Opinion
DOCKET NO. A-0786-12T3
08-01-2014
STUART LANTZ, Plaintiff-Appellant/Cross- Respondent, v. IVY LANTZ, n/k/a IVY BROWN, Defendant-Respondent/Cross- Appellant.
Stuart Lantz, appellant/cross-respondent pro se. Brian Schwartz, LLC, attorneys for respondent/cross-appellant (Mr. Schwartz and Elizabeth Vinhal, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Grall and Waugh. On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-586-03. Stuart Lantz, appellant/cross-respondent pro se. Brian Schwartz, LLC, attorneys for respondent/cross-appellant (Mr. Schwartz and Elizabeth Vinhal, on the brief). PER CURIAM
Plaintiff Stuart Lantz and defendant Ivy Brown (formerly known as Ivy Lantz) married in 1985 and divorced in 2003. At the time of their divorce, the parties' son and daughter were teenagers, and their dual judgment of divorce incorporates a detailed marital settlement agreement (MSA). The MSA addresses, among other things, alimony, basic child support and allocation of responsibility for specified expenses including medical and dental care not covered by insurance and college education. Following their parents' divorce, both children attended colleges located outside New Jersey. The parties' son graduated from college in May 2009, and in conformity with the MSA he was emancipated in May 2009. Their daughter graduated from college with a degree in nursing in May 2012.
Lantz appeals and Brown cross-appeals from a post-judgment order entered on September 24, 2012. That order addresses Lantz's motion to emancipate the parties' daughter effective May 12, 2012, the day following her college graduation, and Brown's cross-motion to delay their daughter's emancipation until she passed the licensing exam and obtained employment as a nurse. The order also addresses Brown's cross-motion to enforce Lantz's support obligations under their MSA, as modified by postjudgment orders.
There has been extensive post-judgment litigation addressing Lantz's support obligations. Because there is no longer any dispute about the amount of alimony and basic child support Lantz was obligated to pay under the post-judgment orders, we have not burdened the text with the amounts.
In any event, Lantz's alimony obligation of $45,000 annually as stated in the MSA has been reduced to $18,900 annually, and the denial of Lantz's application for a further reduction of alimony was affirmed on a prior appeal. Lantz v. Lantz (Lantz II), No. A131210 (App. Div. Mar. 2, 2012).
Lantz's basic child support obligation has also been reduced in light of changed circumstances. The MSA, entered while both children were living with Brown, required Lantz to pay approximately $1591 monthly ($370 weekly) for both children. In Lantz v. Lantz (Lantz I), No. A162208 (App. Div. May 24, 2010), we reversed a denial of Lantz's motion for a reduction of basic child support and remanded for reconsideration in light of Lantz's reduced income and the children's attendance at college away from home. On that remand, child support was reduced to $567 monthly per child — a rate based on $800 monthly for time at home and $400 monthly for time at college. We affirmed that reduction of child support in Lantz II, but we directed the judge to make the reduction effective on an earlier date and remanded for adjustment of arrears. On that remand, the parties agreed to credit Lantz $9000 against his child support arrears.
On Brown's representation that their daughter took the State-administered licensing exam for nurses at the end of July, the judge emancipated the parties' daughter effective July 31, 2012. The judge denied Brown's request for an order compelling Lantz to reimburse their son for a college loan the son paid off after his graduation. The judge, however, awarded Brown adjusted arrears for alimony and basic child support, the full amount Brown sought for the children's college expenses, medical and dental expenses and counsel fees for the expense Brown incurred to enforce the MSA.
The parties raise the following objections to the order. Lantz contends the judge erred by: 1) delaying their daughter's emancipation beyond the date of her college graduation; 2) misreading a provision of the MSA addressing room and board; 3) obligating Lantz to pay other expenses Brown did not prove; 4) directing payment of his arrears through a distribution of his IRA; and 5) awarding Brown counsel fees. Brown argues that the judge erred in declining to enforce Lantz's agreement to repay their son for a college loan their son had paid in full but otherwise urges us to affirm the order.
Judges of the Family Part have expertise that warrants deferential review of their resolution of disputes involving emancipation, child support and enforcement of orders and agreements addressing those issues. Cesare v. Cesare, 154 N.J. 394, 412-13 (1998); Sheridan v. Sheridan, 247 N.J. Super. 552, 569 (Ch. Div. 1990) (discussing the exercise of discretion in granting litigant's relief). Consequently, this court does not disturb rulings on those issues if they are adequately supported by the record and based on an exercise of discretion in accordance with the law.
Nevertheless, interpretation of an MSA involves a question of law that this court must decide de novo. Pacifico v. Pacifico, 190 N.J. 258, 265-66 (2007) (recognizing contractual nature of matrimonial agreements); Kaur v. Assured Lending Corp., 405 N.J. Super. 468, 474 (App. Div. 2009) (holding that interpretation and construction of contracts are subject to de novo review). True, judges have more discretion in interpreting matrimonial agreements than other contracts, but that discretion is not unlimited. Sachau v. Sachau, 206 N.J. 1, 5 (2011); Guglielmo v. Guglielmo, 253 N.J. Super. 531, 542 (App. Div. 1992). Settlement of family matters by agreement of the parties is favored and judges are directed to enforce settlement agreements in accordance with the parties' expression of their intent and general purposes unless enforcement would be unfair or inequitable in the circumstances. J.B. v. W.B., 215 N.J. 305, 326 (2013); Lepis v. Lepis, 83 N.J. 139, 146 (1980).
In this case, the judge misinterpreted provisions of the MSA addressing emancipation and Lantz's obligation for room and board expenses. For that reason, we reverse the provisions of the order addressing those issues and remand for further proceedings in conformity with this opinion. Modification of the emancipation date and room and board expenses awarded to Brown will alter Lantz's arrears and warrants an adjustment of the counsel fees awarded to Brown in aid of her rights as a litigant. Accordingly, those matters must be reconsidered as well. With the foregoing exceptions, we reject the parties' respective objections and affirm the order.
For ease of presentation, we discuss the several issues raised on appeal and our reasons for their disposition separately.
1. Emancipation
The MSA addresses emancipation, and it tightly ties a delay of emancipation beyond the age of eighteen to the child's pursuit of education. The MSA provides: "In order to defer emancipation past the eighteenth birthday of a child, that child must be engaged in post-secondary [education] on a full-time basis as defined by the institution in which the child [is] enrolled." Moreover, the MSA states that a child "shall be considered emancipated upon . . . completion of . . . college education . . . ." Although the MSA provides that a child's full-time employment is a separate event triggering emancipation under the MSA, it does not provide for delayed emancipation based on a college-educated child's inability to secure employment in his or her chosen field.
In support of Lantz's motion to emancipate the parties' daughter effective the day after her college graduation, Lantz relied on the unambiguous terms of the MSA and the fact that the parties' daughter had, at a minimum, $15,000 in savings. Brown did not dispute their daughter's savings. Despite the clarity of the MSA, Brown opposed emancipation effective upon completion of college. Brown contended that she planned to provide her daughter with shelter, food, clothing, car insurance, medical expenses and a cell phone until the young woman studied for and passed the State examination — a requirement for obtaining a license and employment that would allow her to practice nursing. Brown expected her daughter to accomplish her goals by September 2012.
Brown also objected to her daughter being required to invade her savings to support herself pending her full-time employment as a nurse. She argued that Lantz, who had not contributed to their daughter's college expenses as required, should not be able to avoid responsibility for her continued support by having her draw on her savings. Brown further contended that because she had not relied on her daughter's savings when Brown paid her share of the college expenses, Lantz should not be permitted to do that now. In Brown's view, an order compelling that result would disadvantage the parent who supported the child and favor the parent who did not.
Lantz asserted his willingness to pay expenses his daughter could not cover with savings. He admitted that he was unwilling to give Brown additional money to support a twenty-two-year-old college graduate who met the conditions for emancipation set forth in the MSA and had the funds for self-support.
The judge picked an emancipation date between May and September 2012. Deeming preparation for the nursing boards and preparation for the bar exam to be comparable commitments, the judge took notice that both endeavors are commonly treated as full-time responsibilities. On that ground and on Brown's assertion that the nursing exam was given at the end of July, the court emancipated the parties' daughter effective July 31, 2012. Although the judge recognized that the parties' agreement required emancipation because of the child's graduation and completion of full-time studies, he concluded that delay of emancipation was appropriate because the young woman could not put her degree to use until she passed the State-licensing exam. In the judge's opinion, the end of July was "a very reasonable" date for emancipation under the circumstances.
In determining that this two-and-a-half month delay of emancipation the judge ordered was reasonable, he did not address the daughter's $15,000 in savings, an amount more than ten times greater than the support at issue, $1417.50. Nor did the judge consider that even if the daughter contributed twice as much as Lantz was obligated to pay, she would still have more than $10,000 in savings on July 31.
Lantz's child support obligation was $567 monthly and the period between May 12 and July 31, 2012 is approximately twoand-a-half months.
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Setting aside the absence of a certification or other evidence addressing the intensity of the work involved in preparation for the licensing exam for nurses, the judge did not make any findings as to why it would be unfair or inequitable to enforce the unambiguous terms of the MSA calling for the daughter's emancipation upon completion of college.
The question here was not, as Brown argues, fairness or equity between the parties. "[T]he essential inquiry" in an emancipation case "is whether the child has moved 'beyond the sphere of influence and responsibility exercised by a parent and obtains an independent status of his or her own.'" Filippone v. Lee, 304 N.J. Super. 301, 308 (App. Div. 1997) (quoting Bishop v. Bishop, 287 N.J. Super. 593, 598 (Ch. Div. 1995)). This record did not include any evidence that this twenty-two-yearold woman with a college degree in nursing remained within her parents' sphere of influence and responsibility.
In the circumstance of this case, the judge erred in substituting his view of a reasonable emancipation date for the parties' agreement on that point. Brown's desire to prolong this young woman's dependence upon parental support does not, under any precedent we have found, obligate Lantz to join in his former wife's effort, in light of their unambiguous agreement to the contrary.
Given the clarity of the MSA and the daughter's undisputed savings at the time of the motion, we find no basis in the evidence or law for the order delaying emancipation. Accordingly, we reverse and remand for entry of an order emancipating the parties' daughter effective May 12, 2012. Quite obviously, this modification will require an adjustment of Lantz's child support arrears.
2. Room and board expenses
In her cross-motion, Brown sought to enforce a provision of the MSA that, as modified by order of October 28, 2010, required Lantz to pay two-thirds of their daughter's room and board expenses while she was attending college out of State. Brown claimed that Lantz owed $15,172 for room and board during their daughter's last two years of college — June 2010 through May 2011 and June 2011 through May 2012. She sought and was awarded $15,172 for room and board.
This award cannot stand. The exhibit Brown produced to establish what Lantz owed for room and board demonstrates that $15,172 represents two-thirds of what the college would have charged for room and board if their daughter had lived on campus — an amount $4544 more than the actual cost Brown incurred for room and board when their daughter lived off campus. Lantz contends, as he did in the trial court, that the MSA did not require him to pay more than his share of the actual costs of room and board. We agree.
The parties' agreement on college costs is quite specific. It lists the items the parties would allocate as "college expenses" — "room, board, tuition, fees, books and four round trips from the college of the child's choice to New Jersey each year." With respect to the room and board expenses of a child attending college away from home, it also addresses allocation of that cost if a child elects "to live off-campus." Specifically, it provides that Lantz's obligation to pay room and board expenses off campus shall "be limited to the amount he would have paid had the child lived on campus."
The foregoing provision of the MSA cannot be interpreted, as Brown argues, to require Lantz to pay two-thirds of the cost of room and board on campus even if the actual cost of living off campus is less. It appearing that the judge accepted Brown's unsustainable reading of the MSA, we reverse and remand for entry of an order reducing Lantz's share by $4544.
3. College expenses other than room and board and medical and dental expenses
Lantz does not dispute his obligation to pay two-thirds of his children's college expenses other than room and board and two-thirds of their expenses for medical and dental care not covered by insurance. He objects to the adequacy of the documentation provided and to Brown's delay in pursuing reimbursement. After considering the arguments in light of the record, which includes a certification indicating that she had and would provide the documentation on request and a reference to documentation that Brown's attorney produced at oral argument on the motion, we conclude that these arguments have insufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
4. The validity of the mandate directing payment of arrears for college expenses by way of distribution of Lantz's IRA
Lantz argues that the judge erred in directing payment of his arrears for college expenses by distribution of his IRA. He contends that the order violates State law protecting IRAs from creditors. We reject this claim.
Lantz relies on N.J.S.A. 25:2-1(b), a provision of the Fraudulent Conveyance Act, N.J.S.A. 25:2-1 to 25:2-6. The statute provides that "any property held in a qualifying trust and any distributions from a qualifying trust . . . shall be exempt from all claims of creditors and shall be excluded from an estate in bankruptcy." Although Lantz's IRA is a "qualifying trust" within the meaning of the statute, see Gilchinsky v. Nat'l Westminster Bank N.J., 159 N.J. 463, 473 (1999), the statute does not exempt claims from creditors based on "any order for child support or spousal support." N.J.S.A. 25:2-1(b)(2).
Recognizing the statute's lack of protection from creditors seeking to collect child support, Lantz relies upon cases that have noted distinctions between child support and college contributions in other contexts — Newburgh v Arrigo, 88 N.J. 529, 543-45 (1982), Khalaf v. Khalaf, 56 N.J. 63, 71-72 (1971) and Hudson v. Hudson, 315 N.J. Super. 577, 584-85 (App. Div. 1998). His reliance is misplaced. Although our courts have recognized that child support orders and orders compelling college contributions are distinct and entered on discrete considerations, both fall within the scope of the statute's exclusion, which applies broadly to "any order for child support." N.J.S.A. 25:2-1(b)(2).
Federal courts have held that a court order obligating a parent to pay college expenses should be treated as a domestic support obligation under federal law. See generally In re Schumacher, 495 B.R. 735 (Bankr. W.D. Tex. 2013) (and cases discussed therein). And, as the Bankruptcy Court for the District of New Jersey has concluded, the Fraudulent Conveyance Act was adopted to align New Jersey law with federal bankruptcy law. In re Princeton-New York Investors Inc., 255 B.R. 366, 374 (Bankr. D.N.J. 2000). We see no basis for reading the broad language of the statute protecting funds held in IRAs from creditors to include creditors seeking to collect arrears on court-ordered college contributions.
5. Lantz's objections to the award of counsel fees Because we have reversed a portion of the September 24, 2012 order favorable to Brown, we vacate the order awarding counsel fees without prejudice and direct the judge to reconsider the award in light of the modifications of the order required by this opinion.
6. Brown's objection to the denial of her application to compel Lantz to reimburse their son for repayment of a loan taken to fund his college expenses
At Lantz's request, the parties' son accepted a Stafford Loan offered as part of a financial aid package. When Lantz asked his son to take that loan, he also promised to pay the principal and interest. Lantz's request and promise to repay are memorialized in a letter Lantz wrote to his former wife and his son in August 2007. In addition, Lantz's obligation to repay that loan was included in a list of Lantz's arrears for child support and college expenses entered on October 28, 2008. Subsequently, the parties' son repaid the loan and interest.
As previously noted, a request for an order compelling Lantz to repay their son was among the prayers for relief in Brown's cross-motion, but the judge denied that relief. Brown contends that the judge erred in denying her request.
In opposition to Brown's request to compel repayment, Lantz certified that their son, a 2009 college graduate who is employed as an engineer, agreed to take responsibility and repaid the loan. Brown did not dispute those representations.
On appeal, Brown reiterates the argument she made in the trial court — that the judge violated the law of the case doctrine by declining to enforce the October 28, 2010 order, Lantz's promise to repay the loan and the provisions of the MSA in which the parents agreed to pay college expenses. Accepting Lantz's representations, the judge reasoned that orders and agreements are subject to modification based on changed circumstances making enforcement unfair or inequitable. Noting that the son would be free to file an application for reimbursement, the judge concluded that the agreement between father and son warranted denial of Brown's motion.
Finding no merit in the arguments Brown presents to establish error in that determination, we affirm this aspect of the order.
Affirmed in part, reversed in part and remanded for further proceedings in conformity with this decision
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION