Opinion
DOCKET NO. A-0348-10T1
03-29-2012
THOMAS A. WALKUP, Plaintiff-Appellant, v. PATRICIA A. WALKUP, Defendant-Respondent.
Robert J. O'Donnell argued the cause for appellant. Carl W. Cavagnaro argued the cause for respondent.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo and Hoffman.
On appeal from the Superior Court of New
Jersey, Chancery Division, Family Part,
Cumberland County, Docket No. FM-06-494-08.
Robert J. O'Donnell argued the cause for
appellant.
Carl W. Cavagnaro argued the cause for
respondent.
PER CURIAM
In this post-judgment matrimonial matter, plaintiff, Thomas Walkup, appeals from an August 13, 2010 order of the Family Part denying his motion to terminate or, in the alternative, reduce his alimony obligation. Plaintiff argues the trial court erred in denying his motion, and by failing to permit discovery and schedule a plenary hearing. For the reasons that follow, we reject these arguments and affirm.
I.
The parties married in 1973 and had two children, Susan, born in 1977 and Thomas, Jr., born in 1978. By 1998, both children were emancipated. On August 12, 1998, the parties entered into an eleven-page property settlement agreement (PSA) addressing various issues, including equitable distribution and alimony. The basic terms of the agreement were negotiated with the assistance of an attorney who had previously represented the parties in various personal and business matters. Before signing the PSA, both parties retained separate counsel.
Relevant to this appeal, the PSA provided that plaintiff would pay defendant alimony of $1,000 per month. The PSA contained the following anti-Lepis clause: "Any and all maintenance/support ceases only upon the remarriage of the Wife." A final judgment of divorce incorporating the PSA was entered on August 25, 2008.
Lepis v. Lepis, 83 N.J. 139 (1980).
Plaintiff worked for the Philadelphia Fire Department for twenty years, retiring in 1989 on a non-taxable disability pension of $1,975.47 per month. While working as a fireman, plaintiff also operated an extermination business. At the time the PSA was executed, plaintiff worked for the City of Millville Streets and Roads Department as a laborer. In addition to raising the children and attending to household duties, defendant assisted plaintiff in the extermination business, but was not on the payroll. As a result of her non-payroll status, defendant had minimal reportable earnings for most of the marriage. At the time of the PSA, she received $130 per week in unemployment benefits.
Under the terms of the PSA, defendant received assets having an approximate value of $175,000 and plaintiff received assets of approximately $125,000, and defendant waived her interest in both of plaintiff's pensions. The agreement also required plaintiff to provide defendant with health insurance coverage for ten years. This obligation would terminate upon defendant's remarriage or filing for divorce.
The $125,000 figure was exclusive of the value of plaintiff's pensions. Significantly, no valuation of either of plaintiff's pensions occurred at the time of the PSA. Because plaintiff's non-taxable disability pension was already in pay status, its value was substantial in light of plaintiff's age (then forty-nine) and life expectancy (then twenty-nine years).
Plaintiff was able to provide this benefit through his employment with the City of Millville.
On June 25, 2010, plaintiff filed a motion seeking to terminate or reduce his alimony obligation, alleging changed circumstances. In support of his application, plaintiff relied primarily on two developments: his retirement from his position with the City of Millville, effective July 31, 2010, and the resulting reduction in his income; and defendant's cohabitation with a male companion. Plaintiff claimed that health issues, specifically osteoarthritis in his knees, caused him to retire. After filing the motion and upon learning of defendant's current income level, plaintiff argued that defendant's post-PSA increase in income provided additional support for his application.
By the time of this application, plaintiff had risen to the position of supervisor.
Plaintiff provided a case information statement (CIS) indicating that, upon his retirement, he will receive $1,935.32 per month from his City of Millville pension, in addition to $1,975.47 per month from his disability pension. Plaintiff also received $350,000 from his father's estate in 2007. Plaintiff listed a net worth of $711,000, including $160,000 in a deferred compensation account.
Plaintiff's CIS failed to list any value for a recently-purchased home in Florida, although the CIS did list the balance of the mortgage on the home as a debt. This likely resulted in a substantial understatement of plaintiff's net worth.
Defendant provided a CIS indicating a 2009 gross income of $32,985.24 and that she was earning $1,304 every two weeks, or what would equate to $33,904 in annual gross income in 2010. Defendant listed a net worth of $175,476.
Each party received $200,000 of life insurance proceeds after the death of their son in Afghanistan in 2003. Plaintiff certified she used a substantial portion of her share of the proceeds to provide financial assistance to the parties' daughter.
Defendant opposed the motion based upon the anti-Lepis provision, asserting that she gave up her interest in plaintiff's City of Philadelphia pension in return for $1,000 per month in alimony that would cease only upon her remarriage. Defendant also challenged plaintiff's assertion that he was retiring for medical reasons. On the issue of cohabitation, defendant maintained that although she resides with another man, he pays her $400 in monthly rent and buys his own food. Defendant also contended they maintain separate bank accounts and do not otherwise commingle funds.
By order entered on August 13, 2010, the trial court denied plaintiff's motion. The court found that plaintiff failed to meet the burden required to eliminate or reduce his support payments. See Lepis, supra, 83 N.J. at 157. Specifically, the court noted that a report provided by plaintiff's orthopedist does not state that plaintiff cannot work, only that plaintiff's condition may be aggravated if he continues to do so. The court concluded, "[plaintiff] is voluntarily retiring at an age earlier than one might expect. He can continue to pay spousal support."
Because the court found that plaintiff's retirement was voluntary, it analyzed the factors set forth in Deegan v. Deegan, 254 N.J. Super. 350 (App. Div. 1992), and concluded,
[T]he court does not find that the advantage to the retiring spouse outweighs the disadvantage to the dependant spouse . . . . [T]he circumstances here are such that [plaintiff] can afford to continue to meet his obligation to a spouse who still needs the income to maintain her standard of living of the marriage, while clearly maintaining his standard of living too.
With regard to defendant's circumstances, the court noted that although defendant was residing with an adult male, the PSA provided for termination of alimony only in the event of defendant's remarriage. Based upon this language, the court found nothing unreasonable in defendant's expectation that her alimony would continue, notwithstanding changes in her living situation and increases in her income. The court concluded the evidence supported defendant's contention that she waived her right to a portion of plaintiff's pensions in anticipation that spousal support would cease only upon her remarriage. Further, the court noted that plaintiff failed to insist on provisions in the PSA that would have supported his position. The court therefore concluded plaintiff failed to meet the burden required to terminate or reduce his alimony obligation.
II.
A court has the equitable authority to modify support obligations set forth in a property settlement agreement. Lepis, supra, 83 N.J. at 149. However, "[a]n application to modify an agreement is an exception, not the rule," as judges should contemplate that agreements entered into in good faith "shall be performed in accordance with their terms." Glass v. Glass, 366 N.J. Super. 357, 379 (App. Div.), certif. denied, 180 N.J. 354 (2004); see Avery v. Avery, 209 N.J. Super. 155, 160 (App. Div. 1986) (noting "there is a strong public policy favoring stability of consensual arrangements for support in matrimonial matters") (citing Lepis, supra, 83 N.J. at 141).
"As a practical matter, spousal agreements have great potential for ensuring the desired degree of stability in support arrangements. Such agreements have traditionally been more comprehensive and particularized than court orders, and thus more carefully tailored to the peculiar circumstances of the parties' lives." Lepis, supra, 83 N.J. at 153-54 (internal citations omitted). Accordingly, such agreements are "entitled to significant consideration." Glass, supra, 366 N.J. Super. at 372; see Ozolins v. Ozolins, 308 N.J. Super. 243, 249 (App. Div. 1998) (reversing the termination of alimony and finding that the judge erred in failing to "factor in the principle that the amount of alimony here was set originally by the parties themselves," as such agreements ordinarily include trade-offs between the parties). Only where circumstances arise where enforcement of the agreement becomes inequitable should an exception be made to the strict enforcement of the agreement's terms. Glass, supra, 366 N.J. Super. at 379.
Parties are free to enter into voluntary agreements departing from the general Lepis rule and establish their own standards by which they agree to be guided in cases involving "reasonably foreseeable future circumstances." Morris v. Morris, 263 N.J. Super. 237, 241 (App. Div. 1993). Anti-Lepis provisions, which purport to waive the right to future modification, are enforceable in certain limited circumstances. Ibid.
The party seeking modification has the burden of demonstrating such changed circumstances as would warrant relief from his or her obligation. When a supporting spouse brings an application for a downward modification, the central focus is on the supporting spouse's ability to pay. Miller v. Miller, 160 N.J. 408, 420 (1999). In determining whether a downward modification is appropriate, the court may consider the supporting spouse's income and assets. Id. at 422.
III.
We find no mistaken exercise of discretion or misapplication of the law in the trial court's finding that defendant was not entitled to any relief. Plaintiff has not pointed to any adverse financial setbacks between 1998 and 2010. To the contrary, plaintiff's net worth increased more than 600 percent during this time period. Viewed broadly, the parties' negotiated agreement contained trade-offs that were freely and fairly negotiated, with the assistance of counsel on both sides. There is no evidence that the anti-Lepis provision was not knowingly and voluntarily negotiated. See Konzelman v. Konzelman, 158 N.J. 185, 203 (1999). Plaintiff makes no allegations of improprieties, fraud, overreaching, or coercion, and each party was represented by counsel. See ibid. Moreover, the agreement was brought to the attention of the trial court and given judicial approval when it was incorporated into the divorce decree.
This figure is exclusive of the value of plaintiff's pensions.
In light of the high threshold required by the anti-Lepis provision, plaintiff failed to establish a prima facie case of changed circumstances. Plaintiff did not demonstrate any inability to support himself given his current financial condition, including his assets and income. Therefore, the provision setting the alimony obligation in permanent terms was enforceable, absent some unforeseen and very substantial change in circumstances. See Morris, supra, 263 N.J. Super. at 241.
Nor was enforcement of the PSA's anti-Lepis provision unjust or inequitable. See ibid. The equitable distribution of assets effected by the PSA was weighted heavily in plaintiff's favor, in light of defendant's waiving her interest in both of plaintiff's pensions. The broadly worded anti-Lepis provision, by increasing the certainty of defendant's future alimony payments, served to instill some balance in an otherwise-lopsided agreement.
When the estimated value of the pension interests defendant waived is considered, it becomes clear that plaintiff received more than twice as much of the marital estate than defendant received.
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The record fully supports the court's conclusion that defendant gave up her interest in plaintiff's pensions in anticipation that spousal support would continue, and would cease only upon her remarriage. Plaintiff worked for the
Philadelphia Fire Department for a total of twenty years, sixteen while married. If this pension had been divided by way of a qualified domestic relations order, defendant would have received approximately $800 per month, tax-free. Instead, defendant agreed to alimony payments of $1,000 per month, which payments were taxable to defendant and tax-deductible to plaintiff. Placed in this context, the essential fairness of the provision terminating alimony only upon remarriage becomes apparent.
There is no indication the court abused its discretion in giving effect to the anti-Lepis provision and denying plaintiff's application to adjust his alimony obligation. Similarly, as no issues of material fact required resolution by the trial court, there was no basis for an evidentiary hearing. See Adler v. Adler, 229 N.J. Super. 496, 500 (App. Div. 1988) (holding that a hearing is not required, or even warranted, in every contested proceeding for alimony modification, but only where "necessary to resolve a genuine issue of material fact").
Plaintiff's remaining arguments lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION