Bursztyn v. Bursztyn

• Decision Date: 22 July 2005
• Citation: Bursztyn v. Bursztyn, 879 A.2d 129, 379 N.J. Super. 385 (N.J. Super. 2005)
• Parties: Miriam R. BURSZTYN, Plaintiff-Appellant/Cross-Respondent, v. Enrique M. BURSZTYN, Defendant-Respondent/Cross-Appellant.
• Court: New Jersey Superior Court

879 A.2d 129

379 N.J. Super. 385

Miriam R. BURSZTYN, Plaintiff-Appellant/Cross-Respondent, v.Enrique M. BURSZTYN, Defendant-Respondent/Cross-Appellant.

Superior Court of New Jersey, Appellate Division.

Argued February 14, 2005.

Decided July 22, 2005.

Bruce M. Pitman, Springfield, argued the cause for appellant/cross-respondent(Pitman, Pitman, Mindas, Grossman and Lee, attorneys; Mr. Pitman and Heidi V. Rivkin, on the brief).

Jay R. Atkins, River Edge, argued the cause for respondent/cross-appellant(Sunshine, Atkins, Minassian & Tafuri, attorneys; Mr. Atkins and Kristen Capogrosso, on the brief).

Before Judges A.A. RODRÍGUEZ, CUFF and WEISSBARD.

The opinion of the court was delivered by

WEISSBARD, J.A.D.

In this matrimonial litigation, plaintiffMiriam Bursztyn appeals and defendantEnrique M. Bursztyn cross-appeals from an order of the Family Part awarding alimony to plaintiff, ordering the equitable distribution of marital assets and liabilities, tieing defendant's future obligation for college expenses of the parties' younger son to his relationship with the son, compelling plaintiff to execute joint federal and state income tax returns for the years 1999-2001, and awarding counsel fees.We find no error warranting reversal and therefore affirm the judgment in all respects.¹

THE FACTS AND THE COURT'S RULINGS

[At the court's direction, a portion of its discussion of the facts and the court's rulings has been omitted from the published opinion.]

BACKGROUND

Plaintiff, presently age fifty-six, and defendant, presently age fifty-three, were married on November 25, 1982.Two children were born of the marriage: Ian, presently age twenty-one, and Justin, presently age nineteen.In March 2000, after seventeen years of marriage, plaintiff filed for divorce.

Plaintiff holds a masters degree in psychology, and she has completed approximately twenty credits in post-graduate studies.However, plaintiff did not work outside the home at any point during the marriage.Plaintiff served as homemaker and primary caretaker of the parties' two sons.

Defendant, a radiologist, was the sole financial provider for the family.²When the parties met, defendant had completed his medical studies.He was working pursuant to a fellowship at New York Hospital/Cornell Medical Center.

When plaintiff filed for divorce, defendant was working as the medical director at Yonkers Imaging, P.C., in Yonkers, New York, a radiology center he had founded in or about 1987.Between approximately 1992/1993 and 1996, defendant also operated a second radiology center, Westside M.R.I., in Manhattan.However, Westside M.R.I. was never a significant part of defendant's income.

Yonkers Imaging operated pursuant to contracts with a management company.Under the contracts, Yonkers Imaging leased its building and equipment from the management company, and the management company was responsible for collecting on Yonkers Imaging's accounts receivable.Based upon those collections, and pursuant to the contract terms, the management company provided revenue to Yonkers Imaging.Defendant's remuneration was based upon formulas set forth in the contracts.

Defendant earned a substantial, albeit fluctuating, income from Yonkers Imaging.In the years leading up to the divorce, defendant's income significantly decreased due to reduced volume in accounts receivable and increased difficulty in collecting on accounts receivable — circumstances defendant attributed to changes in the medical marketplace in general, and particularly to the switch to managed care reimbursements.In addition, in the years leading up to the divorce, the contracts between Yonkers Imaging and the management company became less profitable for defendant, as the management company required Yonkers Imaging to bear costs which the management company previously had covered, including the costs of defendant's life, health, disability, and malpractice insurance, and the cost of employing replacement physicians while defendant was on vacation.

The record reflects the following adjusted gross (pre-tax) income reported by defendant on his federal income tax returns, based upon the following gross (pre-tax) revenue reported by Yonkers Imaging, P.C. and Westside M.R.I., between the years 1993 and 2000(the year plaintiff filed for divorce):

Defendant's Adjusted Practices' Year Gross Income Gross Revenue ---------------------------------------------------- 1993 $389,190 $602,910³ ---------------------------------------------------- 1994 $478,864 $661,059⁴ ---------------------------------------------------- 1995 $593,811 $741,000⁵ ---------------------------------------------------- 1996 $511,441 $732,900⁶ ---------------------------------------------------- 1997 $397,277 $641,019 ---------------------------------------------------- 1998 $281,656 $489,000 ---------------------------------------------------- 1999 $429,397⁷ $463,108 ---------------------------------------------------- 2000 $509,623⁸ $555,000

In 2001, defendant reported an adjusted gross income of $320,012.And, in 2002, defendant reported an adjusted gross income of $248,905, which was net of the $72,000 in alimony he paid to plaintiff.

During the marriage, and particularly in the years leading up to plaintiff's filing for divorce, the parties maintained a lifestyle which far exceeded their means.For example, the parties sent their sons to separate, expensive private schools in New York State.Ian attended the Dwight School in Manhattan, and Justin attended the Winward School in White Plains.⁹The parties also paid separate chauffeurs to drive the boys to school each day.Defendant estimated the total educational expenses, in 1998 and 1999, at between $60,000 and $80,000 per year.

The parties also hosted extravagant Bar Mitzvahs for their sons.In 1996, the parties spent approximately $95,000 for a Bar Mitzvah for Ian at the Waldorf Astoria Hotel.In 1999, they spent approximately $77,500 for a Bar Mitzvah for Justin.

In terms of vacations, the parties regularly took family vacations to Massachusetts (Martha's Vineyard and Nantucket), California, the Caribbean, and Uruguay (defendant's country-of-origin).In addition, the parties paid for their son Ian to take trips to Europe, Israel, and the Caribbean, and for both sons to attend various sleep-away camps.Finally, on one occasion, the parties took a trip to Europe without the children.

In terms of domestic help, the parties employed a live-in housekeeper, a gardener, a landscaper, a carpet cleaner, a window washer, a drapery cleaner, and a piano tuner.They also employed kitchen staff to assist them during major holidays.

The parties also spent large amounts of money on personal items.For example, between January 1998 and May 2000, the parties wrote approximately $344,000 in checks from one bank account, $134,000 of which was used to purchase jewelry.Also, between January 1997 and May 2000, the parties charged approximately $140,000 on their credit cards.Finally, the parties had significant motor vehicle expenses, leasing two luxury vehicles which they replaced every three or four years.

Defendant's income was insufficient to support the spending habits described above.To finance their spending in excess of income, the parties: did not pay their full income tax obligations; took direct withdrawals from, and wrote personal checks on, defendant's business account; took loans on defendant's practice; made extensive use of their eighteen-to-twenty-four credit cards; took a home equity line of credit on the marital residence; took loans on defendant's life insurance policy, which they ultimately cashed in; and took distributions from defendant's profit sharing retirement plan.The parties had virtually no savings except for defendant's profit sharing plan.

In the final judgment of divorce, the court declared that the parties could not maintain the standard of living they had maintained during the marriage.The court concluded that the parties had supported their lifestyle, which was well beyond their means, only by denuding virtually all of their marital assets in order to satisfy their debts and liabilities.

. . . .

B.Marital Liabilities

1.Tax Liabilities.As mentioned previously, the parties financed their extravagant lifestyle, in part, by failing to pay their full annual income tax obligation.At the time of trial, the parties had satisfied their tax liabilities, including penalties and interest, through 1998.

For the years 1999 and 2000, however, the parties still owed: $243,000 to the federal government, $33,000 to the State of New York, and $17,900 to the State of New Jersey.These numbers represented principal only.The actual amounts owed would be significantly higher after interest and penalties were assessed by the relevant authorities.

As of the date of trial (July 2002), the parties had not filed tax returns for 1999, 2000, or 2001.¹⁰Plaintiff refused to file joint returns for those years.She gave no reason for her refusal, however, other than to state that she needed to consult with her attorneys.

John Miliotis, a joint expert on the resolution of tax issues, opined that in order to abate the interest and penalties, and ultimately resolve the parties' tax issues, it was essential that they file tax returns for 1999, 2000, and 2001.According to Miliotis, plaintiff's failure to sign the joint returns was preventing him from working on the parties' behalf.He further opined that, by filing joint returns for 1999, 2000, and 2001 — i.e., "married, filing jointly," as opposed to "married, filing separately" — the parties would substantially decrease the amount of tax owed.

In the final judgment of divorce, the trial court ruled that the parties owed unpaid taxes and interest of approximately $370,000.The court ordered plaintiff to sign joint tax returns for the years 1999, 2000, and 2001, and ordered defendant to indemnify...