December 24, 2007
TONI-ANN SCHEER, PLAINTIFF-APPELLANT,
DOUGLAS SCHEER, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-55-96.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 30, 2007
Before Judges Coburn, Fuentes and Grall.
Plaintiff Toni-Ann Scheer appeals from post-judgment orders in a divorce case. The orders require plaintiff to transfer residential custody of one of the parties' two children to defendant Douglas Scheer; pay one-half of the fee for an expert appointed by the court at defendant's request; pay a portion of defendant's counsel fees, including fees incurred by defendant on motions; and suspend her right to child support payable to her for the second child, until her debt for the expert's fee and excess child support are paid. We affirm the custody order for the reasons stated by the trial court in a comprehensive and well-reasoned oral decision rendered on June 20, 2006. We reverse the orders fixing fees.
The parties were married in 1988. Their daughter was born in 1992, and their son was born in 1994. The parties separated in 1995 and were divorced in 1996. The final judgment incorporates their agreement to share joint legal custody of the children and to designate plaintiff as the "residential custodial parent."
Subsequent to their divorce both plaintiff and defendant established new relationships. Plaintiff gave birth to two more children, and she and all four of her children reside with the father of her two youngest children. Defendant has remarried. He and his wife reside with her college-age son.
By motion dated June 22, 2005, defendant sought residential custody of the parties' daughter, who was then twelve years of age. According to defendant, he made the request in accordance with the wishes of the child and in her best interest. In his motion, defendant requested an order requiring "a full custody evaluation." Plaintiff opposed the motion and sought no relief other than an award of fees and costs.
On August 5, 2005, the trial court entered an order compelling a custody evaluation, designating two experts, and requiring plaintiff to advance the expert fee, without prejudice. The record does not reflect a referral to mediation or whether the parties attended mediation prior to the court's determination of the motion.*fn1 See R. 5:8-1.
The expert selected, Dr. Wolf, conducted the custody evaluation and prepared a report which was completed on January 1, 2006. Dr. Wolf recommended transfer of custody to defendant. Subsequently, plaintiff retained a second expert, whose report was completed on March 20, 2006. Plaintiff's expert concluded that it was in the best interest of the child to remain in her mother's home.
On April 17, 2006, plaintiff moved to preclude introduction of Dr. Wolf's report and testimony. Plaintiff asserted that Dr. Wolf failed to identify the "methodology" upon which she relied and did not consider a transcript of a municipal court trial that plaintiff deemed relevant. The municipal court proceeding was on a complaint alleging that a friend of defendant's wife placed harassing phone calls to plaintiff in 2003. Although the municipal court judge commented on her "gut-feeling" that defendant's wife had some involvement in the phone calls, the judge concluded that the evidence was inadequate to establish harassment and dismissed the complaint.
The trial court denied plaintiff's motion to exclude Dr. Wolf's report on the grounds that her opinion was not a net opinion and her failure to consider the transcript went to the weight, not the admissibility. Concluding that plaintiff's motion to exclude lacked merit, the court awarded defendant counsel fees in the amount of $900 for the motion. Plaintiff subsequently renewed her request to exclude Dr. Wolf's testimony at the hearing.
The custody hearing commenced on May 15, 2006. By that time, the parties' daughter was thirteen years of age. In accordance with Rule 5:8-6, the court allowed both parties to submit questions and interviewed the child on the record. In response to the court's carefully crafted questions, the child expressed and articulated her reasons for requesting the court's leave to live in her father's home.
The trial court issued its comprehensive custody decision in open court on June 20, 2006. The court addressed the testimony presented at the hearing, the statements made by the child during the interview and the experts' conflicting opinions. In each instance, the court explained how it assessed the credibility of the witnesses and evidence and resolved the factual disputes. The court considered the statutory factors relevant to a determination of custody and gave reasons for its conclusion that a change in residential custody was in the child's best interests. See N.J.S.A. 9:2-4c.
At the conclusion of the court's decision on custody, the court and counsel identified remaining issues: modification of child support in light of the change of residential custody of one of the parties' two children; allocation of responsibility for Dr. Wolf's fee; and counsel fees.
The court immediately, and without explanation, allocated fifty percent of Dr. Wolf's fee to plaintiff. In response to an objection based on plaintiff's inability to pay Dr. Wolf's fee, the court stated: "[The expert's fee is] to be shared 50/50. How we work it out between the parties because of the counsel fee issue, that I'll decide ultimately." Two days later, the court entered an order providing, "the parties shall pay equally the costs of the court-appointed expert, Dr. [Wolf].
Applications for fees shall be simultaneously submitted by July 14, 2006 with appropriate documentation."
The court terminated defendant's obligation to pay child support for his daughter effective June 27, 2006, the date scheduled for transfer of custody. The court directed the parties to exchange case information statements and negotiate the appropriate child support amount in light of the transfer of the custody of one child.
The parties submitted competing applications for counsel fees and case information statements. Defendant's income in 2005 was $95,133. Plaintiff's income in 2005, as certified in her case information statement, was $25,202. During the course of the litigation to that point, plaintiff incurred fees of $34,250 and defendant incurred fees of $22,891.45. Plaintiff had paid her attorney $25,000, and defendant owed his attorney $14,991.45.*fn2
A dispute about disclosure of defendant's tax return arose, and the parties were unable to reach an agreement on child support. As a consequence, prior to the court's decision on counsel fees, defendant filed a motion for child support and for sanctions based on plaintiff's failure to pay her share of Dr. Wolf's fee and the $900 counsel fee assessed prior to the hearing. Plaintiff sought sanctions on the ground that defendant's motion was frivolous.
The trial court resolved the outstanding issues on October 13, 2006.
On the competing claims for fees related to the custody litigation, the court denied plaintiff's application and awarded defendant $7,500, which the court found represented approximately one-half of the fees defendant incurred after Dr. Wolf filed her report. Although the trial court recognized defendant's greater ability to pay counsel fees and plaintiff's inferior ability to contribute to defendant's fees, the court concluded that it could not "ignore" the "unreasonable" position plaintiff asserted thereafter, "to her own detriment, the financial detriment of defendant and not in the best interests of the child." The court explained, "[g]iven the age of [her] daughter and the recommendation of a joint expert, the plaintiff's continued insistence on her position with the resulting litigation . . . cannot be considered either reasonable or in good faith." The court elaborated:
Once the recommendation of the joint expert[,] which was consistent with the child's wishes, was received . . . the litigation should have come to a conclusion.
The clear and reasonable response to the report would be for the parties to agree to a temporary change in custody to see if the change is in the best interest of the child. Plaintiff refused to take that course of action[,] retaining her own expert[,] vehemently contesting the recommendations of the joint expert, even to the point of seeking her exclusion at trial.
The trial court calculated child support for the parties' two children pursuant to the guidelines. Defendant's obligation for the parties' youngest child, after reduction for child support payable by plaintiff for the oldest child, is $136 per week.
Concluding that plaintiff had not complied with the order requiring her to pay one-half of Dr. Wolf's fee, which the court estimated at $6487.50, and had not paid the $900 counsel fee award, the court granted defendant's enforcement motion. Rejecting plaintiff's claims that defendant's motion for child support was unnecessary and that she had no obligation to pay Dr. Wolf's fee until the court addressed the parties' applications for counsel fees incurred in litigating the custody issue, the court awarded defendant an additional $700 for counsel fees on the motion. The order required plaintiff to pay the $700 counsel fee award and to pay Dr. Wolf's fee of $6487.50 within thirty days.
The trial court and this court denied plaintiff's application for a stay pending appeal. Plaintiff did not pay anything to satisfy her financial obligation under the orders. On February 6, 2007, defendant filed a motion to enforce the orders compelling payment of a total of $9100 for counsel fees and $6487.50 for Dr. Wolf. He also sought a credit of $3130.55 for his overpayments of child support. On March 2, 2007, the court suspended defendant's obligation to pay child support for 73.36 weeks to permit defendant to reimburse himself for the amount plaintiff owed for Dr. Wolf's fee and overpayment of child support. The trial court entered the order on March 23, 2007.
Plaintiff filed an amended notice of appeal to include an appeal from the order suspending child support. By orders dated April 2, 4 and June 21, 2007, this court accepted the amended notice of appeal, denied summary disposition and expedited the appeal.
On appeal from the custody order, plaintiff contends that the trial court failed to assess properly the testimony of the witnesses, including the experts, and erred by excluding evidence on the impact that a change of custody would have on plaintiff's other three children. On that basis, she argues that the decision is not supported by the evidence.
Our review of a custody determination is limited. We must affirm if "the findings made could reasonably have been reached on sufficient credible evidence present in the record." Beck v. Beck, 86 N.J. 480, 496 (1981) (internal citations and quotations omitted) (noting that this standard of review applies in custody cases and to a trial court's findings on expert testimony). We may not undertake "an independent analysis of the trial court record." Id. at 497.
Applying that standard of review, we affirm the custody order substantially for the reasons stated in the comprehensive and thoughtful opinion of the trial court. The court's decision is more than adequately supported by substantial credible evidence in the record and consistent with the controlling legal standards, including the standards governing admissibility and evaluation of expert testimony. See N.J.S.A. 9:2-4c (listing factors relevant to best interests determination); Kinsella v. Kinsella, 150 N.J. 276, 317-18 (1997) (discussing the best interests standard relevant to custody determinations); Rosenberg v. Tavorath, 352 N.J. Super. 385, 402 (App. Div. 2002) (distinguishing factors relevant to admissibility and weight of expert opinion).
Plaintiff also argues that the court abused its discretion in requiring her to pay $7500 toward counsel fees defendant incurred between the completion of Dr. Wolf's report and the court's decision on custody. Specifically, she contends that the court improperly concluded that she should contribute to defendant's fees because her decision to litigate the custody question was unreasonable. We agree.
"[T]he award of counsel [and expert] fees in a matrimonial action is discretionary with the trial court and an exercise thereof will not be disturbed in an absence of a showing of abuse." Chestone v. Chestone, 322 N.J. Super. 250, 258 (App. Div. 1999); see Berkowitz v. Berkowitz, 55 N.J. 564, 570 (1970) (same); N.J.S.A. 2A:34-23 (authorizing award of attorney and expert fees). This court may intervene only when the determination is "so wide of the mark as to constitute a mistaken exercise of discretion." Chestone, supra, 322 N.J. Super. at 258. We, however, are obligated to conduct the review and must determine whether the trial court's determination is based on facts supported by the record and a correct application of the legal standards.
The standards governing award of fees in matrimonial litigation are clear.
[T]he court must consider whether the party requesting the fees is in financial need; whether the party against whom the fees are sought has the ability to pay; the good or bad faith of either party in pursuing or defending the action; the nature and extent of the services rendered; and the reasonableness of the fees. [Mani v. Mani, 183 N.J. 70, 94-95 (2005) (discussing proper application of N.J.S.A. 2A:34-23, and the factors set forth in Rule 5:3-5(c), which incorporates by reference Rule 4:42-9) (emphasis omitted).]
"[B]ad faith for counsel fee purposes relates only to the conduct of the litigation . . . ." Mani, supra, 183 N.J. at 95.
In this case, the trial court did not award defendant fees based on his inability to fund his litigation costs or plaintiff's ability to contribute to defendant's costs. To the contrary, the trial court found that defendant had "superior" ability to fund the litigation. The $7500 fee at issue here was awarded solely on the ground that plaintiff acted unreasonably by continuing this litigation after receipt of Dr. Wolf's report. The court had previously assessed fees for what it deemed a baseless motion to exclude Dr. Wolf's report and subsequently assessed fees for plaintiff's failure to comply with court orders. Thus, the only justification for the court's decision to award defendant a $7500 counsel fee was "plaintiff's continued insistence on her position" that the present custodial arrangement was in her daughter's best interests.
This court has noted that "'where one party acts in bad faith, the relative economic position of the parties has little relevance' because the purpose of the award is to protect the innocent party from unnecessary costs and to punish the guilty party." Yueh v. Yueh, 329 N.J. Super. 447, 461 (App. Div. 2000) (quoting Kelly v. Kelly, 262 N.J. Super. 303, 307 (Ch. Div. 1992)). That statement cannot be read too broadly and without regard to judicial decisions discussing "bad faith."
There are limitations on fees that may be awarded on the basis of "bad faith." In order to avoid discouraging litigation of meritorious claims that may not ultimately prevail, the bad faith sufficient to allow the Family Part to give less weight to the parties' relative need and ability to pay requires more than the assertion of a position later rejected by the court. Kelly, supra, 262 N.J. Super. at 309. There must be litigation conduct that is egregious, unjustified and motivated by bad faith. In such a case, the counsel award is imposed "to prevent a maliciously motivated party from inflicting economic damage on an opposing party by forcing expenditures for counsel fees." Kelly, supra, 262 N.J. Super. at 307. Bad faith has been found where a party engaged in conduct that either unnecessarily complicated discovery or the trial or unjustifiably increased the cost of the litigation through defiance of court orders resulting in enforcement motions. See Yueh, supra, 329 N.J. Super. at 462 (discussing relevance of failure to comply with discovery and defiance of court orders); Chestone, supra, 322 N.J. Super. at 259 (approving consideration of lack of candor); Kothari v. Kothari, 255 N.J. Super. 500, 513 (App. Div. 1992) (approving consideration of conduct involving dissipation of assets that had an impact on the "type of trial" required). We have held that "failure to settle disputed claims is not in itself a permissible consideration in assessing a fee." Diehl v. Diehl, 389 N.J. Super. 443, 455 (App. Div. 2006).
The trial court considered plaintiff's failure to settle a custody dispute after receipt of one expert report to be "unreasonable" and not in "good faith." In this case, there were conflicting opinions by experts both bound to render "strictly non-partisan evaluations." R. 5:3-3(b). The trial court noted that plaintiff should have agreed to a temporary change rather than litigate the issue, but the court did not consider that this request arose during the school year and in a situation where, in plaintiff's opinion, the wishes the child expressed were not her own. A parent involved in litigation about the custody and care of a child is entitled to a rebuttable presumption that his or her position is consistent with that parent's view of the best interests of the child. See generally Moriarty v. Bradt, 177 N.J. 84, 101, 116 (2003), cert. denied, 540 U.S. 1177, 124 S.Ct. 1408, 158 L.Ed. 2d 78 (2004). Absent evidence of misconduct in the litigation clearly motivated by the party's desire to cause the other economic harm, which the trial court did not find, it was improper to rest a finding of bad faith upon plaintiff's decision to litigate a question that was ultimately resolved against her.
We further note that need and ability to pay are never irrelevant to the propriety of a counsel fee award. Those factors are simply given less weight in a case involving "bad faith" demonstrated by conduct during the litigation. Need and ability to pay are never irrelevant to the question. Thus, where we have approved of a counsel fee award based on bad faith where an award of fees might not otherwise be appropriate based on need and ability to pay alone, we have been careful to consider whether "the amount of the counsel fee awarded is compatible with [the recipient's] financial needs and the [payor's] ability to pay." Kothari, supra, 255 N.J. Super. at 513; see also Chestone, supra, 322 N.J. Super. at 259 (disapproving punishment of litigation misconduct through a counsel fee award that was grossly disproportionate to the amount in dispute). In this case, even if we had concluded that a finding of bad faith was sustainable, we could not find that the award is compatible with defendant's need and plaintiff's ability to pay.
Because the only basis for the award of the $7500 fee was plaintiff's refusal to settle the custody dispute after receipt of Dr. Wolf's report, we reverse.
Plaintiff also objects to two orders awarding defendant fees on motions. We address those orders separately.
Plaintiff contends that the trial court erred in awarding defendant a $700 fee on his motion to enforce the order requiring her to pay defendant $900 for counsel fees he incurred on her motion to bar Dr. Wolf's opinion and failure to pay Dr. Wolf's fee. Neither of the orders defendant sought to enforce stated a date for payment, and the court had not yet entered an order resolving all counsel fees issues. Although the trial court found that plaintiff had made no effort to comply with either order, the court failed to consider defendant's need, plaintiff's ability to pay, the fact that the orders did not require payment by a certain date, or the reasonableness of the fee charged by defendant's attorney on the enforcement motion. Because all of those factors weigh against an award of fees in favor of defendant on his "enforcement" motion, we reverse the order.
Plaintiff also claims that the court erred in awarding defendant $900 on her motion to exclude Dr. Wolf's report. While she did not prevail on that motion, the trial court made no findings relevant to the reasonableness of the fees charged by defendant's attorney and no finding relevant to "bad faith" that would warrant a fee award despite defendant's superior ability to fund the litigation. Because the record does not include evidence adequate to permit a finding of the requisite bad faith, we reverse that order.
The order requiring plaintiff to pay one-half of Dr. Wolf's fee also must be reversed. There is no question that Rule 5:3-3 gives the trial court discretion to appoint and allocate responsibility for payment of an expert. The Rule applies, however, "[w]henever the court, in its discretion, concludes that disposition of an issue will be assisted by expert opinion . . . ." R. 5:3-3(a). The Rule authorizes the court to "direct who shall pay the cost" when the court makes an appointment or the parties "agree on selection of an expert." R. 5:3-3(i).
Under the facts of this case, defendant's request for plaintiff to contribute to the expert must be addressed as if made pursuant to Rule 5:3-5(c) and N.J.S.A. 2A:34-23.*fn3 Dr. Wolf was not appointed by the court on its own motion or on joint application or agreement of the parties. Defendant filed a motion for change of custody and asked the court to compel an expert evaluation, and plaintiff opposed the motion. Because defendant wished to proceed with an expert, he could, and should, have retained one and, if necessary, moved to compel plaintiff to cooperate. See R. 5:3-3(h). A litigant should not be able to compel a sharing of expert fees, without regard to the standards applicable under Rule 5:3-5(c), simply by filing a motion seeking appointment of an expert that the litigant could retain. Rule 5:3-3(i) applies only when the court exercises its discretion to appoint an expert or both parties agree that the court should appoint an expert.
Applying the standards of Rule 5:3-5(c) and the judge's findings of fact on the motion for counsel fees, we exercise our original jurisdiction and conclude that plaintiff should not be required to contribute to the fee of the expert appointed on defendant's request and over her objection. See Chestone, supra, 322 N.J. Super. at 260 (declining to direct a remand and exercising original jurisdiction to resolve a fee dispute in order to avoid expenditure of additional funds litigating proper fees). As the trial court found, defendant has greater capacity to fund litigation expenses. Further, the trial court's finding of unreasonable litigation conduct inconsistent with good faith was based entirely on plaintiff's conduct after Dr. Wolf's report was completed. Because none of the factors governing award of fees and costs pursuant to Rule 5:3-5(c) favor an order compelling plaintiff to contribute to this expense, we reverse.
Plaintiff's final claim of error is based on the trial court's order directing suspension of defendant's child support obligation until such time as he recouped the $6487.50 plaintiff owed him for Dr. Wolf's fee. Our reversal of the order requiring plaintiff to make that payment for Dr. Wolf's fee moots the issue. We see no error in the court's decision to permit defendant to recoup, by way of offset, $3130.55 for child support that he had overpaid.
In conclusion, we affirm the custody order. We reverse the orders awarding defendant $7500, $900 and $700 for counsel fees and requiring plaintiff to pay defendant $6487.50 for Dr. Wolf. We remand so the trial court may enter an order consistent with this opinion and necessary to permit probation to credit properly the parties' accounts.