June 19, 2008
RANDI G. KINNEY, PLAINTIFF-APPELLANT,
FRANCIS K. KINNEY, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-0310-03C.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted June 2, 2008
Before Judges C.S. Fisher and C.L. Miniman.
In this appeal, we review a determination, rendered at the conclusion of a plenary hearing, that the retirement of defendant Francis K. Kinney from his position as police chief in Highland Park was involuntary and was a changed circumstance that permitted a reduction in the child support and alimony obligations established in a judgment of divorce that was entered less than three months prior to his motion for a reduction. Because we conclude that the judge failed to thoroughly consider the standards set forth in Deegan v. Deegan, 254 N.J. Super. 350 (App. Div. 1992), we reverse and remand for additional proceedings.
The parties' 1981 marriage, which produced two children, was dissolved by way of a judgment entered on September 28, 2006. The preamble of the divorce judgment indicates that its terms were based on the parties' "partial settlement" of February 23, 2004. The judgment also indicates that the partial settlement was "confirmed" by the court on October 25, 2004. Neither the judgment nor the record on appeal, however, delineates the terms that were agreed upon in 2004 as opposed to those that remained unresolved but ultimately included in the judgment entered two years later.
The judgment directs defendant to pay his former wife, plaintiff Randi Goldberg, $275 per week in permanent alimony and $324 per week in child support. The judgment expressly indicates that the amount of these obligations was based upon defendant's income of $2,200 per week as Chief of Police of Highland Park and plaintiff's income of $873 per week as an office worker with Plastic Surgery Arts.
On December 15, 2006 -- less than three months after entry of the judgment of divorce -- defendant moved for a downward modification, citing as a changed circumstance a reduction of his income to the gross annual amount of $80,510, which consists of pension payments to which he was entitled based upon his retirement a few months earlier. Defendant asserted in his sworn statement that his income was, as a result of his retirement, "a full one third less [than] my prior income."
Plaintiff opposed the motion. Although defendant's moving papers made no mention of where he was then employed, plaintiff argued that she understood defendant was working as a real estate broker on Long Beach Island and objected to the fact that he failed to attach any pay stubs or other indicia of his income through this other employment. Plaintiff also asserted that she believed defendant "planned all along to retire, and negotiated in bad faith during the divorce proceedings."
In reply, defendant asserted that he had "received no pay at [his] current employment" and, thus, had no pay stubs to provide. He also denied that his retirement was voluntary or precipitous, claiming:
My department and the Middlesex County Prosecutor[']s Office were conducting a criminal investigation [regarding certain Highland Park officials, including defendant's] direct supervisor. This is a confidential criminal matter that is still open and I am not at liberty to elaborate in this writing. Suffice it to say that I was subject to harassment and interference directly from my supervisor and that when I attempted to remedy the situation the elected body chose to support [my direct supervisor]. I was subject to undue political backlash, and personally harassed by my immediate supervisor, who was directly interfering with the criminal investigation.
The motion judge entered an order on February 2, 2007, which directed the completion of discovery within sixty days and indicated the need for a plenary hearing to resolve the parties' factual disputes.
The plenary hearing occurred on October 9, 2007, before a different judge. Only the parties testified. At its conclusion, the judge rendered an oral decision the entirety of which is the following:
This is an application to eliminate alimony, and a reduction of child support.
The major issue in the case is whether or not the retirement of the [d]efendant in the case was in fact voluntary . . . as [that phrase] is commonly used. That is, was it voluntary in that it was not contemplated by the parties, and was it voluntary in that it was done in order to affect the award of alimony and child support.
The court finds as a matter of fact that the reduction [in] income by [defendant] while it was not anticipated, his retirement as agreed to by both parties, had been within their understanding when he reached 25 years of service with the Police Department of Highland Park. He stayed beyond that period of time, and then voluntarily -- then retired when an investigation that he was conducting, at least according to him, and the politic[al] winds changed in Highland Park making his position untenable for which he retired. He chose at that time to go to work in the real estate business. What he didn't anticipate was the tanking of the real estate, the single-family home real estate market in New Jersey.
So the [c]court finds that this was not an act that was motivated by any of the indicia for reducing the alimony and child support. The court having made that finding and having run the new guidelines in the matter, the child support shall be $181.00 per week for the children, and the alimony shall be negligible. It will be reduced to $18.00 per week.
An order memorializing this determination was entered the same day. Plaintiff appealed, arguing that the judge abused his discretion by failing to apply the standards set forth by this court in cases such as Deegan and Silvan v. Sylvan, 267 N.J. Super. 578 (App. Div. 1993). We now reverse.
The evidence provided to the judge at the hearing was not extensive. There was no dispute that defendant had been employed as the Chief of Police in Highland Park earning $118,902.07 per year, and that, on July 1, 2006, shortly before entry of the judgment of divorce, defendant retired. Defendant claimed, based upon his own testimony, and without corroboration, that he had not retired voluntarily but as a result of harassment and political backlash related to an investigation he was overseeing. In addition, defendant stated that his retirement was justifiable because he had already served twenty-eight years on the force despite being only fifty-one years old at the time of his retirement. He also claimed, and plaintiff agreed, that during the course of the marriage she and defendant understood that he would retire from the force after twenty-five years and thereafter return to school to obtain the credentials to become a teacher.
Following his retirement, however, defendant earned a real estate license and accepted a sales associate position with Diane Turton Realtors. He pursued this employment for approximately six months, allegedly earning no income. Defendant testified that he also conducted a job search for other positions in security, attempting to leverage his experience in law enforcement, but was unable to obtain that type of employment because he lacked a college degree or because he was overqualified for the position based on his level of experience and prior salary. Defendant also asserted at the hearing that his present income consisted of the approximate $81,000 per year pension payments and an additional $7.15 per hour from his part-time job at a local supermarket. In addition, it was revealed that defendant had remarried and had assumed the burden of his and his new wife's shelter expenses of approximately $2,150 per month; his new wife was not employed at the time of the hearing.
Plaintiff testified that she earned approximately $53,000 per year from her job as an insurance coordinator with Plastic Surgery Arts.
N.J.S.A. 2A:34-23 establishes that alimony and child support orders are always subject to modification upon a showing of changed circumstances. Lepis v. Lepis, 83 N.J. 139, 145 (1980). The party seeking modification "'must demonstrate that changed circumstances have substantially impaired the ability to support himself or herself.'" Deegan, supra, 254 N.J. Super. at 354 (quoting Lepis, supra, 83 N.J. at 157). An increase or decrease in the payor's income is recognized as a change in circumstances, Lepis, supra, 83 N.J. at 151, but a decrease in income attributable to one's voluntary retirement does not automatically justify a modification, see, e.g., Lissner v. Marburger, 394 N.J. Super. 393, 399 (Ch. Div. 2007).
In Deegan, we identified the factors to be considered in determining whether such a retirement as that which occurred here warrants a modification, such as "the age [of the party], [the] health of the party, his [or her] motives in retiring, the timing of the retirement, his [or her] ability to pay maintenance even after retirement[,] and the ability of the other spouse to provide for himself [or herself]." Deegan, supra, 254 N.J. Super. at 357 (quoting In re Marriage of Smith, 396 N.E.2d 859, 863 (Ill. App. Ct. 1979)). This test also requires consideration of the "reasonableness" of the early retirement, the expectations of the parties, and the likelihood that the payee will be able to maintain the standard of living despite a decreased level of support. Deegan, supra, 254 N.J. Super. at 357-58 (citing Dilger v. Dilger, 242 N.J. Super. 380, 387-88 (Ch. Div. 1990)). Finally, even in a case in which the retiring spouse has been shown to have acted in good faith and has advanced entirely rational reasons for his or her actions, the trial judge will be required to decide one pivotal issue: whether the advantage to the retiring spouse substantially outweighs the disadvantage to the payee spouse. Only if that answer is affirmative, should the retirement be viewed as a legitimate change in circumstances warranting modification of a pre-existing support obligation. [Deegan, supra, 254 N.J. Super. at 358.]
In Silvan, we again addressed the issue and provided a list of factors, largely incorporating those outlined in Deegan, including: the age gap between the parties; whether at the time of the initial alimony award any attention was given by the parties to the possibility of future retirement; whether the particular retirement was mandatory or voluntary; whether the particular retirement occurred earlier than might have been anticipated at the time alimony was awarded; and the financial impact of that retirement upon the respective financial positions of the parties. It should also assess the motivation which led to the decision to retire, i.e., was it reasonable under all the circumstances or motivated primarily by a desire to reduce the alimony of a former spouse. A court may also wish to consider the degree of control retained by the parties over the disbursement of their retirement income, e.g., the ability to defer receipt of some or all. It may also wish to consider whether either spouse has transferred assets to others, thus reducing the amount available to meet their financial needs and obligations. [267 N.J. Super. at 581.]
These factors, as well as the statutory factors contained in N.J.S.A. 2A:34-23(a), create the framework by which the court may assess the propriety of a modification of child support based on a voluntary retirement. Lissner, supra, 394 N.J. Super. at 396.
Here, after considering the parties' testimony, the trial judge summarily concluded that defendant had not retired voluntarily because he had been constructively forced out of his position as Chief of Police as a consequence of "untenable" working conditions. The judge also found that defendant believed he could find work as a real estate agent and had not anticipated a sharp decline in the housing market. As a result, the trial judge concluded that the retirement was not voluntary within the meaning of Deegan and ordered a reduction in both the child support and alimony payments.
The judge's few conclusory findings do not conform with the requirements of the test outlined in Deegan and Silvan. The judge concluded that defendant had retired in good faith and had done so for understandable reasons, although this finding was based solely on defendant's own -- and otherwise unsubstantiated -- non-specific assertions.*fn1 Even if we assume this evidence was sufficient to permit such a finding, the judge's decision was flawed because his analysis began and ended with that finding. The judge mistakenly failed to consider many of the other factors that might potentially weigh against defendant's position, including the facts that at the time of retirement he was only fifty-one years old and in good health. Indeed, defendant's alleged inability to meet his pre-existing financial obligations to plaintiff and their children -- to which he had bound himself less than three months prior to the filing of his Lepis motion -- seems largely generated by the fact that he had assumed sole responsibility for the support of his new wife.*fn2
The trial judge also mistakenly failed to determine whether the benefits to defendant in retiring substantially outweighed the disadvantages imposed upon plaintiff and the children. Deegan, supra, 254 N.J. Super. at 358. In short, defendant offered no clear reason why it would be in the children's best interests to have support reduced as a result of his retirement. The trial judge stated that because defendant had already worked in the police department for over twenty-five years, he had reached a point where retirement was an option, and he was not obligated to continue working. Of course, even under Deegan, a divorced spouse is entitled to retire or switch career paths despite child support and alimony obligations. But, the real issue is whether the payor's desire to switch jobs or careers substantially outweighs the needs of the payee and the children as established by the judgment of divorce. As Justice (then Judge) Long stated in Deegan,
Any party is free to retire, take a vow of poverty, write poetry or hawk roses in an airport, if he or she sees fit. The only limitation is discontinuance of the financial aid the former spouse requires.
The reason for this is that the duty of self-fulfillment must give way to the pre-existing duty which runs between spouses who have been in a marriage which has failed. [254 N.J. Super. at 358-59.]
Because the trial judge's decision failed to indicate that the judge considered or applied the many factors outlined in Deegan, we reverse and remand for further findings. We would also question whether the drastic reduction of the alimony obligation -- to $18 per week -- was warranted when defendant's income through his pension and additional part time work constituted at least 70% of his earnings as police chief. Even if the evidence were sufficient to allow a reduction based upon the factors contained in Deegan and Silvan, the judge should reconsider in the proceedings that follow whether those circumstances warranted such a significant alimony reduction from $275 per week to $18 per week.
In complying with our mandate, the trial judge may reopen the hearing and take such additional testimony and receive such additional evidence as he deems appropriate.
Reversed and remanded. We do not retain jurisdiction.