JUSTICE PATTERSON delivered the opinion of the Court.
In this appeal, the Court construes New Jersey's equitable distribution statute,
Plaintiff Michael J. Thieme (Thieme) and defendant Bernice F. Aucoin-Thieme (Aucoin-Thieme) were briefly married after an eight-year cohabitation. Before and during the marriage, Thieme was a salaried employee of a biotechnology consulting business, International Biometrics Group (IBG). Although Thieme had no ownership interest in IBG, its principals committed in writing to compensate him for his contributions to IBG's success, in the event that they sold their company. Thieme and Aucoin-Thieme made personal and financial decisions with the expectation that if IBG were sold, Thieme would receive substantial compensation. Thieme worked long hours and traveled extensively on IBG's behalf; Aucoin-Thieme devoted her attention to their child and home and did not seek employment. IBG, however, was not sold during the parties' marriage.
When Thieme and Aucoin-Thieme divorced, they agreed upon the terms of a Property Settlement Agreement (PSA), and their assets were divided in accordance with its terms. Three months after the Family Part's entry of a judgment of divorce, IBG was sold. IBG paid Thieme $2.25 million, characterized as a "Closing Bonus" (the Closing Bonus or the Bonus), granted in compensation for his contributions to the business for more than a decade of service.
In post-judgment proceedings before a Family Part judge, Aucoin-Thieme sought a share of the Closing Bonus. After a bench trial, the trial judge ruled that Aucoin-Thieme was entitled to equitable distribution; however, the equitable distribution was limited to the portion of Thieme's Closing Bonus that was attributable to his work during the parties' marriage and excluded any share of the remainder of that compensation. The Appellate Division affirmed the trial court's determination.
We affirm in part and reverse in part the Appellate Division's judgment. We concur with the trial judge and the Appellate Division that
We derive our summary of the facts from the trial record.
In 1999, Thieme was hired by a longtime friend, Raj Nanavati, to be the first employee of IBG, a company that Raj Nanavati founded with his brother, Samir Nanavati. IBG was a start-up biometrics consulting firm. It provided security services, including fingerprinting and facial identification technology, to businesses. Thieme began his employment with IBG as a consultant and later was assigned the title "Director of Special Projects."
From the inception of his employment at IBG, Thieme worked "non-stop" for the company; he devoted between ninety and one hundred hours per week to his job. He traveled to sixty countries in the course of his employment and was away from home for extended periods. Thieme was not given stock or any other ownership interest in the company. He was initially paid a salary of approximately $40,000 per year, and his salary eventually reached $180,000 per year.
Aucoin-Thieme was a resident of Mississippi, working for a rental car company, when she was introduced to Thieme by his sister in late 2000 or early 2001. A few months later, Aucoin-Thieme moved to Jersey City, where she temporarily lived in an apartment that Thieme shared with his sister. Aucoin-Thieme and Thieme began dating. During that period, Aucoin-Thieme held a series of jobs in retail businesses.
In May 2002, Aucoin-Thieme discovered that she was pregnant. According to Aucoin-Thieme, she and Thieme put money aside for a wedding that would follow their child's birth, but delayed their marriage because they needed to spend the money on other priorities. Thieme testified that they discussed marriage only "in the abstract" at that time, and made no definite plans. They moved into an apartment in Jersey City shortly after they learned of Aucoin-Thieme's pregnancy.
That month, Thieme approached IBG's owners about his position and compensation at the company. He drafted and sent to IBG's owners a document entitled "Statement of Understanding," which provided:
Raj Nanavati testified that he and his brother executed the Statement of Understanding with the "understanding if we sell the company, or cash out, we will take care of [Thieme]. We will give [Thieme] something extra." Thieme, however, testified that he considered the Statement of Understanding to be unenforceable because it did not quantify the proposed compensation. Thieme and Aucoin-Thieme dispute whether Aucoin-Thieme was aware of the Statement of Understanding during that period; he contends that he informed her about it, and she denies that he did so.
Shortly thereafter, Aucoin-Thieme left her retail position. She testified that she did so because she was concerned about the impact of her job and long commute on her pregnancy. The parties' daughter was born in January 2003.
Before and after their child's birth, the parties discussed the division of responsibilities in their personal and professional lives. Although Aucoin-Thieme hoped to pursue a career, Thieme and Aucoin-Thieme agreed that she would not seek a job outside the home, but would take care of their daughter and maintain their residence, as he continued to work on a demanding schedule. Thieme characterized this agreement as a "trade off" that enabled the parties to live on his salary, in light of their shared view that his earning capacity substantially exceeded hers. He recalled that the parties agreed that a return to work would not be cost-effective for Aucoin-Thieme because, if she obtained a job, they would incur significant expenses for child care. With the exception of a brief per diem job as a substitute teacher at her daughter's preschool, Aucoin-Thieme was not employed outside the home after the birth of the child.
According to Aucoin-Thieme, in addition to caring for her daughter and performing nearly all of the household tasks, she conducted minor repairs on the home, paid the bills, and managed the parties' rental properties. The parties dispute the extent of Aucoin-Thieme's assistance in the advancement of Thieme's career. She contends that she actively participated in social activities connected with his job, and he denies that his employment involved significant social obligations.
In 2006, IBG's owners conducted what Thieme characterized as "very preliminary discussions" with a biometric vendor about the potential sale of the business. According to Aucoin-Thieme, Thieme told her at that time that he had a contract that would entitle him to share in the proceeds of any sale, and the parties bought a new home in anticipation of that compensation. The discussions, however, did not lead to a sale of IBG. Shortly thereafter, Thieme, Aucoin-Thieme, and their daughter moved to Virginia so that Thieme could oversee an important government contract for IBG. They remained in Virginia for approximately three years and moved back to New Jersey in 2009.
The parties' relationship, volatile from its inception, deteriorated following their return to New Jersey. The primary focus of their dispute was Thieme's employment at IBG. Aucoin-Thieme resented Thieme's work hours and disliked the owners of the company. At various times, Thieme and Aucoin-Thieme accused one another of verbal and physical abuse, often using e-mail to exchange angry communications.
At the conclusion of a series of acrimonious e-mails written in July 2010, Thieme wrote:
In an e-mail discussion about a potential settlement of their dispute with the assistance of legal counsel, written after Aucoin-Thieme threatened to move to Mississippi with their daughter, Thieme advised Aucoin-Thieme that her counsel would "be shocked as to how much money I will give you," but that he needed "to have the situation with my daughter resolved."
Notwithstanding their frequent discord and vitriolic e-mail exchanges, Thieme and Aucoin-Thieme married in August 2010. Although the parties agree that their marriage began on a positive note, their relationship worsened shortly after their wedding. According to Thieme, Aucoin-Thieme's demands that he shorten his hours and respond immediately to e-mail messages that she sent to him during the workday imperiled his job at IBG.
The parties' conflict reached a critical point in October 2011. In the wake of a dispute over e-mails that Thieme exchanged with a co-worker, Aucoin-Thieme sent a series of inflammatory e-mails about Thieme to IBG's owners and employees. In the e-mails, Aucoin-Thieme contended that she had a video of an altercation between the two in the presence of their daughter. She called the company's owners disparaging names and demanded that they pay her money that she insisted was owed to her. Aucoin-Thieme then sent an e-mail to Thieme, asking whether he was "ready to give [her] a divorce" in the wake of that episode.
Only fourteen months after the parties' wedding, Thieme filed a complaint for divorce in the Family Part. With the assistance of counsel, Thieme and Aucoin-Thieme negotiated the equitable distribution of their assets, alimony, child support, and the custody of their child.
During their negotiations, the parties communicated by e-mail about the prospect that IBG would pay deferred compensation to Thieme. Thieme advised Aucoin-Thieme that he did not "expect to get any large lump-sum bonuses," but that "if some magical $50K bonus appeared, then I'd wind up clearing $30K, and we can make some arrangement—e.g. split it 50/50?" A week later, Thieme confirmed to Aucoin-Thieme that, notwithstanding their "discussions . . . about me someday getting an ownership stake [in IBG]," he had "no idea if it will ever happen, or how it will be structured, or the value." He added that IBG's grant of an ownership interest "may never happen. It will certainly not happen anytime soon." In another e-mail, Thieme added that any stake in IBG awarded to him "would be defined, probably, as stocks," and that he did not anticipate "a big cash payment."
Thieme also asked Aucoin-Thieme to identify what she considered to be her fair percentage share of any "potential income/assets I make if I ever accept a buyout[.]" Aucoin-Thieme did not commit to any specific percentage. Again by e-mail, Thieme stated that although there had been no discussions of a sale of IBG since 2006, he viewed Aucoin-Thieme's claim to his assets to date back to the time of their daughter's birth. He reiterated his view that IBG would not be sold "soon," but again asked her to quantify her claim to "a future ownership stake" in the company. She did not do so.
A month later, Thieme urged Aucoin-Thieme not to delay the settlement of their dispute "based on something that may never happen." He reassured her that if he were awarded "ownership in IBG" in the future, "we are going to need to revisit" the issue. Thieme reiterated that he had no contract with IBG; he represented that there was "absolutely nothing at all stating that I am going to ever get any part of" the company. He suggested that the parties discuss the issue later, in the event that he acquired an interest in IBG.
In April 2012, Thieme and Aucoin-Thieme executed their PSA. Pursuant to its terms, the parties evenly divided their identified assets — whether those assets were acquired during their lengthy period of cohabitation or their brief marriage — and resolved issues of alimony, child support, and visitation. The PSA provided that neither party owned "any businesses or any interests whatsoever in any businesses which are subject to equitable distribution" and that the agreement had no binding effect on undisclosed assets. The PSA did not address any deferred compensation anticipated by the parties.
Shortly after the trial court entered a final judgment of divorce on June 20, 2012, Aucoin-Thieme moved to Mississippi with the parties' daughter. Thieme rented an apartment near Aucoin-Thieme's Mississippi home and spent time with the child in accordance with the visitation schedule set forth in the PSA.
Three months after the entry of the parties' judgment of divorce, IBG's owners entered into an agreement to sell IBG to another company. Shortly before the closing, Raj and Samir Nanavati executed a document offering Thieme the Closing Bonus, described as "a one-time bonus in the amount of $2,250,000" contingent on the closing of the sale. The document referenced the "Statement of Understanding" that was executed in 2002. IBG's owners represented that the Closing Bonus was offered pursuant to the Statement of Understanding, "to show our appreciation for [Thieme's] contributions in helping [IBG] grow into the successful organization that it is today."
In a deposition taken in this action, Raj Nanavati testified that IBG offered Thieme the Closing Bonus in accordance with the Statement of Understanding. He stated that the Closing Bonus was "[b]ased upon [Thieme's] contribution to the company over the 13 years[.]" He testified that Thieme was not told about the sale of IBG until the sale was completed.
It is undisputed that Thieme did not inform Aucoin-Thieme that IBG had awarded him the Closing Bonus. She first learned of the Bonus when Thieme deposited $200,000 into a bank account that, unbeknownst to Thieme, remained a joint account despite the divorce. With no notice to Thieme, Aucoin-Thieme withdrew the deposited funds from the joint account.
Thieme filed a complaint in the Chancery Court of Harrison County, Mississippi, Second Judicial Circuit. In addition to seeking the Mississippi court's intervention in a visitation dispute, Thieme asked the court to hold Aucoin-Thieme in contempt for withdrawing the contested funds from the bank account. Aucoin-Thieme filed a counterclaim. Among other claims, she alleged that Thieme committed fraud by failing to inform her, prior to the parties' divorce, that he would be receiving a substantial amount of money by virtue of IBG's sale. Aucoin-Thieme then relocated to New Jersey, and the Mississippi matter was transferred to the Family Part.
After discovery, a Family Part judge conducted a three-day bench trial addressing two related issues: whether Aucoin-Thieme was entitled to a share of Thieme's Closing Bonus, and whether she would be permitted to retain, or ordered to return, the $200,000 that she withdrew from the parties' joint account.
At the conclusion of the trial, the court determined that the Closing Bonus was earned by Thieme throughout his entire employment with IBG. The trial court found that Aucoin-Thieme was entitled to a share of that portion of the Closing Bonus that was earned by Thieme during the parties' fourteen-month marriage. It concluded, however, that Aucoin-Thieme was not entitled to equitable distribution of any portion of the Closing Bonus that was earned by Thieme during the period in which the parties cohabited prior to their marriage, because of
In accordance with its ruling, the trial court allocated the $2,250,000 Closing Bonus. It concluded that in the course of his employment, Thieme earned the Closing Bonus at a rate of $14,423 per month. Multiplying that amount by a factor of fourteen, the court ruled that during the parties' marriage, Thieme earned deferred compensation in the amount of $201,923. The trial court then determined that Thieme's net income from the allocated portion of his Bonus, after the deduction of taxes, was $100,961. It subjected that amount to equitable distribution under
Aucoin-Thieme appealed the trial court's judgment. She contended that she was entitled to a share of the portion of the Closing Bonus that the trial court allocated to the years in which the parties cohabited prior to their marriage. She premised that claim on alternative theories: equitable distribution under
We granted Aucoin-Thieme's petition for certification. 224 N.J. 245 (2016).
Aucoin-Thieme argues that the trial court improperly construed the equitable distribution statute,
Thieme counters that the trial court correctly concluded that
We review the Family Part judge's findings in accordance with a deferential standard of review, recognizing the court's "special jurisdiction and expertise in family matters."
A more exacting standard governs our review of the trial court's legal conclusions. "Although a family court's factual findings are entitled to considerable deference, we do not pay special deference to its interpretation of the law.... [T]he trial court is in no better position than we are when interpreting a statute or divining the meaning of the law."
We first review the trial court's determination that only the portion of Thieme's Closing Bonus attributed to the work that he performed during the parties' fourteen-month marriage was subject to equitable distribution, and that the remainder of the Bonus, earned prior to the marriage, was exempt from equitable distribution.
The equitable distribution statute authorizes the Family Part to distribute assets "in all actions where a judgment of divorce, dissolution of civil union, divorce from bed and board or legal separation from a partner in a civil union couple is entered."
The Legislature has limited the property that is subject to equitable distribution to "property, both real and personal, which was legally and beneficially acquired by them or either of them during the marriage or civil union."
"[T]he sole function of the courts is to enforce [the statute] according to its terms."
Aucoin-Thieme relies on two Appellate Division decisions,
We agree with the trial court and Appellate Division that if the portion of Thieme's Closing Bonus that was earned prior to the marriage were held to be a marital asset, such a ruling would contravene the plain language of
Our rejection of Aucoin-Thieme's claim for equitable distribution of the portion of the Closing Bonus allocated to the period prior to the parties' marriage does not end the inquiry. Aucoin-Thieme has also asserted claims based on equitable principles. As a remedy for alleged unjust enrichment, Aucoin-Thieme seeks a constructive trust and an allocation of a percentage of the Closing Bonus that was earned by Thieme while they cohabited prior to their marriage.
"The Family Part is a court of equity."
As this Court has noted, "[e]quities arise and stem from facts which call for relief from the strict legal effects of given situations."
To prove a claim for unjust enrichment, a party must demonstrate that the opposing party "received a benefit and that retention of that benefit without payment would be unjust."
In the event that a court finds unjust enrichment, it may impose a constructive trust. That remedy has been described as "the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee."
Notwithstanding the failure of the plaintiff's statutory claims in
The Court observed that judges can "[`]presume that the parties intended to deal fairly with [each other'] [and will] [`]employ the doctrine of
The principles expressed in
The parties' shared anticipation that Thieme would be paid deferred compensation was more than wishful thinking. Given IBG's written commitment to Thieme, and its owners' genuine desire to reward their valued employee, both parties had reason to anticipate a significant payment in the event of a sale. Whether the Statement of Understanding constituted a legally binding contract or an unenforceable expression of IBG's plan, it conveyed an important message. IBG's owners acknowledged their intention to compensate their key employee and longtime friend in a manner commensurate with his pivotal role in the success of their business. That confirmation occurred early in the relationship between the parties. Although the parties dispute the timing and content of their discussions about the Statement of Understanding, it is clear that on multiple occasions Thieme advised Aucoin-Thieme about his expectation that any sale of IBG could generate a substantial financial reward for their family.
Although the prospects for IBG's sale were for many years uncertain, and the company's owners were not in a position to quantify Thieme's compensation until the September 2012 sale, IBG's commitment to reward him was an important consideration in the decisions made by the parties throughout their cohabitation and marriage. Despite his grueling schedule and its impact on his family, Thieme was determined to retain his job. Although he understood Aucoin-Thieme's desire to work outside of the home, Thieme firmly opposed any suggestion that he pursue less demanding employment and take on a more active role in their daughter's care so that she could seek work outside the home. He reasoned that his work at IBG was crucial to the family's future. In short, as they planned their finances and personal lives, Thieme and Aucoin-Thieme anticipated that they might someday share in the proceeds of the company's sale.
During the parties' eight years of cohabitation, and for most of their brief marriage, Aucoin-Thieme undertook significant efforts to support Thieme's challenging career. As Thieme acknowledged, Aucoin-Thieme ably shouldered almost all of the responsibility for caring for their daughter. She maintained and repaired their homes, managed their rental properties, and paid the bills. With the exception of a brief per diem job substitute teaching at her child's preschool, Aucoin-Thieme did not pursue a career or return to school. She moved with Thieme and their daughter to Virginia to accommodate IBG's need to assign Thieme to an important contract. There is no doubt that Aucoin-Thieme was at times disruptive and abusive when Thieme was working, and the series of inflammatory e-mails that she sent to his employer and co-workers in October 2011 could have derailed his career. Thieme was not without fault either, as he admitted.
Indeed, Thieme himself recognized that Aucoin-Thieme's contributions to their family should be rewarded. He acknowledged Aucoin-Thieme's "great sacrifice" of her "career and educational aspirations" to care for their daughter. He committed to support her "fully." Thieme expressly recognized that his obligation to financially support Aucoin-Thieme implicated, to some extent, any compensation that he would receive in the event that IBG were sold. He assured Aucoin-Thieme that if he received an unexpected bonus, they would split that bonus, after the deduction of taxes. Thieme represented that he viewed Aucoin-Thieme's claim to share in his assets to date back to 2003, when their child was born.
Accordingly, the record supports the conclusion that Aucoin-Thieme's decision not to seek further education and employment was made, at least in part, in reliance on Thieme's financial commitment to her. Aucoin-Thieme clearly made decisions regarding her future in light of IBG's unequivocal expression of its intent to fairly compensate Thieme if it had the opportunity to do so, and Thieme's repeated representations that he would generously support her in return for her efforts on the family's behalf. Even as the parties negotiated the terms of their divorce, Thieme suggested to Aucoin-Thieme that if IBG were sold and he were afforded a portion of the proceeds, that payment would be shared with her.
Thieme's Closing Bonus, however, materialized three months after the parties' divorce was finalized — too late to be divided, along with other assets, in the PSA.
As a remedy, a percentage of the portion of the Closing Bonus that Thieme earned during the period in which the parties cohabited prior to their marriage should be deemed to be held by Thieme in constructive trust for Aucoin-Thieme.
On remand, the court should make those determinations based on the comprehensive record presented at trial.
The judgment of the Appellate Division is affirmed in part and reversed in part, and the matter is remanded to the Family Part for proceedings consistent with this opinion.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE PATTERSON's opinion.