December 7, 2007
ELLEN CIFRESE, PLAINTIFF-RESPONDENT,
LEONARD CIFRESE, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Ocean County, FM-15-1531-01-S.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 23, 2007
Before Judges Yannotti and LeWinn.
Defendant, Leonard Cifrese, appeals from the October 27, 2006, order of the Family Part denying his post-judgment motion to modify his alimony and child support obligations. He raises the following arguments:
I. THE TRIAL COURT ERRED IN DENYING DEFENDANT'S REQUEST FOR MODIFICATION OF ALIMONY AND CHILD SUPPORT BECAUSE DEFENDANT'S INCOME HAS DECREASED FOR A PERIOD OF FIVE YEARS.
II. THE TRIAL COURT ERRED BY FAILING TO HOLD A PLENARY HEARING IN ORDER TO DETERMINE IF DEFENDANT'S REDUCTION IN INCOME WAS PERMANENT AND INVOLUNTARY.
III. THE TRIAL COURT ERRED BY DENYING DEFENDANT'S REQUEST FOR A MODIFICATION OF CHILD SUPPORT BECAUSE DEFENDANT'S CHILD HAS COMMENCED ATTENDING COLLEGE AWAY FROM HOME.
IV. THE TRIAL COURT ERRED BY FAILING TO REVIEW DEFENDANT'S CHILD SUPPORT OBLIGATION BASED UPON TRIENNIAL REVIEW
For the reasons set forth herein, we conclude the issues raised in Points I, II and IV are without merit. However, we reverse the trial judge's denial of modification of child support for the parties' elder child who now lives away at college for a significant part of the year; we remand this matter to the trial court for an appropriate modification of defendant's child support obligation for that child.
After a seventeen-year marriage, the parties were divorced by a final judgment entered on November 28, 2001. Two children were born of the marriage. The final judgment incorporated a property settlement agreement that provided for defendant to pay plaintiff permanent alimony of $550 per week and child support of $263 per week. These support obligations were based upon imputed annual income of $110,000 for defendant and $17,500 for plaintiff.
Defendant has worked as an insurance broker since 1995. He brought his first motion to modify his support obligations in 2005, alleging various changes in the insurance industry that caused significant reductions in his earnings. On October 21, 2005, the judge entered an order denying defendant's motion because of his failure to offer sufficient proof of a substantial change in circumstances to warrant modification.
Defendant filed a second motion in September 2006, once again seeking modification of his support obligations based on a claim of changed circumstances in his employment situation. Comparison of defendant's certifications in support of each of these two motions shows they contain identical language describing changes in the insurance industry that he claims are responsible for his reduced earnings. In both certifications, defendant contends: (1) the first company for which he worked, Alliance for Affordable Health, left New Jersey in 1999 due to a large number of claims; (2) he then wrote policies for Union Sponsored Health Plan through associations that, in late 2001, were forced to modify plan benefits and raise rates that reduced his commissions; (3) he "believe[s] the reasons for the rate increase" was "to discourage members to maintain or continue with the policies[;]" (4) due to the "lack of competitive union policy plans,...high cost and reduced coverage," he placed his business in the small group market plans that paid far lower commissions; (5) in 2001 he started to place business with the Martin Agency and NAS Financial who are "master brokers" that pay him commissions for the policies he presents to them; (6) the "insurance field" has become "highly competitive" resulting in a "drop in [his] commission percentages," that would require him to "write triple the amount of new policies to sustain [his] previous income[;]" and (7) he has been trying to write more policies per year by increasing his advertising and marketing but "the high cost of health insurance has discouraged many potential buyers."
We take some time to detail these claims to make the point that not one of them is verified by any supporting documentation. This deficiency was true for defendant's 2005 motion as well. Defendant attached his tax returns for 2000 through 2005 that show fluctuations in his gross earnings from a high of $125,110.00 in 2001 to a low of $67,712.00 in 2005. However, defendant has never provided any documentation of the claims he offers by way of explanation of the change in market conditions allegedly responsible for his reduced earnings.
The judge found as follows:
[T]he financial documentation submitted by the Defendant in support of this Notice of Motion, namely his income tax returns for the years 2001-2005, indicate that the Defendant has experience[d] a significant decrease in his reported income since the time the [judgment of divorce] was entered. On its face, this would appear to constitute a substantial change in the circumstances warranting a modification of the Defendant's support obligation. However, the Court finds that this decrease in the Defendant's income may be voluntary and also may only be temporary....Although the Defendant's income has decrease[d] over the past several years, he has not presented evidence that it will continue to decrease. To the contrary, the evidence presented by the Defendant by its very nature shows that his income fluctuates on a year to year basis and it has the potential to increase at any time....[T]he Court finds that the Defendant has not submitted any evidence to indicate that there are no other jobs available to a skilled person such as himself.
In addition to the annual fluctuations in defendant's gross earnings, the trial judge was also concerned with the complete lack of documentation supporting defendant's claims regarding employment opportunities. These two judicial findings were the underpinnings of the judge's decision to deny relief based on defendant's alleged decrease in income.
It is axiomatic that support provisions in negotiated marital settlement agreements may be subject to modification upon a showing of "changed circumstances" warranting such relief. Lepis v. Lepis, 83 N.J. 139, 149-156 (1980). However, it is also well established that a party seeking such modification has the burden to show such "changed circumstances" as would warrant relief from his or her support obligation. "When the movant is seeking modification of an alimony [obligation], that party must demonstrate that changed circumstances have substantially impaired the ability" to meet that obligation. Id. at 157. Here, defendant has presented his tax returns as evidence of the yearly fluctuations of his earnings. However, he has not presented any evidence of the "changed circumstances" causing those fluctuations-namely those market changes to which he certified in both motions as noted above.
Our courts have consistently rejected modification requests based upon circumstances which appear to be only temporary or voluntary. Bonanno v. Bonanno, 4 N.J. 268, 275 (1950). In such situations the courts have looked not only to the supporting spouse's current earnings but also to that spouse's prior and potential earning capacity and ability to maintain the level of earnings upon which the original support obligation was based. "To the extent that a spouse's potential earning capacity is an important factor in setting alimony, it is equally relevant to modification." Aronson v. Aronson, 245 N.J. Super. 354, 361 (App. Div. 1991).
The trial judge properly found that defendant failed to provide any evidence that his fluctuating earning capacity was involuntary or permanent. The judge found that the income reported on defendant's tax returns appeared "on its face" to constitute a change of circumstances. However, in the absence of explanatory proof, the trial judge was compelled to conclude such changes in income "may be voluntary and may only be temporary." Defendant gave the judge no choice but to speculate in this manner, given the nature of the proofs provided.
Under these circumstances, the trial judge properly rejected defendant's assertion that he had made a prima facie showing of changed circumstances sufficient to warrant a plenary hearing. "[A] party must clearly demonstrate the existence of a genuine issue as to a material fact before a hearing is necessary." Lepis, supra, 83 N.J. at 159. Defendant's failure to document the claimed reasons for his diminution in earnings constitutes a failure to demonstrate a clear inability to maintain an earning capacity comparable to that upon which his support obligations were based. For that reason, he has also failed to "demonstrate the existence of a genuine issue as to material fact" and, therefore, we find no error in the trial judge's denial of such relief.
Regarding defendant's child support obligation for the elder child who now attends college away from home, we conclude defendant is entitled to an appropriate reduction, and we reverse and remand on this issue. We have recognized that college costs and child support for an unemancipated minor are two discrete but related parental obligations. Sharp v. Sharp, 336 N.J. Super. 492, 503 (App. Div. 2001); Hudson v. Hudson, 315 N.J. Super. 577, 584 (App. Div. 1998).
It is unclear from the record whether defendant's original child support obligation of $263 per week for both children was based upon the Child Support Guidelines set forth in Appendix IX to the New Jersey Court Rules.*fn1 In any event, that child support obligation was premised upon plaintiff incurring expenses for the elder child that she does not now incur as he lives away at college for a good part of the year, and those expenses are paid through each party's contribution to his college costs. In recognition of this situation, the Child Support Guidelines are expressly inapplicable when determining the amount of support for a child attending college away from home, for the following reasons:
Many costs associated with college attendance (e.g. room, board, transportation) are included in the Appendix IX-F child support guidelines awards. Thus, a parent who is ordered to pay a guidelines-based child support award and part of the child's college expenses is forced to make duplicate expenditures for the child (i.e., the PAR [Parent of Alternate Residence] would be paying a share of the cost of food for the child to the primary household as well as a share of the cost of a meal plan or food allowance while the child is attending college). As a result, the level of total spending on the child would exceed that of intact families in a similar economic situation and the PAR's share of the total spending on the child would increase beyond his or her income share. Requiring duplicate expenditures for a child is inconsistent with spending patterns of intact families and the economic theory of the child support guidelines. [Child Support Guidelines, Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2301 (2008).]
By denying defendant's request to modify his child support obligation on this basis, the trial judge improperly subjected him to just the type of duplicate expenditures proscribed by the Guidelines. Therefore, we reverse and remand this matter to the trial court with instructions to calculate an appropriate child support obligation for the elder child that takes into account the types of expenses covered by defendant's contribution to his son's college costs.
Defendant's appellate issue regarding triennial review of his child support obligation does not appear to have been presented to the trial judge.*fn2 Defendant does not include his notice of motion in his appendix; however, his supporting certification, which he does include, fails to address this particular claim for relief. In his order, the trial judge itemized defendant's requests for relief; triennial review is not listed there either. Therefore, we regard this issue as one not raised below and, as a consequence, subject to the "plain error" standard of review.
Rule 2:10-2 provides: "Any error or omission shall be disregarded by the appellate court unless it is of such a nature as to have been clearly capable of producing an unjust result, but the appellate court may, in the interests of justice, notice plain error not brought to the attention of the trial or appellate court." This rule "defin[es] noticeable error in terms of its magnitude. Errors having a clear capacity to have produced an unjust result are cognizable, and errors of lesser magnitude are not." Pressler, supra, Comment 1 on R. 2:10-2. Under that standard, a reviewing court should reverse only if a trial error is "clearly capable of producing an unjust result." Boland v. Dolan, 140 N.J. 174, 190 (1995).
We are satisfied that the claimed failure to subject defendant's child support obligation to triennial review was not "clearly capable of producing an unjust result." Defendant received a current review of his child support obligation in the trial court's disposition of his motion. In denying defendant's modification request, the trial court reviewed, and rejected, his claim for a decrease and held him to the same level of earnings imputed to him at the time of the divorce. The trial judge, therefore, did "review" defendant's child support obligation in that decision. There was no evidence of any significant change in plaintiff's earnings. Thus, defendant received the review to which he was entitled under the facts presented to the trial court.
The order appealed from is affirmed in part, reversed in part, and remanded for recalculation of child support for the parties' elder child while he attends college away from home. We do not retain jurisdiction.