March 19, 2008
SUSAN L. INCREMONA, PLAINTIFF-RESPONDENT,
RICHARD E. INCREMONA, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, Docket No. FM-03-6016-03-W.*fn1
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 16, 2008
Before Judges Axelrad, Sapp-Peterson and Messano.
Defendant, Richard E. Incremona, appeals from that portion of the May 4, 2007 order directing an accounting and payment to plaintiff of twenty percent of defendant's unearned income.*fn2 We reverse.
The court entered a dual judgment of divorce (JOD) on October 13, 2004. The JOD incorporated a property settlement agreement (PSA) reached between the parties that, among other issues, addressed child support for the two children born of the marriage and alimony. Under the agreement, both parties were awarded joint legal custody of the children, with plaintiff named as the parent of primary residential custody. Of import to our discussion is Paragraph 5 of the agreement captioned "CHILD SUPPORT." The pertinent portions of that section provide:
5.A. Commencing November 1, 2004, the Husband shall pay to the Wife the sum of Two Hundred Sixty-three Dollars ($263.00) per week as and for child support for the Children.
D. In addition to the alimony set forth above the Husband shall pay to the Wife an amount equal to twenty (20%) pe[rc]ent of all income actually distributed to him (i.e., income actually paid to him as opposed to reported on his tax return) from his family trusts and partnerships, not to exceed $25,000.00 per annum. . . . Payment of sums from the Husband to the Wife pursuant to the provisions of this paragraph shall be deemed additional child support and shall not be deducted by the Husband nor included as income by the Wife on Federal or State income tax returns. In the event that Husband loses the ability to deduct a charitable loss carry[-]forward (the parties expect that this deduction will be available to the Husband through 2008, said circumstance shall constitute, prima facie, a change of circumstance entitling the Husband to apply to reduce the alimony and child support provided for in this agreement, but such reduction if granted will not exceed the amount paid as additional child support pursuant to this subparagraph. The obligation to pay such additional child support shall continue for so long as one child remains unemancipated, when the percentage shall reduce to 15% and terminate upon emancipation of both Children.
In November 2005, the Division of Youth and Family Services (DYFS) effectuated an emergency removal of the two children from plaintiff's physical custody and placed them with defendant. It subsequently filed a verified complaint alleging abuse and neglect of the children by plaintiff. A month later, defendant filed a motion to terminate his child support obligation, to compel "plaintiff to reimburse defendant for all child support and additional child support [plaintiff] received since November 15, 2005[,]" and to compel "plaintiff to pay child support to defendant." In his certification in support of the motion, defendant stated, "Pursuant to the terms of the Property Settlement & Support Agreement . . . . I pay child support to her in the amount of $263.00 per week, plus 20% of my monthly unearned income as additional child support."
Prior to the return date of the motion, on January 19, 2006, plaintiff signed legal and physical custody of the children over to defendant. As a consequence, Judge Peer entered an order dismissing the verified complaint.
On February 3, 2006, the court entered an order directing that "[d]efendant's obligation to pay child support and additional child support to the plaintiff is hereby terminated as of [December] 28, 2005." Additionally, the court ordered plaintiff to "reimburse defendant for all child support and additional child support paid since [December] 28, 2005[,]" and directed the parties to exchange Case Information Statements (CIS) in order to determine the extent of plaintiff's child support obligation to defendant. No motion for reconsideration or notice of appeal was thereafter filed.
In August 2006, defendant filed a motion to compel plaintiff to pay child support, to set child support arrears, and to make all payments payable through the New Jersey Family Support Center. According to the certification submitted in support of the motion, over the next several months following the court's February 3 order, the parties' attorneys exchanged correspondence that addressed the court's order, with defendant claiming that he submitted his CIS within thirty days after the order was entered, and plaintiff failing to do so. Further, defendant stated that when plaintiff finally submitted the CIS, she failed to disclose what defendant claimed was a "substantial profit she realized from the sale of the [former marital home,]" and that over the several months following the entry of the court's order, "not once has plaintiff made an effort to negotiate or address her obligation to financially support our children upon receiving [documents submitted by defendant]." On September 13, 2006, the court entered an order transferring the matter to Burlington County.
It was not until early November that plaintiff opposed the motion and cross-moved for attorney's fees. In her certification, plaintiff acknowledged that she received "$600.00 per week in alimony[.]" She disputed defendant's contention that he had acted in good faith to resolve the issues, pointing out that defendant's CIS contained errors which her attorney identified, including the omission of his "nearly $50,000 in unearned income received by him[,]" his failure to discuss the children with her, and his interference with her relationship with the children. Plaintiff concluded her certification by stating:
Under all of the circumstances in this matter I respectfully suggest to the Court that there is no obligation, and there should be no obligation upon me to provide support directly to the defendant for our children. I do spend money for them when they are with me. More importantly, I am providing for their future by maintaining a home, and by obtaining an education and a skill that will translate into higher earning power for me so that I can provide for my children in the future. Accordingly, I respectfully request that the Court deny all relief sought by the defendant and require that he pay my attorney's fees for the within application.
On November 17, 2006, the Family Part judge hearing the matter in Burlington County entered a post judgment order granting defendant's motion in all respects except as to attorney's fees. In the statement of reasons included in the order, the court noted:
The original PSA entitles plaintiff to 20% of the income distributed to husband from his family trusts and partnerships not to exceed $25,000.00. Specifically it was to be paid in addition to alimony but characterized as child support and non-taxable. As such, these monies have not been included for either party for purposes of the new calculation. It is noted, defendant has not requested a modification of this provision. He argues plaintiff's monthly expenses have decreased while her income has remained the same since the entry of the PSA.
Nothing in the PSA specifically stated that the parties intended that the percentage of unearned income defendant received from the family trust was to be viewed as additional alimony to plaintiff. Rather, the PSA specifically characterized the payments as "additional child support."
In early March 2007, plaintiff filed a motion seeking various relief, including an order,
[c]ompelling the defendant to comply with the provisions of Paragraph 5D of the Property Settlement Agreement requiring that he pay, in addition to alimony, an amount equal to twenty percent (20%) of all income actually distributed to him from his family trust and partnerships and requiring that defendant within ten (10) days of the date of the Court's determination, make a full accounting of all such monies for the years 2005 and 2006.
In her certification in support of the motion, plaintiff indicated that she had not received an accounting from defendant related to his unearned income for the years 2005 and 2006 nor any payments that may have been due to her. Plaintiff pointed out that the court, in its November 2006 order, noted that defendant did not seek modification of his obligation to make payment of "twenty percent (20%) of all income actually distributed to him from his family trust and partnerships" to her. Plaintiff stated further that "[t]his payment was specifically made payable in addition to alimony, although as the Court correctly noted, it was characterized as child support so that it was made non-taxable."
In response, defendant, appearing pro se, disputed that the percentage of unearned income payable to plaintiff was intended to be additional alimony. Defendant noted that the PSA addressed unearned income in the child support section of the agreement and specifically provided that this additional payment would change upon the emancipation of one child and terminate upon the emancipation of both children. Defendant stated that he stopped paying the additional child support to plaintiff in accordance with Judge Peer's February 3, 2006 order in which the judge ordered that "[d]efendant's obligation to pay child support and additional child support to the plaintiff is hereby terminated as of [December] 28, 2005." Defendant noted further that plaintiff did not seek reconsideration of the order nor file an appeal. Defendant argued that plaintiff's motion was an effort on her part to "pervert the Court's Post-Judgment Order of November 17, 2006[,]" which defendant claimed was "factually incorrect in only one respect: it stated that I had not requested relief from the additional child support payments I was obligated to make under Paragraph 5D of the Agreement" and "reflected an oversight with regard to the scope of Judge Peer's Order of February 3, 2006." Defendant also claimed that his attorney had advised him that this discrepancy was brought to the court's attention during oral argument and that the "Court indicated the correction would not affect its judgment."
During oral argument on the motion on May 4, 2007, the motion judge rejected defendant's argument that the additional support was child support rather than alimony. In response to defendant's question whether the court's decision was based upon a credibility determination derived from the court's review of the affidavits or certifications, the court responded, "[w]ell, as far as credibility, I think it's a legal argument and it's a fair reading of the agreement." The court also indicated that it was the court's recollection that when the November 2006 motion to compel plaintiff to pay child support was argued:
[A]s to whether or not this amount should be included for purposes of that application and if I remember correctly, it was [defendant's attorney]'s argument that that amount should be included in the plaintiff's income. So apparently it was not as . . . clearly defined in the past because your own attorney argued . . . there was an inference that this money was to still continue to be paid and the argument was that it should be included in the child support, which I denied that application.
In the order entered on that same date, the judge noted "the parties' agreement clearly links the payments to payment of alimony and not custody." The court ordered, Plaintiff's application to compel defendant to, in addition to alimony, provide 20% of all income actually distributed to him from his family trust pursuant to the parties'
Property Settlement Agreement and requiring he make an accounting of all such monies for the years 2005 and 2006 within ten (10) days of the return date of this application is granted. Defendant's application for a stay of this paragraph of the order pending an appeal is denied.
On appeal, defendant raises the following points for our consideration:
THE ORDER BELOW SHOULD BE REVERSED, BECAUSE THE FAMILY COURT ERRED BY DISREGARDING JUDGE PEER'S VALID, UNAPPEALED ORDER THAT TERMINATED DEFENDANT'S OBLIGATION TO PAY PLAINTIFF ADDITIONAL CHILD SUPPORT.
THE ORDER BELOW SHOULD BE REVERSED, BECAUSE THE FAMILY COURT ERRED BY REFUSING TO ENFORCE THE PLAIN LANGUAGE OF THE PROPERTY SETTLEMENT AGREEMENT INSOFAR AS THE PAYMENTS IN PARAGRAPH 5D WERE DEEMED ADDITIONAL CHILD SUPPORT.
ALTERNATIVELY, THE ORDER BELOW SHOULD BE REVERSED AND THE MATTER REMANDED FOR AN EVIDENTIARY HEARING WHERE CREDIBILITY FINDINGS CAN BE MADE AS TO THE PARTIES' INTENT BEHIND PARAGRAPH 5D OF THE PROPERTY SETTLEMENT AGREEMENT.
The basic contractual nature of matrimonial agreements has long been recognized. Harrington v. Harrington, 281 N.J. Super. 39, 46 (App. Div.) (citing Petersen v. Petersen, 85 N.J. 638, 642 (1981); Massar v. Massar, 279 N.J. Super. 89, 93 (App. Div. 1995)), certif. denied, 142 N.J. 455 (1995). At the same time, "[t]he law grants particular leniency to agreements made in the domestic arena," thus allowing "judges greater discretion when interpreting such agreements." Guglielmo v. Guglielmo, 253 N.J. Super. 531, 542 (App. Div. 1992).
"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, supra, 279 N.J. Super. at 93. A court must discern the intention of the parties from the terms as written and enforce the contract as intended. See Pacifico v. Pacifico, 190 N.J. 258, 266 (2007). To that end, judges presiding over family matters are accorded greater discretion when interpreting agreements made in the domestic arena. Ibid. This reflects appellate courts' recognition of the family courts' special jurisdiction and expertise in family matters. Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). Nonetheless, while we ordinarily defer to the factual findings of a Family Part judge, those findings are only "binding on appeal when supported by adequate, substantial, credible evidence." Cesare, supra, 154 N.J. at 412 (citing Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974)).
In this matter, the motion court concluded that the language "additional support" contained in Paragraph 5D of the PSA was intended to be additional alimony to plaintiff. Although the court advised defendant that its decision was based upon a "fair reading of the agreement[,]" the record demonstrated that the court also relied upon what it believed to have been the representations of defendant's attorney in an earlier proceeding (November 17). Apparently, the court also relied upon the recollections of plaintiff's attorney as to what was argued in that earlier proceeding and, more specifically, his comments relating to the underlying rationale for the "additional support" provision in the PSA. However, as plaintiff's counsel acknowledged during the November 17 oral argument, his adversary at that time was not the attorney who worked with him in drafting the PSA, although both attorneys were from the same firm.
Further, despite the judge's recollection otherwise, the transcript of the November 17, hearing does not contain any representation or suggestion from defendant's attorney that the unearned income payable to plaintiff be "included in the plaintiff's income." Rather, it was plaintiff's attorney who initiated the discussion about unearned income. This was done, however, as part of plaintiff's argument against being required to pay child support. Plaintiff's counsel pointed out that in addition to defendant's salary as an assistant prosecutor, he also received unearned income as part of a family trust. Counsel then proceeded to give the court some background relative to how the parties intended to treat the unearned income:
[PLAINTIFF'S COUNSEL]: [W]e calculated that in the amount of alimony and in the amount of that 20 percent overage that came through. I was the original attorney for my client throughout these proceedings. [Defendant's counsel] was there when we settled the case. He wasn't the original attorney. It was someone else and then Mr. Incremona was pro se for a while and then [defendant's counsel] came in.
But when we negotiated that, we took that into account principally on the amount of alimony and then recognized that because he had these terrific tax benefits that the payment of that percentage to come to my client should come in a tax free payment.
And you recognized that in your tentative decision.
At the conclusion of the November 17 hearing, the judge's decision included the following statement.
I did not include the trust and other family income of which the plaintiff continues to receive 20 percent and there was no modification requested regarding that provision so the Court also expects that Mrs. Incremona, at the end of this year, will receive her 20 percent in accordance with the judgment of divorce.
During the February 3, 2006 oral argument, Judge Peer framed the issues before the court as including defendant's application "to have child support terminated that he has been paying." The judge then described what defendant was paying in terms of child support: "He paid child support directly to the wife in the amount of [$]263 a week, plus 20 percent of his, what they term monthly unearned income as in partnerships or trusts." Assuming Judge Peer was incorrect in stating that defendant was seeking to terminate his obligation to pay to plaintiff "20 percent of his . . . monthly unearned income from partnerships[,]" presumably, plaintiff's counsel would have immediately corrected the court or objected to Judge's Peer's characterization of the issues, particularly since his adversary, who participated in drafting the PSA, was present at that proceeding. Yet, no objection was forthcoming then, and, thereafter, no reconsideration motion or appeal was filed.
We therefore agree with the argument advanced by defendant that plaintiff was collaterally estopped from relitigating the issue of "additional child support." The doctrine of collateral estoppel bars a party from relitigating an issue that a court has previously adjudicated. State, Dept. of Law and Pub. Safety, Div. of Gaming Enforcement v. Gonzalez, 273 N.J. Super. 239, 254 (App. Div. 1994), aff'd, 142 N.J. 618 (1995).
Application of the doctrine promotes finality and repose in litigation, prevents needless litigation, and avoids the expense of duplication. Olivieri v. Y.M.F. Carpet, Inc., 186 N.J. 511, 522 (2006). Ordinarily, collateral estoppel is invoked where a party satisfies a five-prong test:
(1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the court in the prior proceeding issued a final judgment on the merits; (4) the determination of the issue was essential to the prior judgment; and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding. [Id. at 521.]
The doctrine is rooted in equity but will not be applied, even where the requirements for its application have been met, if to do so would be unfair. Id. at 521-22 (citing Pace v. Kuchinsky, 347 N.J. Super. 202, 215 (App. Div. 2002)).
As we noted earlier, during the February 3, 2006 oral argument on defendant's motion to terminate "child support" and "additional child support[,]" Judge Peer: (1) expressly framed the issue before him as, among other issues, terminating defendant's obligation to pay "child support" and "additional child support"; (2) specifically identified the "additional child support" at issue as twenty percent of defendant's share of the unearned income from his family trust; and (3) issued an order terminating defendant's obligation to pay the "additional child support." Additionally, the judgment terminating "additional child support" was final, and plaintiff and defendant were parties to the proceeding. In our view, application of the doctrine under these circumstances is both fair and appropriate. Ibid. Nothing in the record before the court, when it considered plaintiff's motion to compel an accounting and payment of her purported share of any unearned income distributed to defendant from the family trusts, reflected any new events, conditions, or evidence that leads us to conclude that application of collateral estoppel would be unfair. Olivieri, supra, 185 N.J. at 521-22.
Likewise, a court of equal jurisdiction has no right to reconsider an issue resolved in a prior proceeding absent different evidence, new controlling authority or specific findings regarding why the judgment was clearly erroneous. Underwood v. Atlantic City Racing Ass'n, 295 N.J. Super. 335, 340 (App. Div. 1996), certif. denied, 149 N.J. 140 (1997). None of these circumstances were evident here.