Overall the Supreme Court of New Jersey had another busy year, but not in the area of family law. The matrimonial bar was treated to only two significant decisions, neither of which was particularly earth shattering, one on the constitutionality of the Prevention of Domestic Violence Act, and the other on distribution of assets after the death of a party to a divorce action. In both cases, the Court released per curium decisions, looking to public policy and equitable considerations in reaching their determinations.
In Crespo v. Crespo , 201 N.J. 207 (2010), the Court declared the Prevention of Domestic Violence Act to be constitutional based substantially on the reasons expressed by Judge Fisher in the Appellate Division. See Crespo v. Crespo , 408 N.J.Super. 25 (App. Div. 2009).
Incredibly, on an application by the husband to vacate a final restraining order, a trial court judge found that the Prevention of Domestic Violence Act was unconstitutional. The judge held that the act’s practice and procedure components violated the separation of powers doctrine, and that the standard of proof required by the act (preponderance of evidence) violated due process principles. The judge, however, rejected the husband’s other claims of unconstitutionality such as infringement on his Second Amendment right to bear arms and the right to trial by jury. As stated, the Appellate Division reversed and the Supreme Court affirmed the Appellate Division.
Crespo was not the first case in which the Appellate Division ruled that the Act was constitutional. Seventeen years earlier, in Roe v. Roe, 253 N.J. Super. 418, 427-31 (App. Div. 1992), the argument that the standard of proof in a domestic violence matter should be higher (such as by clear and convincing evidence) was rejected. The Roe Court held that due to the interests at stake and the fact-finding required of Family Part judges in domestic violence matters, a standard of proof more demanding than preponderance of the evidence would undermine the social purposes of the act. The Court in Roe found that the preponderance standard better serves the purpose of the Act in protecting victims of domestic violence because allegations of domestic violence are often difficult to prove due to their private nature and there are usually few, if any, eyewitnesses to marital discord or domestic violence.
The Appellate Division made it clear in Crespo that the trial court erred in not following the clear precedent as set forth in Roe. Specifically, the Appellate Division indicated that the trial court “judge was privileged to disagree with Roe , but he was not free to disobey.”
Judge Clarkson S. Fisher Jr., the Appellate Division judge in Crespo , discussed the husband’s assertion that the procedural requirements embedded in the act violated the Separation of Powers doctrine and rejected it as “utterly without merit.” Judge Fisher found that “[r]ather than viewing the Act’s procedural components as usurping its exclusive constitutional authority over the practices and procedures utilized in the courts, the Supreme Court has embraced and enhanced the Act’s procedural components by adopting Rule 5:7A and by participating with the Attorney General in the creation of a Domestic Violence Manual that also incorporates the procedures contained in the Act.” It should be noted, as stated in the Appellate Division opinion, that the act’s procedural provisions are cited throughout R.5:7A, and that the State’s Domestic Violence Procedures Manuel can be found on-line.
In Kay v. Kay, 200 N.J. 551 (2010), the Court again adopted the reasoning in an Appellate Division opinion, this one authored by Judge Jane Grall (See Kay v. Kay , 405 N.J. Super. 278, 281 (App. Div. 2009)), referring to it as a “thoughtful decision on [a] novel question.” In affirming, the Supreme Court determined that an executor of a deceased spouse’s estate may step in and litigate a pending divorce action on behalf of the deceased spouse in order to preserve said spouses equitable interest in the marital enterprise.
The parties were married in 1973, a second marriage for both. There were no children born of the marriage but the wife had one daughter and the husband had two children from prior marriages. The parties separated in 2005. The wife (age 70) filed for divorce in 2006 and the husband (age 83) filed a counterclaim. When the parties sold the marital residence in 2005, they agreed to each take one-quarter of the proceeds and leave the balance of approximately $81,000 in escrow until they could agree upon its distribution. The parties other assets were a joint brokerage account of about $87,000, and stock with a value of approximately $11,000 in the husband’s name. As part of the divorce matter, the husband certified that he estimated the wife, who had managed the parties’ finances for many years, to be holding a total of $650,000 in assets, and that he held approximately $50,000 in assets in his name. It was also alleged that during the marriage, the wife took marital property and put it in her name alone or in her name jointly with her daughter. In May 2007, an order was entered prohibiting further dissipation of marital assets. On August 30, 2007, the husband died. His will, needless to say, excluded the wife as a beneficiary. In September 2007, the wife attempted to withdraw the funds being held in escrow from the sale of the former marital residence but she was unsuccessful. After filing a stipulation dismissing the divorce action, which was not executed by the husband’s attorney, the wife transferred the joint brokerage account into her name solely. Sadly, the husband’s estate did not include sufficient monies to cover his burial expenses.
The husband’s estate sought to intervene and to substitute for the husband in the divorce action. The husband’s estate sought the establishment of a constructive trust to prevent the unjust enrichment of the wife which he claimed would occur if she and her daughter were allowed to retain the marital property that rightfully belonged to the husband and his estate. This application was denied and the trial court dismissed the divorce action.
On appeal by the husband’s estate, the Appellate Division reversed, holding that the substituted pleadings should have been accepted and the court should have “considered whether the equities stemming from the facts alleged call for relief from the strict legal effects of defendant’s death during the pendency of the divorce action.”
The Appellate Division looked to the seminal case of Carr v. Carr , 120 N.J. 336 (1990), in determining this matter. Kay was the opposite of Carr, which permitted a surviving spouse to continue divorce litigation for the limited purpose of proving that the deceased spouse had diverted marital assets. Despite the finding in Carr, two decades ago, that “in limited circumstances, equity permits one spouse to continue divorce litigation following the death of the other,” the trial court in Kay denied the husband’s estate the ability to intervene in his place in order to obtain his equitable share of the marital property. As in Carr , the husband’s estate claimed that “marital assets had been wrongfully diverted by one spouse to the detriment of the other.” The estate did not seek to raise new claims; but rather “to continue claims raised before death … which, in fairness, should not be extinguished lightly or prematurely.”
When one spouse dies during the pendency of a divorce action, the divorce action terminates and equitable distribution is unavailable. However, “the statutes do not reflect a legislative intent to extinguish property entitlements and marital property does not lose its essential and distinctive nature as property arising from the joint contributions of both spouses during the marriage because of the death of one spouse during the pendency of divorce proceedings.” As set forth in Carr, the New Jersey “Supreme Court has held that upon a sufficient evidentiary showing, courts should invoke the equitable remedy of constructive trust and principles of quasi-contract to avoid the unjust enrichment that would occur if the marital property devolving to [a decedent-spouse's estate] included the share beneficially belonging to the surviving spouse.”
In Carr , the deceased spouse had the majority of the assets titled in his name and thus, a constructive trust was set up for the spouse who had no other access to the marital estate and no right to an elective share since the divorce litigation was filed. In Kay, however, the deceased spouse was the one without the majority of the assets in his name and the surviving spouse had access to the marital funds. The Appellate Division held that despite the differences in the fact patterns of Kay and Carr, the same equitable principles apply:
Nothing about the nature and purpose of the equitable remedies applied in Carr warrants automatic rejection of claims asserted by the estate of a decedent spouse. Constructive trusts are invoked to prevent unjust enrichment or fraud. When property has been acquired in such circumstances that the holder of legal title may not in good conscience retain the beneficial interest, equity converts the owner into a trustee. On the same principles and the presumption that parties intend to deal fairly with one another, quasi-contractual obligations are imposed. … While Carr does not expressly authorize imposition of a constructive trust in favor of the estate of a decedent spouse to avoid unjust enrichment of the surviving spouse, the implication of Carr ‘s holding, which limits the surviving spouse’s recovery to the share of the marital property beneficially belonging to her, is that an estate justly retains marital property beneficially belonging to the decedent spouse.
The Supreme Court affirmed that public policy dictates an equitable result and although “the prospect of an estate continuing a battle over marital property that cannot be completed by a spouse who died while the divorce was pending is unpleasant, …a rule that would preclude an estate from obtaining an equitable remedy in all cases has the potential to encourage spouses to treat each other unfairly prior to and during the divorce proceedings.” Thus, “when the estate of a spouse who died while an action for divorce is pending presents a claim for equitable relief related to marital property, the court may not refuse to consider the equities arising from the facts of that case solely on the ground that the estate may not assert equitable claims against the marital estate sounding in constructive trust, resulting trust, quasi-contract or unjust enrichment.”
Snyder is a partner at Snyder & Sarno in Roseland. He is a past president of the New Jersey chapter of the American Academy of Matrimonial Lawyers and a past chairman of the New Jersey State Bar Association, Family Law Section. He gratefully acknowledges Stacey A. Cozewith, an associate at the firm, for her assistance in the preparation of this article.