PHILIP J. WISOFF VS. BARBARA WISOFF (FM-20-1693-03, UNION COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-2131-15T2
PHILIP J. WISOFF,
Plaintiff-Appellant,
v.
BARBARA WISOFF,
Defendant-Respondent.
__________________________________________
Argued May 9, 2017 – Decided August 29, 2017
Before Judges Espinosa and Grall.
On appeal from the Superior Court of New
Jersey, Chancery Division, Family Part,
Union County, Docket No. FM-20-1693-03.
Tanya N. Helfand argued the cause for
appellant (Helfand & Associates, attorneys;
Ms. Helfand, of counsel and on the briefs).
Anastasia Latsos argued the cause for
respondent (Weinstein Lindemann & Weinstein,
attorneys; Jeffrey P. Weinstein, of counsel
and on the brief; Ms. Latsos, on the brief).
PER CURIAM
Plaintiff Philip J. Wisoff appeals the denial of a post-
judgment motion seeking modification of his alimony and child
support obligations. We reverse and remand for further
proceedings in conformity with Lepis v. Lepis, 83 N.J. 139
(1980) and Morris v. Morris, 263 N.J. Super. 237 (App. Div.
1993).
I.
The Wisoffs married in August 1979. Both were graduates of
Brown University, and plaintiff had a master's of science degree
in computer engineering from Stanford University. Defendant had
studied "studio design" at Brown. The Wisoffs have two
children, one born in 1986 and the other in 1989.
Starting in 1986 and throughout the remainder of the
marriage, defendant focused on child-rearing and the home. She
also had medical issues to address. She had spinal surgery in
2000 but at maximal medical benefit in 2002 had difficulty
standing or sitting for prolonged periods that was not expected
to improve; she was, however, otherwise able to "participate in
the majority of activities of daily living."
Throughout the marriage, plaintiff worked in his field.
For many years he was the information technology executive for
well-known professional firms in New York City. In 2001, he
earned $309,881, which included salary and bonus.
The Wisoffs divorced in June 2003, after twenty-four years
of marriage. Plaintiff was forty-eight years old, defendant
forty-six and their children seventeen and fourteen. The
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Wisoffs resolved all ancillary issues — parenting, child
support, alimony and equitable distribution — with a
comprehensive and detailed property settlement agreement (PSA).
They negotiated the PSA, each assisted by an experienced
attorney specializing in matrimonial law.1
Plaintiff assumed significant support obligations in the
PSA. He agreed to pay defendant $3500 child support monthly,
$1750 per child, and to maintain the children's medical
insurance equivalent to the coverage they had prior to the
divorce. He also agreed to pay for their education through
college and professional school, a contribution broadly defined
to include related expenses. The PSA provides for a reduction
of cash support to $437.50 monthly on each child's eighteenth
birthday and until the child's twenty-second birthday. With
each reduction to $437.50, plaintiff agreed to assume
defendant's responsibility for the child's expenses she paid
prior to the reduction.
The PSA addressed emancipation, which the Wisoffs agreed to
delay beyond a child's twenty-third birthday if "injury, illness
or disability of the child" precluded such independence.
1
The Wisoffs were and are represented by different attorneys in
this post-judgment matter in the trial court and on appeal.
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Plaintiff's base alimony obligation under the PSA was $8050
monthly alimony plus defendant's quarterly estimated tax due on
that alimony.2 Paragraph 16 of the PSA explains the alimony
amount was "agreed to and established with respect to support at
a standard of living commensurate with the social status, wealth
and income of the parties during the marriage." That is the
standard under Crews v. Crews, 164 N.J. 11 (2000).
Paragraphs 11, 12 and 13 of the PSA delineate circumstances
warranting upward and downward modifications of alimony.
Defendant's loss of COBRA benefits required a $400 monthly
upward modification, paragraph 11. Defendant's earning income
from work or profit from business requires a downward
modification of alimony and provides a formula for that
adjustment, paragraph 12. Increases in the cost of living
require annual upward modification in conformity with the
Consumer Price Index (CPI), unless plaintiff's "annual earned
income increase percentage is less than the CPI," in which case
defendant "receive[s] the lesser of the CPI or [plaintiff's]
2
In pertinent part paragraph 9 provides:
The Husband shall pay to the wife, as
alimony, the sum of $8,050.00 per month
. . . . The Husband shall also pay to the
wife . . . the taxes due on her alimony
. . . .
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raise," paragraph 13. Paragraph 14 addresses termination of
alimony.
Paragraph 15 precludes modifications not expressly provided
as follows:
[Plaintiff's] aforementioned obligation
to pay alimony to the [defendant] shall be
non-modifiable, except as set forth herein,
regardless of any future changes in
circumstances, whether foreseen or
unforeseen, including, but not limited to,
the following:
(a) the subsequent acquisition (by
inheritance, gift or otherwise) or loss of
assets by either of them;
(b) the dissipation (whether negligent
or not) of the assets received by each of
them as and for equitable distribution in
this matter;
(c) substantial changes in either
party's physical or mental health;
(d) change in the Federal and/or State
income tax laws[.]
[(Emphasis added).]
Plaintiff's earnings increased following divorce. A March
2007 consent order reflects $490,000 earned income in 2006, a
compromise accounting for overlapping severance pay and salary
5 A-2131-15T2
he received when he changed jobs. That compromise was one of
several the Wisoffs addressed in the consent order.3
The Wisoffs' first-born was twenty-one years of age in 2007
and was living with defendant. Under the PSA defendant would
have received $437.50 monthly support for that child, but
plaintiff agreed to pay $875 monthly effective January 1, 2007
unless the child attended college and lived elsewhere.
Defendant was dealing with multiple spinal cysts in 2007
and had surgery to remove them in 2008. Plaintiff agreed to
double his $400 monthly contribution to her health care costs
and to a $346 monthly cost of living adjustment.
Implicitly acknowledging the 2007 deviations from the PSA's
anti-modification provision, the consent order provides: "In
furtherance of [p]aragraphs 15, 16 and 17 of the PSA, the
defendant agrees that the plaintiff shal1 have no further
obligation to contribute to any additional amounts to [her]
health" care expense not "set forth in" the consent order. With
the 2007 adjustments, plaintiff's monthly alimony obligation was
3
Plaintiff's appendices include three copies of what he purports
to be the March 2007 consent order plaintiff signed on March 27
and defendant signed on March 28. They are found at pages 58
through 65 of his appendix and pages 57 to 64 and 873 to 879 of
his supplemental appendix. The purported orders differ, and
neither party addresses the obvious problem. The trial court
should address it on remand. None of the copies show the judge
whose signature appears on the final page filed the original.
6 A-2131-15T2
$9636, but only until December 31, 2007, when the next cost of
living adjustment would take effect.
In the same consent order, the Wisoffs agreed to
recalculate alimony on plaintiff's retirement at age 65 or later
and provided a formula for computing the post-retirement amount.
Their formula excludes income or assets derived "from assets
equitably distributed to each under the PSA" and recognizes that
plaintiff had "$620,000" of excludable assets "as of February
28, 2007." The Wisoffs also agreed to exclude income and assets
of plaintiff's second wife.
Five years later in May 2012, defendant moved to enforce
plaintiff's child support obligation. In response, plaintiff
filed a cross-motion to emancipate the Wisoffs' children, who
were then twenty-six and twenty-three years old. Disabling
illness, requiring a series of hospitalizations and recovery,
had delayed the first-born's education and independence. The
Wisoffs agreed to arbitrate those disputes.
As explained in the arbitrator's written decision in June
2014, the Wisoffs partially resolved the issues in the May 2012
motions, and filed a second round of motions to resolve the
others. A three-day hearing on emancipation and arrears
commenced on March 14, 2014. The arbitrator emancipated the
Wisoffs' second-born, but applying the provision of the PSA
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delaying emancipation due to a child's illness or disability,
the arbitrator denied emancipation of the first-born and
directed plaintiff to provide the support required by the PSA.4
Plaintiff lost his job before the arbitration hearing. His
last employer severed the relationship in mid-July 2013.
Starting in August, plaintiff received seven months' pay
equivalent to his former salary over a six-month period —
through January 2014 — a total of $262,500, $37,500 monthly.
After plaintiff's termination in July 2013, the trajectory
of his career reversed. In the past, plaintiff had easily moved
from job to job. Although plaintiff immediately commenced
efforts to find a new job with comparable pay,5 he had not found
one when he filed the motion to modify his support obligation in
September 2015 or when the judge denied that motion in December
2015.
While continuing to look for employment in August 2013,
plaintiff also started his own consulting business, MTC
4
The arbitrator also fixed child support arrears plaintiff owed
for both children, but that determination is irrelevant to the
issues raised on this appeal.
5
Plaintiff submitted documentation of his efforts in a 556 page
exhibit, Exhibit I, to his certification in support of the 2015
motion. The table of contents entry is singular and general,
"Employment Attempts." Cf. R. 2:6-1(c) (requiring
identification of the initial page of each document, exhibit or
other paper included).
8 A-2131-15T2
Services, LLC. In addition, plaintiff joined the Cutter
Consortium as "a senior consultant," but he reported no earnings
from that association in 2014.
In the trial court and on appeal, defendant submits that
plaintiff's job search was neither diligent nor sincere. She
contends he was "offered" and rejected a job with a salary of
$250,000 in 2013. But plaintiff asserted the job was not
offered and notes it would have required relocation to
Washington, D.C. A series of e-mails plaintiff exchanged with a
recruiter in October 2013 discuss a job with that salary in the
Washington area. The "offer" was an expression of interest in
plaintiff and the proposed salary was lower than plaintiff's
seven months' severance pay. He advised the recruiter he was
passing "on the opportunity" but asked if the company was
interested in an "interim CIO," which he would consider. The
recruiter explained that he had already suggested such an
arrangement and the company was not interested.
Plaintiff's earnings in 2014 were minimal. His August 20,
2015 Case Information Statement (CIS) and his 2014 tax return,
reflect $72,931 net profit from MTC and earned income of
9 A-2131-15T2
$43,750, the severance paid by his last employer in 2014.6 As
for 2015, the CIS reports average gross weekly earnings of $1554
from MTC, about $81,000 annually. He certified he hoped to earn
$75,000 from MTC in 2015.
In 2014, plaintiff's support payments were about $100,000
more than his earned income. He paid $157,778 alimony7 and about
$20,400 child support and met those support obligations by
taking IRA distributions amounting to $160,900. As a
consequence, he paid State and Federal taxes totaling $16,668,
including a $3164 penalty for distributions taken before he
reached the age of 59.5 years. According to plaintiff, he had
no other way to meet his obligations and would have nothing left
for retirement if the obligations were not reduced.
II.
A.
For reasons stated in a letter opinion of December 14,
2015, the judge declined to order discovery, denied modification
6
The 2014 tax return appended to the CIS is a joint return that
includes business income earned by plaintiff's second wife. The
Schedule C for MTC indicates gross earnings of $37,956 and net
profit of $29,181, there is no W-2 included with the 2014 return
of appeal that documents the reported severance pay. A letter
from the tax preparer explains it.
7
Reported on the 2014 tax return.
10 A-2131-15T2
of child support and alimony and awarded defendant a $2000
counsel fee. As to child support, the judge concluded the
parties were "bound by the Order of Arbitration entered in June
of 2014, and should be precluded from relitigating the same
issue absent an additional change in circumstances." As to
alimony, the judge enforced the "anti-Lepis" provision of the
Wisoffs' PSA and concluded this case was not sufficiently
"extreme" to warrant modification despite the "anti-Lepis"
clause. See Morris, supra, 237 N.J. Super. 237.
B.
Courts have statutory authority to modify post-divorce
support "as circumstances may require," N.J.S.A. 2A:34-23, and
equitable authority to modify such obligations "in response to
changed circumstances [that] cannot be restricted," Lepis,
supra, 83 N.J. at 149. "The proper criteria are whether the
change in circumstance is continuing and whether the agreement
or decree has made explicit provision for the change." Id. at
152. Where an "existing support arrangement has in fact
provided for the circumstances alleged as 'changed,' it [is] not
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ordinarily . . . 'equitable and fair,' to grant modification."
Id. at 153 (quoting Smith v. Smith, 72 N.J. 350, 360 (1980)).8
Changes in circumstance warranting modification include
increases or decreases in income or need, including need
attributable to illness or disability and changes in tax law.
Id. at 150-53. The change must substantially affect need or
ability to provide support and cannot be speculative or
temporary. See id. at 151-53; cf. N.J.S.A. 2A:34-23(j)
(providing for modification or termination of alimony based on
"prospective or actual retirement") and (k)(10) (precluding an
application based on job loss "until a party has been
unemployed, or has not been able to return to or attain
employment at prior income levels, or both, for a period of 90
days").9
8
In this case there are no allegations of "unconscionability,
fraud, or overreaching in negotiations of the settlement," that
would provide a basis for invalidation or modification of a PSA.
J.B. v. W.B., 215 N.J. 305, 326 (2013) (quoting Miller v.
Miller, 160 N.J. 408, 419 (1999)).
9
The subsections of N.J.S.A. 2A:34-23 cited above were amended
by L. 2014, c. 42 adopted on September 10, 2014 to take effect
"immediately" but are not to be "construed . . . to modify
specifically bargained for contractual provisions that have been
incorporated" into a judgment of divorce. They are cited here
to illustrate the Legislature's recognition of impropriety of
immediate modification and recognition of the importance of
leaving prior agreements providing solutions addressing a
specific changes of circumstance.
12 A-2131-15T2
On a prima facie showing of a decrease in income leaving a
supporting spouse unable to meet his or her own needs and
support obligations, discovery is warranted. Id. at 157.
Without such discovery, a "court will be unable to make an
informed determination as to 'what, in light of all the
[circumstances] is equitable and fair.'" Id. at 158 (alteration
in original) (quoting Smith, supra, 72 N.J. at 360).
Following discovery, Lepis requires the judge to determine
whether there is a genuine dispute of material fact requiring a
hearing or whether modification can be resolved on undisputed
documentary evidence and facts stated in certifications. Id. at
158-59 (citing among others Hallberg v. Hallberg, 113 N.J.
Super. 205, 208 (1971) (a case involving alimony and child
support)).
Because the Wisoffs' PSA limits modification of alimony but
not child support, we address child support in subsection C and
alimony in subsection D.
C.
Plaintiff contends the judge erred in denying modification
of child support on the ground the arbitrator found the child
support amount appropriate in June 2014 and circumstances had
not changed since. We agree.
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The arbitrator did not address the amount of child support
because that issue was not raised. The initial motions were
filed in May 2012, more than a year before plaintiff lost his
job. Had plaintiff moved to expand the scope of arbitration to
reduce the amount of child support when he lost his job in July
2013, the application would have properly been denied as
premature and based on a temporary change not warranting
modification. Lepis, supra, 83 N.J. at 146, 151-54. Plaintiff,
after all, had a history of successful transition from job to
job, was looking for employment and continued to receive
severance pay equivalent to his final salary through January
2014. The hearing commenced in mid-March of that year.
To the extent the judge's letter opinion can be understood
to suggest collateral estoppel, application of that doctrine
would not equitable. See Kozlowski v. Smith, 193 N.J. Super.
672, 675 (App. Div. 1984). Accordingly, we reverse and remand
for further proceedings on child support in conformity with
Lepis. The arguments defendant presents in favor of affirmance
have insufficient merit to warrant discussion in this opinion.
R. 2:11-3(e)(1)(E).
D.
In denying modification of alimony without discovery, the
judge relied upon paragraph 15 of the PSA, which broadly
14 A-2131-15T2
prohibits any modification not specifically authorized in the
PSA. The judge also followed decisional law favoring
enforcement of settlement agreements, especially in matrimonial
cases, precedents too well-settled to require explication here.
See J.B., supra, 215 N.J. at 326 (and cases cited therein).
"Courts recognize the contractual nature of [PSAs].
Pacifico v. Pacifico, 190 N.J. 258, 265 (2007). As contracts,
PSAs should be enforced according to the original intent of the
parties. Id. at 266." J.B., supra, 215 N.J. at 326. In
discerning the parties' intent, "[c]ontracts should be read 'as
a whole in a fair and common sense manner.'" Manahawkin
Convalescent v. O'Neill, 217 N.J. 99, 118 (2014) (quoting Hardy
ex rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 103 (2009)).
Plaintiff urges reversal on the ground that the judge
relied on selective provisions of the PSA and ignored others.
This objection is well-taken.
Paragraph 12 provides a formula for downward modification
of alimony in the event of defendant's return to work or
starting of a business. Similarly, paragraph 13 provides for a
modification of alimony based on increases in the CPI. Read
together, paragraphs 12 and 13 further the purpose of the
alimony amount the Wisoffs agreed was proper — as paragraph 16
explains, an amount that provides "support at a standard of
15 A-2131-15T2
living commensurate with the social status, wealth and income of
the parties during the marriage." Income defendant earns
decreases her need for alimony to support that marital lifestyle
and, therefore, warrants modification. Similarly, CPI adjusted
increases address need created by inflation. Lepis, supra, 83
N.J. at 153.
Plaintiff presented evidence implicating paragraph 12 that
the judge did not consider. We refer to the home page of
"Barbara Wisoff Designs." That home page provides reason to
believe defendant owned and started a design business in 2010
and was still operating that business when plaintiff accessed
the home page in 2015. Other than a bald denial, defendant
presented nothing to rebut the reasonable inference of profit
from business. That evidence was sufficient to warrant
discovery pertinent to reduction of plaintiff's alimony
obligation as contemplated by paragraph 12.
Because the judge should have directed discovery in
conformity with Lepis on that basis, a remand for that purpose
is required.
We have considered plaintiff's objections to the PSA
contending the so called anti-Lepis clause lacked consideration
and that language in the PSA and March 2007 consent order
addresses tax consequences of alimony payments that warrant
16 A-2131-15T2
modification in light of additional tax he incurs in acquiring
the funds to make alimony payments. Those arguments have
insufficient merit to warrant discussion in this opinion beyond
the brief comments that follow. R. 2:11-3(e)(1)(E).
As to lack of consideration for plaintiff's agreement to
forego modification based on a decline in his income, it
suffices to note this is a complex and carefully crafted PSA
with many trade-offs. Paragraph 16 effectively forecloses
modification based on Crews and increases in plaintiff's income.
Paragraph 13's formula for CPI adjustments provides further
protection in the form of certainty against Lepis applications
based on inflation. Moreover, paragraph 12, requiring a
reduction of alimony by a pre-ordained formula based on
defendant's earnings, can be viewed as another trade-off. In
hindsight plaintiff may view the trade-offs as a poor deal, but
courts are not free to rewrite PSAs on that basis. See J.B.,
supra, 215 N.J. at 326.
As to tax consequences, the provisions of the PSA and March
2007 consent order plaintiff relies upon address tax deductions
for the alimony payments plaintiff makes. They do not address
tax consequences related to tax on earned or unearned income
plaintiff utilizes to pay alimony.
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In contrast, plaintiff's claim that the judge's reliance on
Morris was misplaced warrants discussion. The alimony amount
the parties agreed to in Morris was not established "based upon
the parties' incomes and needs" and, therefore, was unrelated to
Lepis modifications. 263 N.J. Super. at 243. The specific
arrangement at issue here, paragraph 15 of the PSA's expressly
limiting Lepis modifications, is plainly related to those Lepis
standards of need and ability to pay.
Morris provides pertinent guidance, nevertheless. In
Morris, Judge Drier considered the direction the Court provided
in Lepis when it stated it would "not ordinarily be 'equitable
and fair' to grant modification" where the existing support
arrangement addressed the circumstance in question. Lepis,
supra, 83 N.J. at 153(emphasis added); Morris, supra, 253 N.J.
Super. at 242. Judge Drier quoted an illustration provided in
Lepis as an example of a specific arrangement addressing a
changed circumstance — "a single large cash payment made at the
time of divorce was included with the express intention of
meeting the rising cost of living." Morris, supra, 263 N.J.
Super. at 242 (quoting Lepis, supra, 83 N.J. at 153). Judge
Drier focused on a footnote accompanying that illustration in
Lepis, supra, 83 N.J. at 153 n.6, which explained that if the
cash payment in its illustration later proved inadequate "in
18 A-2131-15T2
light of prevailing circumstances," a court would be "free to
require greater support." Morris, supra, 263 N.J. Super. at
242-43. Considering the explanatory footnote, the court in
Morris reasoned that the Supreme Court approved recognition of
"the parties' standards as they may be reasonably enforced" in
"prevailing circumstances" and concluded Lepis allows
modifications of specific arrangements "only where the failure
to modify would be unreasonable or unjust" in "prevailing
circumstances." Id. at 243.
In Morris, the court identified the pertinent prevailing
circumstances and included "plaintiff's agreement to accept and
defendant's agreement to pay a fixed amount, regardless of
change in circumstances." Id. at 242. And the court found no
reason in equity to relieve the supporting spouse of his
agreement in the prevailing circumstances which included an
alimony amount unrelated to need and capacity to pay. Id. at
244. Nevertheless, in light of the impracticality of enforcing
an obligation the husband could not meet at the time,
demonstrated by the fact that he had already been detained for
non-payment, the Morris court provided a remedy in the form of
delayed payment and accrual of a debt to be satisfied at a later
date.
19 A-2131-15T2
That guidance is pertinent to this case, and the judge
should consider it on remand. Here, the "prevailing
circumstances" include not only paragraph 15 and the related
paragraphs of the Wisoffs' PSA but also the parties' deviation
from the PSA in their 2007 consent order. Specifically, the
Wisoffs agreed to increase alimony by doubling plaintiff's
monthly contribution for defendant's health expenses in the face
of her enhanced need and to provide child support above the
level required by the PSA to more equitably address their first-
born's unanticipated needs.
While not yet tested by discovery and cross-examination at
this point, the "prevailing circumstances" also include the fact
that application of the CPI has left defendant with the
continued benefit of alimony based on plaintiff's income from
plaintiff's post-divorce work and plaintiff with a need to
withdraw his share of retirement savings earned during the
marriage and distributed at the time of divorce in order to meet
his alimony obligation.
To the extent defendant argues that she gave up a right to
share in plaintiff's post-judgment income to which she was
entitled, she is mistaken. Because alimony was established to
provide defendant support at the marital standard and was
adjusted with the cost of living to address inflation, she was
20 A-2131-15T2
not entitled to more. Crews, supra, 164 N.J. at 29 (noting that
a dependent former spouse may not use motion to modify alimony
"to share in the post-divorce good fortune of the supporting
spouse"); see N.J.S.A. 2A:34-23(b)(4) (stressing that "neither
party [has] a greater entitlement to that standard of living
than the other"); Crews, 164 N.J. at 31-32 (noting the relevance
of the marital standard of living and other factors used in
setting the initial alimony where modification is at issue).
Matters such as consideration of "prevailing circumstances"
are committed to the sound discretion of the trial court.
Morris, supra, 263 N.J. Super. at 245. As in Morris, we defer
to that discretion and advise the judge to reconsider the
relevance of Morris on remand following discovery.
We also vacate the award of counsel fees which the judge should
reconsider because its propriety must abide the outcome on
remand. Because fees for appellate service also must abide the
trial court's determinations on remand, we anticipatorily refer
any such application to the trial court for disposition. R.
2:11-4.
Reversed and remanded for further proceedings in conformity
with Lepis and Morris. We do not retain jurisdiction.
21 A-2131-15T2