April 24, 2008
JOHN DERASMO, PLAINTIFF-APPELLANT,
JEAN DERASMO, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-885-97.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted April 14, 2008
Before Judges Graves and Sabatino.
In this post-judgment matrimonial case, John Derasmo ("the ex-husband") appeals the Family Part's order of July 12, 2007, as clarified in an amended order of July 27, 2007. The orders in question denied the ex-husband's motion for relief from his ongoing alimony obligations to his ex-wife, respondent Jean Derasmo ("the ex-wife"). The orders were entered without a plenary hearing.
Because the ex-husband's motion papers raised issues of changed circumstances as to the parties' present incomes and financial positions sufficient to warrant a plenary hearing, we remand the case to the Family Part for such further proceedings.
The parties were married in June 1973 and have two children. They were married for twenty-five years. At the time of their divorce in 1998, both of their children were residing with the ex-wife and were unemancipated. At that time, the ex-husband was making approximately $50,000 per year as a carpenter and the ex-wife was earning approximately $24,000 as a medical receptionist. The parties had no significant assets, other than their marital residence in Iselin with a market value of about $150,000, and about $16,000 in a joint investment account.
With the assistance of their respective counsel, the parties entered into a consensual Judgment of Divorce ("JOD") on September 28, 1998. Pursuant to the JOD, the parties equitably distributed the marital assets. The ex-husband also agreed to pay $400 per month in child support for each of the two children. Of significance to the present appeal, the ex-husband also agreed to pay $115 weekly to the ex-wife in permanent alimony.*fn1
The following year, 1999, the marital home was sold. After the mortgage balance on the marital home was paid off, each party received a net sum of approximately $37,000. The ex-wife invested her funds in a condominium in Parlin, where she lived for several years. Eventually, after the children became emancipated, the ex-wife moved into a house in Toms River that her mother purchased and then deeded to her. The ex-wife now leases the Parlin condominium, and receives rental income that allegedly is slightly less than the mortgage interest and realty taxes on the property.
Meanwhile, the ex-husband remarried. He relocated to South Florida in 1999 to do carpentry work in a construction business that his step-brother owned. Eventually, that business went bankrupt. According to the ex-husband's motion papers, he had difficulty in obtaining other steady employment in Florida at or near the $50,000 income level that he had previously sustained in New Jersey. On the other hand, the ex-husband noted that he can work outdoors in Florida on a year-round basis, and that the cost of living there is cheaper than it is in New Jersey.
According to the ex-husband's initial motion certification, his present wife developed medical problems that caused him to look for full-time work with medical insurance benefits. In April 2004, the ex-husband obtained a full-time maintenance job with Broward County in Florida for an annual gross salary of $31,584. The County position comes with health insurance coverage, as well as a potential pension. As the ex-husband's certification attested, "[t]he job security and benefits available to me with my current job are better for me than the uncertainty of the roofing work which I did for many years." He also noted that he was, at that time, fifty-two years old and "[did] not anticipate receiving anything more than modest increases" in his County salary. According to the ex-husband's CIS dated February 2007, his total monthly expenses, including his alimony obligations, are $5,464.25, or more than twice his net monthly earnings of $1,966.18.
The record further indicates that the ex-wife's annual earnings since the time of the JOD have slightly risen to $33,662 in 2005. According to her CIS dated March 2007, the ex-wife now owns about $40,000 in stocks, plus savings and other non-realty investments totaling another $22,000. Conversely, the ex-husband contends that he does not own any real estate or have any investments. He lives in a financed mobile home with a net equity of about $16,000.
After falling behind slightly in support arrears, the ex-husband filed a motion with the Family Part in May 2007, seeking to terminate his alimony obligation. The motion judge, without a plenary hearing, found that the ex-husband had not adequately shown a change in circumstances under Lepis v. Lepis, 83 N.J. 139 (1980) to obtain relief. The judge determined that the ex-husband had become voluntarily underemployed as a result of his move to Florida. He found no significance in the fact that the ex-wife's living expenses had been abated by her mother's gift of the Toms River house. The judge also perceived no material change arising from the rental income that the ex-wife receives from renting the condominium in Parlin.
In a supplemental letter pursuant to R. 2:5-1(b), the motion judge observed that the ex-husband "will take full advantage of his pension as a deferred benefit; thus, his decrease in income does not constitute a change in circumstances that would warrant the termination or reduction of alimony." The ex-husband now appeals that determination, on both substantive and procedural grounds.
Having considered the limited record before us in light of the applicable legal principles, we conclude that the motion judge should have conducted a plenary hearing, one that develops the financial proofs more extensively, before denying the exhusband's motion in its entirety. Consequently, the matter must be remanded for such a hearing.
It is well-established that our courts have "broad equitable powers . . . to review and modify alimony and support orders at any time." Weitzman v. Weitzman, 228 N.J. Super. 346, 353 (App. Div. 1988), certif. denied, 114 N.J. 505 (1989); see also N.J.S.A. 2A:34-23. In making such assessments, we are guided by the Supreme Court's holdings in Lepis, supra, 83 N.J. 139. First, the moving party must make a threshold prima facie showing that "changed circumstances have substantially impaired the ability to support himself or herself." Id. at 157. In considering a proffer of changed circumstances, it is often necessary for the court to delve into the financial status of both parties. Id. at 157-58. When a prima facie showing is made under Lepis, the court next must determine if a plenary hearing is warranted. Id. at 159. To obtain such a hearing, the moving party must "clearly demonstrate the existence of a genuine issue as to a material fact." Ibid. In making this determination, the court should look to the certifications and supporting documents of the parties. Ibid.
Once the plenary hearing stage is reached, there is no firm rule governing when an existing support obligation has ceased to be "'equitable and fair'"; rather, courts are to weigh several factors dependent on the nature of each case. Id. at 153 (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)). These factors include whether the change in circumstance is temporary or permanent; whether the change was voluntary; whether it was motivated by bad faith or a desire to avoid payment; and whether the change in circumstance renders the payor former spouse unable to pay. See Larbig v. Larbig, 384 N.J. Super. 17, 23 (App. Div. 2006) (finding a reduction in income to be temporary); Kuron v. Hamilton, 331 N.J. Super. 561, 572 (App. Div. 2000) (the movant's good faith is an "ingredient" to consider); Deegan v. Deegan, 254 N.J. Super. 350, 355 (App. Div. 1992) (finding that a voluntary change such as retirement may sometimes justify a modification). Courts cannot fairly undertake this balancing of equities when they lack sufficient evidence in the record to do so. Deegan, supra, 254 N.J. Super. at 354.
Although the matter is not free from doubt, we are persuaded that the ex-husband has advanced a prima facie showing of changed circumstances here, sufficient under Lepis, to trigger a plenary hearing. On the surface, his decision to move to Florida eight years ago to work in his step-brother's business, thereby plying his carpentry skills year-round in warmer weather and also reducing his living costs, does not appear to evince bad faith. The situation here differs from that in Larbig, where the former spouse seeking to abate his alimony obligations filed his motion only twenty months after the divorce judgment, and where he had only experienced a reduction in his earnings for that short time period. Larbig, supra, 384 N.J. Super. at 22-23. Here, if the ex-husband's certifications are accepted as true, his earnings have been depressed for nearly four years. See Beck v. Beck, 239 N.J. Super. 183, 189-90 (App. Div. 1990) (plenary hearing on Lepis motion was warranted in situation where, over a four-year period, the payor's income had diminished and the payee's income had increased).
We also cannot determine conclusively from the paper record that the ex-husband is voluntarily underemployed by virtue of his work for the County, or that he necessarily acted in bad faith in accepting a position that provides health coverage, in light of his present wife's alleged medical problems. We also note that, if the figures recited in the ex-husband's CIS are accepted as true, they suggest that "changed circumstances have substantially impaired [his] ability to support himself." Lepis, supra, 83 N.J. at 157. Meanwhile, the ex-wife's living costs appear to be considerably abated by the gift of the Toms River house from her mother.
The ex-wife disputes the ex-husband's reported expenses. She also is dubious of his asserted inability to find more lucrative employment in his trade. Given the nature of this record, those disputes are best sorted out in a plenary hearing. In such a proceeding, the judge will have a chance to assess the credibility of the movant's assertions, as tested through the rigors of cross-examination. See Conforti v. Guliadis, 128 N.J. 318, 322 (1992) (requiring plenary hearings to resolve material factual disputes); Eaton v. Grau, 368 N.J. Super. 215, 222 (App. Div. 2004).
We do not pre-ordain the outcome of such a hearing. It may well be that the ex-husband is not entitled to any abatement of his alimony at all, or only a partial reduction rather than the complete termination sought in his motion. We also concur with the motion judge's general observation that the ex-husband's decision to take a lower-paying job with pension opportunities, in effect trading off present income for future financial security, should not automatically penalize his ex-wife. We simply hold that the matter must be remanded for a full hearing, in which the total mix of facts, circumstances and equities can be developed and weighed.
The orders in question are vacated without prejudice, and a plenary hearing shall be conducted, following any necessary discovery that counsel wish to pursue and the exchange of updated CIS forms. The Family Part also retains the discretion, if any alimony reduction is ordered, to preserve the exhusband's original motion filing date concerning the computation of arrears, potential credits or refunds.
Vacated and remanded. We do not retain jurisdiction.