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 money from the business's cash receipts over the course of a few years. The husband turned to his divorce lawyer to ask whether alimony could 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 the removal of the alimony award. During the divorce proceeding, large deposits were discovered upon review of the defendant's privately held savings account and safe deposit boxes.

As a result, the plaintiff hired an accountant to examine the business's finances. It was discovered that the defendant had been diverting cash from the pharmacy in an amount of up to $400,000 between 2004 and 2008.

Based on the couple's long-term marriage and the plaintiff's ability to support himself while contributing to the defendant's support, the trial judge ordered the plaintiff to pay the 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 the plaintiff's argument that the defendant's egregious conduct should relieve him of any obligation to pay alimony.

At a minimum, he believed the court should have offset his alimony payments by the amount the defendant owed him, totaling $172,845, which represented half of the amount she wrongfully withdrew from the business.

On October 19, 2012, the Appellate Division decided in favor of the plaintiff-appellant and vacated the alimony award. The decision was based on the defendant's long-term scheme of embezzlement, which deprived the plaintiff of 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 relied on the third ground. 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 marital fault may be considered in determining whether alimony should be allowed at all. The first is where the fault has affected the parties' economic life. The second is where the fault so violates societal norms that continuing the economic bonds between the parties would confound notions of simple justice, as established in Mani v. Mani, 183 N.J. 70, 72 (2005).

To rise 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.

If you have any questions about alimony, or if you are in the process of or considering a divorce, contact the attorneys at Villani & DeLuca, P.C.

Our firm has three attorneys who practice solely in the area of family and divorce law, with a combined experience of over 45 years.

Call (732) 709-7757 today for your free initial consultation.