PATRICIA MELE VS. JOHN MELE (FM-02-19256-90, BERGEN 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NOT FOR PUBLICATION WITHOUT THE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-2592-18T4
PATRICIA MELE,
Plaintiff-Respondent/
Cross-Appellant,
v.
JOHN MELE,
Defendant-Appellant/
Cross-Respondent.
______________________________
Argued February 12, 2020 — Decided March 5, 2020
Before Judges Koblitz, Whipple, and Mawla.
On appeal from the Superior Court of New Jersey,
Chancery Division, Family Part, Bergen County,
Docket No. FM-02-19256-90.
Robert T. Corcoran argued the cause for appellant
(Robert T. Corcoran, PC, attorneys; Robert T.
Corcoran, of counsel and on the briefs; Sara J.
Corcoran, on the briefs).
Patrick T. Collins argued the cause for respondent
(Skoloff & Wolfe, PC, attorneys; Patrick T. Collins, on
the brief).
PER CURIAM
Defendant John Mele appeals from a December 27, 2018 order entered
following a post-judgment plenary hearing denying his request to terminate
alimony. Plaintiff Patricia Mele cross-appeals from the denial of her request for
counsel fees. We affirm the alimony determination and reverse and remand the
counsel fee issue.
The parties were divorced in 1993, following a twenty-year marriage.
Five children were born of the marriage. At the time of the divorce, the parties
entered into an oral settlement agreement, which required defendant to pay child
support and housing assistance to plaintiff until the children became
emancipated. The parties agreed plaintiff would be able to seek alimony when
the last child was emancipated. Plaintiff also received equitable distribution
worth $500,000.
The youngest child was emancipated in 2012, and plaintiff filed a motion
seeking alimony. Following a three-day plenary hearing, the trial judge entered
a November 1, 2013 order awarding plaintiff alimony. In his written findings,
the judge concluded plaintiff remained at home to raise the children and to be a
homemaker during the marriage and defendant worked long hours developing
his catering business. The judge found plaintiff's needs totaled $112,264 per
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year. The judge imputed an income of $20,000 per year to plaintiff, then sixty-
three years of age, based upon the testimony of defendant's employability expert.
The judge noted defendant, who was then sixty-six years of age, "did not allege
an inability to pay [alimony] and elected not to have [the c]ourt consider his
present income." The judge found both parties "appear[ed] to be in good
health." He awarded plaintiff permanent alimony of $7688.70 per month,
effective January 1, 2013.
In October 2017, defendant filed a motion to terminate alimony on
grounds he retired for medical reasons. Plaintiff cross-moved for counsel fees.
A different trial judge conducted a plenary hearing at which plaintiff and
defendant, then sixty-seven and seventy-one, testified.
Analyzing the N.J.S.A. 2A:34-23(j)(3) factors and the testimony, the
judge concluded both parties enjoyed good health. The judge found defendant's
reasons for retiring were not due to health concerns.
The judge found defendant did not prove he was retired because he
remained the sole proprietor of his catering business and "[t]here is no generally
accepted age for retirement for business owners as they are able to choose when
to retire." The judge determined defendant had no mandatory retirement age
and "continues to reap the benefits from any of the business profits." She noted
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that, although defendant claimed his wife and children operated the business, he
continued to visit the business "two to three times per week to meet with the
kitchen staff to discuss new recipes and food trends[, and] . . . continues to
oversee . . . operations and . . . occasionally picks up and deposits checks for the
bank. [Defendant] also continues to contact appropriate personnel if the
building is in need of any repairs." The judge concluded defendant "was not
forthcoming about his continued involvement in the business. He clearly
remains very involved in the operations . . . and . . . he is clearly not fully retired
from this business."
The judge found the parties had no reasonable expectation defendant
would retire at the time of the divorce because plaintiff testified they did not
discuss the issue. Furthermore, the parties expressly contracted for alimony to
begin following the last child's emancipation.
The trial judge concluded defendant had the ability to pay because "he is
still the president and sole owner of the [business]. He can collect funds and
retain benefits from the business as he pleases." The judge noted defendant was
able to purchase a property adjacent to the business for $950,000 and opened a
bakery on the site. The judge stated:
In looking at his tax returns it appears that
[defendant] continues to receive financial benefits
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identical to those he received before his retirement
except that those benefits are now directed towards his
current wife. The [c]ourt notes that he used to earn . . .
[an] income of $150,000. And, now his current wife
earns $160,000.
Conversely, the judge found plaintiff's only source of income was
alimony. Although plaintiff's personal residence was mortgage-free, the judge
noted she incurred a mortgage to buy out her siblings' share of a two-family
residence inherited from her father, which she intended to renovate to earn rental
income. The judge declined to impute a rental income to plaintiff from the
property because she was still renovating it. The judge also declined to impute
social security earnings to plaintiff because she intended to claim those benefits
at age seventy, when the payment would be greater. Therefore, the judge
concluded plaintiff still needed alimony.
The judge concluded plaintiff's ability to save for retirement was limited
by the fact she did not contemplate defendant would "retire[] within five years
of receipt of her initial alimony payment." Although the judge found plaintiff
could have saved more money, her "need for alimony substantially outweighs
any disadvantage to [defendant]" and denied the motion.
Addressing the Rule 5:3-5(c) factors, the judge found as follows: each
party could pay his or her own expenses and counsel fees; defendant's motion
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was not made in bad faith; counsel fees had not been previously awarded;
defendant did not obtain a favorable result; and plaintiff's fees were incurred to
enforce defendant's alimony obligation. The judge noted she could not
determine the extent of the fees incurred, or the amount of fees each party
previously were awarded or paid, because neither party filed an affidavit of
services. The judge denied plaintiff's request for counsel fees.
I.
[F]indings by a trial court are binding on appeal when
supported by adequate, substantial, credible evidence.
Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). We
defer to the credibility determinations made by the trial
court because the trial judge "hears the case, sees and
observes the witnesses, and hears them testify,"
affording it "a better perspective than a reviewing court
in evaluating the veracity of a witness." Id. at 412
(citing Pascale v. Pascale, 113 N.J. 20, 33 (1988)).
If the trial court's conclusions are supported by
the evidence, we are inclined to accept them. Ibid. We
do "not disturb the 'factual findings and legal
conclusions of the trial judge unless . . . 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.'" Ibid.
(quoting Rova Farms Resort, Inc. v. Inv'rs Ins. Co. of
Am., 65 N.J. 474, 484 (1974)). "Only when the trial
court's conclusions are so 'clearly mistaken' or 'wide of
the mark'" should we interfere to "ensure that there is
not a denial of justice." N.J. Div. of Youth & Family
Servs. v. E.P., 196 N.J. 88, 104 (2008) (quoting N.J.
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Div. of Youth & Family Servs. v. G.L., 191 N.J. 596,
605 (2007)).
[Gnall v. Gnall, 222 N.J. 414, 428 (2015).]
"Appellate courts accord particular deference to the Family Part because
of its 'special jurisdiction and expertise' in family matters." Harte v. Hand, 433
N.J. Super. 457, 461 (App. Div. 2013) (quoting Cesare, 154 N.J. at 412).
However, "[t]his court does not accord the same deference to a trial judge's legal
determinations[,]" instead "all legal issues are reviewed de novo." Ricci v.
Ricci, 448 N.J. Super. 546, 565 (App. Div. 2017) (citing Reese v. Weis, 430 N.J.
Super. 552, 568 (App. Div. 2013)).
Defendant argues the trial judge erroneously found: (1) there was no good
faith retirement; (2) alimony commenced in 2013; (3) defendant benefits from
the business when he actually passed it on to his wife and children; and (4)
defendant had no medical reason to retire despite receiving a third pacemaker
after the entry of the 2013 order. As to plaintiff, defendant argues the trial judge:
(1) did not properly weigh her ability to save as the statute requires, namely, the
judge did not consider her actual savings and that she would have more money
to support herself if she did not purchase her father's home; (2) did not impute a
rental income to plaintiff based on her purchase of a two-family home; (3)
mistakenly applied the law because she only considered plaintiff's actual
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earnings from inheritance; (4) failed to impute social security earnings to
plaintiff due to her failure to apply for social security before the age of seventy;
and (5) incorrectly concluded plaintiff had not worked outside of the home
during the marriage.
On her cross-appeal, plaintiff argues the judge erred by denying counsel
fees without affording her the opportunity to submit an affidavit of services. We
address these arguments in turn.
II.
At the outset, we reject defendant's assertion that he was paying alimony
prior to 2013. The parties' settlement agreement required defendant to pay
plaintiff child support and housing assistance. There is no evidence the sums
paid were considered alimony, let alone treated as such for tax purposes by either
party. Therefore, defendant's argument that his alimony obligation should cease
because he has paid it since 1993 lacks sufficient merit to warrant further
discussion. R. 2:11-3(e)(1)(E).
We also reject defendant's challenges to the judge's findings under
N.J.S.A. 2A:34-23(j)(3). The statute states:
When a retirement application is filed in cases in which
there is an existing final alimony order or enforceable
written agreement established prior to the effective date
of this act, the obligor's reaching full retirement age as
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defined in this section shall be deemed a good faith
retirement age. Upon application by the obligor to
modify or terminate alimony, both the obligor's
application to the court for modification or termination
of alimony and the obligee's response to the application
shall be accompanied by current Case Information
Statements [CIS] or other relevant documents as
required by the Rules of Court, as well as the [CISs] or
other documents from the date of entry of the original
alimony award and from the date of any subsequent
modification. In making its determination, the court
shall consider the ability of the obligee to have saved
adequately for retirement as well as the following
factors in order to determine whether the obligor, by a
preponderance of the evidence, has demonstrated that
modification or termination of alimony is appropriate:
(a) The age and health of the parties at the
time of the application;
(b) The obligor's field of employment and
the generally accepted age of retirement for
those in that field;
(c) The age when the obligor becomes
eligible for retirement at the obligor's place
of employment, including mandatory
retirement dates or the dates upon which
continued employment would no longer
increase retirement benefits;
(d) The obligor's motives in retiring,
including any pressures to retire applied by
the obligor's employer or incentive plans
offered by the obligor's employer;
(e) The reasonable expectations of the
parties regarding retirement during the
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marriage or civil union and at the time of
the divorce or dissolution;
(f) The ability of the obligor to maintain
support payments following retirement,
including whether the obligor will continue
to be employed part-time or work reduced
hours;
(g) The obligee's level of financial
independence and the financial impact of
the obligor’s retirement upon the obligee;
and
(h) Any other relevant factors affecting the
parties’ respective financial positions.
In addition to the statute, our caselaw requires trial judges to consider every
statutory factor in an alimony determination. See Crews v. Crews, 164 N.J. 11,
26 (2000) (stating: "An alimony award that lacks consideration of the factors set
forth in [the statute] is inadequate.").
The trial judge addressed each factor in a detailed oral decision.
Regarding defendant's health, the judge noted he had pacemakers implanted in
1999, 2004, and 2015. She stated: "After getting his third [pacemaker]
defendant testified that he thought that it was time to . . . '[t]ake it easy' . . . [a]nd
. . . '[t]ime to start enjoying himself,' . . . by retiring. When asked to describe
his current state of health defendant indicated that he . . . '[f]eels great' . . . [a]nd,
that his health is . . . '[g]ood.'" In addition, the judge reviewed defendant's
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medical records and concluded that his "health has not substantially changed
since the inception of his alimony obligation [in 2013]." The record supports
the judge's conclusion that defendant's health was neither a basis for a good faith
retirement, nor demonstrated a change in circumstances requiring a termination
of alimony.
There was also no evidence defendant actually retired and ceased
employment. He proffered no testimony—expert or otherwise—explaining
whether there was an accepted retirement age for sole proprietors of catering
businesses. Moreover, the substantial, credible evidence in the record showed
that regardless of the alleged transition of the business to his wife and son,
defendant continued to manage and operate it.
Indeed, the judge found defendant's testimony that he was no longer
involved in the business lacked credibility. She stated:
It is incomprehensible that someone who once worked
every day of the week to build such a successful
business now only occasionally asks about the
business. This [c]ourt finds that [defendant's] motives
for retirement were not solely due to his health. In his
mind, plaintiff should not receive any alimony despite
a [twenty-]year marriage during which time she stayed
at home to care for the five children.
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Moreover, defendant's credibility suffered when his testimony revealed
his motive was to avoid paying alimony. The trial judge recounted the
following:
Notably, when asked if he could possibly take a step to
ensure that the money owed to [plaintiff] would be
readily available to give to her he responded with "Why
is she entitled to it[?] . . . I'm not married to her." These
responses appear to suggest his unwillingness and
resentment in having to pay alimony. [Defendant]
testified he didn't want to pay the alimony.
The record amply supports the trial judge's findings. Substantial credible
evidence supports the judge's conclusion that defendant did not retire in good
faith.
We also reject defendant's arguments related to the trial judge's
assessment of the statutory factors regarding plaintiff. Plaintiff's testimony that
she was not employed outside of the marital residence since 1973 was unrebutted
by credible evidence. Notwithstanding, the trial judge continued to use the
$20,000 imputed to plaintiff when the court established alimony in 2013.
Moreover, defendant's arguments the judge did not consider plaintiff's
potential savings and earnings are misplaced. Regarding plaintiff's efforts at
savings, the judge noted the following:
The home where [plaintiff] lives is currently mortgage
free. Since [the] initial alimony award [plaintiff]
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purchased an investment property . . . and obtained a
mortgage. She currently owes [$]251,613 according to
her CIS on this mortgage.
. . . [Plaintiff] bought out her siblings' interest in the
home . . . for investment purposes and to generate
income . . . .
She is at the construction site most days. Neither
party produced any evidence for this [c]ourt's
consideration regarding the rental income other than
her testimony that she can rent one [apartment] for
about [$1800] and the other . . . [for] a little less. . . .
According to the testimony however, she's not
generating income from that property yet.
Regarding plaintiff's earnings, the judge accepted her testimony that she
did not apply for social security benefits because she was "[w]aiting for the age
where she could receive the maximum benefits," which the judge noted was
seventy based on materials plaintiff presented from the social security website.
The judge further noted that "[t]he defense failed to provide for this [c]ourt's
consideration concrete evidence regarding the amount that [plaintiff] could be
receiving in [s]ocial [s]ecurity benefits." The judge concluded that "although
[plaintiff] had the ability to make better financial decisions in order to amass
more savings, it is but one fact that the [c]ourt must consider in making the
determination as to whether alimony should be terminated."
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In Miller v. Miller, the Supreme Court held investment income could be
imputed to a supporting spouse for alimony purposes because he was "an
experienced investor who gained great knowledge of financial matters through
his employment." 160 N.J. 408, 425-26 (1999). In Overbay v. Overbay, we
held the rate of income imputed in Miller could not be applied to the payee who
had a different investment strategy and experience because "'no two cases are
exactly alike,' . . . , neither bright-line tests nor hard and fast rules should be
imposed when imputing a reasonable rate of return any more than when
determining an appropriate award of alimony." 376 N.J. Super. 99, 110-11
(App. Div. 2005) (citation omitted).
We stated:
The lesson to be learned from Miller is that when a
spouse with underearning investments has the ability to
generate additional earnings—without risk of loss or
depletion of principal—but fails to do so, it is fair for a
court to impute a more reasonable rate of return to the
underearning assets, comparable to a prudent use of
investment capital. In Miller, the Court took note of the
difference between legitimate investment strategies,
specifically, between investing "designed to produce
[future] income through appreciation in stock values"
and investing for present income. 160 N.J. at 421. In
imputing additional income to Mr. Miller, id. at 423-
24, the Court recognized that it would be unfair to allow
one spouse to maximize future income through
anticipated asset appreciation for his or her own
benefit, while limiting present income that would enter
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into the alimony calculation for the benefit of the other
spouse. That distinction between a "growth" strategy
and an "income" strategy applies equally to a
supporting and a supported spouse in the context of
imputing income to either spouse for purposes of
calculating alimony. Mrs. Overbay's investment
strategy here bears no similarity to Mr. Miller's. There
is no suggestion that she has reduced her current
income in the pursuit of future asset appreciation.
Thus, the trial judge initially erred when he failed to
explain why it was appropriate to impute additional
earnings to defendant's inheritance, and he
subsequently erred when he used an unrealistic rate of
return to impute additional investment income to
defendant.
[Id. at 111-12.]
We discern no error in the trial judge's assessment of plaintiff's efforts to
save and her earning capacity. As the judge noted, plaintiff "did not contemplate
[defendant] retiring within five years of receipt of her initial alimony payment."
Therefore, it was neither feasible nor likely plaintiff would be able to replace
the income derived from alimony with her savings, the portion of the inherited
residence, and by taking an early social security payout. Plaintiff's cautious
approach to handling her inheritance and social security income demonstrated a
practical, realistic approach to future income generation to either supplement or
replace alimony when it terminated.
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As the trial judge stated, plaintiff's "need for alimony substantially
outweighs any disadvantages to [defendant]." Only one factor out of the eight
the judge considered favored defendant, namely, N.J.S.A. 2A:34-23(j)(3)(h).
The judge's decision to maintain alimony was not an abuse of discretion.
III.
Finally, we are constrained to reverse and remand for reconsideration
plaintiff's counsel fees request. The judge analyzed the Rule 5:3-5(c) factors
and determined two favored an award of fees, three did not, and one was not
applicable. The judge also determined that she could not assess three factors,
namely, the extent of the fees the parties incurred, were previously awarded, and
previously paid because neither filed an affidavit of services. However, the
record reveals plaintiff did file the required affidavit with her initial motion
pursuant to Rule 5:3-5(c). Therefore, the judge should consider the initial
affidavit and permit plaintiff to supplement it by providing the judge with a
description and accounting of counsel's services since the initial filing through
the end of the trial to enable the judge to consider all of the Rule 5:3-5(c) factors.
We express no view as to whether attorney fees should be granted.
Affirmed in part and reversed and remanded in part. We do not retain
jurisdiction.
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