Scherzer v. Scherzer

• Decision Date: 10 October 1975
• Parties: Myrna SCHERZER, Plaintiff-Appellant and Cross-Respondent, v. Arthur SCHERZER, Defendant-Respondent and Cross-Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 397

136 N.J.Super. 397

346 A.2d 434

Myrna SCHERZER, Plaintiff-Appellant and Cross-Respondent, v. Arthur SCHERZER, Defendant-Respondent and Cross-Appellant.

Superior Court of New Jersey,

Appellate Division.

Submitted Sept. 16, 1975.

Decided Oct. 10, 1975.

Rubenstein & Sherwood, Totowa, for appellant (J. Mortimer Rubenstein, Totowa, on the brief).

Kasen & Kraemer, Newark, for respondent (Daniel G. Kasen, Newark of counsel, Douglas E. Burns, Newark, on the brief).

Before Judges CARTON, CRAHAY and HANDLER.

The opinion of the court was delivered by

CARTON, P.J.A.D.

In this divorce action the trial judge ruled that plaintiff wife was not entitled to any award reflecting equitable distribution of marital assets. She appeals, contending, among other things, that there were six classes of property which should have been subject to such distribution. They are: (1) defendant's stock interest in Baxter Die Works; (2) marketable securities of an asserted value of $117,000 held by a factor as collateral for loans to Baxter Die Works; (3) a debt of $241,337 owed by Baxter Die Works to defendant husband; (4) defendant's 50% Stock interest in a closely held business corporation named 'Successful Creations, Inc.'; (5) a debt of $65,113 owed by Successful Creations to defendant, and (6) defendant's interest in the corporate pension trust fund.

It appears that Baxter Die Works has gone into bankruptcy and consequently the securities held as collateral are worthless. For the same reason, defendant's stock interest in Baxter Die Works and the debt owed by it to defendant have no value. We are not convinced by plaintiff's further argument that she is entitled to an equitable distribution with respect to these items, despite their being worthless, on the theory that the 'value must be fixed as of the date of filing of the complaint.'

The span to time embraced by the equitable distribution of property provisions of the statute extends from the marriage of the parties to the date of the filing of the complaint. Painter v. Painter, 65 N.J. 196, 320 A.2d 484 (1974). The Legislature mandates that the distribution be an equitable one. In determining what is equitable the trial judge must consider all the particular circumstances of the individuals before it. See Painter at 209, 320 A.2d 484. A proper factor in that determination is any significant change in the valuation of marketable assets that occurs prior to final judgment. We observe no exceptional circumstances in this case which might justify the making of an award in plaintiff's favor as to assets which have become valueless. Nor do we detect anything in the record which suggests that the depletion in value was the result of deliberate action on the part of defendant. Consequently, we are satisfied that the trial judge's determination that these items were not subject to equitable distribution was based upon sufficient credible evidence, and we see no valid basis for disturbing it.

We reach a different conclusion with respect to defendant's stock ownership in Successful Creations, Inc. His 50% Interest in that corporation was not immune from equitable distribution simply because he owned the stock at the time of the marriage. The corporation was a close corporation. The stock in question, unlike ordinary marketable securities, necessarily derived its value in large part from defendant's personal participation in the business. So far as the equitable distribution principle is concerned, there should be no essential difference between a situation in which the husband has an interest in an individual business and one held in a corporate name. The form should not...