October 25, 2007
ROSEMARIE HELDMANN, F/K/A ROSEMARIE PESCATORE, PLAINTIFF-APPELLANT,
KENNETH PESCATORE, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Morris County, Docket No. FM-14-1523-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 3, 2007
Before Judges Wefing and Lyons.
Plaintiff Rosemarie Heldmann appeals from three post-judgment matrimonial orders which modify defendant Kenneth Pescatore's child support obligation by reducing it to $452 per week; deny plaintiff's request for contribution from defendant for child care expenses; and deny plaintiff's counsel fee application. The following factual and procedural history is relevant to our consideration of the issues advanced on appeal.
Plaintiff and defendant were married on June 21, 1987, and had four children: E.P., now eighteen years old, P.P., now sixteen years old, O.P., now ten years old, and S.P., now eight years old. On June 29, 2004, a dual final judgment of divorce (Divorce Judgment) was entered that incorporated a settlement agreement (Agreement) drafted by the parties. The trial court that entered the Divorce Judgment heard no testimony and made no judgment as to the merits of the Agreement because the parties settled their dispute prior to the conclusion of their divorce trial. Trial had commenced before a judge other than the post-judgment motion judge, and settlement was reached in the middle of the trial, after testimony from the joint forensic accountant as to defendant's income. The trial court noted in entering the Divorce Judgment, however, that the parties "freely and voluntarily" entered into the Agreement making it "binding and enforceable."
The parties agreed to share joint legal custody of the four minor children, with plaintiff designated as the "parent of primary residence," and defendant as the "parent of alternate residence." The Agreement between the parties regarding child support payments provides:
The Husband shall pay child support in the sum of $40,000.00 per year.*fn1 Husband shall make the payments in the sum of $3,333.33 on the first of every month through the Morris County Probation Department. The first payment shall be made July 1, 2004. The foregoing child support shall not be subject to modification, either upward or downward, for a period of two years at which time it is subject to review by either party regardless of any change in circumstances.*fn2 (emphasis added).
On May 3, 2006, slightly less than two years after the Agreement was incorporated into the Divorce Judgment, defendant filed a motion seeking, among other things, modification of child support payments. He based his request on the portion of the Agreement that stated "child support shall not be subject to modification, either upward or downward, for a period of two years at which time it is subject to review by either party regardless of any change in circumstances." In defendant's certification, he alleged that the original child support payment was beyond his means. Furthermore, defendant claimed that his business income had decreased while plaintiff's income had increased since entering the Agreement two years ago.
On May 24, 2006, plaintiff filed a cross-motion asking the court to: (1) deny defendant's motion; (2) grant decision-making authority to the parent coordinator; (3) modify the parenting-time schedule; (4) require defendant to contribute to the full-time child caretaker expense; and (5) compel defendant to pay counsel fees and costs. Plaintiff asserted that defendant's income amount on his Case Information Statement (CIS), which he submitted to the motion judge, was "seriously underestimated." Plaintiff suggested that the defendant was "running a significant amount of [personal living] expenses through his business . . . ." Both parties disagreed with the other's assertion of facts concerning income, expenses, and standards of living. This is consistent with the parties' positions during the trial at which allegations and disputes regarding significant unreported income were exchanged.
On June 12, 2006, without having oral argument or a plenary hearing, the motion judge entered an order as to both parties' motions in which defendant's child support payment was reduced to $498 per week, or approximately $25,896 a year, and all other relief was denied. The motion judge did not render a written opinion, but provided a "statement of reasons" on the order itself. The court found "that the [parties'] Judgment of Divorce provides for a review of the child support obligation. The Court has calculated the obligation pursuant to the parties' Case Information Statements and in accordance with the Child Support Guidelines."
The motion court attached to the order a "sole parenting worksheet" on which the revised child support was calculated. The court apparently used the incomes supplied by the parties on their respective CIS forms. The court calculated defendant's obligation to be $498 per month, based on defendant contributing approximately 70% of the parties' total income. In the order, the motion court also denied plaintiff's request to compel defendant to contribute to the "costs of a nanny" because the Divorce Judgment did not provide for it.
On June 28, 2006, plaintiff filed a motion for reconsideration of the June 12 order, asking the court to: (1) maintain the original child support amount, with the exception of additionally compelling defendant to make a 60% contribution toward the child care costs; (2) compel defendant to pay plaintiff's counsel fees and costs; (3) schedule a plenary hearing to establish current child support and permit discovery should the court determine modification is appropriate; and (4) permit the parenting coordinator to revise the parenting time schedule. In support of her motion, plaintiff suggested that the motion judge erred in fixing defendant's income amount because the 2005 income amount stated in defendant's CIS was exactly the same income amount he reported in 2004. Therefore, modification was not warranted. Plaintiff argued that since the trial court did not accept defendant's 2004 income representation, neither should the motion judge.*fn3
On July 5, 2006, defendant filed a cross-motion asking the court to deny plaintiff's application for reconsideration, to award defendant counsel fees, and to eliminate, pursuant to Rule 4:50-1, a clerical error in computing the child support guidelines. The purported clerical error was the omission of a parenting-time credit for sixty-four overnights defendant had with his two younger children. On July 17, 2006, the court entered an amended order correcting defendant's child support obligation to $452 per week, allowing a parenting-time credit for the sixty-four overnights erroneously omitted in the June 12 Order.
On July 24, 2006, the motion court entered an order as to plaintiff's June 28 motion and the remaining issues raised in defendant's July 5 cross-motion. After considering the papers submitted, the motion court: (1) denied plaintiff's request for reconsideration of the June 12 Order concerning child support, child care costs, parenting time, and counsel fees; and (2) denied defendant's request for counsel fees. The order noted that prior orders, which were not inconsistent with the July 24 order, would remain in full force and effect. The motion court provided the following written explanation for its decision:
The Court has denied Plaintiff's request for reconsideration of the Court's decision on child support. The parties entered into an agreement. In order to modify that agreement there must be a demonstration by the movant, who has the burden, of substantial changed circumstances. The movant's allegations are premised upon matters that are subsumed by the parties' agreement. In sum, there was and remains insufficient evidence that the Defendant's financial condition has changed substantially from the date of the agreement.
The Court has denied Defendant's request for counsel fees primarily due to [plaintiff's] entitlement to bring this application pursuant to Rule 4:49-2.
Further, the Court finds that the Plaintiff did not bring the motion in bad faith.
On September 6, 2006, plaintiff filed a notice of appeal with respect to the June 16, 2006, July 17, 2007, and July 24, 2004, orders. Specifically, plaintiff appeals the orders as to the modification of child support, absence of a plenary hearing, denial of contribution to child care expenses, and denial of counsel fees.
On appeal, plaintiff presents the following arguments for our consideration:
THE DECISION OF THE MOTION JUDGE REDUCING CHILD SUPPORT SHOULD BE REVERSED BECAUSE --
A. HE SHOULD HAVE APPLIED TRADITIONAL LEPIS THEORY TO THE SUBSTANCE OF DEFENDANT'S APPLICATION.
B. ALTERNATIVELY, IF THE AGREEMENT IS INTERPRETED TO MEAN THAT THE DEFENDANT IS ENTITLED TO A NEW DETERMINATION FROM SCRATCH, THE COURT SHOULD HAVE SCHEDULED A PLENARY HEARING AFTER APPROPRIATE DISCOVERY.
THE MOTION JUDGE SHOULD HAVE DIRECTED THE DEFENDANT TO PAY AN APPROPRIATE PORTION OF CHILD CARE EXPENSES INASMUCH AS THE NEED THEREFORE WAS A RESULT OF LEGITIMATE CHANGE OF CIRCUMSTANCES.
ON REMAND, THIS COURT SHOULD DIRECT THE MOTION JUDGE TO RECONSIDER PLAINTIFF'S APPLICATION FOR COUNSEL FEES.
We begin our consideration of these arguments by restating applicable legal principles. Generally, in a non-jury case, an appellate court may not disturb the trial court's findings of fact unless wholly unsupported by the evidence. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974). Family court findings are entitled to particular deference because of "family courts' special jurisdiction and expertise in family matters . . . ." Cesare v. Cesare, 154 N.J. 394, 413 (1998). The family court's findings, however, "will be rejected if not based on adequate competent evidence in the record and adequate findings based thereon and consistent therewith." Pressler, Current New Jersey Court Rules, comment 6.2 on R. 2:10-2 (citing P.T. v. M.S., 325 N.J. Super. 193, 219 (App. Div. 1999)). The appellate court does not need to afford any special deference to a trial court's findings if the trial judge has a misconception of the applicable law or misapplies the law to the facts. State v. Steele, 92 N.J. Super. 498, 507 (App. Div. 1966).
Plaintiff argued that the motion judge should not have reduced weekly alimony from approximately $770 to $452 per week in the absence of a showing of changed circumstances as required by Lepis v. Lepis, 83 N.J. 139 (1980). However, the Agreement specifically provided that child support "shall not be subject to modification, either upward or downward, for a period of two years at which time it is subject to review by either party regardless of any change of circumstances." Based upon a number of factors, we read the Agreement's review provisions as simply providing for a moratorium during the first two years. The testimony at the time of trial was quite contentious as to the defendant's actual income. At trial, the joint forensic accountant alleged between approximately $150,000 and $200,000 of unreported income to defendant. We note as well that the parties settled their dispute by the defendant agreeing to pay approximately $40,000 per year in child support, when pursuant to the Child Support Guidelines based on his then-proffered annual income, he would have paid approximately $23,000 per year. These factors indicate that there was no resolution of the income issue, rather an agreement regarding the support amount and a two-year moratorium. Following the initial two-year period, however, either party could seek to review de novo the support situation. See Sterling v. Sterling, 191 N.J. Super. 547 (App. Div. 1983).
Moreover, given that at the time of trial there was significant disagreement as to defendant's income and that the trial judge never made any findings of fact concerning that dispute, it was practically impossible for the motion judge to have determined from the record before him whether there was a prima facie change in circumstance. This is so because no base income level for defendant was ever established at the time the Agreement was entered. Accordingly, we agree that, following the two-year period in the Agreement, either party was entitled to have the court establish child support based on the parties' income and expenses in accordance with the Child Support Guidelines.
However, we find that while a new determination of support was warranted under the Agreement, the motion court's determination not to have a hearing ignored the fact that there were genuine issues of material facts. There was no factual determination, stipulation, or agreement at the time the Agreement was entered into by the parties as to defendant's income and that dispute continued through the time of the motion. While a hearing is not required or warranted in every contested proceeding for the modification of a judgment or order relating to support, where the affidavits show there is a genuine issue as to a material fact, a plenary hearing should be had. Murphy v. Murphy, 313 N.J. Super. 575, 580 (App. Div. 1998).
While we recognize that the parties may expend substantial funds in pursuing the truth as to the parties' income, we cannot ignore the children's best interests and their entitlement to support from both their parents based upon each party's actual income. Given that the forensic accountant at the time of the divorce trial indicated there may well be substantial unreported income in the operation of defendant's business; defendant's counsel's statement at trial acknowledging defendant's business practice of, at times, utilizing cash to purchase inventory as well as pay employees; and plaintiff's affidavits questioning defendant's income tax return as the sole evidence of his actual income, a plenary hearing is warranted. We, therefore, remand the question of child support to the motion judge so that discovery and a plenary hearing can be scheduled.
In light of our remand for a re-determination of the level of child support, we comment briefly on the remaining issues. With regard to plaintiff's contention that defendant should pay an appropriate portion of child care expenses, we note that the average cost of child care is not factored into the Child Support Schedules. Pressler, Current New Jersey Court Rules, comment on Appendix IX-A, ¶ 9 (2008). The average cost of child care, if incurred in a particular case, may be added to the basic support obligation. Ibid. However, the cost of work-related child care is certainly different from general household help. The motion submitted by plaintiff points out that help has been retained to watch her younger children during the hours she is operating her business, which would generally be seen as work-related child care. However, there is a considerable question as to whether the help is being also used for housekeeping, as well as work-related child care. Also, there is a question concerning the need for such services as well as the number of hours that such services are required. Accordingly, it is appropriate for the matter to be explored during the plenary hearing referred to above.
Lastly, with respect to counsel fees, any award shall abide the plenary hearing. The issues, therefore, of child support and work-related child care, are remanded for a plenary hearing at which time the court may consider an award of counsel fees using the appropriate factors.
Reversed and remanded.