July 10, 2007
DONNA LEE MCGLASHAN, PLAINTIFF-RESPONDENT,
SCOTT MCGLASHAN, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Sussex County, Docket No. FM-19-02-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted June 5, 2007
Before Judges Axelrad and Gilroy.
Defendant Scott McGlashan appeals from the December 21, 2005, order of the Family Part that, among other matters, increased his child support obligation from $120 per week to $138 per week. Defendant also appeals from the order of June 16, 2006, denying his motion for reconsideration. We reverse and remand to the trial court for further proceedings consistent with this opinion.
The parties were divorced on June 8, 1999. One child was born to the parties: Scott Gene McGlashan, Jr., born May 13, 1992. The judgment of divorce incorporated a Marital Settlement Agreement (MSA) dated June 8, 1999, which provided for joint legal custody of the parties' son; named plaintiff as the parent of primary residence; and fixed defendant's initial child support obligation at $44 per week. Paragraph 5 of the MSA required the parties to exchange their financial information within thirty days of execution of the MSA for the prior two years in order to recalculate child support, retroactive to the date of the MSA. Paragraph 5 also provided that child support would be recalculated biannually as of the date of the MSA, by averaging the parties' incomes for the two years preceding each recalculation.
On January 19, 2001, an order was entered on cross-motions pertaining to the initial recalculation of child support that directed the parties to submit a consent order within five days, fixing defendant's child support obligation effective June 8, 1999, and calculating the arrears from that date. A revised order was entered on March 6, 2001, that: 1) fixed defendant's child support obligation at $118 per week, retroactive to June 8, 1999; and 2) fixed the amount of arrears at $3,285.00 for the period from June 8, 1999, to January 16, 2001. The amount of child support and arrearages were determined pursuant to Paragraph 5 of the MSA and in accordance with the average of the Child Support Guidelines (the Guidelines) Shared Parenting Worksheet.*fn1
On September 26, 2003, a consent order was entered, recalculating defendant's child support obligation for the period of June 8, 2001, through June 8, 2003. The order fixed the obligation at $120 per week, retroactive to June 8, 2001, and determined defendant's arrearages at $66 as of September 19, 2003, "without regard to any such increase or decrease in said arrears as may result from the re-computation of [d]efendant's child support obligation as of June 8, 2003, and as provided for in the parties' June 8, 1999 [MSA]." Lastly, the order also directed the parties, upon exchange of tax return information, to recalculate the bi-annual child support obligation, effective June 8, 2003, using factors determined by the court concerning the child's health insurance and daycare costs. Unfortunately, the recalculation was not completed because the parties were unable to agree on all factors required by the Guidelines. On October 28, 2004, the parties entered into a consent order, agreeing that they would continue to work toward resolving the support issue, and that defendant's arrearages did not exceed $571.96. By April 2005, the recalculation for the third biannual recalculation remained unresolved, with the parties not agreeing on the amount of defendant's income.
On April 5, 2005, defendant filed a motion, seeking among other matters, a determination whether certain business deductions for telephone and motor vehicle expenses and mis-reported income of $2,173 should be included as part of his gross 2001 income for the purpose of calculating child support. Plaintiff filed a cross-motion, seeking sole legal custody of their son and requesting the court to fix defendant's child support obligation and arrearages. On May 6, 2005, two orders were entered resolving the parenting issues, but not the issues concerning child support or defendant's business expenses and misreported income. Those issues were denied without prejudice to either party. On August 8, 2005, a consent order was entered, making additional changes to the parenting schedule and agreeing on certain factors in calculating child support from June 8, 2003, through the date of the order as to health insurance costs, childcare costs, and plaintiff's income. The order also provided that "[p]laintiff's income shall be $778.50/week for the years 2001 and 2002 which is the amount to be used in the 2003 computation." Lastly, the order set a discovery schedule in order to determine defendant's income.
On October 12, 2005, defendant filed an order to show cause (OTSC), seeking immediate physical custody of his son. Plaintiff cross-moved to suspend defendant's parenting time because of child support arrearages. In reply to plaintiff's cross-motion, defendant filed a certification that not only included detailed calculations of child support through the anticipated return date of the motion, but also addressed the issues concerning his business expense deductions and the misreported income for the year 2001. According to defendant, the only issues remaining for determination concerned his business expenses and misreported income. Defendant asserted that his motor vehicle expenses, his business telephone expense, and the $2,173 misreported income should not be included in his gross income for purposes of child support. Specifically, defendant certified that: his 1997 Ford pickup truck was used for business; he maintained a telephone line for his business; in 2001 a client had accidentally issued a 1099 statement in the amount of $2,173 to defendant personally, rather than to his landscaping business; and the $2,173 had already been included in his gross business receipts.
On November 7, 2005, a hearing was held on the OTSC and plaintiff's cross-motion. Because defendant withdrew his request for custody, the only issues addressed at the hearing were the amount of defendant's child support obligation and arrearages. Plaintiff testified that in 2001 she earned approximately $38,076 as a building manager at Poulte Homes. Similarly in 2002, she earned $42,157.70. She later quit that position in 2003 because of her long commute and of the job's demanding schedule. In 2003, plaintiff earned $12,532 from unemployment benefits and $18,456 from her job with Poulte Homes for a total income of $30,988. In 2004, plaintiff received $6,266 from unemployment benefits and earned $4,862 as a waitress for a total income of $11,128. Plaintiff currently works as a waitress and as a bus driver. She earns about $17 per hour, or about $500 gross per week as a bus driver. She also earns between $60 to $90 per evening (three times a week) as a waitress, or $195 to $270 per week. Thus, according to plaintiff, her stated income from both jobs is approximately $657 per week.
Defendant testified as follows: He has been a self-employed landscaper for sixteen years and has thirty-six customers to whom he provides regular landscape maintenance and snow plowing services, each paying by check. He denied having income except for the amounts reported in his tax returns, the same tax returns he uses to calculate his child support obligation for his second son from a subsequent marriage. Concerning his driving a new Cadillac Escalade SUV, defendant stated that he had paid $10,000 cash down on the motor vehicle, but other than that amount, his girlfriend had bought him the car as a gift. The Escalade is under his girlfriend's name, and his girlfriend continues to make the monthly payments. He sold his 2002 Ford pickup truck, receiving $16,000, and used a portion of those proceeds as the $10,000 down payment. Defendant testified that in 2001, he earned $27,276 and in 2002, he earned $26,818.
The trial judge found both plaintiff and defendant's testimony regarding their income not credible. Although the judge determined plaintiff's income as a bus driver accurate, he did not believe that plaintiff reported all tip income. As for defendant, the judge neither believed that the Escalade was a gift from his girlfriend, nor that he was accurately reporting all income from his landscaping business. The judge reserved his decision and advised the parties that he would issue a written decision at a later date.
On December 21, 2005, without issuing a written or oral decision, or attaching a statement of reasons, the judge entered an order fixing defendant's child support obligation at $138 per week and arrearages at $1,390 as of the date of the order. The order stated that the child support obligation was based on the Guidelines and the judge's "findings and/or assumptions" that plaintiff's annual income was $19,590 based on the New Jersey Department of Labor Wage survey, and defendant's annual income was $43,680 based upon the same survey. The order had affixed a copy of the Guidelines sole parenting worksheet*fn2 but did not have the referenced survey attached. The $1,390 arrearage amount was allocated in the order: $750 of arrears as of November 7, 2005; $720 for six weeks of child support from November 7, 2005 to the date of the order; and $80 credit to the defendant for a payment remitted to the Probation Division on December 15, 2005.
On January 5, 2006, defendant filed a motion for reconsideration, arguing that: 1) the trial judge did not follow the terms of the MSA or the terms of the September 26, 2003 order; 2) the judge mistakenly used the Guidelines' sole parenting worksheet, not crediting defendant with 130 overnight visits; 3) the judge neglected to credit defendant for the support paid for his other child; and 4) the judge imputed income to plaintiff that was less than what she testified to earning. Plaintiff filed a cross-motion, seeking dismissal of defendant's motion. On June 16, 2006, the trial court denied both motions.
On appeal, defendant argues:
THE COURT'S FINDINGS ARE NOT SUPPORTED BY THE FACTS IN EVIDENCE OR APPLICABLE LAW.
THE COURT ERRED IGNORING THE MARITAL SETTLEMENT AGREEMENT AND THE SUBSEQUENT WRITTEN AGREEMENTS OF THE PARTIES.
THE COURT ERRED IN ACCEPTING PLAINTIFF'S REDUCED INCOME WITHOUT FINDING THAT PLAINTIFF PRESENTED A CHANGE OF CIRCUMSTANCES WARRANTING SUCH REDUCTION.
"The scope of appellate review of a trial court's fact-finding function is limited. The general rule is that findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). Such deference is "especially appropriate when the evidence is largely testimonial and involves questions of credibility." In re Return of Weapons to J.W.D., 149 N.J. 108, 117 (1997). Moreover, "[b]ecause of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding." Cesare, supra, 154 N.J. at 413. However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Tp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
We cannot determine the correctness of the trial judge's determination as to the amount of defendant's child support obligation because the judge failed to adequately explain how he arrived at the amount of $138 per week.
On the conclusion of a non-jury action, the trial court is required "by an opinion or memorandum decision, either written or oral, [to] find the facts and state its conclusions of law thereon." R. 1:7-4. "'Meaningful appellate review is inhibited unless the judge sets forth the reasons for his or her opinion. In the absence of reasons, we are left to conjecture as to what the judge may have had in mind.'" In re Farnkopf, 363 N.J. Super. 382, 390 (App. Div. 2003) (quoting Salch v. Salch, 240 N.J. Super. 441, 443 (App. Div. 1990)). Accordingly, "[a] trial judge must make detailed factual findings and relate them to the applicable law." C.F. Seabrook Co. v. Beck, 174 N.J. Super. 577, 595 (App. Div. 1980). The failure to perform that judicial function "constitutes a disservice to the litigants, the attorneys and the appellate court." Kenwood Assocs. v. Bd. of Adj. of Englewood, 141 N.J. Super. 1, 4 (App. Div. 1976). "Naked conclusions do not satisfy the purpose of R. 1:7-4." Curtis v. Finneran, 83 N.J. 563, 570 (1980). Because the judge failed to comply with Rule 1:7-4, concerning his determination as to amount of defendant's child support obligation and imputation of income to the parties, we reverse and remand to the trial court to make appropriate findings of fact and conclusions of law on the issues. We add the following comments concerning the issues presented.
Defendant argues that the trial judge erred by ignoring the formula contained in the MSA for recalculating child support as acknowledged by the court under the prior consent orders of March 6, 2001, and September 26, 2003. We agree.
"The basic contractual nature of matrimonial agreements has long been recognized." Pacifico v. Pacifico, 190 N.J. 258, 265 (2007). "Marital agreements are essentially consensual and voluntary and as a result, they are approached with a predisposition in favor of their validity and enforceability." Massar v. Massar, 279 N.J. Super. 89, 93 (App. Div. 1995). Trial courts should enforce a marital agreement as the parties intended. Pacifico, supra, 190 N.J. at 266. "'[W]hen the parties and their attorneys have bargained at arm's length and there is no showing of unfairness, the trial court should not supply terms which the parties obviously considered and yet did not adopt.'" Rolnick v. Rolnick, 262 N.J. Super. 343, 352 (App. Div. 1993) (quoting Berkowitz v. Berkowitz, 55 N.J. 564, 569 (1970)).
The parties had bound themselves under the MSA to a formula for future child support recalculations and had operated in conformity with that formula, post-judgment. The formula required that the parties' average income for the years 2001-2002 years be used for calculating child support effective June 8, 2003. Although not stated in the MSA, the parties agreed to complete two separate child calculations, using the Guidelines' shared parenting worksheet, averaging those child support amounts to account for the change in their respective tax deductions from year to year. The parties had twice modified defendant's child support obligation, based each time upon their average incomes for the prior two years. They had also reached substantial agreement as to the basis for a third recalculation, except for those matters relating to defendant's business expense deductions and whether defendant was obligated to include $2,173 in misreported income in his 2001 gross income for purposes of child support. Defendant had not challenged plaintiff's assertion that her average income for 2001, and 2002 was $778.50 per week, as contained in the August 8, 2005 order.
Notwithstanding the parties' formula for recalculating child support, the judge did not follow it in reaching his determination. The judge did not use the parties' average income for the prior two years in fixing the amount of child support; used the Guidelines' sole parenting worksheet, rather than the shared parenting worksheet; and did not fix the child support retroactive to June 8, 2003, based on the parties' 2001-2002 income, nor did he recalculate child support as of June 8, 2005, using the parties average incomes for 2003-2004. Moreover, the judge did not state why he departed from the parties' formula. Absent good cause for the departure, the judge should have followed the parties' formula in recalculating the child support obligation effective June 8, 2003, and June 8, 2005.
On remand, when recalculating child support, the trial judge should, unless otherwise inappropriate, use the Guidelines' shared parenting time worksheet, not the sole parenting worksheet, the child not having less than 130 overnight visitations with defendant during each year.*fn3 In addition, the court should consider monies defendant has paid each year as child support for his second son.*fn4 Lastly, the court is to address the issues concerning defendant's business expense deductions and the misreported income for the year 2001 that was credited to his 2001 personal tax return, although it was also included in defendant's business gross receipts.
Defendant argues that the trial judge erred by imputing plaintiff's annual income at $19,590, approximately $14,500 less than plaintiff had testified to earning during the hearing, and $20,892 less than the earnings agreed upon by the parties in the August 8, 2005 consent order.
"An award of child support is within the discretion of the trial court. It will not be disturbed unless it is 'manifestly unreasonable, arbitrary, or clearly contrary to reason or to the evidence, or the result of whim or caprice.'" Raynor v. Raynor, 319 N.J. Super. 591, 605 (App. Div. 1999) (quoting DeVita v. DeVita, 145 N.J. Super. 120, 123 (App. Div. 1976)). Trial courts must follow the Guidelines. The Guidelines are mandatory in all cases for the initial application or modification of child support except when good cause is shown. R. 5:6A.
If the court finds that either parent is, without just cause, voluntarily underemployed or unemployed, it shall impute income to the parent according to the following priorities:
a. impute income based on potential employment and earning capacity using the parent's work history, occupational qualifications, educational background, and prevailing job opportunities in the region. The court may impute income based on the parent's former income at that person's usual or former occupation or the average earnings for that occupation as reported by the New Jersey Department of Labor (NJDOL);
b. if potential earnings cannot be determined, impute income based on the parent's most recent wage or benefit record (a minimum of two calendar quarters) on file with the NJDOL (note: NJDOL records include wage and benefit income only and, thus, may differ from the parent's actual income); or
c. if a NJDOL wage or benefit record is not available, impute income based on the full-time employment (40 hours) at the New Jersey minimum wage ([$7.15] per hour).*fn5
[Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A, at 2226-27 (2007)].
Here, the judge found that the parties were not reporting all income on their tax returns. The judge found plaintiff's testimony that she reported all her tip income credible. The judge determined defendant was underreporting income, not believing that the Escalade was a "gift" from his girlfriend and that defendant only accepted payment by check for his work.
"Both the guidelines and the case law of this State explicitly permit the imputation of income where earnings cannot be determined." Tash v. Tash, 353 N.J. Super. 94, 99 (App. Div. 2002). "The court may impute income based on the parent's former income at that person's usual or former occupation or the average earnings for that occupation as reported by the [NJDOL]." Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2226 (2007). Accordingly, the judge had the discretion to impute additional income to plaintiff after determining that she had not reported all the tips from waitressing. However, this is not what the judge did. The judge determined plaintiff's income at $19,590, an amount far below the amount she testified to at the hearing, and the amount the parties had agreed to in the August 8, 2005 consent order. Such determination was not supported by the evidence and is "manifestly unreasonable, arbitrary, or clearly contrary to reasons or to the evidence." Raynor, supra, 319 N.J. Super. at 605. Additionally, the judge failed to append the relevant wage surveys to the order, and thus, there is no way to ascertain whether the figures used are correct.
Reverse and remanded to the trial court for further proceedings consistent with this opinion. We do not retain jurisdiction.