too different from a review of a motion for partial summary judgment, see R. 4:46-2, but with the claim limited to a matter encompassed in an order rather than a judgment.

Defendant sought to have the trial and discovery shortened by eliminating all references to the value of his business, which he considered a premarital asset not subject to equitable distribution. If he were correct, an in limine motion would be the...