JACQUELINE R. HERSCH VS. NATHAN J. HERSCHÂ (FM-07-2100-09, ESSEX COUNTY AND STATEWIDE)
A-2339-15T3
| N.J. Super. Ct. App. Div. | Jul 28, 2017Background
- Divorce judgment entered 2010 after 15-year marriage with two minor children; parties executed a detailed marital settlement agreement (MSA) allocating base and "additional" alimony and child support tied to bonuses, deferred compensation, stock, and other forms of compensation.
- MSA: base child support $16,900/year; additional child support = 8% of gross bonus/other compensation received as cash.
- MSA: base alimony $27,000/year for 12 years 3 months; additional alimony = 25% of the difference between Husband's cash bonuses/compensation and Wife's cash compensation (subject to caps and reporting/exchange obligations).
- Husband (Nathan Hersch) received substantial severance payments after post-divorce layoffs (portions received in 2011–2015); he reported severance as wages on federal returns.
- Wife (Jacqueline Hersch) sought orders to treat severance as income under the MSA and to collect additional alimony and child support; trial judge entered orders requiring Husband pay additional sums, scheduled arrear payments, denied modification, and awarded Wife $10,000 counsel fees.
Issues
| Issue | Plaintiff's Argument (Wife) | Defendant's Argument (Husband) | Held |
|---|---|---|---|
| Whether severance pay is "compensation/earned income" under the MSA for calculating additional alimony | Severance is includable as earned income and triggers additional alimony per MSA language | Severance is more like damages for termination, not compensation; requires factual hearing; should be treated as replacement for lost wages only for a limited period | Court: MSA language is clear and broad; severance is reportable wages under federal law and MSA; no plenary hearing required; include severance for additional alimony |
| Whether a plenary evidentiary hearing was required to resolve parties' differing contract interpretations | Interpretation can be resolved as a question of law from clear contract language | Husband argued existence of material factual dispute about nature of severance necessitated plenary hearing | Court: Contract interpretation was legal — MSA unambiguous; plenary hearing unnecessary absent genuine material factual dispute |
| Whether additional child support should be reduced by alimony paid to Wife (i.e., shift/deduct alimony from Husband's income before applying 8%) | Wife: apply MSA literal 8% of gross compensation; no offset | Husband: Court should shift alimony to Wife and deduct from Husband's income per Child Support Guidelines before calculating additional child support | Court: This is not a Guidelines calculation; MSA plainly calls for 8% of gross compensation — no deduction/shift required |
| Whether Husband proved changed circumstances to modify base alimony/child support and whether arrears/payment schedule and counsel-fee award were reasonable | Not applicable (Wife opposed modification and sought enforcement/fees) | Husband sought modification based on unemployment and severance; challenged payment schedule and fees | Court: Husband failed to show permanent changed circumstances; judge had discretion to set arrear schedule and award fees based on Husband's conduct and financial disclosures; rulings affirmed |
Key Cases Cited
- Owens v. Press Publ'g Co., 20 N.J. 537 (N.J. 1956) (interpret contract language in context and give words rational meaning consistent with parties' purpose)
- Pacifico v. Pacifico, 190 N.J. 258 (N.J. 2007) (marital settlement agreements are contracts to be interpreted under contract principles)
- Segal v. Lynch, 211 N.J. 230 (N.J. 2012) (plenary hearing only required when a genuine, material, legitimate factual dispute exists)
- Adams v. Jersey Cent. Power & Light Co., 21 N.J. 8 (N.J. 1956) (severance pay characterized as compensation earned by service, not merely temporary unemployment relief)
- Reinbold v. Reinbold, 311 N.J. Super. 460 (App. Div. 1998) (distinguishing types of post-marital employer payments for equitable distribution analysis)
- Caplan v. Caplan, 182 N.J. 250 (N.J. 2005) (distinguishing contract-based support arrangements from Child Support Guidelines calculations)