NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-0496-19T2
MARIA D. NEWMAN,
Plaintiff-Respondent/ Cross-Appellant,
v.
MARK T. NEWMAN,
Defendant-Appellant/ Cross-Respondent. _______________________
Submitted January 6, 2021 – Decided February 5, 2021
Before Judges Whipple, Rose, and Firko.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-2265-11.
LaRocca Hornik Rosen Greenberg, attorneys for appellant/cross-respondent (Frank J. LaRocca and Rotem Peretz, on the briefs).
Price Meese Shulman & D'Arminio, PC, attorneys for respondent/cross-appellant (Cathy J. Pollak, of counsel and on the briefs; Aaron Cohen, on the briefs). PER CURIAM
In this post-judgment matrimonial matter, defendant Mark T. Newman
appeals from paragraphs one and two of an August 26, 2019 order entered by
the Family Part judge denying his request for a recalculation of child support
based upon a substantial change in circumstances and denying his request for a
reallocation of responsibility between the parties for expenses not included in
child support under the Child Support Guidelines in proportion to the parties'
net incomes. Plaintiff Maria D. Newman cross-appeals paragraph seventeen of
the order denying her request for counsel fees. We affirm.
I.
We derive the following pertinent facts from the record. The parties were
divorced in November 2013, after eighteen years of marriage. They have a son,
J.N.,1 born in January 2008, age thirteen. The parties entered into a prenuptial
agreement prior to their marriage. Following a lengthy trial, a judgment of
divorce (JOD) was entered. The parties were granted equal parenting time with
J.N., and neither party was designated as the parent of primary residence.
1 We use initials to identify the child to protect and preserve his confidentiality. R. 1:38-3(d)(13). A-0496-19T2 2 As per the amended judgment of divorce (AJOD), defendant was ordered
to pay child support directly to plaintiff of $3000 per month. He was also
obligated to pay 95% of J.N.'s summer camp, extracurricular activities,
unreimbursed medical expenses, with the exception of the first $250 incurred
per year in accordance with Rule 5:6A, equipment for sports and hobbies, cost
of enrichment at school, and any extraordinary expenses as defined by law.
Plaintiff has two children from a prior marriage and pays $562.50 per month in
child support to the father of those children.
In July 2009, defendant became employed at Morgan Stanley and signed
a promissory note for $2,259,000 in forgivable loans, with a 3% per annum rate
of interest, "to recruit individuals from competitors." Defendant entered into
two more such arrangements after meeting incentive goals: $627,500 in
November 2009 and $288,960.71 in August 2011. These funds were deposited
by defendant into an account in his sole name. Defendant claimed these assets
were exempt from equitable distribution under the terms of the parties'
prenuptial agreement. The AJOD, filed on December 11, 2013, which
incorporated the trial judge's findings of fact and conclusions of law from the
trial, stated "[p]laintiff works on a base salary plus commissions. The defendant
A-0496-19T2 3 works based on commissions and has an advance which he must pay back to his
employer over a period of time."
The AJOD provided it was "appropriate to base child support on the last
three years' gross earned income for the parties." Plaintiff's gross earned income
for the most recent three years preceding the divorce was: $59,930 in 2010;
$67,732 in 2011; and $65,302 in 2012. Her average income was $64,141.
Defendant's gross earned income for the three years preceding the divorce was:
$989,851 in 2010; $1,076,553 in 2011; and $1,112,939 in 2012. His average
gross earned income for those years was $1,059,780, which was the amount
utilized by the trial court in establishing child support.
Defendant alleges he disagreed with the trial court's conclusions relative
to his income set forth in the AJOD but chose to forgo appealing the issue. He
now contends his income at the time of divorce was $650,000 to $700,000 and
only exceeded $1,000,000 because of the forgivable loans from Morgan Stanley.
According to defendant, each year during the loan term, a portion of the
principal and interest associated with the loans was "forgiven" and attributed to
him as income in the form of a bonus, thereby artificially inflating his income
because he never actually received these amounts. In addition, defendant claims
the promissory notes for the forgivable loans have been satisfied, and he is no
A-0496-19T2 4 longer eligible to receive such bonuses in the future. The final sums were
forgiven in 2018. Defendant contends he has been paying an excessive amount
of child support.
On January 28, 2019, plaintiff filed an ex parte order to show cause
seeking injunctive relief before the Family Part judge regarding the parties' son
J.N. Pursuant to a January 30, 2019 consent order, defendant's parenting ti me
with J.N. was temporarily suspended and contact was limited to telephonic
conversations on plaintiff's landline subject to recording. By consent, defendant
agreed to commence anger management therapy and a parenting coordinator was
appointed.
On July 22, 2019, defendant filed a motion seeking recalculation of his
child support obligation arguing a substantial change in his financial
circumstances. Plaintiff filed opposition to the motion and a cross-motion
seeking counsel fees and costs incurred in connection with this matter. In his
moving certification, defendant asserted that in 2018, his obligations under the
promissory notes were fully satisfied, and he was no longer eligible to receive
any similar bonuses going forward. By way of explanation, defendant submitted
a letter dated May 9, 2019, from Joseph Vaccaro, Senior Vice President and
Branch Manager of Morgan Stanley, explaining defendant's forgivable loans,
A-0496-19T2 5 compensation package, and annual income throughout his career at Morgan
Stanley. Mr. Vaccaro stated in pertinent part: "These bonuses averaged
$401,675 per year over the last nine years. During this same period, [defendant]
averages $634,565 per year in salary and commissions . . . ."
Defendant also argued his income was found to be $1,059,781 when child
support was initially calculated at the time of divorce, and his annual average
income had decreased to $634,565 between 2010 through 2018, a forty-percent
difference. For 2019, defendant projected his income would be $632,519 , based
upon a base salary of $24,000, anticipated commissions, and other remuneration.
In her opposition and cross-motion, plaintiff argued defendant's motion
was "premature conjecture" as to his contemplated 2019 income. She also
contended her gross income declined to a three-year average of $58,766.84, her
salary being $61,659 at the time the motions were considered. Plaintiff also
contended defendant's net worth increased from $4,564,085 in 2013 to
$5,683,000 in May 2019, while plaintiff's net worth was negative $191,070.
Plaintiff further argued defendant's Schedule A and C expenses, exclusive of
child support, were higher in 2019 than in 2012, confirming his ability to pay
the $3000 child support obligation and 95% of J.N.'s supplemental and
extraordinary expenses. In her cross-motion, plaintiff sought counsel fees for
A-0496-19T2 6 having to defend defendant's motion, which she claimed lacked merit and was
motivated by his "reprehensible bad faith conduct."
The Family Part judge considered the motions on August 26, 2019. After
hearing oral arguments, the judge denied both motions and entered a
memorializing order that day. In her oral decision, the judge rejected
defendant's argument that his 2019 income should be extrapolated and projected
for 2019 based on year-to-date paystubs he submitted with his moving papers.
The judge found "there's nothing to say . . . what he's going to earn. There may
be incentives and information or commissions that come later in the year in
addition . . . ." Consequently, the judge found defendant failed to demonstrate
a prima facie showing of changed circumstances warranting modification of his
child support obligation. The judge also noted that defendant failed to show
J.N.'s needs have lessened and maintained defendant's obligation to pay 95% of
the child's supplemental and extraordinary expenses.
In denying plaintiff's cross-motion, the judge found plaintiff had the
ability to pay her own counsel fees and defendant's motion was not filed in bad
faith. This appeal and cross-appeal followed.
On appeal, defendant argues the judge erred in denying his motion for
modification of child support and child-related expenses not included in child
A-0496-19T2 7 support because he established a prima facie case of a substantial change of
circumstances based upon a diminution in his income. In her cross-appeal,
plaintiff argues the judge correctly denied defendant's motion but erred in not
granting her request for counsel fees.
II.
Our review of the Family Part's determinations involving child support is
limited. Avelino-Catabran v. Catabran, 445 N.J. Super. 574, 587 (App. Div.
2016). "'The general rule is that findings by the trial court are binding on appeal
when supported by adequate, substantial, credible evidence.'" Crespo v. Crespo,
395 N.J. Super. 190, 193 (App. Div. 2007) (quoting Cesare v. Cesare, 154 N.J.
394, 411-12 (1998)). The reviewing court should "'not disturb the factual
findings and legal conclusions of the [motion] judge unless [it is] convinced that
they are so manifestly unsupported by or inconsistent with the competent,
relevant and reasonably credible evidence as to offend the interests of justice.'"
Catabran, 445 N.J. Super. at 587 (first alteration in original) (quoting Rova
Farms Resort, Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474, 484 (1974)).
"'When reviewing decisions granting or denying applications to modify
child support, we examine whether, given the facts, the trial judge abused his or
her discretion.'" Ibid. (quoting Jacoby v. Jacoby, 427 N.J. Super. 109, 116 (App.
A-0496-19T2 8 Div. 2012)). Reversal is appropriate only if the award is "manifestly
unreasonable, arbitrary, or clearly contrary to reason or to other evidence, or the
result of whim or caprice." Ibid. (quoting Jacoby, 427 N.J. Super. at 116).
However, our review of purely legal issues is de novo, "because the trial
court is in no better position than [the Appellate Division] when interpreting a
statute or divining the meaning of the law." D.W. v. R.W., 212 N.J. 232, 245-
46 (2012); see also Catabran, 445 N.J. Super. at 587. Child support orders are
always subject to review and modification upon a showing of "changed
circumstances." Lepis v. Lepis, 83 N.J. 139, 146 (1980). Upon a motion to
modify an order, "the moving party has the burden to make a prima facie
showing of [the] changed circumstances warranting relief." Isaacson v.
Isaacson, 348 N.J. Super. 560, 579 (App. Div. 2002).
When a modification application is made, the court should examine
evidence of the paying spouse's financial status in order "to make an informed
determination as to 'what, in light of all of the [circumstances] is equitable and
fair.'" Lepis, 83 N.J. at 158 (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)
(alteration in original)). The party seeking modification of a prior orde r bears
the burden of making a prima facie showing of changed circumstances. Id. at
157. Changed circumstances may "include 'an increase in the cost of living, an
A-0496-19T2 9 increase or decrease in the income of the supporting or supported spouse,
cohabitation of the dependent spouse, illness or disability arising after the entry
of the judgment, and changes in federal tax law.'" Quinn v. Quinn, 225 N.J. 34,
49 (2016) (quoting J.B. v. W.B., 215 N.J. 305, 327 (2013)).
In assessing changed circumstances the court must typically find more
than just a downward turn in economic circumstances, especially where, as here,
the payor's reduced income is still relatively high. This court has previously
noted that "[u]nderpinning the basis of every support order is the proposition
that the payor has the 'ability to pay' the amount set, or agreed to." Dorfman v.
Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998). Support orders may be
modified upon a showing of changed circumstances, but a mere reduction in
income is not dispositive on its own. Generally, a payor must show that there
has been a "substantial, non-temporary change[] in [their] ability to support
[themselves] or pay support." Gordon v. Rozenwald, 380 N.J. Super. 55, 67-68
(App. Div. 2005).
This court has emphasized that where a payor continues to live lavishly, a
showing of substantial change in circumstances is unlikely. Donnelly v.
Donnelly, 405 N.J. Super. 117, 130-31 (App. Div. 2009). We have also
previously noted that where a payor has had a reduction in their income they
A-0496-19T2 10 generally must also "demonstrate how he or she has attempted to improve the
diminishing circumstances." Id. at 130 n.5; see also Aronson v. Aronson, 245
N.J. Super. 354, 361 (App. Div. 1991).
Additionally, this court recognizes that as with all child support decisions
"[a]ny decision must be made in accordance with the best interests of the
children." Jacoby, 427 N.J. Super. at 116. The court must therefore also weigh
whether a modification is equitable and fair. Lepis, 83 N.J. at 158. This
necessarily includes examining the situation of each party, including their assets,
property, and capital assets. Heller-Loren v. Apuzzio, 371 N.J. Super. 518, 531
(App. Div. 2004); see also Mowery v. Mowery, 38 N.J. Super. 92, 105 (App.
Div. 1955).
In addition, Rule 5:5-4(a)(2) provides: "When a motion or cross-motion
is filed to establish alimony or child support, the pleadings filed in support of,
or in opposition to the motion, shall include a copy of a current case information
statement." Rule 5:5-4(a)(4) requires a "movant's case information statement
previously executed or filed in connection with the order, judgment or
agreement sought to be modified" to also be appended.
The reason given by the Family Part judge for denying defendant's request
for modification was his 2019 income was uncertain at the time the motion was
A-0496-19T2 11 decided. The judge noted defendant's dividend income and capital gains listed
on his tax return did not show that "his financial circumstances have changed
for the . . . worst . . . ." Further, the judge emphasized when child support was
set at $36,000 per year, that equated to 3.4% of defendant's income. Assuming
defendant was on track to earn $760,000 in 2019, the child support obligation
would be 4.7% of his income, less than a 1.5 percentage-point change. And,
since the parties' combined income exceeded $187, 200, under N.J.S.A. 2A:34-
23(a), the parties' assets had to be considered in the child support calculation.
[I]f the combined net income of the parents is more than $187,200 per year, the [c]ourt shall apply the guidelines up to $187,200 and supplement the guidelines-based award with a discretionary amount based on the remaining family income (i.e., income in excess of $187,000) and the factors specified in N.J.S.A. 2A:34- 23. Thus, the maximum guidelines award in Appendix IX-F represents the minimum award for families with net incomes of more than $187,200 per year.
[Child Support Guidelines, Pressler & Verniero, Current N.J. Court Rules, Appendix IX-A to R. 5:6A, www.gannlaw.com (2021) (emphasis added).]
We reiterate, the factors specified in N.J.S.A. 2A:34-23, which the court must
consider in determining the child support award in addition to the base guideline
child support award, are as follows:
1) Needs of the child; 2) Standard of living and economic circumstances of each parent; 3) All sources
A-0496-19T2 12 of income and assets of each parent; 4) Earning ability of each parent, including educational background, training, employment skills, work experience, custodial responsibility for children including the cost of providing child care and the length of time and cost of providing child care and the length of time and cost of each parent to obtain training or experience for appropriate employment; 5) Need and capacity of the child for education, including higher education; 6) Age and health of the child and each parent; 7) Income, assets and earning ability of the child; 8) Responsibility of the parents for the court-ordered support of others; 9) Reasonable debts and liabilities of each child and parents; and 10) Any other factors the [c]ourt may deem relevant.
Moreover, we have previously addressed the delicate balance the Family
Part judge must strike in establishing child support obligations in high -income
situations.
Even with high income parents, the court still must 'determin[e] needs of a child in a sensible manner consistent with the best interests of the child.' Isaacson, 348 N.J. Super. at 584. '[T]he law is not offended if there is some incidental benefit to the custodial parent from increased child support payments.' Ibid. While 'some incidental benefit' is not offensive, 'overreaching in the name of benefiting a child is.' Id. at 585. '[A] custodial parent cannot[,] through the guise of the incidental benefits of child support[,] gain a benefit beyond that which is merely incidental to a benefit being conferred on the child.' Loro v. Del Colliano, 354 N.J. Super. 212, 225-26 (App. Div. 2002).
[Strahan v. Strahan, 402 N.J. Super. 298, 308 (App. Div. 2008) (alterations in original).]
A-0496-19T2 13 Here, the judge also scrutinized defendant's assets to ascertain if a prima
facie change of circumstances was met. The judge found, based on defendant's
2012 and 2019 case information statements, his net worth increased by
$1,100,000 since the time of the divorce to $5,683,000. Moreover, the judge
aptly highlighted that defendant's monthly Schedule A expenses were $11,495
in 2012 and $16,097 in 2019, an increase of approximately $3500. Defendant's
monthly Schedule C expenses increased from $5105 in 2012 to $6498 in 2019,
a difference of $1400. J.N.'s older age was properly not deemed a relevant
change of circumstances either by the judge.
Moreover, the record demonstrated that defendant's alleged change of
circumstances was not permanent. Miller v. Miller, 160 N.J. 408, 420 (1999)
(citing Lepis, 83 N.J. at 157). Accordingly, we discern no abuse of discretion
on the part of the Family Part judge, and her decision was not based on a
palpably incorrect basis. The judge reviewed defendant's financial situation and
found his income had not substantially changed since the time the AJOD was
entered.
We are also unpersuaded by defendant's argument that J.N.'s needs have
also decreased because he failed to provide any evidence to support his
contention. The moving party for a downward modification of support has the
A-0496-19T2 14 burden of proving the child's needs have lessened. Jacoby, 427 N.J. Super. 120-
21. Here, defendant has not met that burden, and the judge correctly declined
to recalculate the child support obligation.
We are likewise unpersuaded by defendant's argument that because
plaintiff now resides in a "five-bedroom, four-bathroom [3300] [square] [foot]
home," the benefit she gains is more than merely incidental. The payee sp ouse,
namely plaintiff here, does not have to account for her expenditure of child
support monies as defendant implies. Child Support Guidelines, Pressler &
Verniero, Current N.J. Court Rules, Appendix IX-A to R. 5:6A,
www.gannlaw.com (2021). Saliently, defendant's parenting time with J.N. was
suspended in early 2019 by the judge, and plaintiff did not receive an increase
in child support notwithstanding the fact that child support was calculated based
on an equally shared, alternating week basis. Therefore, defendant's argument
is unavailing.
We also disagree with defendant's argument that the judge erred by not
recalculating the percentage share of each party's responsibility to pay J.N.'s
supplemental and extraordinary child support expenses. Defendant has not
proven that his earned and unearned income now represents only 91% of the
gross combined income of the parties. The judge was correct in pointing out
A-0496-19T2 15 that "attendant to [child support] is the reallocation for the responsibility of
expenses. And, . . . in my mind, I view those two things as inextricably
intertwined." The judge's decision was based upon substantial, credible
evidence in the record. Therefore, defendant's motion was properly denied.
The judge also properly rejected plaintiff's request that defendant start
paying his child support obligation through the Department of Probation. In her
ruling, the judge explained:
I understand that, in the history of this family, that at one point there—payment was made through the Department of Probation. And, ultimately there was a consent order removing it from probation's enforcement and rather calling for direct pay.
And that—the order itself sets forth the circumstances where—wherein the case would be payable again through probation, which required—or— the instance that would give rise to that would be if [defendant] missed two child support payments—and I believe it was in a row. Give me one minute. Two missed child support payments.
And, that order was June 27th, 2014. And, I do not find that that condition precedent to the consent order has . . . occurred here. So, I am . . . denying plaintiff's application to do that.
We add the following brief remarks. Rule 5:7-4(b) provides:
"Enforcement of child support orders shall presumptively be in the county in
which the child support order is first established (county of venue) . . . ."
A-0496-19T2 16 N.J.S.A. 2A:17-56.13 provides, "in every award for alimony, maintenance or
child support payment, the judgment or order shall provide that payments be
made through the Probation Division of the county in which the obligor resides,
unless the court, for good cause shown, otherwise orders." (Emphasis added).
The judge was correct in concluding that plaintiff has not shown that
defendant missed two consecutive child support payments. Hence, the condition
precedent set forth in the consent order was not satisfied, and there was no basis
upon which the judge should have ordered child support payments to be made
through the Probation Division.
III.
We next address plaintiff's argument that the Family Part judge erred and
abused her discretion in denying plaintiff's request for counsel fees and costs
because she misapplied the factors enumerated under Rule 5:3-5(c).
Specifically, plaintiff claims defendant filed his motion in bad faith, and the
judge's finding that plaintiff had sufficient income to pay her attorney's fees was
inconsistent with the record.
Counsel fee determinations rest within the trial judge's sound discretion.
Williams v. Williams, 59 N.J. 229, 233 (1971). We will disturb a trial court's
determination on counsel fees "only on the 'rarest occasion,' and then only
A-0496-19T2 17 because of clear abuse of discretion." Strahan, 402 N.J. Super. at 317 (quoting
Rendine v. Pantzer, 141 N.J. 292, 317 (1995)). An "abuse of discretion only
arises on demonstration of 'manifest error or injustice,'" Hisenaj v. Kuehner, 194
N.J. 6, 20 (2008) (quoting State v. Torres, 183 N.J. 554, 572 (2005)), and occurs
when the trial judge's 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 Cnty. Prosecutor, 171 N.J. 561, 571 (2002)).
"A lawyer's fee must be reasonable." Giarusso v. Giarusso, 455 N.J.
Super. 42, 50 (App. Div. 2018) (quoting Rosenberg v. Rosenberg, 286 N.J.
Super. 58, 69 (App. Div. 1995)). Determining the reasonableness of the fee
involves "determining the number of hours reasonably expended multiplied by
a reasonable hourly rate." Id. at 51 (citing Rendine, 141 N.J. at 334-35).
In determining whether to award counsel fees the trial court must consider
the factors enumerated in Rule 5:3-5(c):
(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
A-0496-19T2 18 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.
Here, plaintiff's attorney certified that the estimated fees and costs
incurred by plaintiff in connection with this matter were $10,538.50. The judge
evaluated the reasonableness of the fees requested by each party, as required
under Rule 1.5, and determined the fees requested by each party were
reasonable: "Both the attorneys who are representing the parties in this matter
are seasoned attorneys, both of whom have rates that are reasonable in light of
their years of experience and years of—in light of the vicinage in which they
practice."
In evaluating the Rule 5:3-5(c) factors the judge noted in her analysis that
each party had the ability to pay their own fees. Plaintiff does not contend she
is unable to pay her counsel fees; rather she stresses given the disparity in the
parties' incomes, defendant should pay her fees. The judge specifically noted
that defendant did not litigate this matter in bad faith or unreasonably. We
discern no abuse of discretion in the judge's fee analysis. Gotlib v. Gotlib, 399
N.J. Super. 295, 314-15 (App. Div. 2008) (noting that counsel fee awards are
committed to the Family Part's "sound discretion"); see also Loro v. Colliano,
354 N.J. Super. 212 (App. Div. 2002).
A-0496-19T2 19 We have fully considered the balance of the arguments raised by both
parties on appeal and conclude that they lack sufficient merit to require
comment. R. 2:11-3(e)(1)(E).
Affirmed.
A-0496-19T2 20