NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2184-18T2
HARISH SHETTY,
Plaintiff-Appellant,
v.
SEEMA SHETTY,
Defendant-Respondent. ____________________________
Submitted November 18, 2019 – Decided January 3, 2020
Before Judges Messano and Vernoia.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-0883-16.
Townsend Tomaio & Newmark LLC, attorneys for appellant (Gregory A. Pasler, on the briefs).
Frank E. Tournour, attorney for respondent.
PER CURIAM
Plaintiff Harish Shetty appeals from a Family Part order denying his
motion to modify his alimony obligation based on an alleged change in circumstances related to changes in his income and the income of his former
spouse, defendant Seema Shetty. Based on our review of the record in light of
the applicable law, we vacate the court's order and remand for further
proceedings.
I.
Following twenty-two years of marriage and the births of their two
children, plaintiff and defendant divorced in October 2016. Their final judgment
of divorce incorporated a matrimonial settlement agreement (MSA) in which
plaintiff agreed to pay defendant $52,000 annually in limited duration alimony
for fifteen years.1 Plaintiff also agreed to pay $258 per week in child support.
The MSA expressly provides that the child support obligation is "based on
[defendant's] income of approximately $20,000 per year."
Seven months after entry of the final judgment, plaintiff moved to reduce
his child support and alimony obligations. The court denied the request for
modification of alimony, finding plaintiff failed to demonstrate defendant's
post-judgment employment constituted a condition permitting a modification of
the MSA's alimony provision. The court found the MSA "lays out the conditions
1 The original judgment of divorce was entered on October 13, 2016. An amended judgment of divorce, with revisions not relevant on appeal, was entered on October 27, 2016. A-2184-18T2 2 for modifying" alimony that "does not include an increase in income." The court
concluded the parties had not reached an agreement on alimony that "would be
subject to change upon [d]efendant obtaining employment."
The court, however, ordered the recalculation of child support because the
parties agreed that the child support obligation in the MSA was based in part on
an imputed annual income of $20,000 to defendant. The court concluded that
following entry of the judgment, defendant obtained employment earning $20
per hour and, as a result, child support should be recalculated based on the
parties' then current incomes.
Eight months later, in August 2018, plaintiff moved again for modification
of his alimony obligation. The motion was founded on plaintiff's claims he had
become involuntarily unemployed, he no longer earned the $175,000 annual
income upon which his alimony obligation was based, and he could not afford
to maintain the alimony obligation under the MSA. The court denied the request
without prejudice, finding that following the filing of his modification motion,
plaintiff obtained new employment at $155,000 per annum, and that he had
received more than $25,000 in severance from his prior employer and collected
unemployment compensation benefits prior to obtaining his new position. The
court's order stated that plaintiff certified defendant had obtained employment
A-2184-18T2 3 earning "twice the income provided" in the MSA and ordered that defendant
provide an updated case information statement to plaintiff within fourteen days.
In November 2018, plaintiff filed his third motion for modification of his
alimony obligation. Plaintiff claimed there were changed circumstances
warranting the modification: his current income of $155,000 and plaintiff 's
current income of $42,600.2 Plaintiff asserted that his alimony obligation under
the MSA was based on his $175,000 annual income, but his income had been
reduced to $155,000 following his post-judgment involuntary termination from
his prior employment and subsequent reemployment by a new employer. He
further averred that his alimony obligation is based on an imputed income of
$20,000 for defendant, but that her income had more than doubled to $42,600
following entry of the final judgment of divorce. Plaintiff also claimed
defendant had $825,000 in assets and no liabilities.
Defendant cross-moved for a denial of plaintiff's motion. Defendant
argued that although the parties' agreement on child support was based on an
imputed income of $20,000 for her, the alimony obligation was based on an
analysis of statutory factors. Defendant further claimed the change in the
2 Defendant's 2018 earned income was calculated based on her October 18, 2018 case information statement. A-2184-18T2 4 parties' respective incomes did not warrant the requested modification, and
plaintiff's eligibility for bonuses in his new position made it possible for him to
earn more than he earned when the parties entered into the MSA. Defendant
also argued that if plaintiff sought to preserve the option to move for
modification of alimony based on any increase in her income, he should have
negotiated for such a provision in the MSA.
In his reply, plaintiff disputed that his alimony obligation was based on
the statutory factors and claimed the amount was instead calculated by taking
one-third of the difference between defendant's imputed $20,000 income and
plaintiff's then $175,000 annual income. Plaintiff also contested defendant's
claim that the increase in her income was "slight," asserting that she currently
earned "significantly more" than the $20,000 imputed to her when the parties
divorced.
Following a December 7, 2019 motion hearing, the court issued a written
opinion denying plaintiff's modification motion. The court concluded plaintiff
failed to demonstrate a change in circumstances—based on changes in the
parties' incomes—sufficient to warrant modification of his alimony obligation.
The court found that, at the time of the divorce, plaintiff's income "from all
sources" was $175,000, and that, following a short period of unemployment,
A-2184-18T2 5 plaintiff obtained new employment with a base gross annual income of
$155,000. The court further found plaintiff is eligible for bonuses of between
$15,500 and $31,000, such that he has the potential to earn between $170,500
and $186,000 with his new employer. Thus, the court determined plaintiff has
"the opportunity to perhaps receive even a greater salary than that he attributed
to himself at the time of divorce." The court also noted that plaintiff's new
employer offered him participation in a long-term wealth building plan or 401(k)
savings plan "with a three percent employer match," and an employee stock
option plan.
The court further found plaintiff did not dispute that he was aware at the
time of the divorce that defendant earned $16 per hour, or $35,630 per annum,
when the judgment of divorce was entered. The court found the alimony
obligation is not based on the $20,000 annual income plaintiff attributed to
defendant at the time of the divorce. Although the parties were divorced in
2016, the court relied on a W-2 wage statement showing defendant's 2017
income of $35,630 to support its conclusion that defendant's income, which in
2018 was $42,016, increased by approximately only $6,300, from the 2016 final
judgment of divorce to the filing of plaintiff's third motion to modify his alimony
obligation.
A-2184-18T2 6 The court considered the statutory factors pertinent to a modification of
alimony, see N.J.S.A. 2A:34-23(k), and determined plaintiff failed to satisfy his
burden of establishing a change in circumstances—based on changes in the
parties' respective incomes—sufficient to warrant either a plenary hearing or a
modification of his alimony obligation. The court further concluded an
evidentiary hearing was unnecessary because neither party requested such a
hearing and "it is unlikely" to "result in an alternative finding."
The court entered an order denying plaintiff's motion to modify his
alimony obligation based on a change in circumstances and his request to
recalculate his alimony obligation based on his and defendant's then current
salaries.3 This appeal followed.
II.
Our scope of review of Family Part orders is limited. Cesare v. Cesare,
154 N.J. 394, 411 (1998). We accord deference to the Family Part due to its
"special jurisdiction and expertise" in family law matters. Id. at 413. The court's
findings are binding so long as its determinations are "supported by adequate,
substantial, credible evidence." Id. at 411-12. We will not disturb the factual
3 The court's order addressed other issues, including requests for modification of child support and for the emancipation of the parties' oldest child, which are not the subject of the pending appeal. A-2184-18T2 7 findings and legal conclusions unless convinced they are "so manifestly
unsupported by or inconsistent" with the evidence presented. Id. at 412.
"Alimony is an 'economic right that arises out of the marital relationship
and provides the dependent spouse with "a level of support and standard of
living generally commensurate with the quality of economic life that exist ed
during the marriage."'" Quinn v. Quinn, 225 N.J. 34, 48 (2016) (quoting Mani
v. Mani, 183 N.J. 70, 80 (2005)). Parties to a divorce "may enter into voluntary
agreements governing the amount, terms, and duration of alimony" that "are
subject to judicial supervison and enforcement." Ibid. Changed circumstances
permitting a modification of alimony include "an increase or decrease in the
income of the supporting or supported spouse," id. at 49 (quoting J.B. v. W.B.,
215 N.J. 305, 327 (2013)), or the subsequent employment of the dependent
spouse, Lepis v. Lepis, 83 N.J. 139, 151 (1980).
The decision to modify an alimony obligation "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), and an alimony
determination will not be overturned on appeal absent an abuse of discretion,
see Rolnick v. Rolnick, 262 N.J. Super. 343, 360 (App. Div. 1993) (holding that
vacating a court's findings as to modification of alimony requires a
A-2184-18T2 8 determination "that the trial court clearly abused its discretion"). "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.'" Milne v. Goldenberg, 428 N.J. Super. 184, 197 (App. Div. 2012)
(quoting Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)). "A trial
court's interpretation of the law and the legal consequences that flow from
established facts are not[, however,] entitled to any special deference."
Manalapan Realty, LP v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
Plaintiff contends the court erred by finding that he failed to establish a
sufficient change in the parties' respective incomes to support modification of
his alimony obligation. He argues the court erred by mistakenly determining
that defendant was employed and earning $16 per hour, or $35,630 per year,
when the parties entered into the MSA. Plaintiff has maintained throughout the
post-judgment modification motions that defendant was unemployed when the
MSA was executed, and the parties imputed a $20,000 annual income to her as
a result. According to plaintiff, the court's mistaken finding that the parties
agreed defendant was earning $16 per hour when the MSA was executed resulted
in the corresponding error that defendant's post-judgment income increased by
only $6,300 prior to the filing of plaintiff's modification motion. Plaintiff asserts
A-2184-18T2 9 that the court should have determined defendant's income increased from the
$20,000 used to calculate the alimony obligation in the MSA to more than
double that amount for the income she earned in 2018, and that the difference
represents a sufficient change in circumstances warranting a modification of
alimony.
Consideration of a motion to modify alimony requires application of the
standard established by our Supreme Court in Lepis. 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. See, e.g.,
Faucett v. Vasquez, 411 N.J. Super. 108, 128-29 (App. Div. 2009).
"There is . . . no brightline rule by which" a court measures a change in
circumstances. Larbig, 384 N.J. Super. at 23. "Each and every motion to modify
an alimony obligation 'rests upon its own particular footing and [we] must give
due recognition to the wide discretion which our law rightly affords to the trial
judges who deal with these matters.'" Donnelly v. Donnelly, 405 N.J. Super.
117, 127 (App. Div. 2009) (quoting Larbig, 384 N.J. Super. at 21). If a prima
facie showing is made, the court must then determine if a plenary hearing is
warranted. Lepis, 83 N.J. at 159; see also Crews v. Crews, 164 N.J. 11, 28
A-2184-18T2 10 (2000) (noting the party seeking modification must make a prima facie showing
of changed circumstances before being entitled to a hearing).
Here, the record does not permit a determination of whether the court
erred in determining defendant was employed and earning $16 per hour at the
time of the divorce because there is a factual dispute as to how the parties
calculated the alimony obligation in the first instance. The MSA provides that
the child support obligation "is based on [defendant's] income of approximately
$20,000 per year." However, the alimony obligation clause lacks any similar
reference to defendant's income and does not explain how the alimony obligation
was calculated.
In the certifications submitted in connection with plaintiff's first
modification motion, the parties presented conflicting statements about
defendant's income. In plaintiff's certification, he stated
[a]s set forth in [d]efendant's Trial Brief, she was employed, making $16[] per hour, at her job . . . However a few weeks before we settled the case, my attorney received a letter saying that [d]efendant was terminated from her position . . . As a result instead of utilizing approximately $33,280 ($16[] per hour multiplied by a forty (40) hour week), we had to settle on imputing her an income of $20,000. This figure was what my alimony obligation was based upon. . . .
A-2184-18T2 11 However, in her opposition certification, defendant disputed plaintiff's
assertion, stating
I had a job making $16[] an hour at the time of our divorce. That income was imputed to calculate child support, not alimony. I have subsequently obtained alternate employment at $20[] an hour.
....
Income was imputed at $20,000[] per year for purposes of child support.
[(emphasis in original).]
In the court's order denying plaintiff's first modification motion, it noted
that "[t]he parties acknowledge that an annual income of $20,000 was imputed
to defendant at the time of the parties' divorce and that since then, defendant has
obtained employment earning approximately $20[] per hour." However,
although the court referred to defendant's income in its discussion of plaintiff's
request to modify his child support obligation, it did not make any findings
concerning defendant's income in its denial of plaintiff's request to modify his
alimony obligation.
Similarly, in the certifications submitted in connection with the
modification motion that is the subject of this appeal, the parties again presented
conflicting statements about defendant's income at the time the MSA was
A-2184-18T2 12 executed and the methodology used to calculate plaintiff's alimony obligation.
Plaintiff certified that "alimony was based upon [his] income of $175,000 and
[d]efendant's imputed income of $20,000," and that the parties "divided the
difference between these two . . . incomes by three . . . , which yields" the
$52,000 per annum alimony obligation.
In her certification, defendant states "[a]t the time of the divorce, I was
unemployed for about two months and that is why in large part $20,000 was the
number used for child support. My hourly rate at the time of the divorce was
about $16[] per hour but I was only working 20 hours a week." In these two
sentences, defendant incongruously suggests she was both employed and
unemployed at the time of divorce. Elsewhere, she states more affirmatively
that "[a]limony was not based upon [plaintiff's] income of $175,000 and an
imputed income of $20,000 to me. Child support was based on those numbers."
Finally, in his reply certification, plaintiff accused defendant of "blatantly
falsi[fying]" the basis of the alimony award to "mislead the [c]ourt." Plaintiff
stated that defendant "knows that we arrived at an alimony award of $52,000 by
taking a third of the difference between her imputed income $20,000 and my
income of $175,000," and that "[t]o claim that the alimony award was based
upon statutory factors is an absolute lie."
A-2184-18T2 13 During the December 7, 2019 motion hearing, the court focused on the
uncertain record as to the manner in which alimony was calculated, asking the
parties whether the alimony payment was truly alimony or more akin to a
"mathematical buyout." Plaintiff asserted the payment was mathematically
constructed based on their incomes, including defendant's imputed income of
$20,000. Defendant disputed plaintiff's contention, stating the alimony award
had been crafted based on statutory factors, rather than solely based on income.
In its written opinion, the court found plaintiff failed to make a prima facie
showing of a substantial change in circumstances, concluding that "[p]laintiff
does not dispute his awareness of [d]efendant's $16[] per hour salary at the time
of divorce" and "[d]efendant's 2017 W-2 Wage Statement shows a gross salary
for 2017 of $35,630[] . . . not the $20,000[] figure [p]laintiff attributes to her at
the time of divorce."
The court's findings, however, are not supported by the record. As noted,
plaintiff disputes defendant's claim she earned a $16 per hour salary at the time
of divorce, asserts defendant was unemployed during the relevant period, and
represents that his alimony obligation was based in part on an imputation of only
$20,000 per year income to plaintiff. In addition, the parties divorced in 2016
and the MSA was entered into in October 2016. Thus, contrary to the court's
A-2184-18T2 14 finding, defendant's W-2 statement for her 2017 income could not establish her
actual income, if any, in 2016 when the MSA was executed and the parties
divorced. Plaintiff argues on appeal the court "mistakenly utilized" the 2017
income information, and, as a result, the court "was under the impression that
[d]efendant's income had increased by only $6,300 . . . from that date . . . until
the present, though it had increased by over $20,000[]." We agree. Defendant's
W-2 statement did not provide the appropriate benchmark against which a
determination of changed circumstances could be properly measured.
The record does not support the court's factual findings, and, for that
reason, we are constrained to vacate those portions of the court's order denying
plaintiff's request for a modification of his alimony obligation and remand for
further proceedings. See Gonzalez-Posse, 410 N.J. Super. at 354 (finding we
should vacate a trial court's findings if "the determination could not reasonably
have been reached on sufficient credible evidence present in the record").
Moreover, the record presents conflicting evidence concerning the income for
defendant that was used to calculate the alimony obligation, the methodology
used to make the calculation, and the parties' agreement, if any, concerning the
amount of defendant's income and the methodology used to determine alimony.
The unresolved fact issues do not allow us to determine if there are changed
A-2184-18T2 15 circumstances sufficient to warrant a modification of plaintiff's alimony
On remand, the court shall consider such additional evidence as may be
required and conduct such hearings it deems appropriate to resolve the issues
and make the necessary findings of fact and conclusions of law concerning the
income for defendant and methodology used to determine plaintiff's alimony
obligation set forth in the MSA and judgment of divorce. Based on those
findings, the court shall also determine whether plaintiff demonstrated changed
circumstances warranting either a modification of his alimony obligation or a
plenary hearing on the issue. We do not find the court abused its discretion by
determining that the change in plaintiff's income by itself is insufficient to
establish changed circumstances warranting either a modification of his alimony
obligation or requiring a plenary hearing.
Vacated and remanded for further proceedings in accordance with this
opinion. We do not retain jurisdiction.
A-2184-18T2 16