Opinion
DOCKET NO. A-5113-12T2
09-04-2014
ANDREW RICH, Plaintiff-Appellant, v. LINDA RICH, Defendant-Respondent.
Law Offices of Jill Anne LaZare, LLC, attorneys for appellant (Christopher Ciotoli, on the brief). Laufer, Dalena, Cadicina, Jensen & Boyd, LLC, attorneys for respondent (Mario N. Delmonaco, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Lihotz, Maven and Hoffman. On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-646-09. Law Offices of Jill Anne LaZare, LLC, attorneys for appellant (Christopher Ciotoli, on the brief). Laufer, Dalena, Cadicina, Jensen & Boyd, LLC, attorneys for respondent (Mario N. Delmonaco, of counsel and on the brief). PER CURIAM
Plaintiff Andrew Rich appeals from two May 16, 2013, post-judgment matrimonial orders. The first denied his request to reduce his alimony obligation to defendant Linda Rich. The second awarded $2915 in counsel fees and costs to defendant related to the filing of her cross-motion for enforcement of litigant's rights. We affirm.
The parties' March 16, 2010 dual final judgment of divorce (JOD) incorporated a property settlement agreement (PSA) that resolved all collateral issues, including alimony. Relative to alimony, the parties acknowledged "this is a permanent alimony arrangement" as a result of their twenty-five year marriage. The terms of the PSA stipulated plaintiff's annual earnings from Genesys Graphics, LLC (Genesys), his closely held corporation, and Chelmar, LLC, were $105,000, and he agreed to pay defendant $2000 per month commencing April 1, 2010. Plaintiff defaulted on these payments shortly after the divorce was final. Defendant moved for enforcement, which was ordered. However, plaintiff continued to accumulate arrearages, such that when the Family Part reviewed the current motions, plaintiff owed $10,000 for 2010, $24,000 for 2011, and $4000 for 2012.
Plaintiff initiated the motion review by filing a request to reduce his alimony obligation. He asserted he suffered an "involuntary, permanent change in circumstances . . . which negatively affected" his financial circumstances. He also believed defendant's fortunes had reversed since their divorce and she experienced an increase in earnings and income.
In his pleadings, relying on an evaluation prepared during the matrimonial litigation, plaintiff suggested Genesys had "no value." He stated the company's assets, which were comprised of accounts receivable, were transferred to another corporation, Innerworkings, in exchange for the latter's assumption of outstanding accounts payable. Genesys then "closed" sometime in 2011, after plaintiff "sold" the business in July 2011. Plaintiff has not provided documentation of these transactions. Thereafter, plaintiff became an employee of Innerworkings and was provided an annual draw of $80,000, but suggested he had "not even come close to meeting the sales goals set for [him]. . . ." Consequently, his income plummeted. Plaintiff asserts his Innerworkings 2011 W-2 showed wages of less than $60,000; however, the actual document is not attached. He provided paychecks for nine months in 2012, which reflected earnings of approximately $60,000 for this period. Plaintiff's 2013 expenses, reported on his case information statement, were $6430 per month. He asserted he had no remaining assets as he had lost his real estate to foreclosure and filed a voluntary Chapter 7 bankruptcy petition.
Defendant filed a cross-motion, challenging plaintiff's alleged dire financial circumstances and seeking enforcement of the provisions of the PSA, including payment of the alimony arrearages. She noted plaintiff's claimed expenses exceed $77,000 annually and he generally reported no debt. She also questioned why plaintiff would transfer Genesys for nothing, when the valuation report he attached reported a book value of $30,000. Further, she questioned why he would accept a job paying him less money, specifically noting he offered no information to show he made a good faith effort to find comparable employment. Finally, she sought an award of counsel fees for the enforcement motion.
The motions were considered by a Family Part judge, without the benefit of oral argument. The judge entered two orders. One order denying plaintiff's request for modification of alimony and granting almost all of defendant's enforcement requests. The other order awarded defendant counsel fees. The judge attached a statement of reasons supporting the conclusions reached in the two orders issued. The judge determined plaintiff's circumstances were temporary, not permanent and, therefore, modification was not warranted. The judge also determined plaintiff had failed to comply with the JOD and granted defendant's enforcement motion and ordered plaintiff's wages garnished to collect future alimony payments. Specifically, the judge ordered plaintiff to satisfy the $38,000 in alimony arrears within seven days; and reimburse defendant's health insurance premiums of $2662.60 and $2500 set forth in the JOD. Finally, defendant was awarded counsel fees and costs of $2 915 for her enforcement motion.
On appeal, plaintiff argues the judge failed to comply with the requirements of Rule 1:7-4, which states:
The court shall, by an opinion or memorandum decision, either written or oral, find the facts and state its conclusions of law thereon in all actions tried without a jury, on every motion decided by a written order that is appealable as of right[.]He also maintains a plenary hearing was necessary to address the decrease in his income and the increase enjoyed by defendant, which he asserts requires an adjustment to the alimony award. Finally, plaintiff contends his motion was filed in good faith, obviating an award of counsel fees.
Our cases have repeatedly stressed the importance of a trial judge's responsibility to provide findings and conclusions to assure informed appellate review. Rosenberg v. Bunce, 214 N.J. Super. 300, 303 (App. Div. 1986). This court has noted that "an articulation of reasons is essential to the fair resolution of a case." Schwarz v. Schwarz, 328 N.J. Super. 275, 282 (App. Div. 2000) (remanding case on issue of changed circumstances where trial judge made no findings of fact or conclusions of law). The oft-cited instruction by the Supreme Court regarding trial court factfinding provides:
Failure to perform that duty "constitutes a disservice to the litigants, the attorneys and the appellate court." Kenwood Assocs. v. Bd. of Adj. Englewood, 141 N.J. Super. 1, 4 (App. Div. 1976). Naked conclusions do not satisfy the purpose of R [ ule] 1:7-4. Rather, the trial court must state clearly its factual findings and correlate them with the relevant legal conclusions.
[Curtis v. Finneran, 83 N.J. 563, 569-70 (1980).]
"Naked conclusions do not satisfy the purpose of the rule." Monte v. Monte, 212 N.J. Super. 557, 565 (App. Div. 1986) (citing Curtis, supra, 83 N.J. at 570). The need to articulate the basis for a ruling is "particularly applicable to matrimonial cases," because "[w]ithout such findings it is impossible for an appellate court to perform its function of deciding whether the determination below is supported by substantial credible proof on the whole record." Ibid. (citations omitted) (noting that the trial judge failed to make any findings of fact or address any of the steps or criteria applicable in determining equitable distribution).
Specific to the issues before the Family Part, we note a trial judge has broad discretion when reviewing an application to modify alimony. Storey v. Storey, 373 N.J. Super. 464, 470 (App. Div. 2004) (citing N.J.S.A. 2A:34-23; Innes v. Innes, 117 N.J. 496, 504 (1990)). On appellate review, we accord great deference to discretionary decisions made by Family Part judges. Donnelly v. Donnelly, 405 N.J. Super. 117, 127 (App. Div. 2009) ("Each and every motion to modify an alimony obligation 'rests upon its own particular footing 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.'") (quoting Larbig v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006)).
The scope of judicial discretion is broad, but not unbounded.
"'[J]udicial discretion connotes conscientious judgment, not arbitrary action; it takes into account the law and the particular circumstances of the case before the court.'" Hand v. Hand, 391 N.J. Super. 102, 111 (App. Div. 2007) (quoting Higgins v. Polk, 14 N.J. 490, 493 (1954)). 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)).
[Milne v. Goldenberg, 428 N.J. Super. 184, 197 (App. Div. 2012).]
Finally, in our review, we do not defer to the trial court's legal decisions, which we consider de novo. Crespo v. Crespo, 395 N.J. Super. 190, 194 (App. Div. 2007) (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
Turning to plaintiff's motion, the law guiding our review is clear. "[A]limony and support orders define only the present obligations of the former spouses[,]" which "duties are always subject to review and modification on a showing of 'changed circumstances.'" Lepis v. Lepis, 83 N.J. 139, 146 (1980) (citations omitted). Even if the parties enter an agreement regarding alimony, a former spouse may seek judicial review or modification of the spousal support based upon a showing of changed circumstances. Glass v. Glass, 366 N.J. Super. 357, 370 (App. Div.) (citing Miller v. Miller, 160 N.J. 408, 419 (1999)), certif. denied, 180 N.J. 354 (2004).
The party seeking to modify an alimony obligation has the burden of showing "changed circumstances." Lepis, supra, 83 N.J. at 157 (citing Martindell v. Martindell, 21 N.J. 341, 353 (1956)). In addition, the party must "demonstrate that changed circumstances have substantially impaired [his or her] ability to support himself or herself." Ibid. "Courts have consistently rejected requests for modification based on circumstances which are only temporary or which are expected but have not yet occurred." Id. at 151 (citations omitted). See Larbig, supra, 384 N.J. Super. at 22-23.
Current earnings have never been viewed as "the sole criterion [upon which] to establish a party's obligation for support." Weitzman v. Weitzman, 22 8 N.J. Super. 346, 354 (App. Div. 1988) (citation and internal quotation marks omitted), certif. denied, 114 N.J. 505 (1989). Rather, "a court 'has every right to appraise realistically [a spouse's] potential earning power.'" Ibid. (alteration in original) (quoting Mowery v. Mowery, 38 N.J. Super. 92, 102 (App. Div. 1955), certif. denied, 20 N.J. 307 (1956)). A party's "potential to generate income is a significant factor to consider when determining his or her ability to pay port." Miller, supra, 160 N.J. at 420 (citations omitted). "[O]ne cannot find himself in, and choose to remain in, a position where he has diminished or no earning capacity and expect to be relieved of or to be able to ignore the obligations of support to one's family." Arribi v. Arribi, 186 N.J. Super. 116, 118 (Ch. Div. 1982).
Guided by these principles, we determine, although the judge's findings could have been more detailed, they were adequate to address the issues presented and sufficient to support his conclusions. Here, the divorce settlement was negotiated in March 2010, at which time plaintiff stipulated his annual income was $105,000. Notwithstanding plaintiff's agreement that this obligation was fair and reasonable, he defaulted on his alimony payments shortly after the divorce was finalized.
In his motion, plaintiff reported his 2011 income was approximately $60,000 from Innerworkings. He did not disclose when he commenced this employment, and revealed no funds or benefits provided by Genesys, despite that its sale did not occur until July 2011. Also, plaintiff failed to explain his decision to transfer his business to another corporation of which he because an employee, and in making this choice, he accepted a reduction in earnings. See Storey, supra, 373 N.J. Super. at 472 ("[W]here a layoff is followed by a shift to a job that does not draw on prior skills and experience, the obligor must explain that choice with reference to other options explored and efforts to find work with comparable pay."). Simply, plaintiff's motion lacked the reason for the change in his business ownership and employment and included no evidence he diligently attempted to procure comparable employment and those efforts were unsuccessful.
In 2012, plaintiff was on target to earn at least $80,000 from Innerworkings; he does not include his 2012 income tax return. Finally, the documentation verifies that during plaintiff's employment at Innerworkings, for five months in 2011 and nine months in 2012, he successfully increased his wages.
All of these facts satisfactorily demonstrate the change in financial circumstances, occasioned by plaintiff's decision to change his employment and transfer his company, was in fact temporary. See Storey, supra, 373 N.J. Super. at 469 ("When an alimony obligor changes career, the obligor is not free to disregard the pre-existing duty to provide support."). He had the burden to prove modification was warranted, however, his scant proofs failed to meet this minimal threshold. Dorfman v. Dorfman, 315 N.J. Super. 511, 515 (App. Div. 1998).
Accordingly, we find no basis to interfere with the judge's conclusion to deny relief. See Storey, supra, 373 N.J. Super. at 479 ("A trial court's rulings on an application to modify alimony, including the decision to impute income, are discretionary rulings, and we do not overturn those determinations unless the court abused its discretion, failed to consider controlling legal principles or made findings inconsistent with or unsupported by competent evidence."). The absence of a prima facie basis proving changed circumstances obviates the need for a plenary hearing.
Plaintiff adds an issue raised for the first time on appeal. He suggests the May 16, 2013 order requires a garnishment that exceeds the federal statutory guidelines. See 15 U.S.C.A. § 1673(2) (setting maximum garnishment against wages). The matter is not properly before us and we will not consider it. See Nieder v. Royal Indemn. Ins. Co., 62 N.J. 229, 234 (1973) ("[O]ur appellate courts will decline to consider questions or issues not properly presented to the trial court when an opportunity for such a presentation is available unless the questions so raised on appeal go to the jurisdiction of the trial court or concern matters of great public interest.") (citation and internal quotation marks omitted)).
The last issue presented challenges the award of counsel fees to defendant. Plaintiff maintains the award, based on a finding of bad faith, was unsupported by the facts of record. We disagree.
N.J.S.A. 2A:34-23 authorizes the Family Part to award counsel fees after considering "the factors set forth in the court rule on counsel fees, the financial circumstances of the parties, and the good or bad faith or either party." See Gotlib v. Gotlib, 399 N.J. Super. 295, 314 (App. Div. 2008) ("Rule 4:42-9(a)(1) authorizes the award of counsel fees in a family action on a final determination pursuant to R[ule] 5:3-5(c)."). Further, "applications for the allowance of fees shall be supported by an affidavit of services addressing the factors enumerated by RPC 1.5(a)." R. 4:42-9(b). Further, Rule 5:3-5(c) provides:
Subject to the provisions of R. 4:42-9(b), (c), and (d), the court in its discretion may make an allowance, both pendente lite and on final determination, to be paid by any party to the action, including, if deemed to be just, any party successful in the action, on any claim for divorce, . . . nullity, support, alimony, custody, parenting time, equitable distribution, separate maintenance, [and] enforcement of agreements between spouses . . . relating to family type matters. . . . In determining the amount of the fee award, the court should consider, in addition to the information required to be submitted pursuant to R. 4:42-9, the following factors: (1) the financial circumstances of the parties; (2) the ability of the parties to 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.
Moreover, when called on to enforce its orders, Rule 1:10-3 authorizes the court "in its discretion" to award "counsel fees to be paid by any party to the action to a party accorded relief under this rule." Furthermore, Paragraph 59 of the PSA provides a basis for a fee award when enforcement is sought. See Rock Work, Inc. v. Pulaski Const. Co., Inc., 396 N.J. Super. 344, 350-51 (App. Div. 2007) ("Under the "American Rule," which "is the law of this State, a prevailing party may not be granted attorney's fees unless authorized by the parties contract[.]"), certif. denied, 194 N.J. 272 (2008). It states:
Indemnification. Should either party fail to abide by the terms of this Agreement, the defaulting party will indemnify the other for all reasonable expenses and costs, including attorney's fees, incurred in successfully enforcing this Agreement.
Here, plaintiff had substantially ignored his alimony obligation. He made no payments in 2011 and had accumulated $38,000 in arrearages. Plaintiff also failed to comply with other financial obligations he agreed to accept in the PSA. The trial judge characterized his conduct as "unreasonable" and found it represented an act of "bad faith." The sum sought by defendant's counsel was found to be "fair and reasonable" and "diligently . . . documented." We find the entry of the award was a reasoned exercise of judicial discretion. We discern no basis to alter the court's determination.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION