On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, FM-03-1184-94.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges S.L. Reisner and LeWinn.
This appeal stems from a post-judgment dispute over the parties' respective obligations to contribute to the cost of the special education needs of one of their children. Plaintiff Christine Decker appeals from the March 20, 2007 order of the Family Part requiring defendant Michael Decker to contribute eighteen percent of those expenses, amounting to $6,420; plaintiff further appeals the May 18, 2007 order of the Family Part denying her motion for reconsideration.
On appeal, plaintiff argues that the trial court erred in (1) imputing income to her; (2) determining the actual expenses at issue; and (3) determining that defendant had no ability to pay a larger proportion of those expenses. Having reviewed the record in light of these contentions, we affirm substantially for the reasons set forth by Judge John E. Harrington in his March 20, 2007 order, and for the reasons set forth by Judge Evan H. C. Crook, in his May 18, 2007 order.
Plaintiff owns and operates her own business, Amenity Rentals, Inc. In his March 20, 2007 order, Judge Harrington noted that plaintiff has failed to provide the Court with business tax returns despite requests for same. This business tax return is essential to determining Plaintiff's income both because as owner of her business Plaintiff may adjust her compensation and because certain business deductions permissible under the Internal Revenue Code are "added back in" as income available to pay child support under Appendix IX-B of the Child Support Guidelines. Many of these tax-deductible expenses overlap with expenses that might be claimed on a Case Information Statement [CIS] budget. In this instance, Plaintiff running significant expenses through her business would explain how she is able to maintain an annual budget of $250,368 despite a salary of only $96,516 and unearned income of $9,891.
Based upon the expenses set forth in plaintiff's CIS, the court calculated that she "experience[d] a deficit of $109,560[,]" leading the court to conclude "that this additional $109,560 represents income received by Plaintiff either through her business or through . . . sources not currently in evidence." The judge therefore imputed an additional $109,560 in annual income to plaintiff "as net income because it is extrapolated from the expenses on Plaintiff's budget and expenses are paid with net income." The court imputed total net income of $190,112 to plaintiff "without prejudice." The court added: "Plaintiff may bring [an] application before this Court to recalculate her income based upon the provision of her business tax returns and all applicable schedules and attachments."
Regarding defendant's income, the court relied upon an August 31, 2005 child support order imputing $49,002 in taxable income and $1,296 in non-taxable income to defendant, resulting in net income of $41,964. The court found "this imputation to be appropriate given that Defendant continues voluntarily as a full-time college student despite his ability to work. The Court finds no reason to distinguish income imputed for the payment of child support from income imputed for the payment of extraordinary expenses related to a child."
In her motion for reconsideration, plaintiff contended that her prior CIS contained numerous errors overstating her expenses and, therefore, the judge had erred in imputing income to her based on those inflated expenses. Plaintiff appended revised schedules of expenses totaling $104,784 per year. Plaintiff further certified that she had previously submitted her tax return including "the [IRS Form] K-1 income [she] receive[s] as a partner in [her] business." Plaintiff certified that she was re-submitting her K-1, as well as a profit and loss statement for the business dated December 31, 2005.
Plaintiff also contended that the costs incurred for the child's special education needs had increased from the amount she had presented in her prior motion, $35,664.10, to a total of $66,353.33. After deducting reimbursements paid by the child's school district, plaintiff asserted that her total out-of-pocket expenses were $40,045, plus $3,164.10 for transportation. Plaintiff additionally sought reimbursement of $1500 in legal fees she incurred on behalf of the child in a juvenile delinquency proceeding. Thus, plaintiff sought defendant's contribution to a total amount of $44,709.10.
In denying reconsideration, Judge Crook granted plaintiff the benefit of the doubt regarding her adjusted CIS expenses, recognizing "that mistake of a party is an appropriate ground for relief under R. 4:50-1 . . . ." However, the judge stated:
[E]ven assuming, . . . that the court were to recognize Plaintiff's reduced [CIS] budget, the Court does not have sufficient information to recalculate Plaintiff's income. The Court made its prior calculation in the absence of appropriate proof as to Plaintiff's income; the Court will not now recalculate Plaintiff's income in the continued absence of appropriate proof.
The court noted that, despite plaintiff's certification that she had attached her K-1, she had in fact attached the Schedule E from her personal tax return. The court stated that the submitted form "is not a substitute for the K-1 form, which would provide specific information such as the business's payments, dividends, gains, deductions, expenses, and distributions." As Judge Harrington had found, Judge Crook noted that the K-1 "is essential to calculation of Plaintiff's income because under Appendix IX-B of the Court Rules, ...