October 31, 2007
RONALD T. VILLONE, JR., PLAINTIFF-APPELLANT,
KATHERINE VILLONE, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, FM-02-1799-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 2, 2007
Before Judges Skillman, Winkelstein and Yannotti.
Plaintiff, a major league baseball player, and defendant, his former spouse, were divorced in 2004. Defendant moved for an increase in the child support and alimony awards that were entered as part of the final judgment of divorce. Plaintiff appeals from a July 27, 2006 order increasing his alimony and child support obligations, and imposing the increases retroactively;*fn1 and requiring him to use a car service to transport his children to his baseball games, instead of permitting them to be transported by his new wife or his mother. He also appeals from an August 4, 2006 order directing him to pay defendant's counsel fees. We affirm the counsel fee order, and those portions of the July 27, 2006 order that awarded child support and required a car service to transport the children. We reverse that portion of the order that increased plaintiff's alimony obligation.
The parties were married in January 1994, two years after plaintiff began his professional baseball career. They had two children: a daughter, born on March 26, 1996, and a son, born on September 14, 1997. From the time the parties were married until their divorce, plaintiff played for different teams and his income varied considerably. From 1994 through 2004, he earned the following:
In 2005, he signed a two-year contract with the Seattle Mariners, which paid him $2.2 million in 2005, inclusive of a $500,000 signing bonus, and $2 million in 2006, with built-in performance based incentives.
The parties' final judgment of divorce, entered January 22, 2004, and supplemented on April 23, 2004, incorporated a settlement agreement, which provided, among other things, that plaintiff would pay defendant $144,000 annual permanent alimony. The agreement also included a mechanism that would allow either party to seek modification of the alimony dependent upon plaintiff's future income.*fn2
I. ALIMONY, SUPPORT AND MAINTENANCE OF THE WIFE
A. The Husband shall pay to the Wife the sum of One Hundred Forty-Four Thousand ($144,000.00) Dollars per year as and for alimony, payable in equal monthly payments of Twelve Thousand ($12,000.00) Dollars per month, commencing on February 1, 2004, . . . and subject to the adjustment as hereinafter set forth.
B. Payment of alimony in the sum as set forth in "A" shall continue, so long as the Husband has earnings from his current baseball contract, including licensing fees and endorsements, annually between the sum of Nine Hundred Fifty Thousand ($950,000.00) Dollars and One Million Five Hundred Thousand ($1,500,000.00) Dollars. In the event the Husband earns less than said sum, then the Husband has the right to apply to the Court for a reduction in alimony unless it can be otherwise negotiated by agreement between the Parties. If the Husband has earnings in excess of said sum, then the Wife may seek an increase in alimony from the Court.
On March 30, 2006, based on plaintiff signing his Mariners contract, defendant moved to have the existing $144,000 annual alimony award increased by $75,000 in 2005 and $105,000 in 2006, effective retroactively. She also sought a $5250 increase in plaintiff's monthly $7000 child support obligation, retroactive to January 1, 2006; and $85,817.74 as retroactive child support for 2005.
Following argument on defendant's motion, and plaintiff's cross-motion for relief that is not the subject of this appeal, the court increased plaintiff's child support obligation by $5250 a month, and ordered him to pay $63,000 in retroactive support for 2005, and $36,750 for 2006. The court granted, and retroactively imposed, defendant's request for increased alimony in the amounts she requested: $75,000 for 2005 and $105,000 for 2006. The court also ordered plaintiff to provide a car service for his children when they attended his baseball games with either his mother or current wife. The judge subsequently granted defendant's request for counsel fees, directing plaintiff to pay fees of $15,128.30.
Our standard of review of a decision of the family court requires that we accord deference to the court's factfinding. Cesare v. Cesare, 154 N.J. 394, 413 (1998). So long as the trial judge's findings are supported by adequate, substantial and credible evidence, they will not be disturbed. See Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974).
Applying this standard to plaintiff's arguments on appeal, we first conclude that his challenge to the portion of the July 27, 2006 order requiring him to provide a car service for his children is without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We affirm that portion of the order.
We turn to plaintiff's challenge of the alimony award. Courts have the equitable power to modify alimony orders at any time. See N.J.S.A. 2A:34-23 ("[C]court may make such order as to the alimony or maintenance of the parties, and also as to the care, custody, education and maintenance of the children, or any of them, as the circumstances of the parties and the nature of the case shall render fit, reasonable and just."). "Alimony and support orders define only the present obligations of the former spouses . . . [they are] subject to review and modification on a showing of 'changed circumstances.'" Lepis v. Lepis, 83 N.J. 139, 146 (1980).
The standard for determining and modifying alimony is whether the supported spouse can maintain a lifestyle that is reasonably comparable to the standard of living enjoyed during the marriage. Crews v. Crews, 164 N.J. 11, 16 (2000). "The supporting spouse's obligation is mainly determined by the quality of economic life during the marriage, not bare survival." Lepis, supra, 83 N.J. at 150. The supported spouse's needs contemplate continued maintenance at the standard of living she had become accustomed to prior to the separation. Ibid.
As the New Jersey Supreme Court has explained, Lepis articulated a three-part examination to determine whether an alimony award should be modified when support of an economically dependent spouse is at issue: "'the dependent spouse's needs, that spouse's ability to contribute to the fulfillment of those needs, and the supporting spouse's ability to maintain the dependent spouse at the former standard.'" Crews, supra, 164 N.J. at 24 (quoting Lepis, supra, 83 N.J. at 152).
The party seeking modification of an alimony order in a post-judgment setting must first make a prima facie showing that changed circumstances have substantially impaired his or her ability to support himself or herself. Lepis, supra, 83 N.J. at 157. "Only after the movant has made a prima facie showing should the [other party's] ability to pay become a factor for the court to consider." Ibid.
"A motion to modify alimony may not be used to enable a dependent spouse to share in the post-divorce good fortune of the supporting spouse." Crews, supra, 164 N.J. at 29.
When modification is sought, the level of need of the dependent spouse must be reviewed in relation to the standard of living enjoyed by the couple while married.
If that need is met by the current alimony award and there are no other changed circumstances, support should not be increased merely because the supporting spouse has improved financial resources. [Ibid.]
Thus, when the dependent spouse is the moving party, "the financial condition of the supporting spouse is not relevant to the first step in the Lepis review, in which the movant must show that circumstances have changed for him or her." Id. at 31; but see Guglielmo v. Guglielmo, 253 N.J. Super. 531, 542-44 (App. Div. 1992) ("[c]hanged circumstances may be evidenced by an increase in the supporting spouse's income . . . a spouse who maintains the home while her husband's career advances should share in the rewards of their combined efforts").
Here, the trial court granted defendant's motion for an increase in alimony based substantially, if not solely, on plaintiff's increased income. The court relied on the provision of the settlement agreement that permitted the parties to seek modification of alimony if plaintiff's salary increased above $1.5 million or decreased below $950,000. We do not view that provision as mandating an increase in alimony just because plaintiff's income exceeded $1.5 million, or a decrease when his income falls below $950,000. Rather, when these triggers are met, it is the equivalent of a changed circumstance, which would then allow the court to consider a modification application without the necessity of the moving party demonstrating additional changed circumstances.
An upward modification of the alimony award, however, would still require the court to review the supported spouse's current standard of living vis-à-vis her standard of living at the time of the marriage, as required by both Lepis, supra, 83 N.J. at 152, and Crews, supra, 164 N.J. at 29. Here, the trial judge failed to engage in the requisite analysis. While he stated that he "did consider . . . certain lifestyle issues," he did not analyze the parties' lifestyles either during their marriage or at the time of the application for the increase. Consequently, we set aside the alimony award.
We next address the child support award. Any increase in child support must be made after consideration of the relevant statutory factors articulated in N.J.S.A. 2A:34-23(a). Isaacson v. Isaacson, 348 N.J. Super. 560, 580 (App. Div. 2002), certif. denied, 174 N.J. 364 (2002). The guiding principle in determining upward modification of a child support order is the "best interests of the children." Lepis, supra, 83 N.J. at 157. Generally, where the parties have the financial ability to provide for their children, the children are entitled to the benefit of the financial advantages available to their parents. Isaacson, supra, 348 N.J. Super. at 579. Children are entitled to have their needs accord with the current standard of living of both parents, which may reflect an increase in parental good fortune. Ibid.; Zazzo v. Zazzo, 245 N.J. Super. 124, 130 (App. Div. 1990) (unlike alimony, child support is not tied to the standard of living during the marriage), certif. denied, 126 N.J. 321 (1991). A supporting parent has the obligation not only to meet his children's bare necessities, but also share with the children the benefit of his financial achievement. Isaacson, supra, 348 N.J. Super. at 580.
Courts may classify supporting parents as "high earners"; those whose wage level substantially exceed the child support guidelines and who can afford "any rationally based awards of increased child support." Ibid. When a parent is a high earner, the dominant guidelines are the reasonable needs of the children, which are to be addressed in the context of the standard of living of the parties. Id. at 581. The court must consider the children's age, health, assets, and income. Ibid. After basic needs are met, if a parent's income permits, "children are entitled to other non-essential items that are reasonable and in [their] best interest." Id. at 582.
Here, the court found that "when you analyze [defendant's requests and plaintiff's income], the increase in clothing, in restaurants, $750 a month is not unreasonable, $1000 for clothes; vacations; camps; entertainment; gifts; tutoring for [the daughter's] special needs . . . there's room to grow." The judge found defendant's requests to be "fair . . . reasonable [and] just."
Notably, plaintiff is a high earner; his income exceeds the child support guidelines. A $5250 monthly increase in child support for his two children was not out of line with the substantial increase, of nearly $1 million, in his income. Cf. Ibid. ($1100 increase in support merited where supporting spouse's salary increased by approximately $300,000). The increase in support allows the children to share in his good fortune. Given the substantial discretion afforded family courts, it cannot be said that the trial judge abused his discretion in entering the child support award.
The question then becomes whether the court abused its discretion in making the child support award retroactive. Though defendant did not move for an increase in child support until March 30, 2006, the court granted child support retroactive to the beginning of 2005.
We begin with N.J.S.A. 2A:17-56.23a. On its face, this statute appears to prohibit retroactive increases in child support prior to the date a motion for an increase is filed. It provides:
No payment or installment of an order for child support, or those portions of an order which are allocated for child support established prior to or subsequent to the effective date of [this statutory provision], shall be retroactively modified by the court except with respect to the period during which there is a pending application for modification, but only from the date the notice of motion was mailed either directly or through the appropriate agent. [N.J.S.A. 2A:17-56.23a.]
In Keegan v. Keegan, 326 N.J. Super. 289, 294 (App. Div. 1999), however, we held that "the purpose of the statute was to remedy the loopholes of interstate child support enforcement laws in order to benefit children, not to eliminate any perceived unfairness" to the supporting parent. We concluded that, "[n]othing in the legislative history [of N.J.S.A. 2A:17-56.23a] suggests that the law was enacted to protect parents from retroactive modifications increasing support obligations where equitable." Ibid. Thus, the statute is not a per se bar to an award of retroactive child support.
In this case, the trial court determined that equity required retroactive application of the increase in child support; that the children were entitled to share in their father's good fortune from the time he benefited from his new contract, regardless of when their mother sought modification. That decision was not an abuse of the court's discretion.
Finally, we turn to the counsel fee award. The award of counsel fees in a matrimonial action rests in the sound discretion of the trial court. Guglielmo, supra, 253 N.J. Super. at 544-45. Success is not a prerequisite for an award of counsel fees. Id. at 545. Trial judges are to consider the following factors when awarding counsel fees: "[t]he party requesting the award must be in financial need; the party against whom the award is granted must have the financial ability to pay; and, where the first two factors have been established, the party requesting the fees must have acted in good faith in [the] litigation." Ibid. In Guglielmo, supra, for example, we concluded that counsel fees were properly ordered where the trial court found that the plaintiff's counsel fees were reasonable, the plaintiff's needs were clear, and the defendant, whose salary was four times that of plaintiff's, was in a position to pay the fees. Ibid..
Plaintiff here claims the court awarded fees solely on his ability to pay. We disagree. The court stated:
[Defendant's] ability to pay her own fees is nominal.
. . . I feel based on the clause in -- in the contract, that the parties should have come forward and tried to resolve the situation. It's unfair to her. I feel that she dealt reasonably and in good faith.
I think plaintiff can afford it. . . .
He's done very well for himself.
The court considered three relevant criteria: defendant's need, plaintiff's ability to pay, and defendant's good faith. Given the broad discretion trial judges possess in deciding whether to award counsel fees, the court's award of fees was not an abuse of discretion. Defendant incurred over $15,000 in counsel fees. She received $12,000 in monthly alimony, while drawing a small salary as a teacher. Plaintiff made over $2 million dollars, well over ten times defendant's income. The court made findings as to the prerequisites for the award of fees, and the record adequately supports those findings.
In sum, with the exception of the alimony award, we affirm the court's orders of July 27, 2006 and August 4, 2006. We reverse the alimony award and remand for further proceedings consistent with this opinion. We do not retain jurisdiction.