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Malpractice Award Can Affect Alimony
A New Jersey Superior Court Judge has found that money received by a wife in a legal malpractice settlement stemming from the divorce trial can be used to reduce or eliminate alimony. Moreover, a supported spouse could not pay an excessive amount for a new home and then complain she does not have enough money for savings.
Barbara Crews received a $1.49 million malpractice settlement in March 2003, which netted her $940,000 after counsel fees and expenses. (The case's bizarre journey up and down the court system was triggered at the original divorce trial in 1994, when Barbara Crews' lawyer walked off her case because he said he needed more time for discovery and counsel fees from the husband, which had been ordered but not yet paid, to continue the case.) The judge concluded that the award negated the need for further alimony, since — even at 5% interest — Crews would earn $45,000 annually on that sum, more than the $42,000 in annual alimony. As a result, Crews must pay her ex-husband 13 months of alimony, or $45,500. The ruling ended alimony of $42,000 a year for the wife in Crews v. Crews, which has been in the courts for 13 years and is about to go to the Appellate Division for a fourth time.
The case set new precedent. Crews v. Crews, 164 N.J. 11 (2000) held that the supported spouse's standard of living during the marriage dictates alimony and modifications due to changed circumstances. The supreme court remanded the case to the trial level to determine Crews' standard of living, which could not have been established completely in 1994 because she walked out with her lawyer.
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