S.O. VS. M.O.(FM-04-1788-02, CAMDEN COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: October 20, 2017
• Docket: A-5028-15T3
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-5028-15T3

S.O.,

Plaintiff-Appellant,

v.

M.O.,

Defendant-Respondent. _______________________________

Submitted October 10, 2017 – Decided October 20, 2017

Before Judges Sabatino and Whipple.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Camden County, Docket No. FM-04-1788-02.

Newman & Ingemi, LLC, attorneys for appellant (Scott J. Newman, on the briefs).

Obermayer Rebmann Maxwell & Hippel, LLP, attorneys for respondent (Shari B. Veisblatt and Amy L. Rokuson, on the briefs).

PER CURIAM

This appeal concerns efforts by a former husband to reduce

his monthly permanent alimony payment in a situation where his

annual earnings have declined and his ex-wife's annual earnings

have risen since the time of the parties' 2003 divorce. The Family Part initially granted the ex-husband's seemingly-unopposed

request and cut his alimony in half, but then reinstated the full

monthly sum after finding that the ex-wife had not been aware of

his motion. After a plenary hearing on the merits, the Family

Part denied the ex-husband's motion in its entirety, and also

ordered him to pay a portion of the ex-wife's counsel fees.

The ex-husband now appeals the Family Part's ultimate

rejection of his motion for alimony reduction and the counsel fee

award. For the reasons that follow, we vacate those determinations

and remand for further proceedings and reconsideration.

I.

Because this case is being remanded, we need not discuss the

record comprehensively. The following summary will suffice for

our purposes.

Plaintiff S.O. and defendant M.O. entered into a Dual Final

Judgment of Divorce ("DFJD") on March 25, 2003.1 The parties two

daughters were then minors. The then-husband was then earning an

average of $200,000 annually and the then-wife was earning an

average of $30,000. The wife's reasonable monthly budget was

agreed at the time of the DFJD to be in the range of $8,000 to

1 Because we quote and discuss income and expense information from the parties' divorce agreement and case information statements, we use initials to maintain confidentiality. See R. 1:38-3(d)(1) (as revised, eff. Sept. 1, 2017).

2 A-5028-15T3 $8,400. The husband agreed to pay the wife permanent alimony in

the amount of $55,000 annually, as well as child support, and to

maintain life insurance to secure his support obligations.

The parties specifically recited in the DFJD that, apart from

grounds for modification based on cohabitation, they "acknowledge

that an application for modification of this alimony award can

also be brought by either party based upon a substantial change

of circumstances."

At the time of the divorce, the husband was working as a

sales representative and project manager for a company. He then

had a $100,000 annual base salary and was then receiving

approximately $100,000 more in bonus income, for a combined total

of $200,000.

Thereafter, the company's bonus eligibility formula (which

depended in part on the performance of co-workers in the ex-

husband's work unit) became more difficult, although the ex-

husband's base salary was raised to $160,000. Meanwhile, the ex-

husband remarried and now has two minor dependents from that

relationship.

Conversely, the ex-wife's own earnings have risen. As of

2014, she was earning about $52,000, or about $22,000 above what

she had been earning at the time of the 2003 divorce. In addition,

her household expenses have slightly decreased.

3 A-5028-15T3 The ex-husband initially moved to modify and reduce his

alimony in 2009. His application was denied by the Family Part

for failure to show changed circumstances. That 2009 ruling was

not appealed.

The ex-husband continued to earn below his 2003 income level

of $200,000. Consequently, in the latter part of 2014, he filed

another motion for modification. His attorney served the ex-wife

with the motion papers by regular and certified mail in accordance

with Rule 1:5-2. Even though the parties had continued to engage

in email and text message exchanges concerning the children, the

ex-husband and his attorney decided not to provide the ex-wife

with additional notice of the motion through her business email,

allegedly because of confidentiality and security concerns.

Consequently, the ex-husband's modification motion, which was

accompanied by a motion to emancipate the two daughters, was not

seen or opposed by the ex-wife.

The trial court thereafter issued an order on December 12,

2014 emancipating the children2 and scheduling a plenary hearing

in January 2015 on the alimony modification motion. The ex-wife

did not respond, again having only been served with notice of the

upcoming plenary hearing by mail.

2 The ex-wife has not challenged the emancipation ruling.

4 A-5028-15T3 The motion judge treated the modification motion as

unopposed. That judge issued an order on January 16, 2015,

reducing the ex-husband's alimony obligation by half to $27,500

annually, and also reducing his corresponding life insurance

policy obligation by half from $500,000 to $250,000 in coverage.

According to the ex-wife, she first learned of this motion

practice when she received a substantially-reduced alimony check

from the ex-husband in early 2015. This prompted her to file a

motion to vacate the court's orders for lack of adequate service.

The motion judge decided to conduct a plenary hearing on the

service issue. He heard testimony at that hearing from both the

ex-husband, whom he did not find credible on these service issues,

and the ex-wife, whom he conversely did find to be credible. The

judge found that the husband had "willfully misled" the court

concerning the supposed confidentiality problems with providing

the wife notice of his motion through her work email. The judge

consequently vacated the prior order of modification from January

2015, and set down the merits of the contested alimony modification

issues for a plenary hearing.

The plenary hearing on the alimony issues took place over two

days in March and April 2016, during which the judge heard

testimony from both parties. This time, the judge found both

parties to be "credible and believable." Having considered their

5 A-5028-15T3 testimony and other proofs, the judge denied modification to the

ex-husband in a written decision issued on June 17, 2016. The

judge concluded that the ex-husband had not shown a sufficient

change in circumstances to warrant such relief.3

Thereafter, in a separate order dated July 18, 2016, the

trial court awarded $7,961.75 in counsel fees to the ex-wife, a

sum representing about half of the fees that she said she had

incurred. The judge found that the ex-husband's wrongful conduct

had caused the need for the court's initial plenary hearing on

service issues. Moreover, the ex-husband's unsuccessful motion

to modify alimony had generated additional attorney time,

including counsel appearances at the plenary hearing on the merits.

II.

On appeal, the ex-husband argues that the trial court erred

in several respects. First, he contends that the court should

have taken into account the substantial increase in the wife's

income since the DFJD was entered in 2003. Second, he argues that

the judge should not have required him to seek other higher-paying

employment once his long-time employer's bonus structure changed.

3 We note that in an earlier portion of the written decision the judge stated, conversely, that the ex-husband's net loss of $35,000 in annual earnings "meets the threshold element for changed circumstances." We suspect that the judge meant that the ex- husband had presented a prima facie case of "changed circumstances," but ultimately not a sufficiently persuasive one.

6 A-5028-15T3 Third, he argues that the trial court did not sufficiently consider

that the ex-wife has less expenses now that the children are

emancipated. Fourth, he maintains that the court's counsel fee

award is excessive, and that it fails to take into account that,

once alimony is factored in, the parties have roughly equivalent

income. The ex-wife has not cross-appealed any of the trial

court's rulings.

It is well recognized that our courts have "broad equitable

powers . . . to review and modify alimony and support orders at

any time." Weitzman v. Weitzman, 228 N.J. Super. 346, 353 (App.

Div. 1988), certif. denied, 114 N.J. 505 (1989); see also N.J.S.A.

2A:34-23; Reese v. Weis, 430 N.J. Super. 552, 569-70 (App. Div.

2013). In making such assessments, we are guided by the Supreme

Court's holdings in its seminal opinion of Lepis v. Lepis, 83 N.J.

139 (1980). We repeat those familiar concepts for context.

First, the moving party under Lepis must make a threshold

prima facie showing that "changed circumstances have substantially

impaired the ability to support himself or herself." Id. at 157.

In considering a proffer of changed circumstances, it is often

necessary for the court to delve into the financial status of both

parties. Id. at 158.

When a prima facie showing is made under Lepis, the court

next must determine if a plenary hearing is warranted. Id. at

7 A-5028-15T3 159. To obtain such a hearing, the moving party must "clearly

demonstrate the existence of a genuine issue . . . [of] material

fact." Ibid. In making this determination, the court should look

to the certification and supporting documents of the parties.

Ibid.

Once the plenary hearing stage is reached, there is no firm

rule governing when an existing support obligation has ceased to

be "'equitable and fair'"; rather, courts will assess several

factors dependent on the nature of each case. Id. at 153 (quoting

Smith v. Smith, 72 N.J. 350, 360 (1977)). These factors include,

among other things, whether the change in circumstance is temporary

or permanent; whether the change was voluntary; whether it was

motivated by bad faith or a desire to avoid payment; and whether

the change in circumstance renders the payor former spouse unable

to pay. See, e.g., Larbig v. Larbig, 384 N.J. Super. 17, 23 (App.

Div. 2006) (finding a reduction in income to be temporary); Kuron

v. Hamilton, 331 N.J. Super. 561, 572 (App. Div. 2000) (finding

that the good faith of the movant is "but one ingredient" to

consider); Deegan v. Deegan, 254 N.J. Super. 350, 355 (App. Div.

1992) (finding that a voluntary change such as retirement may

still warrant a modification). Courts cannot fairly undertake

8 A-5028-15T3 this balancing of equities when they lack sufficient evidence in

the record to do so. Deegan, supra, 254 N.J. Super. at 354.4

In reviewing the Family Part's rulings in such matrimonial

cases, we generally accord considerable deference to that court'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). However, we will provide

appellate relief in instances where the trial court has strayed

from legal principles, overlooked material facts or factual

issues, or reached its conclusions without adequate support in the

record. See, e.g., Milne v. Goldenberg, 428 N.J. Super. 184, 197

(App. Div. 2012) (recognizing the need for appellate relief when

a trial court's decision is made without a rational explanation,

has inexplicably departed from established policies, or has rested

upon an impermissible basis).

4 In supplemental briefs requested by this court, both parties have now acknowledged that the revised alimony standards adopted by the Legislature in 2014, as now codified in subsection (k) of N.J.S.A. 2A:34-23, do not retroactively apply to the ex-husband's motion to modify the agreed-upon alimony obligation that was set forth in the parties' 2003 DFJD. See Spangenberg v. Kolakowaski, 442 N.J. Super. 529, 538-39 (App. Div. 2015); see also L. 2014, c. 42, § 2 (instructing that the 2014 amendments do not apply to agreed-upon alimony terms incorporated into a final divorce judgment pre-dating the effective date of the 2014 amendments). Hence, the motion judge appropriately did not apply new subsection (k) to the ex-husband's motion.

9 A-5028-15T3 Here, we agree that the ex-husband presented sufficient

indicia of a material change in circumstances under Lepis to

warrant the plenary hearing the trial court conducted. That prima

facie material change is supported by the ex-husband's loss of

approximately $35,000 in annual earnings, and the ex-wife's

increased earnings of approximately $22,000. In addition, the

monthly household expenses of both parties have been affected

since 2003 by the emancipation of their children and by the ex-

husband's remarriage.

That said, there are several aspects of the trial court's

analysis in its written decision that warrant reexamination.

First, the trial court does not seem to have given explicit

consideration to the ex-wife's increase in earnings. Although we

agree that her increase is rather modest, it should improve her

ability to meet her reasonable household expenses, particularly

since the children are now emancipated. In this regard, a closer

review of her actual current expenses and expenses appears to be

warranted.

Second, we disagree with the trial court's determination that

the ex-husband has violated a legal duty to seek more lucrative

employment and that, in essence, he is voluntarily underemployed.

As the ex-husband emphasizes, he has worked in a stable job

with the same employer for over twenty-five years. He has no

10 A-5028-15T3 control over his employer's change in the bonus formula. The

achievement of a bonus is not entirely within the ex-husband's

personal control but depends upon his work unit's overall

performance and profitability. Presumably his work colleagues

would have incentives to achieve the bonuses even if,

hypothetically, the ex-husband's incentives were somehow tempered

by his duty to pay his ex-wife alimony and his desire to obtain

modification. If, as the trial court presumed, another position

with a different employer earning $200,000 were available to the

ex-husband, taking such a new job would create a risk that it

could be less secure and stable than the ex-husband remaining with

his long-time employer of over twenty-five years. In sum, the

"totality of circumstances" do not bespeak a situation of the ex-

husband's voluntary underemployment. Storey v. Storey, 373 N.J.

Super. 464, 472-75 (App. Div. 2004).

Third, the record is somewhat murky concerning a fair and

appropriate allocation of expenses within the ex-husband's current

household. His current wife apparently earns approximately

$50,000 to $100,000 annually. She has no legal duty to support

her husband's former spouse. On the other hand, the ex-husband's

"role in his new family does not obviate his responsibilities to

his first family." Guglielmo v. Guglielmo, 253 N.J. Super. 531,

544 (App. Div. 1992). See also Wei v. Wei, 248 N.J. Super. 572,

11 A-5028-15T3 575 (App. Div. 1991) ("[An alimony obligation] may [not] be excused

in whole or in part from those obligations by remarrying and

voluntarily assuming additional obligations which may in part

conflict with his undertaking in the divorce proceedings").

Here, the trial judge's analysis divided the ex-husband's

household expenses equally with his present wife. That may well

be a fair and equitable allocation. However, since this matter

needs to be remanded in any event, the parties on remand are free

to develop the record on this point in more depth and detail what

the actual division of expenses is within the household. The

judge could then reconsider whether a 50/50 allocation is

sufficiently protective of the ex-wife's right to alimony, while,

at the same time, not indirectly foisting an unfair financial

burden upon the new spouse.

For these many reasons, we vacate the orders at issue and

remand this matter to the Family Part for further proceedings. On

remand, the trial court shall allow the parties to present updated

financial proofs and any other pertinent evidence. Pending the

outcome of the remand, the ex-husband's existing alimony

obligation shall remain in force.

If, on reconsideration with a fuller record, the trial court

decides to reduce the ex-husband's alimony level, the court shall

have the discretion to determine an appropriate effective date for

12 A-5028-15T3 the modification, and to make any adjustments to arrears that may

be warranted.5 The trial court shall convene a case management

conference within thirty days to plan the remand proceedings.

Vacated and remanded. We do not retain jurisdiction.

5 Because we are remanding the merits of the alimony issues, we need not address the counsel fee questions in depth, which shall abide the outcome of the remand. For the guidance of the parties and the trial court, we do note that we detect no abuse of discretion in the partial amount of fees the court awarded, although the ex-wife's status as prevailing party could be affected by the outcome of the remand, in which case, the prior counsel fee award must be reconsidered. See Strahan v. Strahan, 402 N.J. Super. 298, 317 (App. Div. 2008) (noting that an abuse of discretion review standard applies on appeal to Family Part counsel fee awards).

13 A-5028-15T3