Equitable Distribution of Stock Options in Divorce

M.G. v. S.M. is a post-judgment divorce matter where the marital coverture share of a stock award vesting after the filing of the divorce complaint was sought by the Defendant. The parties married in 1998. Every August, from 2003 through 2010, the Plaintiff received a stock award from his employer which would vest in stages thereafter, beginning in 2011. On July 28, 2014, Plaintiff filed the divorce complaint. By that time, M.G. had been granted eight stock awards but only three had fully vested with the remainder to vest annually thereafter, each August. The company’s policy was reviewed and specifically stated that employees were granted stock to compensate them for long-term contributions to the company’s success and that the stock awards “represent the future right to receive shares…when a vesting requirement is satisfied.” According to the Plaintiff, the stock awards are a way for the employer to retain employees and give them reason to drive the stock higher through personal performance. Plaintiff did agree to share the vested stocks with the Defendant but maintained that any non-vested stock would vest only if he continued to perform at higher levels following the filing of the divorce complaint. The trial judge found that S.M. was entitled to one-half of all stocks awarded before or near the date of the complaint. In his opinion, the trial judge found Plaintiff to be credible and Defendant non-credible. In his written opinion, the judge went on to include that the stock awards of 2014 were based on the Plaintiff’s past performance, which was rendered during the marriage. The Plaintiff filed a motion for reconsideration with which he submitted documents from his employer spelling out the fact that post-award changes in employment status, hours, leaves, disability, and otherwise “shall” affect the employee’s rights in stock awards in support of his argument that the non-vested options did not belong, in part, to the Defendant. The motion was denied. Plaintiff appealed to the New Jersey Appellate Division. In Pascale v. Pascale, 140 N.J. 583 (1995) and Reinbold v. Reinbold, 311 N.J. Super. 460 (App. Div. 1998), the court held that options and other incentives earned during the marriage, even if distributed later, are subject to equitable distribution. The trial judge misapplied these cases to stock awards that would be earned after the marriage. In Slutsky v. Slutsky, 451 N.J. Super. 332, 344 (App. Div. 2017), the court held that “reversal is warranted when the trial court’s factual findings are ‘so manifestly unsupported by or inconsistent with competent, relevant and reasonably credible evidence as to offend the interests of justice.” In Clark v. Clark, 429 N.J. Super. 61, 71 (App. Div. 2012), the court determined that a family judge has wide discretion in the distribution of assets which are subject to equitable distribution, however, in the within case, the trial judge’s findings were not supported by credible evidence and controlling legal principles pursuant to the terms of Gonzalez-Posse v. Ricciardulli, 410 N.J. Super. 340, 354 (App. Div. 2009). In Pascale, the Supreme Court upheld its earlier decision from Landwehr v. Landwehr, 111 N.J. 491, 504 (1988), wherein the court held that when equitable distribution is sought for assets received post complaint, the touchstone becomes whether the asset was acquired as a result of efforts during the marriage, in which case the asset is subject to equitable distribution, or post-complaint in which case it belongs to the spouse who still must earn the asset. The N.J. Appellate Division panel determined that the trial judge was incorrect in his decision. The matter was reversed and remanded to the trial judge for findings pursuant to applicable case law and N.J.S.A. 2A:34-23.1. If you are considering divorce or have been served with divorce papers, you should consult with an experienced family law attorney in order to insure that your rights are protected. For more information about divorce, post-judgment motions, equitable distribution or other family law matters, visit DarlingFirm.com. To schedule a consultation, call us today at 973-584-6200. This blog is for informational purposes only and not intended to replace the advice of an attorney.

Woman Contests Judge's Decision To Make Her Pay Permanent Alimony

In the New Jersey case Sanchez v. Sanchez, a woman appealed from a trial court judge's issuance of a dual judgment of divorce that ordered her to pay permanent alimony to her husband. Following the parties' divorce trial, Judge Patricia A. Roe, J.S.C., entered a dual judgment of divorce ordering the Plaintiff wife to pay permanent alimony to the Defendant husband in the sum of $200 per week, each party was to retain their own retirement or investment accounts, and the Plaintiff was to pay the Defendant $2,500 in counsel fees from her share of the proceeds of the sale of the marital residence. The Plaintiff appealed from this decision and the Appellate Division affirmed the decision of the lower court. The parties were married in 1996 and had one child, a daughter born in 1998. The parties separated in 2010 and the Defendant moved from Jackson to Jersey City. The Plaintiff remained in the marital home with the parties' daughter and her elderly father. The Plaintiff had earned a bachelor's degree in nursing from a university in the Philippines and worked as a neonatal intensive care unit nurse at a hospital earning $92,000 a year. In 2009 and 2010 she filed separate tax returns and claimed her daughter and mortgage interest as deductions - which she did not share with the Defendant. Plaintiff admitted that she took a $28,000 loan from her 401K plan and $6,500 loan from a home equity line of credit to cover her living expenses. The Defendant earned a bachelor's degree in accounting from a university in the Philippines. In 2009 he earned nearly $65,000 which reflected his highest annual compensation. Soon after he became unemployed and was unable to find work. He received unemployment compensation until his benefits expired and his total income for 2011 was $20,000. In her appeal the Plaintiff argues that the judge erred in awarding the Defendant permanent alimony as both had worked throughout the marriage and that her income did not "significantly exceed" the Defendant's income. The Appellate Court held that: "the goal of a proper alimony award is to assist the supported spouse in achieving a lifestyle reasonably comparable to the one enjoyed while living with the supporting spouse during the marriage." Steneken v. Steneken, 183 N.J. 290, 299 (2005). "When determining whether an award of alimony is warranted, a trial judge must issue 'specific findings on the evidence' presented, N.J.S.A. 2A:34-23(c), weighing the objective standards delineated in N.J.S.A. 2A:34-23(b)." Clark v. Clark, 429 N.J. Super. 61, 73 (App. Div. 2012). In its disposition, the Appellate Court found that the trial court judge's conclusions were amply supported by the evidence presented at trial and therefore her decision was affirmed. If you anticipate that you may want to petition the court for a modification of your alimony award or any other relief that was awarded in a final judgment of divorce it is imperative that you seek out the advice of an experienced attorney before moving forward. For more information about divorce, alimony, child support, equitable distribution, or other family law matters in New Jersey visit DarlingFirm.com. This blog is for informational purposes and in no way is intended to replace the advice of an attorney.