NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-0973-20
MICHAEL GIUNTA,
Plaintiff-Appellant,
v.
SHANNON FAHEY,
Defendant-Respondent. _______________________
Submitted November 15, 2021 – Decided December 6, 2021
Before Judges Sabatino and Rothstadt.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Somerset County, Docket No. FM-18-0851-19.
Gomperts Penza McDermott & Von Ellen, LLC attorneys for appellant (Marissa Lepore Hovanec, of counsel and on the briefs).
Thomas J. Hurley, attorney for respondent.
PER CURIAM After a three-day divorce trial, the Family Part entered a final judgment
that, among other things, ordered plaintiff Michael Giunta ("the husband") to
pay $2,500 monthly ($30,000 per year) in limited duration alimony to defendant
Shannon Fahey ("the wife") for a period of twelve years. The court set the
alimony amount after imputing earnings to the husband, a financial executive
who had very recently been laid off, but declining to impute additional earnings
to the wife above her existing salary. The court also ordered the husband to
obtain a life insurance policy with a death benefit to secure his alimony
obligation. The husband moved for reconsideration, which the court denied ,
with the exception of ordering a reduction of the life insurance policy coverage
amount.
On appeal, the husband seeks reversal of the $30,000 annual alimony
award and a further reduction the face value of the life insurance policy. He
argues he is not voluntarily unemployed, and it was unfair for the court to impute
the earnings level that it ascribed to him. He further argues the court should
have adopted his vocational expert's opinion that a higher annual salary should
have been imputed to the wife. He does not appeal other aspects of the
judgment. The wife opposes the alimony reduction, but she is amenable to an
adjustment of the life insurance amount. She has not cross-appealed.
A-0973-20 2 For the reasons that follow, we affirm the court's alimony determination,
without prejudice to the husband's ability to move for a future modification as
the parties' employment circumstances may evolve. We remand in part solely
concerning the life insurance amount.
I.
Since the issues before us are limited to the alimony and life insurance
awards, we need not detail the many facets of the parties' marriage that emerged
at trial having little or no relevance to those financial issues. The following
overview will suffice for our purposes.
The parties married in January 2004, which signifies their marriage was a
fairly lengthy one spanning slightly over sixteen years. The parties are in their
early fifties. They have two children, who are now ages fifteen and sixteen. The
child-related issues were resolved in mediation, with an agreement designating
the wife as the children's primary residential custodian and dividing parenting
time on a roughly equal basis.
The equitable distribution issues, including the sale of the marital home,
were decided by the trial court and have not been appealed. The court found,
and it is not disputed on appeal, that the parties enjoyed a marital lifestyle
beyond their financial means.
A-0973-20 3 The husband has a B.A. degree in accounting and finance from St. Joseph's
University. The wife has a B.A. degree in Business Administration from the
University of Miami. Throughout their marriage until he was laid off in 2020,
the husband worked in the financial services industry. The wife initially worked
for a pharmaceutical company, but then left the workforce to raise the children.
She eventually returned to work as a receptionist in September 2019 after the
divorce complaint in this case was filed.
Three witnesses testified at trial: the two parties and a vocational
consultant, Lynn Levine, Ph.D., who testified as an expert for the husband about
the wife's earnings capacity. The first day of trial in March 2020 took place in
a courtroom, but the second and third days were conducted remotely in June
2020 due to the COVID-19 health restrictions.
The husband testified that he worked for many years in the financial
industry, eventually attaining the position of a Global Group Comptroller for the
international firm of Bain Capital. He worked for a company named Kantar
from 2011, which was acquired by Bain it (and renamed "Lightspeed Research")
in December 2019.
In 2019 the husband earned $195,000 in salary plus a $5,000 allowance,
and he had earned roughly commensurate amounts in preceding years. The
A-0973-20 4 husband contended that he had been "vastly overpaid" as the result of Kantar—
despite it being based in New Jersey—matching his previous salary when we
worked at BlackRock in New York City.
In late February 2020—less than a month before the start of this divorce
trial—the husband was informed by Bain that he was being terminated. He
learned he was bring laid off, along with approximately a hundred other
employees, as part of a company-wide reorganization. From June 1, 2020, the
husband received from Bain nine weeks of severance pay.
The husband recounted that, after being notified he was being let go, he
"immediately took steps" to look for employment, including updating his resume
and LinkedIn account, and contacting acquaintances at a recruiting firm and
former employers. He started having conversations with contacts, including
several recruiting firms, in the first days of March 2020, within days of being
notified of his termination. The husband also stated that, by June 15, 2020, he
had sent out over eighty job applications through LinkedIn.
As of the time of the husband's June 2020 trial testimony, none of those
applications and efforts had led to job interviews. The husband explained that
virtually all the job openings for which he would otherwise be qualified include
"MBA or CPA preferred" and that he possesses neither credential. He testified
A-0973-20 5 the annual salaries for the jobs he is qualified for, and to which he had been
actively applying, range between $125,000 and $140,000 per year.
The husband believed that in the months before the COVID-19 pandemic,
he might have been able to find a job "within a few weeks" given his strong
resume and many contacts. He perceives the pandemic had caused firms in his
field to cease hiring for the time being and had cast uncertainty over his
prospects. Based on his unsuccessful job search thus far, the husband
anticipated "his pay [level at Bain of $200,000] is going to go down probably
around $50,000."
The husband was not making support payments to the wife, pendente lite,
since his termination. Due to COVID-19, his mortgage companies had allowed
him to defer monthly payments in light of his unemployment, and he had
deferred these payments by six months as of June 2020. He stated he instead
has been using available funds to pay down the family's debts.
In her own testimony, the wife recounted that after her college graduation
in 1992 through 2005, she worked in various sales roles at Holman Enterprises,
the Carter-Wallace Company, and Janssen Pharmaceuticals. She received a
number of promotions and salary raises over that period. She earned
approximately $65,000 as a financial analyst at Janssen the year before she left
A-0973-20 6 the workforce to become a stay-at-home parent in 2005. She resumed working
in 2019, earning $50,000 annually as a receptionist for a local firm. The wife
expressed relief at being able to find a receptionist job at the salary she is
earning, given her extended time out of the workforce.
Dr. Levine was presented by the husband as an "employability and
vocational expert." The wife did not contest her qualifications as an expert
witness. The husband retained Dr. Levine to opine on the wife's earning
capacity in light of her employment history, education, and current work as a
receptionist. Dr. Levine did not opine about the husband's own earning capacity ,
nor did the wife present a competing expert witness.
After meeting several times with the wife and reviewing her employment
history, Dr. Levine opined that "[u]pon completion of an upgrading in skills,
upon obtaining that additional certification that would overlay and update her
Bachelor's Degree, [the wife] would enter the role of compensation and benefits
analyst or representative at an entry salary in the low to upper $60,000 range."
The expert added that such training programs would typically cost
"anywhere from the low 2, $3,000 range, [and] … for an extensive program it
could be as much as 8 to $10,000[.]" Dr. Levine declined to opine that the wife
was "underemployed," asserting instead that "[t]he question for [her] evaluation
A-0973-20 7 is what is [the wife's] employability and … career options, and that was the
question [she] was responding in [her expert] report."
Commenting on the wife's current employment, Dr. Levine stated that
"$50,000 a year … [is] a great salary for a receptionist in [the wife's] geographic
area" based on "New Jersey Department of Labor 2018 data." Although not
deeming the wife "underemployed," the expert acknowledged she "could be
doing better when looking at her educational background."
In its oral decision, the trial court granted the parties a dual judgment of
divorce on the grounds of irreconcilable differences. With respect to alimony,
the court analyzed the fourteen factors to be weighed when considering the
allocation of spousal support under N.J.S.A. 2A:34-23, applying his findings to
each.1
Addressing the "actual need and ability of the parties to pay" under
N.J.S.A. 2A:34-23(b)(1), the court acknowledged the husband's recent job loss,
and the absence of any expert testimony about to his ability to earn. 2 The court
noted the husband's detailed summary of his employment search efforts, as well
1 Rather than detail the judge's findings on each of the fourteen factors, we discuss only the findings most relevant to the three central issues at stake. 2 Indeed, the trial court suggested the husband work with Dr. Levine to aid his search for employment, which the husband agreed was a sound idea. A-0973-20 8 as his contention that personal connections with his former employer in New
York led to his being "substantially overpaid" while earning approximately
$200,000 per year. The court found the husband's testimony credible, and
specifically regarded as "believable" the husband's doubts as to whether he
would be able to earn $200,000 per year in a new role.
Taking this testimony and the circumstances into account, the judge
imputed what he termed a "fair and reasonable" lower sum of $120,000 in annual
earnings to the husband, in light of "his work history." The court noted that
whether or not the husband was employed, "neither of the parties would have
the ability to maintain the standard of living that they enjoyed during the
marriage." However, considering the wife's present salary of $50,000, "there is
clearly a need for [her to receive] alimony."
With respect to the wife's earnings, the court deemed Dr. Levine's expert
testimony "credible," and found "she did a good job of going through the facts
. . . and explaining why she believes [the wife] was capable of earning more[,]"
but stopped short of imputing additional income to the wife, beyond her actual
current salary of $50,000 per year. 3 The court noted Dr. Levine's opinion that
3 Because the trial court's findings concerning the wife's earning capacity hinged largely upon the husband's own expert, we need not address here the husband's arguments concerning the wife's credibility. A-0973-20 9 the wife could be earning in the low- to mid-$60,000 per year range was
contingent on approximately "eighteen months of additional training," and thus
implied it would be unfair to consider her voluntarily underemployed.
Regarding the parties' ages and physical and emotional health under
N.J.S.A. 2A:34-23(b)(3), the court found no age or health concerns prohibitive
of the parties respectively "maximizing his or her income."
Turning to the "standard of living established in the marriage" under
N.J.S.A. 2A:34-23(b)(4), the court reiterated that while their marital lifestyle is
unsustainable whether either party is unemployed or not, that "the reduced
lifestyle should be shared by both the parties."
Under N.J.S.A. 2A:34-23(b)(5), which considers the parties' "earning
capacity" and educational level—a key provision with respect to imputing
income—the court stated it had covered that factor in deciding to impute
$120,000 to the husband. The court reiterated that because the wife would
"need[] additional training" at a cost for an increase in salary, it would not
impute a higher salary to her.
A-0973-20 10 Considering these along with the remaining factors under the statute, 4 the
court ordered an alimony award of $2,500 per month to the wife for a limited
term of twelve years. The court refrained from ordering any modification of
alimony based on pendente lite support provisions.
Lastly, the court ordered the husband to maintain the couples' life
insurance policy with a death benefit of $600,000 naming the wife as
beneficiary.
The court entered a final judgment of divorce on August 30, 2020, which
incorporated the $2,500 monthly alimony award and the $600,000 life insurance
policy obligation. The husband moved for reconsideration, arguing those sums
were excessive. The court declined to reconsider the alimony award, but it did
reduce the life insurance policy amount to $400,000.
This appeal by the husband ensued. He solely contests the alimony award
and the life insurance amount. In particular, he argues the court erred in
imputing $120,000 in annual income to him and in declining to impute a higher
income to the wife.
4 The remaining factors largely speak to other assets, pre-divorce support, and childcare, none of which speak directly to the imputed income issue at hand. These factors also contribute to child support and equitable distribution, discussed in the trial court's oral opinion but again not relevant here.
A-0973-20 11 II.
We begin by addressing the court's limited-duration alimony award and
its associated determinations of the parties' respective earnings capacity. The
pertinent law is well established.
Limited-duration alimony ("LDA"), also known as term alimony, consists
of alimony payable for a specified period of time. The Legislature has expressly
authorized LDA as a permitted form of alimony. N.J.S.A. 2A:34-23(c). LDA
is generally appropriate in cases involving marriages of intermediate or shorter
length, in which the spouse seeking support has an economic need, but also
possesses" the skills and education necessary to return to the workforce" at some
time in the immediate future. Gordon v. Rozenwald, 380 N.J. Super. 55, 66
(App. Div. 2005) (citing Cox v. Cox, 335 N.J. Super. 465, 483 (App. Div.
2000)).
A key purpose of LDA is to address a dependent spouse's post-divorce
needs following intermediate or shorter-term marriages, in situations where
permanent or rehabilitative alimony is not warranted but where economic
assistance to the dependent spouse for a limited period of time is nevertheless
justified. See Gnall v. Gnall, 222 N.J. 414, 431 (2015) (citing J.E.V. v. K.V.,
426 N.J. Super. 475, 485-86 (App. Div. 2012)).
A-0973-20 12 The alimony statute authorizes a court to consider the "earning capacity"
of each party to a divorce or dissolution. N.J.S.A. 2A:34-23(b)(5). Pursuant to
N.J.S.A. 2A:34-23(b)(5), that consideration implicates the respective parties'
educational level, vocational skills, and employability, as well as the length of
absence from the job market of the party seeking maintenance under N.J.S.A.
2A:34-23(b)(6). Louis & Seiden, N.J. Family Law, Volume II: Divorce,
Alimony & Property Division, §24:4-2 (2021) (citing Miller v. Miller, 160 N.J.
408, 420 (1999), where the Supreme Court held that a party's "potential to
generate income is a significant factor to consider when determining his or her
ability to pay [support][,]" along with a number of other cases on point.)
A court may be required to impute income to a party who is unemployed,
meaning the party is completely absent from the work force, or underemployed,
meaning a party's current income is less than a previously demonstrated earning
capacity. Id. at §24:4-2(a). A spouse's unemployment or underemployment
must be regarded as voluntary for a court to impute income to that spouse. Ibid.;
see also Tannen v. Tannen, 416 N.J. Super. 248, 261-62 (App. Div. 2010), aff'd
o.b. 208 N.J. 409 (2011).
Unemployment or underemployment in this support context is deemed
voluntary where it involves a "volitional, or intentional" decision by the
A-0973-20 13 divorcing spouse to earn less than that spouse is demonstrably capable of
earning. Id. at §24:4-2(a)(1). Imputing income is inappropriate where the
decision to remain unemployed or underemployed was made with "just cause."
Ibid. The assessment of "just cause" for voluntary unemployment or
underemployment is to be "determined by an analysis of all of the relevant
statutory factors" as is fair and reasonable under the circumstances. Ibid.
Unemployment or underemployment is instead deemed involuntary, precluding
imputation of income, when it is "attributable solely to events beyond the party's
control." Ibid. (citing Dorfman v. Dorfman, 315 N.J. Super. 511, 517 (App. Div.
1998)).
Once it has been established that unemployment or underemployment is
voluntary, the next step is to "determine the reasonable amount of income to be
imputed to that party." Caplan v. Caplan, 182 N.J. 250, 270 (2005). That
determination involves a "realistic[] apprais[al]" of the party's capacity to earn,
considering educational background, employment experience, and job
availability. Storey v. Storey, 373 N.J. Super. 464, 474-75 (App. Div. 2004).
"Competent evidence" of earning capacity may include the party's record of
prior earnings, or "data on prevailing wages from sources subject to federal
notice." Ibid.
A-0973-20 14 In assessing whether the trial court appropriately applied these principles
in calibrating alimony here, we must be mindful that our scope of review is
limited. We generally accord considerable deference to the Family Part's
expertise in family matters and its exercise of discretion. See Cesare v. Cesare,
154 N.J. 394, 411-12 (1998); see also Pascale v. Pascale, 113 N.J. 20, 33 (1988).
Deference is especially important where evidence is testimonial and involves
credibility issues because the observing judge "has a better perspective than a
reviewing court in evaluating the veracity of witnesses." Pascale, 113 N.J. at 33
(citations omitted). With respect to the pivotal issues before us, a trial judge's
decision to impute income of a specified amount will not be overturned unless
the underlying findings are "inconsistent with or unsupported by competent
evidence." Overbay v. Overbay, 376 N.J. Super. 99, 106–07 (App. Div. 2005)
(quoting Storey v. Storey, 373 N.J.Super. 464, 474–75 (App. Div. 2004)).
Viewed through this prism of appellate deference, we affirm the trial
court's assessment of the parties' earning capacities and its resultant alimony
award. The court's decisions have substantial support in the evidence and
comport with the applicable law.
With respect to the husband, the trial court appropriately recognized that
he had been employed for many years in the financial industry, attaining an
A-0973-20 15 annual salary of nearly $200,000. The husband's steady earnings history did not
change until a month before the trial when he was unexpectedly included in a
company downsizing. As of the time of his trial testimony, the husband had
been without work for only a few months and was in the midst of a job search.
Too little time had passed for the court to deem him incapable of obtaining a
substantial salary, and to consider his income capacity to be zero.
We realize that the husband did not have a job as of the time of his trial
testimony. However, current earnings have never been viewed as "the sole
criterion [upon which] to establish a party's obligation for support." Weitzman
v. Weitzman, 228 N.J.Super. 346, 354 (App. Div. 1988) (citations omitted).
Instead, "a court 'has every right to appraise realistically [a spouse's] potential
earning power.'" Ibid. (citations omitted). To be sure, the husband was
involuntarily terminated by his employer and had, in a short time, pursued new
job opportunities. Even so, insufficient time passed to enable a declaration that
he is incapable of restoring much or all of his previous salary.
The $120,000 annual income the trial court imputed to the husband was a
fair compromise. The court did not impute to him the $200,000 in compensation
he had been earning. Nor did it find he lacked an earning capacity despite his
present joblessness. The $120,000 figure the court selected roughly corresponds
A-0973-20 16 to slightly below the range of salaries the husband testified he was then pursuing
in his job search, i.e., $125,000 to $140,000. We discern no inequity in the
court's imputation. Moreover, as the trial court acknowledged, if the husband's
unemployment or underemployment persists despite his best efforts, he can
move to modify the alimony due to an alleged change in circumstances. Lepis
v. Lepis, 83 N.J. 139, 145-46 (1980).
We likewise uphold the trial court's adoption of the wife's current $50,000
annual income. She only recently reentered the work force after over a decade
as a stay-at-home parent. Even the husband's expert witness recognized that the
wife's skill set needed to be updated with training in order for her to earn more.
Her present salary is quite generous for a receptionist, and it would be
speculative that she could readily obtain a higher-paying job without training.
Again, if circumstances materially change, the husband can move for a future
modification.
The $2500 monthly alimony figure selected by the court represents a
$30,000 yearly boost in the wife's income and a corresponding $30,000
reduction in the husband's annual imputed income. As such, the amount roughly
equalizes the parties' presumed incomes ($80,000 for the wife versus $90,000
A-0973-20 17 for the husband). The sums are within the zone of fair and equitable judicial
discretion.
For all these reasons, the trial court's alimony determination is affirmed,
without prejudice.
III.
As a final brief point, we agree with the husband that a $400,000 face
amount of the life insurance policy is greater than what is needed to assure the
wife will be paid the alimony owed to her if the husband dies. The annual
alimony of $30,000, times twelve years, amounts to a total liability of $360,000.
That figure would be further reduced if discounted for present value. Given that
the wife is amenable to reducing the $400,000 policy amount, we remand for the
issue to be either settled or reexamined by the court.
Affirmed in part and remanded in part. We do not retain jurisdiction.
A-0973-20 18