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Rancich v. Rancich

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


August 8, 2007

ANNETTE RANCICH, PLAINTIFF-RESPONDENT,
v.
ROBERT RANCICH, DEFENDANT-APPELLANT.

On appeal from the Superior Court of New Jersey, Family Division, Hudson County, Docket No. FM-09-258-98.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted July 24, 2007

Before Judges Gilroy and Lihotz.

Defendant Robert M. Rancich appeals from the June 29, 2006, post-judgment order that, among other matters: 1) denied his motion to terminate, or in the alternative, substantially reduce, his alimony obligation to plaintiff Annette Rancich; and 2) directed that he pay an additional $100 per month towards arrearages. We reverse and remand the matter to the trial court for further proceedings consistent with this opinion.

Plaintiff and defendant were married on May 12, 1979; separated in July 1997; and divorced on March 16, 2000. No children were born of the marriage. The final judgment of divorce incorporated the terms of a Property Settlement Agreement (PSA) dated February 6, 2000.

The PSA provided that defendant would: 1) pay plaintiff $3,010 per month alimony through the Hudson County Probation Department, together with 33% of his gross earned income, in excess of $100,000 per year; 2) maintain three life insurance policies, having an aggregate face value of $150,000, with plaintiff designated as the primary beneficiary on the policies; 3) pay plaintiff's non-covered medical, dental, drug, and other health-related expenses, with the exception of plaintiff's psychological therapy and elective procedures; and 4) pay plaintiff's car insurance, exclusive of any surcharges that may be assessed against plaintiff. Paragraph 3 of the PSA provided that defendant's alimony obligation would terminate upon any of the following events: a) plaintiff's death; b) plaintiff's remarriage; c) defendant's death; or d) agreement between the parties.

Defendant is an information technology computer programmer who specializes in the mainframe legacy systems. Defendant commenced work in 1979 with Pan American Airlines. In 1983 defendant became a contract programmer and was paid a higher hourly wage in exchange for not receiving paid sick days, holidays or vacation time, and was obligated to pay his own medical health insurance premium. In November 1998, defendant's employment agency placed him with the New York Life Insurance Company, where he remained until he was involuntarily terminated in October 2001. For the next ten months, defendant collected unemployment insurance. In August 2002, plaintiff regained employment at New York Life, where he remained employed as a programmer until he was again involuntarily terminated on August 31, 2003. Defendant collected unemployment benefits for the next six months, ending in March 2004, and remained unemployed until June 2006. During defendant's employment, his income varied. Defendant earned $133,122 in 1999; $160,816 in 2000; $142,542 in 2001; $41,246 in 2002; $116,768 in 2003; and $4,820 in 2004. Defendant did not earn any income in 2005.

Notwithstanding defendant's loss of employment, defendant paid plaintiff all alimony due her during the ten months he was unemployed from October 2001 through September 2002. From September 2003 through April 2006, defendant paid plaintiff $75,290, primarily by exhausting his savings and stock brokerage accounts and by borrowing over $20,000 against credit card accounts. Having exhausted his funds and assets, defendant fell into arrears and was arrested in October 2005. While incarcerated, defendant's parents paid the purge amount of $12,500, which was applied toward arrearages and turned over to plaintiff.

In November 2005, defendant moved to terminate or reduce his alimony obligation as well as his obligation to pay plaintiff's uninsured medical expenses and car insurance premiums, asserting a reduction in income. Plaintiff cross-moved, not only seeking to enforce the PSA and to compel payment of arrearages, but also for attorney fees on the cross-motion.

Defendant supported his motion with several certifications, attesting to his employment history, his earnings, the exhaustion of his savings and stock brokerage accounts, his debt, and the amount of alimony paid to plaintiff since August 31, 2003. In addition, plaintiff certified that he had been looking for employment initially as a computer programmer, primarily through job searches via the Internet, a common method for his profession. Defendant estimated that he made inquiries of various employers at a rate of approximately 100 per month, and retained copies of those inquiries for approximately thirty days before discarding them when he had not received a reply. Although he initially sought employment as a computer programmer, defendant also sought minimum wage employment at stores such as Target and Home Depot but was unsuccessful. Believing that defendant had not presented sufficient evidence supporting his efforts to regain employment, as well as proving that the monies withdrawn from his savings account had been paid to plaintiff as alimony, the judge carried the motion until June 26, 2007, providing defendant an opportunity to submit additional documentation in support of his motion. A confirming order was entered on May 4, 2006.*fn1

On the continued return date of June 26, 2006, the judge considered the additional information presented by defendant, including 495 inquiries made by defendant through the Internet of various employers, averaging about 100 per month from January 2006 forward. Defendant also submitted documentation verifying liquidation of his savings account, showing that the money was withdrawn bi-monthly and paid to probation. Defendant's proofs also verified that he had borrowed approximately $23,303 against his credit cards.

On June 29, 2005, the judge rendered an oral decision, denying defendant's motion, determining that defendant had failed to prove a prima facie case of changed circumstances caused by a reduction in his income, and that any reduction in income was temporary and not to be considered in determining defendant's future alimony obligation:

Defendant's claim that his unemployment was involuntary has not been proven. While defendant has submitted what this [c]court might consider a good faith attempt at a search of employment from January of [2006] through May of [2006], through his submission of proof, he sent out 495 e[-]mails, this [c]court has no basis to measure defendant's good faith employment search efforts from September [2003] through January [2006]. Despite defendant's claim that he did not save that evidence, it is still his burden of proof as to a claim of changed circumstances.

Defendant has recently, as of June 26 of [2006], secured a job in his field earning $39 an hour. The plaintiff previously earned $82 per hour back in 2000 when the alimony was determined in the PSA. Even assuming that this [c]court [was] to consider a change of circumstances in defendant's decrease in income to $39 and taking into consideration his age of 52 and actually give validity to his claims about the diminished market, such change is temporary and not to be considered by this [c]court in considering a modification of his obligations under the PSA. The PSA was signed by the plaintiff and defendant and their respective counsel. The PSA stated that the husband was to pay $3,010 per month for alimony through Probation until the earliest of the occurrences of the wife's death, wife's remarriage, husband's death or a superseding agreement.

The PSA also states that the husband shall be responsible for wife's medical, dental, drug-related psychological therapy.

However, the PSA did not include a provision for a decrease in the event of change of employment. Defendant should have planned for a potential loss of job or a decrease in income by including language in the PSA. In the absence of such, the party seeking the modification bears the burden of proving a prima facie case for changed circumstances.

On appeal, defendant argues that the trial judge erred in denying his motion to terminate, or in the alternative, to reduce his alimony obligation because of changed circumstances caused by a reduction in his income. Defendant contends that he established a prima facie showing of changed circumstances, requiring the grant of a plenary hearing on all issues, including his obligation to continue payment of plaintiff's uninsured medical bills and automobile insurance premiums. Lastly, defendant requests that we direct the trial court to order the Hudson County Probation Department to provide a detailed audit, extending back to the inception of the account in 1988, for the purpose of reconciling his calculation of arrears against that of the Probation Department.

Plaintiff counters that the judge properly determined that defendant had failed to establish a prima facie showing of changed circumstances, determining that defendant had not presented any proofs, other than his certification, as to his employment search from September 2003 to January 2006. Plaintiff contends that defendant's "conclusionary allegations of unsuccessful job searching, without more, does not make out a prima facie case of changed circumstances." Plaintiff asserts that the trial court granted defendant's request for a full audit of his Probation Department account, thereby rendering that issue moot.

"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. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

"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). Matrimonial agreements, relating to alimony, "which are fair and just," fall within the category of contracts enforceable in equity." Petersen v. Petersen, 85 N.J. 638, 642 (1981). Notwithstanding, an "agreement to provide spousal support without limitation as to time, '[t]he duties of former spouses regarding alimony are always subject to review or modification by our courts based upon a showing of changed circumstances.'" Glass v. Glass, 366 N.J. Super. 357, 370 (App. Div. 2004) (quoting Miller v. Miller, 160 N.J. 408, 419 (1999)). Orders for support "may be revised and altered by the court from time to time as circumstances may require." N.J.S.A. 2A:34-23. Changed circumstances are not limited to events that were unforeseeable at the time of divorce. Dilger v. Dilger, 242 N.J. Super. 380, 385 (Ch. Div. 1990). Changed circumstances may include a change in the payor spouse's income. Lepis v. Lepis, 83 N.J. 139, 151-52 (1980).

The party seeking modification has the burden of demonstrating a change in circumstances, warranting relief from the support obligation. Id. at 157. "When the movant is seeking modification of an alimony award, that party must demonstrate that changed circumstances have substantially impaired the ability to support himself or herself." Ibid. Because almost all matrimonial matters involve factual disputes of some nature, the moving party must demonstrate a prima facie change in circumstances warranting relief before a court is required to hold a plenary hearing on a motion to modify support obligations. Id. Prima facie proof is evidence that, "if un-rebutted, would sustain a judgment in the proponent's favor." Baures v. Lewis, 167 N.J. 91, 118 (2001). It is against these principles that we consider defendant's appeal.

We are satisfied from a review of the record that defendant established a prima facie showing of changed circumstances caused by his involuntary unemployment from August 31, 2003 to June 2006, and by his current reduction in income from $89 to $32 per hour. We are also satisfied that defendant raised material questions of fact concerning his efforts to gain new employment, thus requiring a plenary hearing. Defendant submitted to the court 495 separate e-mail contacts, concerning his employment search from January 2006 through June 2006, and certified that he had conducted similar voluminous searches for the last two-and-one-half years since being laid off on August 31, 2003, but had not retained prior e-mails beyond thirty days when the inquiries proved negative. We believe that the trial judge mistakenly applied the wrong standard of review by requiring plaintiff prove a change in circumstances, not prima facie demonstrating a change of circumstances. The credibility of defendant's statements should be determined by a plenary hearing. Nor do we understand the trial judge's reasoning that defendant's decrease in income from $82 to $39 per hour is "temporary" and should not be considered in determining "modification of [defendant's] obligations under the PSA." Based on defendant's unemployment since August 31, 2003, and evidence of his efforts to regain employment, it does not appear that the judge's conclusion was based upon credible evidence in the record. However, because the matter is being remanded for a plenary hearing, the judge should consider this issue anew.

We are also satisfied that the trial judge improvidently rejected defendant's request for credit against arrearages for alimony paid directly to plaintiff since August 31, 2003. Defendant asserts that he paid $14,297 directly to plaintiff by personal checks since he was involuntarily terminated from employment and that plaintiff had improperly written notations in the "memo" portion of some of the checks after she had received them, indicating that the checks were payments for matters other than alimony. Defendant contends that plaintiff had failed to notify probation of the alimony she had received directly from him, and that he is entitled to a credit for the alimony he paid. Defendant asserts that because the payments were made directly to plaintiff, probation will not grant him credit unless probation receives direction from the court. In rejecting defendant's claim, the judge stated:

Mr. Rancich is not entitled to credit for the checks that he gave Mrs. Rancich that were marked for "Animal Hospital" with a notation of "Pinky" in the memo. Mr. Rancich is also not entitled to credit for the checks which he gave Mrs. Rancich which indicate "Verizon" in the memo. He is not entitled to credit for the checks he gave her which state "Birthday Gift" in the memo. He argues that he should be entitled to credit for those checks he made to Mrs. Rancich with the memo of back alimony. He also is not entitled to credit for those checks because the plaintiff and defendant have an account set up through Hudson County Probation. There is no reason for defendant to have made any payments directly to his ex-wife. The plaintiff claims that none of these checks were payments for alimony.

This [c]court must see this issue in a light most favorable to the plaintiff since there is no concrete proof that the plaintiff agreed to accept these payments for alimony. The defendant could write or say whatever he chooses on the checks, but the bottom line is that the defendant should have made all payments through Hudson County Probation as he was required to.

Because the dispute involved conflicting factual contentions, requiring credibility determinations, we are satisfied that the trial judge should not have resolved the issue without a plenary hearing. Palmieri v. Palmieri, 388 N.J. Super. 562, 564 (App. Div. 2006); Shaw v. Shaw, 138 N.J. Super. 436, 440 (App. Div. 1976). Accordingly, we remand the issue to the trial judge to resolve on a plenary hearing. On resolution, if the judge determines that defendant made alimony payments directly to plaintiff as claimed, defendant is entitled to credit for the arrearages for the amounts of alimony he paid.

Accordingly, we reverse and remand the matter to the trial court to conduct a plenary hearing as to whether defendant proved a change of circumstances warranting a modification in his alimony obligation and his obligation to pay plaintiff's uninsured medical expenses and car insurance premiums. If proven, the trial judge must determine the amount of reduction appropriate under the facts presented, and whether any such reduction should be retroactive. On remand, the judge shall also conduct a plenary hearing on defendant's claim that he is entitled to a credit against arrearages for alimony allegedly paid directly to plaintiff post-August 31, 2003 through June 29, 2006.

Reversed and remanded to the trial court for further proceedings consistent with this opinion. We do not retain jurisdiction.


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