On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, FM-07-1176-95.
Before Judges Skillman, Carchman and Wells.
The opinion of the court was delivered by: Carchman, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Two issues dominate in these consolidated appeals from post- judgment orders in the Family Part. The first is whether an attorney appointed as a mediator to resolve ongoing economic disputes between the parties may also serve as a guardian ad litem to represent the interests of the children. While we recognize that the attorney appointed in this litigation provided outstanding service to the litigants, the court and, most important, to the children, we hold that the roles of a court- appointed mediator and guardian ad litem are so inherently incompatible that one individual cannot serve in this dual capacity in the same ongoing litigation.
The second issue concerns the modification of child-support where a parent has received a substantial increase in income, can be classified as a "high-income earner" whose income level exceeds the scope of the Child-Support Guidelines and who does not dispute the ability to pay any reasonable amount of child support. We particularly focus on the standards to be applied in considering a modified award, the supporting parent's obligation to provide additional benefits to the children, and the scope of discovery required on such an application. We conclude that the increased award of child support was supported by the record, but the father should provide increased private school costs for the benefit of the children. We further conclude that the judge's restriction of the mother's discovery requests was not an abuse of discretion.
Accordingly, we modify that portion of the February 16, 2000 order allocating 79% of the children's private school tuition and impose the entire obligation of private school tuition on the father and reverse the order of November 15, 2000, denying the mother's application to remove the mediator and guardian ad litem. In all other respects including the award of counsel and expert fees and the denial of a refund of asserted excess child support, the orders of the Family Part are affirmed.
We decide these issues in the following factual and procedural context. Following a twelve year marriage, plaintiff Joel Scott Isaacson ("father" or "plaintiff") and defendant Lily Isaacson ("mother" or "defendant") were divorced by judgment dated January 22, 1996. Two children were born of the marriage — Rebecca on September 10, 1986, and Sara on June 1, 1989. The judgment incorporated a comprehensive property settlement agreement, which provided that the parties would share legal custody of the children, and defendant would be the primary residential parent. The agreement addressed alimony and child support as well. Among other provisions, the agreement required plaintiff to pay alimony in the amount of $2,600 per month, with the last payment to be made on November 1, 1999. Plaintiff also agreed to pay child support for each child in the amount of $1,200 per month, pay for the children's unreimbursed medical expenses and pay for their summer camp. He also agreed to make additional payments in the amount of $800 per month for the 1996 and 1997 school years to be applied to the girls' private school tuition. The tuition for subsequent years was to be negotiable.
Various post-judgment disputes arose and, by order of December 29, 1997, the judge appointed Judith Hartz, Esq. as mediator and guardian ad litem for the children. The order provided in relevant part:
2. In addition to serving as Guardian ad Litem for the children, Ms. Hartz shall also serve as a binding mediator regarding disputes between plaintiff and defendant. Accordingly, each party shall serve his or her list of disputed issues to Ms. Hartz within two weeks of the entry of the within Order; Ms. Hartz will attempt to mediate the said issues, however, should the parties be unable to agree upon an acceptable solution to an issue, Ms. Hartz will make the decision which shall be binding upon the parties; *fn1
4. The parties are directed to cooperate with Ms. Hartz, who shall be authorized to report any lack of cooperation to the Court;
6. Ms. Hartz shall serve as Guardian ad Litem and mediator until further Order of this Court, however, no party may make an application regarding the continuation/discontinuation of Ms. Hartz as a mediator until March 9, 1998, unless good cause shown[.]
During the next few years, Hartz apparently successfully resolved, through the mediation process, various disputes between the parties. Included in these disputes were resolution of responsibility for the cost of school tuition, the installation of a teen telephone and payments for Rebecca's Bat Mitzvah. Additionally, in her role as guardian ad litem, Hartz consulted with the children and the parties to resolve parenting time and other related problems.
Given the contentiousness of the parties, not surprisingly, issues arose regarding the children's willingness to spend time with plaintiff and their attendance at therapy sessions. Hartz, in her role as guardian ad litem, aggressively intervened in support of the children and in the process reached conclusions regarding defendant's involvement and cooperation, or lack thereof, regarding such issues. Hartz viewed her role as dynamic and proactive, and she properly forwarded to the trial judge reports concerning the children and the issues in dispute. As guardian ad litem, she assessed the factual circumstances surrounding these issues, as she perceived them, and in some instances, criticized defendant's conduct and cooperation. The result of such reports was predictable as defendant asserted that Hartz was biased against her, ultimately resulting in defendant's application seeking Hartz's removal as both mediator and guardian ad litem. Hartz then voluntarily suspended her function as mediator.
Subsequent proceedings, with Hartz presumably acting in her role as guardian ad litem, provided stimuli to defendant's complaints about Hartz's dual role. At one point, Hartz presented an order to show cause seeking to compel the parties to undergo psychological evaluations and family therapy, as well as other relief with respect to the interests of the children. Hartz asserted that defendant was no longer acting in the children's best interests. In opposing the order to show cause, defendant alleged that Hartz had revealed confidential information to the judge that had been obtained by speaking to the therapist for one of the daughters, that Hartz had not met with either daughter since June 2000, that both girls were doing well academically and socially, and that Hartz was acting as the father's advocate and spoke to him frequently outside of wife's presence. Defendant claimed that the children perceived Hartz as being totally aligned with plaintiff; moreover, defendant alleged that Hartz was biased against her. On the return date of the order to show cause, the judge discussed issues relating to the denial of plaintiff's access to his children and, significantly, instructed defendant that he had no intention of removing Hartz as guardian ad litem and mediator.
While the ongoing disputes regarding parenting time were being pursued, defendant sought financial relief as well. In September 1999, several months before defendant's alimony was due to terminate, she filed a motion seeking increased child support. In support of this motion, she alleged that she had demonstrated changed circumstances as a result of the substantial positive change in plaintiff's financial situation. That is, she claimed that, at the time of the divorce in 1996, she was unemployed and plaintiff earned approximately $180,000 per year. As of the date of the motion, defendant was employed and earning approximately $50,000 per year, while plaintiff's income had increased to more than $500,000 per year. She further claimed that, with the pending termination of her alimony, she could no longer afford to support the two children on only $2,400 per month.
Although apparent attempts were made by the parties to resolve the economic issues, disputes arose as to the quantum of financial information made available by plaintiff regarding his income and other assets. Plaintiff, a Certified Public Accountant, was the chief executive officer of a successful financial services firm, which was incorporated as a sub-chapter "S" corporation. There were four principals in the firm. Significantly, the company was subject to a regular Securities and Exchange Commission (SEC) balance sheet audit performed by an independent certified public accountant.
During the pendency of defendant's application, issues arose as to the scope of discovery. Plaintiff initially provided his 1998 W-2 form and his 1997 personal income tax return. Defendant retained a forensic accountant who requested substantial documentation including not only plaintiff's personal and business tax returns, but 1998 and 1999 bank statements on all business accounts, 1998 and 1999 purchase invoices, canceled checks, time and billing records, accounts receivable records, a pay stub dated December 31, 1998, his three most recent pay stubs, and current statements for all his investment accounts. The judge observed that he had been familiar with this litigation for six years, plaintiff was involved in a business that was subject to regular scrutiny by the SEC, and this post- judgment application did not require the in-depth discovery sought by defendant. The judge ordered that plaintiff produce his 1998 business and personal tax returns as well as a certified statement as to his anticipated 1999 earnings. Plaintiff offered that his income had increased dramatically to a sum in excess of $500,000, and his 1999 income would be within five to ten percent of his 1998 income of $536,000. In fact, he thereafter filed an affidavit indicating his 1999 income, including add-backs, was $554,750.
Most significantly, plaintiff conceded that he could pay any amount of child support ordered by the judge. Equally as significant, defendant failed to make any showing either through her forensic accountant or otherwise that the income figures provided by plaintiff were subject to further dispute or that additional discovery would reveal anything more to enhance defendant's entitlement to additional child support beyond the amount that she sought on her application. Moreover, neither defendant nor her expert challenged the premise of the judge's determination that plaintiff's income was subject to scrutiny by governmental agencies obviating the necessity for further inquiry. The judge noted that since there was no significant dispute as to plaintiff's income, it was unnecessary "to spend $15,000 to $20,000 on discovery" just to get increased child support. Lastly, defendant's demands for increased child support were relatively modest, and defendant did not suggest, in any meaningful way, that plaintiff's lifestyle had significantly changed or that he was living in a manner or mode that was significantly disparate from that of his children. Plaintiff had remarried and fathered another child, but nothing before the motion judge suggested that this child, albeit an infant, was treated in a manner materially or substantially different from that of plaintiff's older children who were the subject of this application.
Defendant also sought an increase in plaintiff's contribution to the children's private school expenses. In December 1997, prior to the motion for an increase in child support, the parties, with Hartz as the mediator, had successfully mediated an agreement that called for plaintiff to pay for 79% of the children's private school tuition and 100% of their summer camp costs. This amounted to additional payments by plaintiff each year of $12,000 for school and $11,000 for camp. Plaintiff also spent about $4,000 per year for the children's health insurance and $3,000 per year for orthodontics. He also took them on vacation and incurred other visitation expenses, although his present relationship with the children was in issue.
Although allusions were made to the general rule of relevance of the parties' present lifestyle, defendant focused her efforts on discovery of plaintiff's personal and corporate income. The judge refused to require husband to provide an updated case information statement (CIS). That is, according to the judge, only if plaintiff argued that he could not afford to pay for something would the judge require him to submit a CIS. The judge also disagreed with defendant's argument that plaintiff's investment income was relevant. Rather, according to the motion judge, such income became relevant only when a spouse's earned income was insufficient to pay for child support.*fn2 The judge ordered defendant to isolate the children's monthly expenses so that their needs could be determined, since it was not assumed to be pro rata. Defendant's allocation of expenses were of particular significance because she had submitted a CIS in 1994, when she was unemployed, listing monthly expenses for herself and the children at $11,060. In July 1999, while the parties were in negotiation, she presented a CIS setting forth monthly expenses in excess of $16,000. Significantly, the CIS filed in support of her December 1999 motion for increased child support listed expenses for defendant and the children at $9,376, apparently $1,700 less than her 1994 expenses. The judge indicated that if the parties did not agree on an amount for child support, he would determine the appropriate amount, not to "fill the hole that the alimony loss has caused," but to focus primarily on the maturation of the children and plaintiff's increase in income.
The judge ordered temporary child support of $5,000 per month pending final hearing, and at final hearing ordered plaintiff to pay total child support in the amount of $3,500 per month or $42,000 per year, tax free, allocated equally between the two girls. The judge rejected defendant's argument that because plaintiff's income had tripled, his child support obligation should triple. The judge instead considered the maturation of the children and the standard of living and economic circumstances of both spouses. Defendant, in particular, was more financially self-sufficient than she had been at the time of the divorce, and the total amount of money now available to her was almost equal to what she had before she earned any money on her own. The judge maintained plaintiff's responsibility for private school tuition at 79% because plaintiff would be absorbing greater educational expenses for the children as they matured.
In rejecting defendant's theory that she was entitled to support based on a percentage of plaintiff's income, the judge noted that at the time of the divorce, defendant had negotiated a limited period of alimony, inferring that when plaintiff had agreed to pay one-third of his income in support, he had "frontloaded" the negotiation, that is, agreed to pay limited increased support so that he would receive financial relief when defendant became financially independent, and her alimony terminated. That event had now come to pass.
The judge did not dwell on defendant's overstatement of her expenses because the child support guidelines "don't care about expenses . . . in the first level," noting that he was not extrapolating income, merely supplementing it, and that he was giving the children:
[S]ome other advantages that they ordinarily wouldn't have. You know, sleep away camp is not a given to ...