[221 NJSuper Page 533] Plaintiff-husband and defendant-wife were divorced in 1981. Two children were born of their marriage. In the final judgment of divorce entered on January 5, 1981 a written property settlement agreement ("PSA") dated December 11, 1980 was incorporated into the judgment. The PSA obligated plaintiff-husband to pay child support of $120 a week for the two children, as well as certain other delineated expenses. In 1979 plaintiff's income was $52,317 from his employment in a business controlled by defendant's family. In addition to being an employee, plaintiff also became a shareholder in that business.
In 1984, three years subsequent to the divorce, plaintiff declared bankruptcy. At that time plaintiff had been employed by a competitor of his former employer. As a result of litigation between plaintiff and his former employer, who alleged that plaintiff had violated a covenant-not-to-compete, plaintiff gave up his stock interest in his former employer. Plaintiff's employment with the competitor terminated in 1985 as a result of adverse business conditions. Plaintiff then obtained other employment which terminated in 1985 as a result of a reorganization of that employer.
In March 1986 plaintiff became associated with Total-Tel USA, a division of Mansol Ceramics Company, ("Total-Tel") as a self-employed independent contractor for Total-Tel's long distance service. The uncontradicted record is that plaintiff, as an independent contractor, receives no salary or wages from Total-Tel; he is compensated for his efforts strictly and solely on a commission basis. Total-Tel, in recognition that it would take some time for plaintiff, a new comer to the communication industry, to obtain a large volume of business for it, gave him a weekly advance known as "Chargeable Draw Against (Future) Commissions." As set forth in certifications filed by Total-Tel's officers, this would allow plaintiff to realize predictable personal revenue while at the same time incurring debt to Total-Tel chargeable against future commissions. Plaintiff's debt to Total-Tel became his contractual obligation when, during the first week of his association with Total-Tel, plaintiff signed a guarantee to repay his indebtedness out of future commissions. According to Total-Tel this relationship has been and continues on a strictly voluntary basis.
In June 1986 defendant (improperly designated as plaintiff in the moving papers) filed a motion to enforce litigants rights and to compel plaintiff (improperly designated defendant) to comply with his obligation of child support, fix the arrears on account of nonpayment of child support and order income withholding pursuant to N.J.S.A. 2A:17-56.1. On July 1, 1986 an order was entered adjudging plaintiff to be in arrears on account of child
support and directing the Essex County Probation Department to proceed with income withholding from defendant's earnings.
In November 1986 Total-Tel received a notice to "payor" of income withholding from the Essex County Probation Department ("Probation Dept."). Total-Tel wrote to Probation Department that plaintiff was not an employee but an independent contractor. According to certifications filed on behalf of Total-Tel, it believed that because plaintiff was not an employee, the notice from the Probation Dept. was not applicable to it insofar as the relationship between Total-Tel and plaintiff was concerned. On March 31, 1987 the Essex County Office of Child Support Enforcement filed a motion to compel Total-Tel to make payments pursuant to the income withholding notice served upon it.
Subsequent to the filing of the motion by the Essex County Office of Child Support Enforcement, plaintiff filed a notice of motion for a reduction of child support and the amount of the outstanding arrears. Certifications in support of, and in opposition to, plaintiff's motion were filed with the court and, subsequent to oral argument, the court entered an order reducing plaintiff's support obligation from $120 a week to $100 a week, effective June 9, 1987, but denied plaintiff's motion to reduce the outstanding arrearage on his support obligations. The only issue left open was that of Total-Tel's obligation to comply with the income withholding notice served upon it by the Essex County Probation Department. For the calendar year 1986, Total-Tel advanced plaintiff $23,178, while his commissions for the same period were $5,050, leaving a debt due by plaintiff of $18,128. As of June 17, 1987, Total-Tel had made advances totaling $8,302, while commissions earned equalled $7,045, or a difference of $1,257.
Total-Tel first contends that under N.J.S.A. 2A:17-51 only if it is indebted to plaintiff for wages can it be obligated to make any payments pursuant to the notice of income withholding it received in November 1986. Second, it contends that plaintiff is
indebted to it for the advances made since his association with Total-Tel and therefore under N.J.S.A. 2A:17-53 it is not obligated to pay anything to the Probation Department. The court will deal with those issues in the order contended by Total-Tel.
Initially, it should be pointed out that Total-Tel misconceives the nature of the claim being asserted against it. The notice of income withholding was not served upon it pursuant to N.J.S.A. 2A:17-50 et seq., which relates to execution against wages to satisfy judgments. The present proceedings by the Office of Child Support Enforcement is brought pursuant to the Support Enforcement Act of 1985 ("1985 act"), N.J.S.A. 2A:17-56.7 et seq., which amended the New Jersey Support Enforcement Act which had been enacted in 1981 ("1981 act"), L. 1981, c. 417. The 1981 act was passed pursuant to the mandate of part D of Title IV of the Social Security Act adopted by the Congress in 1974 known as the Child Support Enforcement Program, Pub.L. 93-647, 42 U.S.C.A. §§ 651-662. Because of the deficiencies in the original 1974 legislation, in 1984 Congress enacted the "Child Support Enforcement Amendments of 1984" ("CSEA"), Pub.L. 98-378, 42 U.S.C.A. § 651, et seq. Under CSEA, states were required to have in place by October 1, 1985 specified procedures intended to improve child support enforcement or lose federal funds. (For a comprehensive review of the many problems not answered by the earlier 1974 legislation which the Congress attempted to address in CSEA, see U.S. Department of Health and Human Services, A Guide for Judges in Child Support Enforcement (2 ed.); U.S. Department of Health and Human Services, Office of Child Support Enforcement, Remedies Under the Child Support Enforcement Amendments of 1984 (1985).
It was in direct response to CSEA that the 1985 act was adopted. As set forth in the Assembly Judiciary Committee's statement to the 1985 act;
As amended by the committee, this bill, entitled the "Support Enforcement Act of 1985", revises various sections of law in order to ensure New Jersey's statutes are in compliance with ...