Opinion
DOCKET NO. A-2197-13T4
08-27-2015
TERESA GILL CIRILLO, Plaintiff-Respondent, v. ANTHONY CIRILLO, JR., Defendant-Appellant.
Ronald G. Lieberman argued the cause for appellant (Adinolfi and Lieberman, P.A., attorneys; Mr. Lieberman, of counsel and on the briefs). Robyn B. Flynn argued the cause for respondent (Graziano & Flynn, P.C., attorneys; Ms. Flynn, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Lihotz, Espinosa and St. John. On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Camden County, Docket No. FM-04-311-12. Ronald G. Lieberman argued the cause for appellant (Adinolfi and Lieberman, P.A., attorneys; Mr. Lieberman, of counsel and on the briefs). Robyn B. Flynn argued the cause for respondent (Graziano & Flynn, P.C., attorneys; Ms. Flynn, of counsel and on the brief). PER CURIAM
Defendant Anthony Cirillo appeals from several provisions included in a December 18, 2013 dual final judgment of divorce (DFJOD) ending his more than twenty-year marriage to plaintiff Teresa Gill Cirillo. Specifically, defendant maintains the trial judge erred: when determining each party's percentage obligation for support-related items because the calculation did not consider defendant's payment of alimony to plaintiff; in fixing the amount of alimony awarded, which was unsupported by plaintiff's proof of expenses; in equitably distributing 401(k) funds and personal property; by denying his request that the parties file joint income tax returns; and in awarding counsel fees and costs. Following our review, we affirm in part and reverse and remand in part.
The facts pertinent to our review are taken from the record of the eleven-day trial. The trial judge issued an oral opinion, later memorialized by a sixteen-page DFJOD. We recite a general overview of the DFJOD and provide more specific detail when discussing defendant's challenges.
The DFJOD granted each party's request for divorce based upon his and her respective evidence of irreconcilable differences. The parties were awarded joint legal custody of their three children, designating plaintiff the parent of primary residence and defendant the parent of alternate residence. Parenting time was set and included vacation periods and holiday visits. The parties' older two children were college students, living on campus, who returned to plaintiff's home during breaks. The youngest child was in middle school.
The support provisions ordered defendant pay $401 per week to support the minor child and the two college students. Further provisions provided the method of computing parental contributions for current and future college costs and listed the parties' obligations to maintain the children's medical and dental insurance, pay uninsured health expenses, retain life insurance, and share dependency exemptions. In calculating these support-related obligations, the trial judge found plaintiff's annual gross income was $62,000 and defendant's annual gross income was $205,000. The DFJOD allocated the cost of the children's medical insurance, any uninsured medical expenses, and net college expenses as payable 23% by plaintiff and 77% by defendant.
The DFJOD awarded plaintiff $950 per week in alimony and equitably distributed various assets accumulated during the marriage, which included real estate, depository accounts, personal property, and retirement assets. The parties were ordered to pay identified accumulated debts and defendant was ordered to contribute toward plaintiff's counsel fees and costs.
On appeal, defendant's challenges identify errors in the trial judge's factual findings and the application of the law undergirding the conclusions in the DFJOD. Our review of a trial judge's factfinding is limited. A trial judge's findings in a non-jury trial are binding on appeal "when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 412 (1998). Family Part factfinding receives particular deference because of "the family courts' special jurisdiction and expertise in family matters," id. at 413, and will be disturbed only upon a showing that it is "'manifestly unsupported by or inconsistent with'" the evidence. Bd. of Educ. of Clifton v. Zoning Bd. of Adjustment, 409 N.J. Super. 389, 425 (2009) (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963)).
Defendant's first two challenges relate to alimony. He does not disagree with the propriety of an alimony award; rather, he contends plaintiff's economic need did not require a $950 per week award. He believes the judge applied a "one-third 'rule-of-thumb'" formula, that is, fixing alimony at one-third the difference in the parties' respective gross earnings, which he maintains was erroneous.
Interspersed within this argument is the suggestion defendant's annual income was incorrectly set at $205,000, which in fact was his gross annual income set forth on his 2012 W-2. He deceptively and wrongly suggests the court should have used the more limited level of wages identified for the purpose of calculating Medicare contributions. Further, suggestions that the judge imputed income are disingenuous and the advocacy for applying income averaging is legally unsupportable. R. 2:11-3(e)(1)(E).
Plaintiff rejects this rationale and identifies the record evidence supporting her monthly budgetary needs of $12,889 (which includes a monthly savings component of $2,917, but no mortgage payment since the mortgage had been paid off), and noted her gross monthly income was merely $5,167. Even when considering a portion of the expenses represents the children's needs, which in part was satisfied by the $1,724 per month child support, the available funds were insufficient to satisfy plaintiff's budget and a shortfall remains.
In setting the alimony award, the trial judge properly considered the factors identified in N.J.S.A. 2A:34-23(b), recognizing the obligation to weigh all applicable evidence. See Gnall v. Gnall, ___ N.J. ___, ___ (2015) (slip op. at 22-25). Her findings established plaintiff had resumed employment outside the marital home shortly before filing for divorce, and had unequivocally established the need for additional support. Plaintiff had primary responsibility for the minor child's care, and defendant's personal expenses greatly increased since separation evincing he was "living a better life" than that enjoyed during the marriage. Further, defendant's budget, which exceeded what was submitted for plaintiff and the minor child, revealed defendant's ability to fully provide for articulated monthly needs and pay support to plaintiff. Defendant also had sizeable assets in addition to his income.
The judge also made very thorough and specific credibility findings, after considering the demeanor of the parties throughout the eleven-day trial. She found plaintiff's testimony credible as it was "consistent on direct and cross-examination" and corroborated by documentary evidence. She determined plaintiff advanced "reasonable positions on the financial issues . . . ." Regarding plaintiff's budget, the judge found plaintiff was "not inflating costs, but was being honest about the expenses for her and the children." The judge found "plaintiff [wa]s not seeking to deprive defendant of his money but [wa]s simply asking for what she feels she is entitled to under the law."
Noting defendant kept sole reign on family finances during the marriage, the judge found he had an "obsession with money." She characterized his conduct during trial as "antics" and exaggerated displays of "visceral reactions" during plaintiff's testimony regarding her needs, including eye rolling and shaking his head. The judge labeled defendant's positions taken prior to and during trial as "unreasonable" and stated she was "struck" and "astounded" by defendant's "combativeness, belligerence and evasiveness." She also noted he would not directly answer questions; and he was "an extremely argumentative and difficult witness." The judge was "taken aback by the number of times . . . defendant said he could not recall facts." Her overall assessment found defendant was not credible, but "motivated by his contempt for plaintiff and his pre-occupation with money."
The family court is given broad discretion in awarding alimony, and an alimony determination will not be disturbed absent an abuse thereof. Steneken v. Steneken, 367 N.J. Super. 427, 434 (2004), aff'd as modified, 183 N.J. 290 (2005); N.J.S.A. 2A:34-23(b). N.J.S.A. 2A:34-23(b) sets forth the guidelines and objective standards which a judge should apply when determining an alimony award. Further, the statute requires that the court "make specific findings on the evidence about the above factors" when "there is a request for an award of permanent alimony . . . ." N.J.S.A. 2A:34-23(c).
While we agree the trial judge did not detail the exact mathematical computation employed when fixing the weekly alimony sum, we find no abuse of discretion in the ordered result. The record reflects the judge faithfully applied the statutory factors and assessed the financial picture painted by the parties' testimony. She set forth her findings, including credibility assessments, to determine whether permanent alimony should be awarded. She concluded plaintiff's proofs established her dependence and need for support as well as defendant's ability to meet that need. Consideration and weighing of other applicable factors was also completed.
We determine the underlying facts were fully supported by the evidence contained in the record, and justified the alimony award established. Heinl v. Heinl, 287 N.J. Super. 337, 345 (App. Div. 1996). The amount of alimony awarded is neither excessive nor shocking in light of supporting documentation and plaintiff's credible testimony regarding her budget. We accord those findings, particularly the credibility determinations, substantial deference. N.J. Div. of Youth & Family Servs. v. R.G., 217 N.J. 527, 552 (2014); Cesare, supra, 154 N.J. at 412. With this in mind, defendant's challenge to the sufficiency of the trial judge's factfinding is rejected.
Next, defendant argues the requirement that he pay 77% of insurance premiums, uninsured health expenses, and college costs was erroneous because it was based on the parties' gross incomes and did not account for his annual $49,400 alimony payment. Defendant maintains whatever the alimony award, that amount must be deducted from his total gross annual income and added to plaintiff's gross annual income prior to fixing the percentages of responsibility for additional items of child support. Plaintiff suggests the judge concluded that the New Jersey Child Support Guidelines (Guidelines) do not apply, and thus removed the need to shift income. We agree with defendant.
The Guidelines specifically instruct: "If child support and alimony . . . are being determined simultaneously (for the same family), the court should set the alimony . . . first and include that amount in the recipient's gross income . . . before applying the child support guidelines." Child Support Guidelines, Pressler & Verniero, Current N.J. Court Rules, Appendix IX-B to R. 5:6A at 2652 (2015). The income shift is appropriate because the obligor's available income is reduced by the alimony paid to the obligee. Such a shift is not dependent upon application of the Guidelines, as evidenced by federal income tax law providing alimony is income to the recipient and deductible by the payor. See 26 U.S.C.A. §§ 71, 215.
Further, plaintiff's contention the Guidelines do not apply to this high-income earning family misstates the law. When fixing child support for parents whose combined incomes exceed the scope of the Guidelines, "the court shall apply the guidelines up to $187,200 and supplement the guidelines-based award with a discretionary amount based on the remaining family income (i.e., income in excess of $187,200) and the factors specified in N.J.S.A. 2A:34-23." Pressler & Verniero, supra, comment 20 on Appendix IX-A to R. 5:6A at 2645. See also Caplan v. Caplan, 182 N.J. 250, 265-66 (2005). The appropriate calculation requires use of the Guidelines for the parties' combined net incomes up to $187,200, and a determination of whether additional discretionary support is appropriate and necessary for the care of the children, after application of the statutory factors. Caplan, supra, 182 N.J. at 266. "This combined approach should result in a fair award of child support that is in the best interest of the child[ren]." Ibid.
That the Guidelines provide a methodology to determine supplemental discretionary support in high-income situations has no bearing on the application of the income shift resulting from defendant's payment of alimony to plaintiff. If plaintiff were correct that this was an intentional deviation from the Guideline's standards, the trial judge would have had an affirmative obligation to explain why the Guidelines were not followed. See R. 1:7-4(a) (requiring a trial judge accompany all opinions with findings of fact and conclusions of law). She did not make such findings.
This court may not rely on assumptions or invent a rationale for a trial judge's determination. On its face, the failure to shift the income representing alimony appears to have been an error. Accordingly, the omission of critical factual findings to support the basis of the decision to fix the percentage obligations without consideration of the amount of alimony paid by defendant to plaintiff "impedes our review and requires a remand limited to this issue." Elrom v. Elrom, 439 N.J. Super. 424, 443 (App. Div. 2015).
The next two issues attack the equitable distribution of certain assets. Defendant argues the judge mistakenly ordered distribution of two separate 401(k) plans, when in fact there was only one plan, as he maintains the first was rolled into the second. Next, defendant attacks as unfounded the undocumented assertion of a differential in the value of personal property retained by each party in their respective residences, resulting in an order for defendant to pay plaintiff $10,000. Additional facts are necessary to provide context for these issues.
Defendant testified regarding his interest in a 401(k) plan managed by his current employer. He also produced a statement showing a 401(k) plan managed by a prior employer. The older plan commenced in 2004 and a 2010 statement showed withdrawal of the $263,795 balance by December 31, 2010. Defendant maintained the prior employer was acquired by the current employer and, likely, the monies were rolled from the initial 401(k) plan to the succeeding plan. Plaintiff testified defendant's sole management of these funds left her unable to determine whether the funds were rolled over or placed elsewhere when withdrawn in 2012. She requested defendant's documentation to prove his claims of rollover. However, defendant produced only the documentation mentioned, omitting proof of the asserted rollover.
In her opinion regarding this issue, the judge determined all funds in the current employer's 401(k) plan were acquired during the marriage and the value of the account on the date of the complaint was $287,230. The judge concluded plaintiff's entitlement was 50% of the coverture value of this plan. Regarding the 401(k) plan managed by the prior employer, there was no dispute defendant controlled and withdrew the sums from that account. The judge referenced defendant's testimony stating he "could not recall" when the funds were withdrawn from the account or "where the monies were transferred." She found defendant presented "no credible evidence to prove the whereabouts of the $263,795.70." Further, the judge concluded defendant did not prove the asset was exempt. Consequently, she ordered the sum equitably distributed, and granted plaintiff 50% of the last known value.
"The coverture fraction represents the number of years during coverture that the pensioner spouse was a member of the pension plan, divided by the total number of years that the pensioner spouse was a member of that pension plan. The resulting coverture fraction represents that portion of the pension that is subject to equitable distribution." Claffey v. Claffey, 360 N.J. Super. 240, 256 (App. Div. 2003). --------
Defendant argues, had he spent the money, the issue would have been reported on the 2010 income tax return. Since it was not, he suggests this alone is conclusive proof of a rollover. Defendant argues the judge ignored this evidence and erroneously double counted the same retirement asset when ordering equitable distribution. We disagree.
Again, the judge's findings make clear defendant unilaterally controlled this retirement asset. Her opinion noted defendant's sharp recollection of certain events, despite the time that passed; however, he could not remember what he did with over a quarter of a million dollars, approximately eight months before plaintiff filed for divorce. Defendant alone withdrew and redeposited the funds.
When questioned on this issue during trial, defendant first unhesitatingly stated, "the money was rolled over into a rollover IRA." When asked to identify the IRA depository institution, he changed his testimony and stated, "in all likelihood," the prior employer 401(k) funds were transferred or rolled over to the current employer's managed 401(k) account. This equivocation coupled with the marks of untrustworthiness attached to defendant's testimony support the judge's rejection of the probability of employer to employer rollover.
The "portion of a pension legally or beneficially acquired by either party during marital coverture is subject to equitable distribution." Claffey, supra, 360 N.J. Super. at 255 (citing Kikkert v. Kikkert, 88 N.J. 4, 5 (1981)). "The party seeking exemption from equitable distribution bears the burden of proof." Larrison v. Larrison, 392 N.J. Super. 1, 13-14 (App. Div. 2007) (citing Landwehr v. Landwehr, 111 N.J. 491, 504 (1988)).
Here, defendant had the burden to prove this retirement asset, acquired during the marriage, was not otherwise subject to equitable distribution. He could not. The judge did not accept as credible defendant's claims of his inability to obtain the necessary documentation. This is understandable, as he remained employed by the same company and a relatively short period had passed since the asserted rollover. Certainly, the time which passed was not so great as to have caused these types of business records to be destroyed. Further, as noted, defendant first identified a rollover to an IRA, which is distinctly a different retirement vehicle than an employer managed 401(k) plan. Also, the fact that monies were not declared as received on the 2010 income tax return does not conclusively show a 401(k) rollover to the current employer's 401(k) plan. In fact, a rollover of the prior employer 401(k) fund into an individual IRA would also exempt the funds from being reported as income on the tax return. Therefore, we reject defendant's challenge to the trial judge's findings and conclusions.
Defendant next challenges as unfounded a $10,000 credit for furniture and furnishings based solely on plaintiff's assumption that the furniture and appliances in her home were older than those in defendant's home. While we agree with plaintiff that valuation is not an exact science, we cannot ignore that no factual basis exists in this record to support the conclusion plaintiff was entitled to a $10,000 credit.
Plaintiff's testimony was general, suggesting her home was mostly furnished early in the marriage and these furnishings should be replaced. She testified she had no living room furniture, the master bedroom furniture was from defendant's first marriage, the children's rooms were furnished at various times, and her clothes dryer needed to be replaced. She suggested defendant's home was furnished approximately five years prior to trial with newer and nicer furniture. Otherwise, there was no other description of the type, condition, or value of items retained by plaintiff and defendant.
The age of furniture is not always a measure of its value. Moreover, assuming the judge employed the same equal distribution as she applied to the marital home, we find no basis to support a finding defendant's personal property was worth $20,000 more than plaintiff's. Also, the suggestion of crediting plaintiff $10,000 was not presented through testimony but in counsel's written summations, which is not evidential. See Vorhies v. Cannizzaro, 66 N.J. Super. 551, 558 (App. Div. 1961) ("[I]t is improper for counsel to draw inferences where there are no grounds for them in the evidence, or to indulge in denunciations based on assumed facts." (citation and internal quotation marks omitted)). The provision granting plaintiff a $10,000 credit for personal property must be vacated as unsupported.
The next argument attacks as error the failure to require plaintiff to amend her income tax filings for 2011 and 2012, to allow the parties to file joint rather than separate returns, which defendant asserts would realize "substantial tax savings." Plaintiff responds, stating no evidence shows mutually beneficial tax treatment would result from amending the filed returns. Also, defendant never presented this request at trial, despite the opportunity to do so.
Prior to trial, the court ordered the parties exchange proposed tax information for 2011. Plaintiff provided her information and in return defendant submitted his filed return claiming separate rather than joint filing status. Although the pendente lite order required defendant pay carrying charges for the parties' two homes, he deducted not only the mortgage interest and real estate tax expense, but also claimed he paid alimony. He also listed all three children as his dependents, although he knew plaintiff had previously claimed two of the children. In the DFJOD, the judge ordered defendant to amend his returns to eliminate the alimony claim because there was no order for the payment of alimony pendente lite, and to modify the dependency exemptions he claimed. There does not appear to be any request by defendant to file joint tax returns, making this an issue raised for the first time on appeal.
We reject defendant's late attempt to advance a new position regarding the prior tax filings. "[A]ppellate courts will decline to consider . . . issues not properly presented to the trial court when an opportunity for such a presentation is available unless the questions . . . go to the jurisdiction of the trial court or concern matters of great public interest." Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (citation and internal quotation marks omitted).
The final matter is the counsel fee awarded to plaintiff. The assessment of counsel fees is discretionary, and will not be reversed, except upon a showing of an abuse of discretion. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001). An abuse of discretion "arises when a decision is 'made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002) (quoting Achacoso-Sanchez v. Immigration & Naturalization Serv., 779 F.2d 1260, 1265 (7th Cir. 1985)). See also Rendine v. Pantzer, 141 N.J. 292, 317 (1995) (holding an appellate court will disturb a trial court's determination on counsel fees only on the "rarest occasions, and then only because of a clear abuse of discretion"); Strahan v. Strahan, 402 N.J. Super. 298, 317 (App. Div. 2008) (same).
Under Rule 5:3-5(c), the trial judge, in her discretion, may award counsel fees in a matrimonial action. Tannen v. Tannen, 416 N.J. Super. 248, 285 (App. Div. 2010) (stating counsel fees are awarded in the discretion of the trial court), aff'd, 208 N.J. 409 (2011). When determining whether counsel fees should be awarded, a judge reviews these nine factors enumerated in the rule:
(1) the financial circumstances of the parties; (2) the ability of the parties toSee also R. 4:42-9(a)(1) ("No fee for legal services shall be allowed in the taxed costs or otherwise, except . . . [i]n a family action, a fee allowance . . . on final determination may be made pursuant to R. 5:3-5(c)."). Success in the litigation is not "a prerequisite for an award of counsel fees." Guglielmo v. Guglielmo, 253 N.J. Super. 531, 545 (App. Div. 1992). Rather, the party requesting the fee award must be in financial need and the party paying the fees must have the financial ability to pay, and if those two factors have been established, the party requesting the fees must have acted in good faith in the litigation. Ibid.; see also Kelly v. Kelly, 262 N.J. Super. 303, 307 (Ch. Div. 1992) ("Fees in family actions are normally awarded to permit parties with unequal financial positions to litigate (in good faith) on an equal footing.").
pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties both during and prior to trial; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.
[R. 5:3-5(c).]
Plaintiff testified she paid approximately $104,000 in attorneys' fees and she used her savings, credit cards, and loans from family and friends to satisfy the bills. At trial, invoices admitted into evidence showed an outstanding balance of $92,320.94. In awarding that sum to be paid by defendant, the judge applied the nine factors set forth in Rule 5:3-5(c). She found defendant's income was three times more than plaintiff's, and plaintiff had limited ability to earn additional income yet defendant's future income prospects remained high. The judge noted defendant was "financial[ly] secure and always had been," but plaintiff had no savings. The facts showed plaintiff could not pay her fees, but defendant had the ability to pay his and contribute to hers. The judge also analyzed the numerous orders resulting from defendant's failure to comply with discovery and plaintiff's early willingness to resolve custody, parenting time, and distribution of assets, which were resisted by defendant. Following the filing of the divorce complaint, defendant made unilateral financial decisions affecting the parties, dissipated marital assets, made unsupported and false allegations, and exhibited bad faith in advancing "irrational" positions. His positions at trial on several instances were found to be "unreasonable." Defendant could not recall the amount he paid his four different attorneys. Plaintiff proved she incurred more than $200,000, "an exorbitant amount," of which "a good portion" resulted from "defendant's unwillingness to abide by [c]ourt orders, and the unreasonable positions he took on many issues."
We conclude the judge's statement of reasons respecting the applicable factors was specific and reflected a weighing of the evidence presented, satisfying the requirements of Rule 5:3-5(c). Accardi v. Accardi, 369 N.J. Super. 75, 90 (App. Div. 2004). We find no abuse of discretion in the fee award granted.
In summary, we reverse two provisions in the DFJOD: the allocation of responsibility for payment by plaintiff and defendant for items related to the support of the children, and the $10,000 personal property credit granted to plaintiff. We remand this matter to the trial judge for further review and consideration of these two issues, in light of our opinion. The balance of the DFJOD is affirmed.
Affirmed in part, reversed and remanded in part. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION