S.O. VS. M.O.(FM-04-1788-02, CAMDEN 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NOT FOR PUBLICATION WITHOUT THE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-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
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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
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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.
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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
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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).
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