Opinion
DOCKET NO. A-0202-13T4
03-06-2015
TINA JO GALANTE, Plaintiff-Respondent, v. THOMAS GALANTE, Defendant-Appellant.
John C. Feggeler, Jr., argued the cause for appellant. Robin Jill Schneider argued the cause for respondent.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Ostrer and Hayden. On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-0655-09. John C. Feggeler, Jr., argued the cause for appellant. Robin Jill Schneider argued the cause for respondent. PER CURIAM
Defendant Thomas Galante appeals from a May 23, 2013 Family Part order denying his motion for modification of support obligations, and an August 15, 2013 order denying his motion for reconsideration and awarding counsel fees and ordering defendant to buy a car for his daughter. After carefully reviewing the record and applicable legal principles, we reverse and remand to the trial court for a plenary hearing.
The record reflects that the parties were married on March 12, 1986 and had three children, born in 1988, 1991, and 1994 respectively. The parties entered into a Marital Settlement Agreement (MSA) on June 7, 2011, which was incorporated into the judgment of divorce entered that same day.
An Amended Final Judgment of Divorce was entered by the Family Part on October 3, 2011, which contained a clean version of the MSA.
Under the MSA, plaintiff received the former marital residence free and clear of the existing mortgage, the 401k account from one of defendant's businesses, and the parties' 2010 tax refund. Defendant retained the parties' 2009 tax refund, and his fifty-percent interest in the three related businesses he acquired during the marriage, Hudson Street Litho Plate Service, Inc., Popular Bindery, Inc., and Brita Litho, Inc., which were valued at $974,500 by a forensic accountant.
The MSA provided for a two-step alimony payment schedule because defendant was unable to pay off the existing mortgage securing the former marital residence. The first step, for the period before the former marital residence was sold, required defendant to pay the mortgage and the associated real estate taxes; homeowner's insurance; most utilities; plaintiff's health insurance, provided by defendant's business; and $400 in weekly alimony. The second step, beginning after the sale of the marital residence, required defendant to pay $1500 in weekly alimony to plaintiff.
Defendant also agreed to pay for all of the youngest, unemancipated child's expenses, in particular those expenses related to automobile, health, education, and clothing. This arrangement was in lieu of a direct child support obligation. In 2012, defendant filed a motion to vacate the MSA based upon its "manifest unfairness." The court denied this motion on July 12, 2012.
In the July 2012 Family Part order, a child support payment of $313 per week was set. Defendant's child support obligation was temporarily suspended pursuant to the Family Part's August 15, 2013 order.
On February 20, 2013, defendant filed a motion seeking to modify his alimony, child support, and other support obligations, requesting a plenary hearing, and other relief. In support of his motion, defendant certified that his financial circumstances had precipitously declined resulting in a significant change in circumstances, which justified modification of the MSA. He reported that he had been hospitalized and, as he was without insurance, owed a $16,000 medical bill. Defendant also asserted that over the past several years his business had suffered huge losses due both to the 2008 financial crisis and to new technology, causing him to permanently lose his customer base. He averred that his companies had collapsed, the companies' assets and equipment had been seized by creditors, he was evicted by the landlord, and he faced several commercial lawsuits by his creditors and his former business partner.
Defendant further asserted that after the collapse of his printing businesses, he searched very actively for new jobs and obtained employment with a new company that went out of business in the summer of 2012. Defendant was then able to secure another job, earning $2500 per week; however, this meant that he was only earning $130,000 per year, rather than almost $400,000 per year as he had in the past. Defendant certified that as a result of these events, he experienced a substantial and permanent decline in his financial circumstances. Plaintiff filed a cross-motion requesting that the trial court deny defendant's requests and asserted several requests for relief.
On May 23, 2013, the trial court denied defendant's application. The trial court determined that defendant had failed to set forth a prima facie showing of changed circumstances that warranted modification of his support obligations. Specifically, the trial court reasoned that the documentation provided by defendant was "woefully deficient[,]" that defendant "provided no evidence of the status of his three businesses[,]" that the defendant "failed to prove that he has looked for comparable employment[,]" and that defendant's problems with his businesses were well-known to him at the time that he entered into the MSA.
On June 12, 2013, defendant filed a motion for reconsideration seeking the same relief as his initial February 20, 2013 motion, which plaintiff again opposed. Defendant attached to his reconsideration motion his 2012 personal tax return showing an adjusted gross income of $67,333, dissolution statements of defendant's companies, a statement by his tax preparer detailing the decrease in defendant's financial situation, and copies of three recent pay stubs showing defendant's yearly income to be $130,000. These documents were not included in defendant's February 20, 2013 motion.
On August 15, 2013, the trial court denied defendant's motion for reconsideration, reasoning that defendant was attempting "to cure his deficiencies by supplying information that was readily available at the time of the first motions." The trial court also denied defendant's other requests for relief, noting that plaintiff had voluntarily agreed to reduce defendant's obligations.
At the August 2, 2013 hearing on defendant's motion for reconsideration, plaintiff agreed to receive $1000 a week in alimony with the reduction of $500 being added to the arrears. In doing so, plaintiff recognized that defendant did not have the available resources to pay the full amount at that time.
On appeal, defendant argues that he showed the requisite change in circumstances under Lepis v. Lepis, 83 N.J. 139 (1980), thereby warranting a plenary hearing. He also challenges the award of attorney's fees and order to provide a car for his daughter who was working full time without a hearing on his financial ability to pay for same.
In particular, defendant contends that he made a prima facie demonstration that due to the loss of his businesses, his income has permanently decreased and his expenses and obligations have increased. Furthermore, defendant asserts that he attempted to find comparable employment opportunities, but that his prospects are slim as he did not graduate high school and his skills are limited to the printing industry. He also provided a listing of all the printing jobs that he had sought. Defendant also argues that he produced documentation in his original motion to substantiate his claims of a change in circumstances. We conclude that defendant has established a prima facie showing of a permanent and significant change in financial circumstances and that the trial court abused its discretion in failing to schedule a plenary hearing.
We begin with a review of the well-settled principles that guide our analysis. Alimony and child-support "may be revised and altered by the court from time to time as circumstances may require." N.J.S.A. 2A:34-23. To make such a modification, a showing of "changed circumstances" is required. Lepis, supra, 83 N.J. at 146 (internal citations omitted); see also Weishaus v. Weishaus, 180 N.J. 131, 140-41 (2004). Examples of changed circumstances include:
(1) an increase in the cost of living;
(2) increase or decrease in the supporting spouse's income;
(3) illness, disability or infirmity arising after the original judgment;
(4) the dependent spouse's loss of a house or apartment;
(5) the dependent spouse's cohabitation with another;
(6) subsequent employment by the dependent spouse; and
(7) changes in federal income tax law.
[Lepis, supra, 83 N.J. at 151 (internal citations omitted).]
Temporary or anticipated circumstances do not warrant modification. Ibid. Moreover, "[t]he party seeking modification has the burden of showing such 'changed circumstances' as would warrant relief from the support or maintenance provisions involved." Id. at 157 (citing Martindell v. Martindell, 21 N.J. 341, 353 (1956)).
To determine whether there is a prima facie showing of changed circumstances, a judge must consider the terms of the order at issue and compare the facts as they were when that order was entered with the facts as they are at the time of the motion. Faucett v. Vasquez, 411 N.J. Super. 108, 129 (App. Div. 2009), certif. denied, 203 N.J. 435-36 (2010) (internal citations omitted). Once a prima facie case has been made and financial disclosures have been evaluated, "the court must decide whether to hold a hearing." Lepis, supra, 83 N.J. at 159. A trial judge has the discretion to decide the motion exclusively on the papers. Faucett, supra, 411 N.J. Super. at 128; Shaw v. Shaw, 138 N.J. Super. 436, 440 (App. Div. 1976). "It is only where the affidavits show that there is a genuine issue as to a material fact, and that the trial judge determines that a plenary hearing would be helpful in deciding such factual issues, that a plenary hearing is required." Shaw, supra, 138 N.J. Super. at 440.
Our scope of review of the trial court's decision is limited. Cesare v. Cesare, 154 N.J. 394, 411 (1998). "Whether an alimony obligation should be modified based upon a claim of changed circumstances rests within a Family Part judge's sound discretion." Larbig v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006); see also Storey v. Storey, 373 N.J. Super. 464, 470 (App. Div. 2004). Each individual motion for modification is particularized to the facts of that case, and "'the appellate court must give due recognition to the wide discretion which our law rightly affords to the trial judges who deal with these matters.'" Larbig, supra, 384 N.J. Super. at 21 (quoting Martindell, supra, 21 N.J. at 355). We will not disturb the trial court's decision on support obligations unless we
conclude that the trial court clearly abused its discretion, failed to consider all of the controlling legal principles, or must otherwise be well satisfied that the findings were mistaken or that the determination could not reasonably have been reached on sufficient credible evidence present in the record after considering the proofs as a whole.
[Heinl v. Heinl, 287 N.J. Super. 337, 345 (App. Div. 1996).]
Here, the trial court mistakenly exercised its discretion in determining that a plenary hearing was not necessary before deciding defendant's motion for modification of support. Additionally, the court awarded counsel fees to plaintiff and directed defendant to purchase a car and car insurance for his daughter without properly considering his claim of changed financial circumstances. Although defendant filed his motion less than twenty months after the MSA was finalized, the facts presented by defendant - that he lost his three businesses, all his business equipment and company assets, and was left with massive commercial debts and ongoing litigation in an industry experiencing rapid technological changes resulting in business contraction - clearly amounted to a prima facie demonstration that the changed circumstances were of a permanent nature. Cf. Larbig, 384 N.J. Super. at 23 (noting that "[t]here is . . . no brightline rule by which to measure when a changed circumstance has endured.
We recognize that defendant did not provide any evidence of the downturn in the economy or technological changes that he certified as causing him to lose his businesses and end up underwater financially. For purposes of considering this uncorroborated claim, we can take judicial notice of the 2008 economic downturn and the widespread changes in the printing industry. See N.J.R.E. 201(b) (discussing when courts may take judicial notice of facts); see also N.J. Dep't of Labor & Workforce Dev. v. Crest Ultrasonics, 434 N.J. Super. 34, 43-44 (App. Div. 2014) (wherein the court took judicial notice of the recent economic recession and its effect on businesses). At a plenary hearing, specific facts can be presented to determine the effect, if any, of these widespread economic changes on defendant's businesses and ability to earn his former income.
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This is not a case where defendant is simply making broad generalizations and bare assertions that business is bad or that he cannot find more employment. Rather, he has provided specific details about his businesses, their demise, pending lawsuits, and his efforts to obtain employment. Moreover, defendant has obtained employment, although it is not nearly as lucrative as owning three businesses. Furthermore, the trial court failed to take into consideration defendant's assertion that his job prospects are particularly bleak considering that he did not graduate high school and his employment skills and experiences have all been in the now declining printing industry.
In contrast to defendant's contentions, plaintiff argues that defendant is manipulating the facts and possibly hiding assets and income, that any business losses were defendant's fault, and that he knew his businesses were in trouble when he entered into the MSA. Thus, there were material disputed facts at issue here. As defendant has presented sufficient facts to establish a prima facie case of changed circumstances, a plenary hearing should have been scheduled to consider the disputed facts before the entry of the May 23, 2013 order. Accordingly, we reverse that order.
We emphasize that we do not hold that defendant has proven a permanent change of circumstances warranting a modification, but merely that defendant has established a prima facie showing of changed circumstances warranting an evidentiary hearing to determine the disputed facts. See Miller v. Miller, 160 N.J. 408, 420 (1999). The court may provide a period of discovery prior to the plenary hearing to further develop the facts. We also vacate that part of the August 15, 2013 order that awarded counsel fees and ordered defendant to purchase a car for his daughter, pending consideration of defendant's request to modify the MSA support provisions. Based on our remand of the May 23, 2013 order, we need not reach the issues in the appeal of the motion for reconsideration.
Reversed and remand for further proceedings consistent with this opinion. 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