Opinion
DOCKET NO. A-0776-12T4
05-28-2014
PAUL PROKOP, Plaintiff-Respondent, v. AMY PROKOP, Defendant-Appellant.
Amy Prokop, appellant pro se. Respondent has not filed a brief.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Maven and Hoffman.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-361-04.
Amy Prokop, appellant pro se.
Respondent has not filed a brief. PER CURIAM
In this post-judgment matrimonial matter, a Family Part judge granted plaintiff's enforcement motion regarding income tax exemptions and found defendant in violation of litigant's rights. Defendant's motion for reconsideration was denied and she appeals. For the reasons that follow, we reverse.
The parties were married in 1997 and divorced in 2004. They have two children, a daughter born in 1998, and a son, born in 2001. The parties signed a Property Settlement Agreement (PSA) on November 8, 2004, which the court incorporated into the final judgment of divorce, entered on November 16, 2004. Relevant to this appeal, the PSA designated defendant the parent of primary residence and required plaintiff to pay weekly child support of $130. Regarding income tax exemptions relating to the children, the PSA provided "that [h]usband and [w]ife shall each be permitted to declare one child as an income tax exemption for [f]ederal, [s]tate, and local income text purposes."
Apparently, the parties encountered no problems regarding the tax exemptions for the children during the first six years following their divorce. Problems arose, however, in late 2011 when defendant requested an increase in child support as well as plaintiff's agreement for her to claim the tax exemptions for both children. Plaintiff declined both requests. While defendant indicated she intended to file a motion on December 6, 2011, to address these issues if the parties could not resolve these matters directly, no such motion was filed.
On February 15, 2012, plaintiff's counsel sent a letter to defendant stating "you are required to execute the necessary Internal Revenue Service [F]orm 8332 (Form 8332) allowing Mr. Prokop to take one of your children as a dependency deduction." By letter dated February 27, 2012, plaintiff's counsel then advised defendant if she followed through with her motion to amend the PSA to allow her to claim the tax exemptions for both children, plaintiff would move for enforcement and ask that she be held in violation of litigant's rights.
"The Internal Revenue Code, 26 U.S.C.A. § 152(e)(1), gives a custodial parent the right to the exemption, subject to waiver by that parent." Heinl v. Heinl, 287 N.J. Super. 337, 352-353 (App. Div. 1996) (quoting Gwodz v. Gwodz, 234 N.J. Super. 56, 62 (App. Div. 1989)). Form 8332, by its terms, applies primarily to post-2008 divorce decrees and separation agreements.
Despite defendant's announced objection to plaintiff claiming one of the children as an exemption, she claimed only one child on her 2011 state and federal tax returns. Plaintiff proceeded to file his 2011 tax returns without claiming either child, based upon the mistaken assumption defendant was required to sign Form 8332 for him to claim one of the children. Plaintiff then filed a motion to enforce litigant's rights seeking to compel defendant to honor the PSA permitting each party to declare one exemption and requiring defendant to pay plaintiff the $1584 he would have received had he claimed one of the children on his 2011 returns. Plaintiff also sought counsel fees and costs.
Defendant filed a cross-motion requesting the court to amend their PSA to allow her to claim the tax exemptions for both children. In her certification in support of her cross-motion and in opposition to plaintiff's motion, defendant explained she has not received
an increase in child support[,] which is severely needed. Therefore since I am the custodial parent, with 86% of the parenting time burden, . . . left with the sole responsibility of making ends meet to keep the children out of poverty[,] . . . I sent [plaintiff] a letter to discuss the issue of modifying our . . . [PSA].Defendant further explained why plaintiff's claim that she violated their PSA lacked merit:
5. My 2011 Federal Income Tax Return clearly shows that I was in compliance with the original [PSA]. My son . . . was my only exemption. I did not wrongfully receive the benefit of both children as stated in the plaintiff[']s Notice of Motion. Therefore I did not "violate the agreement." I do not owe the plaintiff the $1584 that he is requesting. It is the tax payer's sole responsibility to file a correct return. The plaintiff may amend his 2011 tax return if he wishes to receive additional funds. It is not owed to the plaintiff by me[.] It is not my responsibility.
6. The Internal Revenue Service clearly states that [F]orm 8332 is not needed if there is a decree or agreement. This can be viewed online at http://www.irs.gov/pub/irs-pdf/f8332.pdf ([Exhibit "D"])[.] This same information was sent to the plaintiff in December 2011, printed from the website and
sent directly to the plaintiff. . . . Simply, his attorney wrongfully advised the plaintiff that he needed the form.
On June 19, 2012, the motion judge decided the motions, without oral argument, and granted plaintiff's motion and denied defendant's cross-motion. Specifically, the judge granted enforcement of the PSA "permitting each party to declare one unemancipated child . . . each year," and required defendant to "cooperate in any manner necessary to ensure that [p]laintiff has the ability to declare one unemancipated child[,] . . . including[,] but not limited[,] to the execution of the necessary Internal Revenue Service documents[.]" The judge further held defendant in violation of litigant's rights and required her to pay plaintiff $1584, representing the amount of additional tax refund he would have received had he claimed one child as an exemption. The judge failed to address defendant's argument Form 8332 did not apply to the parties.
Defendant moved for reconsideration of the court's order, challenging the determination she had violated plaintiff's rights as a litigant. Defendant again noted plaintiff did not need Form 8332 to claim one of the children as an exemption because their PSA went into effect after 1984 and before 2009. She further emphasized that she had never executed Form 8332 for any previous years. The judge denied plaintiff's motion for reconsideration, stating defendant "has not offered any argument[] which illustrates that the [c]ourt has based its decision upon a palpably incorrect basis, or that the [c]ourt failed to consider the significance of probative, competent evidence." Once again, the judge's statement of reasons did not discuss defendant's argument that Form 8332 did not apply in this case. This appeal followed.
The scope of appellate review of the Family Part's fact-finding is limited. Cesare v. Cesare, 154 N.J. 394, 411 (1998). "We grant substantial deference to a trial court's findings of fact and conclusions of law, which will only be disturbed if they are 'manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence.'" Crespo v. Crespo, 395 N.J. Super. 190, 193-94 (App. Div. 2007) (quoting Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974)). Moreover, "[b]ecause of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding." Cesare, supra, 154 N.J. at 413. However, we review the Family Part's interpretation of the law de novo without any special deference. Manalapan Realty, L.P v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). Further, in construing and enforcing a PSA, the judge must consider the parties' intent, as well as common sense and equity. See Sachau v. Sachau, 206 N.J. 1, 5-6 (2011) (stating the basic contractual nature of matrimonial agreements require courts to "discern and implement the common intention of the parties").
As a threshold matter, we conclude the judge erred finding defendant violated the parties' PSA and granting plaintiff's motion for enforcement. As defendant explained in her certifications, plaintiff did not require her signature on Form 8332 to claim one of the children as an exemption. Defendant's right to do so was clearly set forth in the parties' PSA. A cursory review of Form 8332 confirms defendant's position that the form did not apply to the parties in this case. We find no factual support for the conclusion defendant violated the PSA or otherwise violated litigant's rights. The form defendant was ordered to sign contains specific language stating that the form is not required "[i]f the divorce decree . . . went into effect after 1984 and before 2009[.]" I.R.S., Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, http://www.irs.gov/pub/irs-pdf/f8332.pdf (Rev. Jan. 2010). For parents with divorce decrees entered in that time frame, the non-custodial parent can attach the relevant pages from the PSA instead of Form 8332. Ibid.
Even if the judge were correct that defendant violated the exemption provisions of the PSA, we discern no basis for ordering defendant "to reimburse plaintiff $1,584.00 representing tax refunds he would have received had [d]efendant complied with [the] PSA." The record clearly demonstrates defendant did not claim both children in 2011, or act in any way to preclude plaintiff from claiming one child as an exemption as per mitted by the PSA. The court did not make any finding that plaintiff was unable to amend his 2011 tax return to claim the other child nor does the record provide any support for such a finding. At that point, and even today, plaintiff was well within the three-year time period for filing amended returns.
See N.J.S.A. 54A:9-8(a) (allowing, generally, taxpayers to amend their State returns within three years of the original filing); I.R.S., Topic_308_-_Amended_Returns, http://www.irs.gov/taxtopics/tc308.html (last updated April 22, 2014) ("Generally, to claim a refund, Form 1040X must be filed within 3 years after the due date of your original return . . . .").
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A judge in a matrimonial action may award a party reasonable attorney's fees and costs, and in making that determination "shall consider the factors set forth in the court rule on counsel fees, the financial circumstances of the parties, and the good or bad faith of either party." N.J.S.A. 2A:34-23. See R. 5:3-5(c). While the judge acknowledged her obligation to consider these factors, she failed to make specific findings regarding the factors or otherwise explain her decision to award plaintiff counsel fees of $1690. Regardless, because we conclude defendant did not violate the PSA or otherwise violate litigant's rights, we find no support in the record for an award of any counsel fees to plaintiff.
Reversed.
I hereby certify at the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION