Innes v. Innes

• Decision Date: 31 May 1988
• Citation: 225 N.J.Super. 242,542 A.2d 39
• Parties: Frank T. INNES, Plaintiff-Appellant, v. Nita L. INNES, Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 242

225 N.J.Super. 242

542 A.2d 39

Frank T. INNES, Plaintiff-Appellant, v. Nita L. INNES, Defendant-Respondent.

Superior Court of New Jersey Appellate Division.

Argued Feb. 18, 1988.

Decided May 31, 1988.

James J. Byrnes, Union, argued the cause for plaintiff-appellant (Byrnes & Guidera, attorneys; James J. Byrnes, on the brief).

Norman W. Albert, New Providence, argued the cause, for defendant-respondent (Libby E. Sachar, Plainfield, attorney; Libby E. Sachar, on the brief).

Before Judges FURMAN, BRODY and LONG.

The opinion of the court was delivered by

BRODY, J.A.D.

The parties were divorced in March 1984. Plaintiff was then 60 years old, and his wife 59. Their major assets were the marital home and their pensions. The judgment of divorce incorporating the terms of an agreement provided, among other things, that plaintiff pay defendant $650 a month alimony and, as her share of his pension, $19,000 less 40% of the value of her pension. The judgment further provided that the marital home be sold within a year and the proceeds divided equally. Plaintiff used a portion of his share of the proceeds from the sale of the home to pay defendant her net share of the value of his pension. After these adjustments, she received approximately $75,000 of the proceeds and he received approximately $40,000.

Plaintiff was laid off from work in June 1985 and immediately moved for termination of alimony because he was no longer earning income. The trial court reduced his alimony payments from $650 to $550 a month, established arrearages in the amount of $3,600 and ordered him to pay $1,200 of defendant's attorney's fees. In reducing alimony by only $100 a month and establishing arrearages of $3,600, the trial judge found that plaintiff's monthly income was $1,502, consisting of $622 Social Security benefits, $720 pension payments, and $160 payments from an annuity that plaintiff had purchased with $24,000 of his share of the proceeds from the sale of the home.

The basic issue in this appeal is whether, for the purpose of determining alimony, the trial judge properly considered the payments plaintiff receives from his pension and from the annuity he had purchased with the proceeds of the sale of the marital home. Plaintiff contends that those payments are derived from his equitable share of the marital assets and therefore are not available to pay alimony. He relies on the holding in D'Oro v. D'Oro, 187 N.J.Super. 377, 454 A.2d 915 (Ch.Div.1982), aff'd 193 N.J.Super. 385, 474 A.2d 1070 (App.Div.1984). We respectfully disagree with D'Oro.

D'Oro posed the question of whether pension payments to a husband who retired five months after the divorce should "be included in an income base for purposes of re-establishment of alimony[.]" Id. 187 N.J.Super. at 378, 454 A.2d 915. As here, the wife in D'Oro had received a portion of the value of the pension in a lump sum as part of the equitable distribution of marital assets, the preferred method of distributing a spouse's equitable share of the other spouse's pension. Kikkert v. Kikkert, 177 N.J.Super. 471, 477-478, 427 A.2d 76 (App.Div.1981), aff'd 88 N.J. 4, 438 A.2d 317 (1981). The court held that "it will be inequitable for plaintiff [wife] to be able to include his pension income twice for her benefit, first for a share of equitable distribution, and second, for inclusion in his cash flow for determination of an alimony base." D'Oro, 187 N.J.Super. at 379, 454 A.2d 915. (Emphasis in original.) The court "left to another day" the question of whether pension payments may be considered as a basis for alimony "after such point in time as defendant [husband] has received his share of 'present value.' " Id. at 380, 454 A.2d 915. (Emphasis in original.)

There is surface appeal to the argument that a supporting spouse should not be required to pay a dependent spouse "twice" from the supporting spouse's pension. Kikkert encourages a lump sum payment to a spouse of the value of the other spouse's future pension payments in order to avoid prolonging contacts between divorced spouses. Kikkert, 177 N.J.Super. at 477-478, 427 A.2d 76. (That rationale is questionable in cases where an alimony award assures post-divorce contacts.) In the present case, plaintiff "advanced" to defendant the lump sum present value of his pension from his share of the proceeds of the sale of the marital home. Superficially, it seems unfair to require him to pay plaintiff part of his pension payments "again" as alimony.

The argument is unsound because equitable distribution and alimony are not the same. They are fundamentally different in one important respect:

[Equitable distribution to a wife] gives recognition to the essential supportive role played by the wife in the home, acknowledging that as homemaker, wife and mother she should clearly be entitled to a share of family assets accumulated during the marriage. Thus the division of property upon divorce is responsive to the concept that marriage is a shared enterprise, a joint undertaking, that in many ways it is akin to a partnership.

[ Rothman v. Rothman, 65 N.J. 219, 229, 320 A.2d 496 (1974).]

Alimony, on the other hand, is meant to impose on the supporting spouse the duty to give the dependent spouse sufficient financial support, within the means of the supporting spouse, to continue to live according to the economic standard that was established during the marriage. Mahoney v. Mahoney, 91 N.J. 488, 501-502, 453 A.2d 527 (1982). "When support of an economically dependent spouse is at issue, the general considerations are the dependent spouse's needs, that spouse's ability to contribute to the fulfillment of those needs, and the supporting spouse's ability to maintain the dependent spouse at the former standard." Lepis v. Lepis, 83 N.J. 139, 152, 416 A.2d 45 (1980).

Thus it is not inconsistent for a dependent wife to receive the value of a portion of her husband's pension as her share of the marital partnership, and nevertheless look to later pension payments as evidence of her former husband's ability to contribute towards maintaining her at their former marital economic standard.

For the same reasons it is not inconsistent to consider as evidence of his ability to pay alimony the payments he receives from an annuity purchased with his equitable share of the marital estate. The same point is made in Beyer v. Beyer, 64 Ohio App.2d 280, 413 N.E.2d 844, 846 (1979):

Although it is true, as plaintiff husband argues, that this sum represents the sale of an asset which was awarded to the plaintiff in the property settlement, nonetheless, this sum is an asset which may be taken into consideration in determining alimony just as any asset which the wife holds may be taken into consideration. It is of no consequence that these assets may have originated from the property settlement.

This is not to say that equitable distribution and alimony are unrelated. Rothman emphasizes that equitable distribution serves an important second purpose besides distributing the assets of the marital partnership to the partners:

Hitherto future financial support for a divorced wife has been available only by grant of alimony. Such support has always been inherently precarious. It ceases upon the death of the former husband and will cease or falter upon his experiencing financial misfortune disabling him from continuing his regular payments. This may result in serious misfortune to the wife and in some cases will compel her to become a public charge. An allocation of property to the wife at the time of the divorce is at least some protection against such an eventuality. [ Rothman, 65 N.J. at 228-229, 320 A.2d 496.]

This relationship between equitable distribution and alimony may require the dependent spouse to tap her assets, including property received in equitable distribution, to absorb some of the diminution of the supporting...