SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0700-17T3

EDWARD FOX, III,

Plaintiff-Appellant,

v.

CATHERINE FOX,

Defendant-Respondent.

____________________________

Argued November 14, 2018 – Decided April 9, 2019

Before Judges Ostrer and Currier.

On appeal from Superior Court of New Jersey, 

Chancery Division, Family Part, Camden County, 

Docket No. FM-04-0355-16.

Robert J. Wittmann argued the cause for appellant.

Michael J. Confusione argued the cause for respondent 

(Hegge & Confusione, LLC, attorneys; Michael J.

Confusione, of counsel and on the brief).

PER CURIAM

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the 

internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
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Plaintiff, Edward Fox III, appeals from the trial court's equitable 

distribution of his bowling equipment company, EBN Services, Inc. (EBN). 

After trial, the court split the value of the company equally between Edward and 

his former spouse, Catherine Fox. 

Edward presents three arguments on appeal. He contends that EBN should 

not have been subject to equitable distribution because Catherine did not 

contribute to the company's growth during or after the marriage. Second, he 

argues if EBN is subject to equitable distribution, then it should have been 

distributed according to its value in 2012, the date of separation, instead of 2015, 

when Edward filed for divorce. Last, Edward contends that the trial court abused 

its discretion by distributing the business equally.

After reviewing the facts and underlying legal principles, we remand for 

a determination of the company's pre-marital value. Edward started his 

company in 2001, about three years before the couple married in 2004. The trial 

court assumed that EBN did not have a positive value in 2004 because it was 

not profitable at the time. The court therefore subjected EBN's full 2015 value 

to distribution. On remand, Edward will have an opportunity to refute the trial 

court's assumption. We otherwise affirm.
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I.

We discern the following facts from the record. Edward and Catherine

first met and moved in together in 1996. Shortly after, the two had their first 

child together, E.F., who has autism. The couple had a second child, A.F., in 

1999. Edward and Catherine each brought a son from a previous partner into 

the relationship – D.E. and C.P. The relationship broke down in late 1999 and 

the couple split up for the first time.

During the separation, Edward worked as a bowling alley mechanic, but 

he also started his own small business, EBN, in 2001. The company mostly 

acquired and resold used bowling equipment. Edward ran EBN out of his 

apartment as a part-time endeavor. Between 2001 and 2004, the business did 

not turn a profit. In 2004, the business had a net loss of roughly $13,000 on 

gross receipts of over $208,000, according to Edward's tax return.

Edward and Catherine moved back together in 2003 and married in July 

2004. During the marriage, Catherine and Edward shared the household work. 

Edward testified that he did most of the grocery shopping and transported the 

kids to and from school four days a week. He admitted that Catherine did the 

laundry and most of the other shopping. He said that he and the older children

took care of the younger children most of the time. However, Catherine testified 
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that she had primary responsibility for all the kids. The older children also 

testified and mostly corroborated Edward's testimony. They said they did most 

of the household cleaning. When it came to cooking responsibilities, no one 

agreed.

Around the time he married Catherine, Edward quit his mechanic job and 

began pursuing EBN full time. The business grew over the next four years, 

although the record does not include tax returns or financial reports for 2005, 

2006 or 2007. By 2008, EBN had over $770,000 in gross sales, although it still 

had a net loss of around $20,000. In 2008, EBN started to backslide because of 

the down economy. Then in 2010, Edward grappled with personal issues that

affected the business. Those resolved in 2011 and did not recur.

Edward testified that Catherine never worked for EBN in any significant 

manner. She worked as a hairdresser. Her annual-reported income was steady 

at around $28,000 between 2005 and 2007. Her income started to drop in 2008.

According to Edward, Catherine was losing clientele. In 2011, Catherine went 

to school to become a medical assistant. She graduated and has been working 

part-time at a chiropractor's office since then. 

Edward asserted that Catherine's income remained above his own until 

around 2012. However, there was conflicting evidence on this assertion. For 
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A-0700-17T3

some period of time, Edward comingled his personal and business funds. In 

2010, Edward more formally started to take a shareholder distribution from the 

company. An accountant hired to value EBN found an average normalized 

officer compensation of around $45,000 between 2008 and 2011 and average 

actual distributions of around $23,000. From this, we can infer that Edward 

shouldered much of the financial burden for the family. Furthermore, Edward 

claimed that he was primarily responsible for paying the family's bills.

The couple separated in May 2012. By this time, the older children were 

adults. Edward moved out and Catherine remained at home with their two 

younger children. Both parties testified that they knew the separation was final.

Eventually Edward and Catherine found other paramours and cohabitated with 

them.

A couple of months after the separation, Edward contacted an attorney 

who drafted a written separation agreement. Catherine said she read the 

agreement but did not move forward with it because she could not afford an 

attorney. The court credited Catherine and found that she did not accept the 

written agreement. Instead, as the court found, the parties entered an oral 

agreement for post-separation support. Catherine testified she received $1600 a 

month from Edward, but Edward claimed to pay slightly more. Once the 
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children finished their schooling, Catherine and Edward agreed to sell the house 

and split the proceeds. They did not discuss EBN. 

EBN flourished after the separation. Edward said that he was able to give 

more time to the business than before because Catherine was spending more 

time with the kids. EBN also expanded in two important ways. First, it acquired 

new product lines – EBN started to act as a distributor for a number of suppliers

in the industry. Second, it acquired Ashford Manufacturing and was thus able 

to manufacture and sell some parts and components internally. Also, Edward 

said that the earlier economic slowdown had driven a number of his competitors 

out of business.

Nearly two-and-a-half years after the separation, Edward filed for divorce 

on September 2, 2015. Edward and Catherine both explained that the delay had 

to do with financial considerations. 

Edward and Catherine jointly hired the accountant to value EBN. She 

assessed the business's fair market value at two points in time. She valued EBN 

at $183,000 in 2015 and, using a less involved methodology, valued it at 

between $43,000 and $56,000 in June 2012. She did not value the company as 

of 2004.
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The court equitably distributed half of the $183,000 value to Catherine, 

payable in sixty-one monthly installments. The only other significant marital

asset, the marital home, was to be sold after E.F. graduated from school, and its 

proceeds equally divided. Based on Catherine's cohabitation, the court denied 

her alimony. The court ordered Edward to pay $203 in weekly child support for 

E.F., and declared A.F. emancipated.

II.

Edward presents three issues are on appeal, all pertaining to the equitable 

distribution of EBN: (1) was EBN subject to equitable distribution; (2) if so, 

should it be valued as of the date of separation, or the date of the divorce filing; 

and (3) did the trial court err by awarding EBN's value equally between Edward 

and Catherine.

We review the trial court's fact findings with substantial deference, Cesare 

v. Cesare, 154 N.J. 394, 411-12 (1988), but review legal conclusions de novo,

Manalapan Realty v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). We 

apply an abuse-of-discretion standard in reviewing an equitable distribution. La 

Sala v. La Sala, 335 N.J. Super 1, 6 (App. Div. 2000). In other words, we will 

only overturn a distribution award if the trial court's decision "was not premised 

upon consideration of all relevant factors, was based upon consideration of
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irrelevant or inappropriate factors, or amounts to a clear error in judgment."

Masone v. Levine, 382 N.J. Super. 181, 193 (App. Div. 2005).

A.

We first consider whether EBN was subject to equitable distribution. The 

trial court held that it was subject to equitable distribution because EBN was an 

active-immune asset, which increased in value during the marriage, partly due 

to Catherine's contributions. We agree.

Property acquired before marriage is generally immune from equitable 

distribution. Painter v. Painter, 65 N.J. 196, 214 (1974); N.J.S.A. 2A:34-23.1

The party asserting immunity has the burden of proof. Pascale v. Pascale, 140 

N.J. 583, 609 (1995); Painter, 65 N.J. at 214. However, once a party proves that 

an asset is generally immune, the non-owner spouse may overcome the 

"rebuttable presumption that any subsequent increase in value will also be 

immune." Sculler v. Sculler, 348 N.J. Super. 374, 381 (Ch. Div. 2001). Three 

elements must be shown:

(1) there has been an increase in the value of the asset 

during the term of the marriage; (2) the asset was one 

which had the capacity to increase in value as a result 

of the parties' effort (an active immune asset); and (3) 

 

1

 Pre-marital property may also lose its immunity if the owner commingles it 

with marital assets, with the intent to gift it to the marital enterprise. See, e.g., 

Ryan v. Ryan, 283 N.J. Super. 21, 25 (Ch. Div. 1993).
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the increase in value can be linked in some fashion to 

the efforts of the non-owner spouse. 

[Ibid.]

The first element speaks for itself. We explain the other two.

Immune assets can be either passive or active. Valentino v. Valentino, 

309 N.J. Super. 334, 338 (App. Div. 1998). Passive assets fluctuate in value 

solely due to external market conditions. Ibid. Active assets fluctuate in value 

due to the efforts of involved persons. Ibid.

The non-owner spouse can contribute to an asset's appreciation in a 

number of ways. For instance, a non-owner spouse can provide the necessary 

support that allows his or her partner to devote time and energy to a business. 

Id. at 339 (concluding that a spouse who "took care of the home, worked parttime and raised [their son]" contributed to an asset's appreciation).

The trial court did not err in finding that EBN was subject to equitable 

distribution. The asset increased in value during the marriage. While the 

increase was directly tied to Edward's efforts, Catherine indirectly contributed 

to the increase by enabling Edward to devote time and resources to EBN.

Edward argues that this is incorrect for two reasons. First, he claims that 

Catherine did not contribute to EBN because she did not perform the majority 

of the household duties during the marriage. This argument is inconsistent with 
10 A-0700-17T3

Valentino. Catherine provided financial stability and flexibility so that Edward 

could pursue EBN, a risky business venture. As the trial court found, based on 

adequate support in the record, "[I]t was his marriage to [Catherine], and her 

financial and non-financial contributions to the household and child rearing, that 

allowed plaintiff to devote his full-time efforts to building EBN."

Second, Edward argues that most of EBN's appreciation took place after 

the 2012 separation. Consequently, he suggests Catherine did not contribute to 

EBN's growth. However, the fact that the company grew significantly postseparation but pre-complaint is relevant to the ultimate allocation decision, not 

the question whether EBN was subject to distribution in the first place. The 

Supreme Court has explained that the effects of a separation should enter the 

trial court's analysis when distributing the assets between the parties. Portner v. 

Portner, 93 N.J. 215, 222-23 (1983); Rothman v. Rothman, 65 N.J. 219, 232 

(1974) (distinguishing between a trial court's decision to identify, valuate, and 

equitably distribute an asset).

Separately, Edward argues that the trial court improperly subjected EBN's 

full $183,000 value at the end of the marriage to equitable distribution. He 

correctly notes that only the value that appreciated during the marriage is subject 

to equitable distribution, and then, only if the appreciation is "derived, in part 
11 A-0700-17T3

or in whole, from the efforts of the non-owner." Valentino, 309 N.J. Super. at 

338. 

The trial court assumed that EBN had no value in 2004, at the start of 

marriage. At first glance, this assumption seems reasonable. Edward 

established EBN in 2001 but first decided to pursue it as a full-time business in 

2004, a year for which EBN reported a net loss of $13,000. Edward argues that 

the trial court should not have made that assumption. We agree.

An unprofitable business may still have a positive fair market value.2 For 

instance, a business can have valuable tangible assets or inventory, as well as 

intangible assets, such as goodwill and customer lists. Notably, EBN had sales 

of over $208,000 in 2004 and a gross profit, after deducting cost of goods, of

over $38,000. EBN possessed inventory and two vehicles. Nevertheless, the 

record in this case does not establish what value, if any, EBN held in 2004. A 

remand is necessary to develop more information.

 

2

 See Shannon P. Pratt et al., Valuing a Business: The Analysis and Appraisal 

of Closely Held Companies 53 (4th ed. 2000) ("[T]he value of a business or 

business interest is the sum of the expected future benefits to its owner . . . .") 

(emphasis added); David Lara, Shannon P. Pratt, Business Valuation and 

Federal Taxes: Procedure, Law, and Perspective Ch. 17 (2d ed. 2011) 

(describing an approach used to value companies that are "unprofitable for the 

foreseeable future"). 
12 A-0700-17T3

We consider whether Edward or Catherine should have the burden of 

proof to establish EBN's value in 2004. Sculler explains that the non-owner 

spouse must show that "there has been an increase in value of the asset during 

the term of the marriage." 348 N.J. Super. at 381. Naturally, to establish an 

asset's appreciation, its value must be established at both the beginning and the 

end of the valuation period. Sculler can be read to suggest it was Catherine's

burden to prove EBN's value in 2004.

We do not think such a rule makes sense in this case. General principles 

suggest that courts must consider the parties' "comparative interests" and 

"relative litigational strengths," their "access . . . to proof[s]," and the "objectives 

to be served by the evidence," when assigning the burden of proof. Romano v. 

Kimmelman, 96 N.J. 66, 89 (1984). Here, Edward contends EBN had value 

before marriage. In other words, he asserts part of the asset is immune from 

equitable distribution. Because the burden to establish an asset's immunity 

"rest[s] upon the spouse who asserts it," Painter, 65 N.J. at 214, we hold that 

Edward must prove that EBN had value in 2004. As it may have been unclear 

that he had that burden, it is fair to remand to give him an opportunity to present 

proof as to EBN's pre-marital value. 
13 A-0700-17T3

B.

We next consider whether EBN should be subject to distribution using its 

value in 2015 or 2012. We conclude that the trial court correctly used 2015 as 

the valuation date.

Property acquired after a marriage has ended is not subject to equitable 

distribution. Thieme v. Aucoin-Thieme, 227 N.J. 269, 285 (2016) ("[T]he 

property to be divided is that which was earned, or otherwise acquired, during 

the period in which the parties acted in pursuit of the shared enterprise of a 

marriage or civil union."). Equitable distribution of an asset is thus bounded by 

the end date of the marriage.

The Painter Court considered various dates that could constitute a 

marriage's end date for purposes of an asset's valuation. 65 N.J. at 217-18. The 

Court rejected the divorce judgment date because it would create a burdensome 

bifurcated trial. Ibid. The Court then considered whether, on public policy 

grounds, the date of "irretrievable breakdown of the marriage" should be used.

Ibid. The Court said it "would be unworkable" because it would be too difficult 

to establish with "any reasonable precision" when the marriage broke down.

Ibid. The Court settled on a pragmatic solution: the day the divorce complaint 

was filed. Ibid.
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Over time, the Court moved away from this bright-line rule in limited 

situations. The Court rebalanced Painter's pragmatic concerns, where possible, 

with public policy considerations. The Court recognized two exceptions to the 

Painter rule: first, where the couple physically separated and entered into a 

written separation agreement, the agreement date governs; second, where the 

couple separated and actually divided their assets pursuant to an oral agreement, 

"assets acquired afterwards are not eligible for equitable distribution." Portner, 

93 N.J. at 220 (quoting Brandenburg v. Brandenburg, 83 N.J. 198, 208-09 

(1980)). In such cases, the parties have physically separated and there was "an 

event that clearly indicated that both parties had agreed that marriage was 

completely and finally dissolved." Portner, 93 N.J. at 220.

This case does not satisfy either exception. Although Edward and 

Catherine physically separated, they only reached an oral agreement regarding 

financial support. Here, the parties never agreed about the disposition of EBN, 

never submitted a written agreement dividing assets, and never actually divided 

assets. The court correctly valued EBN using the date the divorce complaint 

was filed in 2015.

Edward argues that 2012 should be used because both parties testified that 

they believed the marriage was over in 2012. Quoting Portner, he asserts "an 
15 A-0700-17T3

event that marks the end of a marriage for the purpose of equitable distribution 

should reflect an unconditional intent to end the marriage." 93 N.J. at 221.

Edward misunderstands Portner. Evidence of a marriage-ending event, such as 

infidelity, does not suffice. The Court fashioned a rule to avoid litigation over 

"the ever-elusive date when the marriage truly ended." Id. at 223. To depart 

from the divorce complaint's filing date, Portner requires a party to present 

reliable evidence in the form of a written agreement or the actual division of 

assets, which formally ended the shared pursuit of marriage.

C.

Edward argues that the trial court abused its discretion by dividing EBN 

equally between himself and Catherine. He claims that Catherine did not 

significantly contribute toward EBN or the household; he bore the risk of 

pursuing EBN, and he should receive just reward as the primary risk bearer. 

The Legislature enumerated a non-exhaustive list of sixteen factors that a 

trial must consider when equitably distributing marital property. N.J.S.A. 

2A:34-23.1. To apply the factors, a trial court "shall make specific findings of 

fact." Ibid. While a trial court may not "mechanistically" divide marital assets 

equally, Gibbons v. Gibbons, 174 N.J. Super. 107, 114 (App. Div. 1980), rev'd 

on other grounds, 86 N.J. 515 (1981), equal division may be appropriate, see,
16 A-0700-17T3

e.g., Overbay v. Overbay, 376 N.J. Super. 99, 114 (App. Div. 2005). In this 

case, the trial court considered all sixteen factors and made specific findings of 

fact for all of them.

The trial court observed that Edward did not pursue EBN full-time until 

after he decided to marry Catherine. The court found that Edward was able to 

safely pursue EBN because of Catherine's financial and non-financial 

contributions. The record shows that Catherine contributed a significant 

portion, if not most, of the household income between 2004 and 2012. Catherine

helped raise the kids and performed at least some household chores, such as the 

laundry. The trial court's findings were based on sufficient evidence in the 

record. Therefore, we shall not disturb them.

Edward's risk-based argument fails to respect the partnership nature of a 

marriage. While he was pursuing EBN, Catherine lacked the benefit of a 

spouse's regular income and stable employment. In other words, Catherine

shared in the risk with Edward when he pursued EBN.

Most of EBN's appreciation occurred after the separation, but we find that 

the trial court properly considered this fact when it distributed EBN. While EBN 

grew for a number of reasons, Edward himself admitted that the separation gave 

him more time to work on EBN because Catherine assumed a greater share of 
17 A-0700-17T3

the household and child-rearing duties. We shall not disturb the trial court's 

finding that "[Catherine] made an equal, non-financial contribution to the 

appreciation in value of [EBN] even after the parties separated." 

We remand to allow Edward the opportunity to prove EBN had positive 

pre-marital value. We otherwise affirm. We do not retain jurisdiction.