S.W. VS. G.M. (FM-20-2163-11, UNION COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1278-18T3

S.W.,

Plaintiff-Respondent, APPROVED FOR PUBLICATION

February 24, 2020
v.
APPELLATE DIVISION
G.M.1,

Defendant-Appellant.
______________________________

Argued January 29, 2020 — Decided February 24, 2020

Before Judges Whipple, Gooden Brown, and Mawla.

On appeal from the Superior Court of New Jersey,
Chancery Division, Family Part, Union County,
Docket No. FM-20-2163-11.

Brian G. Paul argued the cause for appellant
(Szaferman, Lakind, Blumstein & Blader, PC,
attorneys; Brian G. Paul, of counsel and on the briefs).

Jeffrey P. Weinstein argued the cause for respondent
(Weinstein Lindemann & Weinstein, attorneys; Jeffrey
P. Weinstein, of counsel and on the brief; Rachel
Zakarin, on the brief).

The opinion of the court was delivered by

1
We use initials to protect the parties' privacy interests. See R. 1:38-3(d).
MAWLA, J.A.D.

This matter returns after we reversed and remanded portions of a final

judgment of divorce, directing the trial judge "to articulate, numerically, his

findings regarding the marital lifestyle" for alimony purposes. S.W. v. G.W.,

No. A-4063-14 (App. Div. Feb. 20, 2018) (slip op. at 39). We also stated "[t]o

the extent the determination upon remand necessitates a review of the life

insurance award, the trial judge should also adjust the insurance amount

plaintiff [S.W.] is required to maintain, if appropriate." Id. at 47.

Following the remand, the trial judge considered written submissions

from the parties and entered an August 27, 2018 order amending the judgment

of divorce, increasing defendant G.W.'s alimony without enumerating the

marital lifestyle. On November 9, 2018, the judge denied defendant's motion

for reconsideration and reduced the life insurance amount he previously found

appropriate to secure plaintiff's alimony obligation. Defendant appeals from

both orders. Because the judge did not numerically calculate the marital

lifestyle, we reverse and remand.

We set forth the facts adduced at trial in greater detail in our prior

decision. To summarize, the parties were in a long-term marriage, which

produced three children, all of whom are emancipated. Both parties are

college educated. Defendant ceased her employment decades ago following

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the birth of the parties' first child. Plaintiff was the sole breadwinner as a

Senior Managing Director of a boutique restructuring firm, Zolfo Cooper (ZC).

Plaintiff's aggregate compensation was capped at $2,000,000 per year.

His income ebbed and flowed with ZC's fortunes, exceeding the cap in several

years and declining far below it in others. We found no abuse of discretion

and upheld the trial judge's calculation of plaintiff's net income at $1,313,000

per year by averaging the five years of earnings prior to the complaint. 2

We also upheld the trial judge's description of the parties' lifestyle

recounting the following:

The parties lived a wealthy lifestyle and did not
save. At the time of trial, the parties had no
retirement accounts because [they] had been
liquidated to fund the marital lifestyle. The parties
purchased a marital residence in 1986 and a residence
on Cape Cod in 1998. According to the testimony, the
judge concluded both residences "were renovated and
enlarged on an almost constant basis." The
improvements were financed through mortgage re-
financing of both homes.

The parties owned twelve boats during the
marriage including sailboats and three Boston
Whalers. Plaintiff's Case Information Statement (CIS)
nearest the date of complaint set forth monthly
expenses of $80,853 and defendant's CIS indicated

2
Contrary to defendant's assertion on this appeal, our conclusion that the trial
judge did not abuse his discretion in averaging plaintiff's income was not a
declaration the income determination was immune to modification or a change
in circumstances. Neither we nor the trial judge made such a statement.

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 those expenses were $92,147 per month. The parties'
children attended private schools, including exclusive
boarding schools for high school. The children's
educational and activity fees and expenses were
funded by plaintiff's income and student loans. The
family enjoyed the benefits of country club, dinner
club, and yacht club memberships. Plaintiff's CIS
articulated a family vacation budget of $60,000 and
defendant $150,000 per year. Defendant spent
$100,000 per year on a photography hobby.

Even though defendant estimated the family
spent between $1,000,000 and $1,500,000 annually,
defendant maintained plaintiff had secreted funds
from the marriage. The trial judge concluded
defendant had not proved a dissipation because she
had admitted all of plaintiff's income was used to pay
the marital expenses. The judge found "[t]he
overwhelming evidence is that these parties both lived
an incredibly profligate lifestyle as evidenced by both
parties['] [CISs]. . . . In short, it was a budget without
any apparent restraints."

[S.W., No. A-4063-14 (slip op. at 5-6).]

We recited the trial judge's reasoning for awarding alimony:

The trial judge awarded defendant permanent
alimony utilizing the version of N.J.S.A. 2A:34-23(b)
that existed before its amendment in September
2014. . . .

The judge determined permanent alimony was
supported by the majority of the statutory factors. He
concluded the marriage was of an "extremely long
duration" and "the parties lived a relatively opulent,
and certainly an upper income lifestyle. Their
lifestyle consumed the entirety of [plaintiff's]
income." He found:

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4
 the goal of "maintaining the lifestyle" is
more of a goal than a reality. In the case
of [defendant,] her most recent CIS shows
that her lifestyle has decreased from
$92,352 to $27,042 per month. Without
even beginning to analyze these figures
for credibility purposes, it is clear that she
has had to "sacrifice" her prior lifestyle
during the course of this litigation, and
will have to do so going forward.

The judge found plaintiff's ability to maintain
the lifestyle going forward was facilitated by "an
extremely generous expense account." Thus, the
judge found plaintiff would "have more flexibility" in
maintaining the lifestyle than defendant who would be
dependent on alimony alone. Conversely, the judge
found the equitable distribution award supported the
alimony amount awarded because defendant would
receive at least $750,000 from her share of ZC to
invest "while [plaintiff] will likely someday have the
ability to be bought out upon retirement."

The judge found defendant could earn no money
because she had been "out of the workforce for
decades." The judge found that plaintiff and his
partners had reduced their draw from $850,000 to
$450,000 per year each. He determined plaintiff's
income fluctuated dramatically because the "bonus
can vary relatively wildly." However, the judge
determined there was never a year where plaintiff's
income fell below $1,000,000.

The judge ordered the alimony payable at a rate
of $22,000 per month from plaintiff's draw and
$186,000 per year payable from the bonus for a total
yearly obligation of $450,000. The judge made
alimony taxable to defendant and tax deductible to
plaintiff. The judge ordered plaintiff to maintain life

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 insurance of $4,000,000 to secure his alimony
obligation.

[S.W., No. A-4063-14 (slip op. at 18-20).]

We reversed the alimony determination and, as related to the issues now

raised on this appeal, stated:

Although the judge's descriptive findings
regarding the lifestyle were adequate, we are unable to
correlate his findings regarding the parties'
expenditures with the alimony award. Indeed, the
judge ordered plaintiff to pay defendant permanent
alimony of $450,000 per year based on an income of
$1,313,000, but without a numerical finding of
lifestyle, we are unable to determine how the alimony
figure was derived. For these reasons, we reverse the
alimony award and remand for the trial judge to make
a numerical finding of the marital lifestyle and then
explain whether and how the alimony award meets it.

[S.W., No. A-4063-14 (slip op. at 40-41).]

In the August 27, 2018 order, the trial judge increased alimony to

$36,792 per month, and credited defendant's pendente lite support based on the

increase. In his November 9, 2018 order the judge reduced plaintiff's life

insurance obligation from $4 million to $2.2 million.

As to alimony the judge reasoned as follows:

[Defendant] testified that the marital lifestyle was
approximately $700,000 at one time, and then later
went to range from one million to one and a half
million dollars. Defendant's CIS[] dated September 1,
2011[,] claimed monthly expenditures of $92,147,
which, according to her, had only decreased to

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$90,142 after separation. In contrast, [p]laintiff's CIS,
filed with the court on January 8, 2013, indicated
marital lifestyle of $80,853, and post-separation
expenses for him of $63,540. However, this latter
number included pendente lite support as well as
considerable expenses for the children. Moreover,
[plaintiff] complained that the pre-separation lifestyle
number was inflated by [defendant] "overspend(ing)
on extravagancies", giving an example of her spending
$120,000 on a photography habit.

By 2014, the number submitted by the parties
had changed significantly. Defendant's CIS, as
submitted on May 23, 2014, indicated a monthly
lifestyle amount of $27,042. Plaintiff's CIS, as filed
with the court on May 21, 2014, indicated an amount
of $57,579, including the then current pendente lite
support amount of $22,000, as well as $12,500 for the
children's school costs. Taking away these two
amounts would represent a current lifestyle for
[plaintiff], as of the time of filing, of approximately
$23,000. However, as previously noted, at the time of
this court's initial decision, [plaintiff's] lifestyle was
supported by his expense account at [ZC].

The court, in reviewing [d]efendant's final CIS
prior to trial, finds same to be credible. The court is
also satisfied that the expenditures contained therein
do not represent true numbers of the lifestyle enjoyed
during the marriage. That is not to say that the court
accepts [p]laintiff's argument that the court can assign
a number that represents the actual lifestyle during the
marriage. As the court has previously found, the
parties lived a lifestyle which completely subsumed
[plaintiff's] income. There is simply no way to return
both parties to that exorbitant lifestyle. However,
[defendant's] CIS omits numerous spending categories
that should be accounted for to achieve a lifestyle
somewhat commensurate with the marital lifestyle.

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 At this point, the judge added back to defendant's current lifestyle

budget amounts representing some CIS schedule B and C line item expenses

he determined were reasonable to include in her budget. We do not repeat thi s

aspect of the findings because the judge's starting point was defendant's

current budget, as opposed to the marital lifestyle. At the conclusion of the

exercise, the judge stated "[b]ased upon the foregoing, the court determines

defendant's actual monthly need is $36,792."

On reconsideration, the judge reiterated his reasoning regarding the

alimony and did not elaborate further on the issue of marital lifestyle.

Regarding life insurance, relying on plaintiff's certification, which defendant

disputed, the judge explained his reasoning as follows:

And, finally, there's this issue of the . . .
insurance necessary. Of course, the insurance is
necessary as a surety against the payment of the
alimony. [A]pparently [plaintiff] has a three-million
dollar policy, I'm told in the papers. And the
argument is that at least . . . [$]2.2 million should be
guaranteed to [defendant] going forward, and that is
based on the alimony amount that the [c]ourt has
calculated spread over a five-year term.

At which point he will presumably, at least
potentially, reach an age of good faith retirement.
That . . . argument does resonate with the [c]ourt. I
did omit it from my decision, so I will order that $2.2
million be the surety amount through life insurance
. . . to protect [defendant's] interests . . . .

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 I.

In reviewing an alimony award, we typically defer to the trial judge's

findings and reverse only where there is an abuse of discretion. See Overbay

v. Overbay, 376 N.J. Super. 99, 106 (App. Div. 2005). We likewise review the

denial of reconsideration for an abuse of discretion. Cummings v. Bahr, 295

N.J. Super. 374, 389 (App. Div. 1996). However, where the issue is a mistake

of law, our review is de novo. S.D. v. M.J.R., 415 N.J. Super. 417, 430 (App.

Div. 2010) (citing Manalapan Realty, LP v. Twp. Comm. of Manalapan, 140

N.J. 366, 378 (1995)).

Defendant argues the trial judge set alimony based on her pendente lite

budget, which was far below the marital lifestyle. She argues the judge

disregarded our instructions to find the numerical lifestyle and explain

whether, and how, the alimony met it. Defendant argues the judge should have

used the budget for the intact family and then set a post-divorce budget for her.

She also asserts the Mallamo3 credit was erroneous due to the improper

lifestyle analysis. She argues the judge reduced the life insurance death

benefit for alimony by improperly speculating plaintiff would retire at the full

social security age. Defendant urges we exercise original jurisdiction to

finally decide these issues.

3
Mallamo v. Mallamo, 280 N.J. Super. 8 (App. Div. 1995).

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 II.

The importance of finding the marital lifestyle cannot be overstated. It

is at once the fixed foundation upon which alimony is first calculated and the

fulcrum by which it may be adjusted when there are changed circumstances in

the years following the initial award.

Alimony is an "economic right that arises out of
the marital relationship and provides the dependent
spouse with 'a level of support and standard of living
generally commensurate with the quality of economic
life that existed during the marriage.'" Mani v. Mani,
183 N.J. 70, 80 (2005) (quoting Stiffler v. Stiffler, 304
N.J. Super. 96, 99 (Ch. Div. 1997)). . . . "The basic
purpose of alimony is the continuation of the standard
of living enjoyed by the parties prior to their
separation." Innes v. Innes, 117 N.J. 496, 503 (1990)
(citing Mahoney v. Mahoney, 91 N.J. 488, 501-02
(1982)).

[Quinn v. Quinn, 225 N.J. 34, 48 (2016).]

The goal in fixing an alimony award "is to assist the supported spouse in

achieving a lifestyle that is reasonably comparable to the one enjoyed while

living with the supporting spouse during the marriage." Crews v. Crews, 164

N.J. 11, 16 (2000). "The standard of living during the marriage is the way the

couple actually lived, whether they resorted to borrowing and parental support,

. . . [or] limited themselves to their earned income," Glass v. Glass, 366 N.J.

Super. 357, 371 (quoting Hughes v. Hughes, 311 N.J. Super. 15, 34 (App. Div.

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10
1998)), or if they chose to accumulate savings. Lombardi v. Lombardi, 447

N.J. Super. 26, 36-37 (App. Div. 2016).

In contested divorce actions, once a finding is
made concerning the standard of living enjoyed by the
parties during the marriage, the court should review
the adequacy and reasonableness of the support award
against this finding. That must be done even in
situations of reduced circumstances, when the one
spouse's income, or both spouses' incomes in
combination, do not permit the divorcing couple to
live in separate households in a lifestyle reasonably
comparable to the one they enjoyed while living
together during the marriage.

[Crews, 164 N.J. at 26.]

In Hughes, the parties spent more than they earned and relied on

borrowing and parental support to meet the marital lifestyle. 311 N.J. Super.

at 34. The trial judge discounted these additional funds and determined the

lifestyle using only the family's earned income, which the judge termed the

"real" standard of living. Ibid. We held "[t]he judge . . . confused two

concepts. The standard of living during the marriage is the way the couple

actually lived, whether they resorted to borrowing and parental support, or if

they limited themselves to their earned income." Ibid.

In many cases, parties live above their means or spend their earnings and

assets to meet expenses. In such instances, a finding of the marital lifestyle

must consider what the parties spent during the marriage and not merely offer

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a nod to a bygone, unattainable lifestyle. In this case, the trial judge

overlooked the lessons from Crews and Hughes and our instruction to find,

numerically, the marital lifestyle. To the extent Crews and Hughes implicitly

required that marital lifestyle be determined numerically, we now explicitly

state a finding of marital lifestyle must be made by explaining the

characteristics of the lifestyle and quantifying it.

In a contested case, a trial judge may calculate the marital lifestyle

utilizing the testimony, the CISs required by Rule 5:5-2, expert analysis, if it is

available, and other evidence in the record. The judge is free to accept or

reject any portion of the marital lifestyle presented by a party or an ex pert, or

calculate the lifestyle utilizing any combination of the presentations.

Here, the trial judge disregarded the marital budget altogether and

instead supplemented defendant's current budget with some expenses she once

enjoyed during the marriage. This methodology is problematic because it

ignored the judge's own findings that the marital lifestyle "subsumed" the

entirety of plaintiff's earnings. By application of this logic, if the judge

determined the net yearly income was $1,520,268 4 or $126,689 per month, the

4
On remand, the trial judge adjusted his finding of the net yearly income from
$1,313,000 to $1,520,270. Notably, the record reflects expenditures near the
adjusted income figure. In evidence was a marital lifestyle analysis plaintiff
commissioned, reflecting expenditures of $1,600,104.

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alimony award allotted defendant disposable income of $36,792 5 and plaintiff

$89,897 per month without explanation. This was a misapplication of law

because it ignored Crews and N.J.S.A. 2A:34-23(b)(4), which requires a judge

consider "[t]he standard of living established in the marriage . . . and the

likelihood that each party can maintain a reasonably comparable standard of

living, with neither party having a greater entitlement to that standard of living

than the other."

To be clear, N.J.S.A. 2A:34-23(b)(4) does not signal the Legislature

intended income equalization or a formulaic application in alimony cases, even

where the parties spent the entirety of their income. Had the Legislature

intended alimony be calculated through use of a formula, there would be no

need for the statutory requirement that the trial court address all the statutory

factors. The Legislature declined to adopt a formulaic approach to the

calculation of alimony. See Assemb. 845, 216th Leg., 2014 Sess. (N.J. 2014)

(declining to enact legislation computing the duration of alimony based upon a

set percentage).

5
This figure excluded substantial expense line items enjoyed during the
marriage according to both parties' CISs, namely, a second home, boats, and
domestic help. Indeed, plaintiff's CIS nearest the trial date reflected a marital
lifestyle of $946,548 and defendant's CIS reflected $1,109,988 per year.

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 The portion of the marital budget attributable to a party is likewise not

subject to a formula. Contained in most marital budgets are expenses, which

may not be associated with either the alimony payor or payee, including those

associated with children who have since emancipated or whose expenses are

met by an asset or a third-party source having no bearing on alimony. There

are also circumstances where an expense is unrelated to either the payor or the

payee but is met by that party on behalf of a child. And, as is the case here

with defendant's photography hobby, there are expenses which only one party

incurred during the marriage. Therefore, after finding the marital lifestyle, a

judge must attribute the expenses that pertain to the supported spouse. Only

then may the judge consider the supported spouse's ability to contribute to his

or her own expenses and the amount of alimony necessary to meet the

uncovered sum. Crews, 164 N.J. at 32-33.

For these reasons, we again reverse and remand the alimony computation

and direct the judge to numerically determine the marital lifestyle and

apportion it. Because we have remanded the alimony computation, we do not

address the Mallamo credits, as they too will be adjusted based on the new

alimony award.

III.

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 The reversal of the alimony award also requires that we reverse and

remand the life insurance determination for reconsideration. The judg e relied

on N.J.S.A. 2A:34-23(j)(1), which states: "There shall be a rebuttable

presumption that alimony shall terminate upon the obligor spouse or partner

attaining full retirement age." The judge determined the $2.2 million coverage

amount by multiplying the alimony by five years, at which point plaintiff

would reach the full social security age.

A determination of the proper amount of life insurance coverage for a

support obligation requires a consideration of many variables. Where a party

is insurable and able to pay the necessary premiums, a life insurance death

benefit should neither only meet a beneficiary's bare needs, nor be a windfall.

In the former case, unexpected changes in circumstances can leave a

beneficiary with unmet needs, whereas the latter condition exposes a payor's

estate to obligations he or she never had during the marriage.

In the alimony context, "once the amount of the obligation is established,

the present value (or more correctly, the continuing present value as the

obligation decreases) should be determined." Lawrence J. Cutler & Robert J.

Durst, Life Insurance As a Security Vehicle In Dissolution Cases, 12 J. Am.

Acad. Matrim. Law 155, 161 (1994). Online present value calculators simplify

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the ability to perform this calculation. See, e.g., MSN, Present Value,

Microsoft News, https://www.msn.com/en-us/money/tools/timevalueofmoney/.

The present-day value methodology is appropriate where there is a

"known future quantity" of an obligation. Ibid. Where the alimony obligation

is not readily quantifiable because the duration of the obligation is unknown, a

trial judge may utilize an obligor's life expectancy to determine the duration of

the obligation if it is reasonable to do so. Life Expectancies for All Races &

Both Sexes, Pressler & Verniero, Current N.J. Court Rules, Appendix I-A,

www.gannlaw.com.

Additionally, a reduction in the amount of security as the obligation is

satisfied is an appropriate means of assuring alimony is secured but not subject

to a windfall. See Claffey v. Claffey, 360 N.J. Super. 240, 264-65 (App. Div.

2003) (stating "it is perfectly reasonable to provide for the periodic reduction

or review of the amount of . . . required security to reflect the diminishing need

for it as the parties age, or circumstances otherwise change."); see also

Lawrence J. Cutler & Robert J. Durst, Life Insurance As a Security Vehicle In

Dissolution Cases, 12 J. Am. Acad. Matrim. Law at 161 (endorsing a declining

death benefit). In some cases, where the obligation has the potential to extend

beyond an assumed end date because of a change in circumstances, or where a

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presumption of termination has been rebutted, it may be appropriate to

decrease the death benefit in smaller increments or not at all.

In alimony contexts, determining whether to use life expectancy or the

presumptive retirement age, and a fixed or declining amount of security will

depend on the circumstances of each case and is a matter of judicial discretion.

Here, there was no testimony, and only a disputed assertion regarding

plaintiff's potential retirement at the full social security age. Additionally,

because the alimony award is of an open duration and may not necessarily

terminate when plaintiff reaches the full social security age, the methodology

we have set forth will provide the trial judge with enough flexibility to

determine the extent and amount of life insurance needed.

IV.

Finally, we decline to exercise original jurisdiction to adjudicate this

appeal. We "may exercise . . . original jurisdiction as is necessary to the

complete determination of any matter on review." R. 2:10-5. "In determining

whether to exercise original jurisdiction, an appellate court not only must

weigh considerations of efficiency and the public interest that militate in favor

of bringing a dispute to a conclusion, but also must evaluate whether the

record is adequate to permit the court to conduct its review." Price v. Himeji,

LLC, 214 N.J. 263, 295 (2013). "Despite the utility of the original-jurisdiction

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authority, it is clear that resort thereto by the appellate court is ordinarily

inappropriate when fact-finding or further fact-finding is necessary in order to

resolve the matter." Pressler & Verniero, Current N.J. Court Rules, cmt. 1 on

R. 2:10-5 (2020) (citing Price, 214 N.J. at 294-95).

The trial judge should resolve the remaining disputes because having

heard the case and considered the testimony he has a "feel of the case." Cesare

v. Cesare, 154 N.J. 394, 411-13 (1998). Further testimony may or may not be

required to complete the remand. We are confident the trial judge will

adjudicate the remaining issues fairly and the matter should be left to him.

Reversed and remanded. We do not retain jurisdiction.

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