Wife’s Withdrawal of Almost $400,000 from Marital Business Discovered
This October, the Superior Court Appellate Division reversed a trial court’s award of alimony based on the defendant’s long-term scheme to embezzle over $345,000 from the family business during the marriage. The defendant’s wife served as the bookkeeper for the family pharmacy business and secretly withdrew the money from the business’s cash receipts over the course of a few years. The husband turned to his divorce lawyer, to learn ” can alimony be reversed in this type of case?”. The wife’s embezzlement caused “more than a mere economic impact” on the marital assets, enough to justify a removal of an alimony award.
In the review of defendant’s privately-held savings account and safe deposit boxes during the divorce proceeding, large deposits were discovered. As a result, the plaintiff hired an accountant to examine the business’s finances. It was discovered that defendant was diverting cash from the pharmacy in an amount up to $400,000 between the years of 2004 and 2008. Based on the couple’s long-term marriage and plaintiff’s ability to support himself while contributing to defendant’s support, the trial judge ordered plaintiff to pay defendant permanent alimony of $600 per week.
Husband Appealed Alimony Award Based on Wife’s Egregious Conduct
At the center of the appeal in Clark v. Clark, Superior Court Appellate Division, Docket No. A-1147-11T1, is plaintiff’s argument that defendant’s egregious conduct should relieve him of any obligation to pay her alimony. At the very minimum, he believed the court should have offset his alimony payments by the amount that defendant owed him, totaling $172,845 (half of the amount she wrongfully withdrew from the business).
On October 19, 2012, the Appellate Division decided in favor of plaintiff-appellant and vacated the alimony award based on defendant’s long-term scheme of embezzlement which deprived plaintiff of his deserved income and affected the family’s future security in violation of societal norms. The case was returned to the trial court for further consideration.
Alimony May be Denied Based on Spouse’s Marital Misconduct
An appellate court will reverse a trial court’s decision only if it is determined that the judge abused his or her discretion in one of three ways: (1) the stated findings were mistaken; (2) the determination could not have reasonably been reached on the evidence presented; or (3) the judge failed to consider all of the controlling legal principles. Here, the Appellate Division relies on the third. N.J.S.A. 2A:34-23(g) provides that a trial court may consider facts supporting marital fault when determining the amount of an alimony award, although it is not usually weighed heavily.
There are two exceptions in which the marital fault may be considered in determining whether alimony should be allowed at all – where “the fault has affected the parties’ economic life” and where “the fault so violates societal norms that continuing the economic bonds between the parties would confound notions of simple justice.” Mani v. Mani, 183 N.J. 70, 72 (2005). To rise up to the level of “egregious fault”, one’s marital misconduct must fraudulently and purposefully deprive his or her spouse of the economic benefits of the marriage in violation of societal norms.
Villani & DeLuca, P.C.
Contact the attorneys at Villani & DeLuca, P.C. if you have any questions about alimony or if you are in the process of or considering a divorce. Villani & DeLuca, P.C. has three (3) attorneys who practice solely in the area of family and divorce law who have an aggregate of over forty-five (45) years of experience. Please call 732-965-3350 today for your free initial consultation.