August 15, 2008
SABATINO A. RUSSO, PLAINTIFF-APPELLANT,
PATRICIA A. SANSON, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM 12-1252-97.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 22, 2008
Before Judges Winkelstein and LeWinn.
Plaintiff Sabatino A. Russo appeals from various provisions of the Family Part order entered on July 29, 2007, recalculating his child support obligation.
The parties were married on September 29, 1990. They have one child, a son born July 18, 1993. The parties were divorced by judgment entered on March 10, 1998, incorporating their property settlement agreement (PSA).
Paragraphs (6)(A) and (B) of the PSA set forth plaintiff's child support obligation:
(A) Effective upon the execution of this Agreement, the Husband shall pay the Wife as and for child support the sum of $1,500.00 Dollars per month. Said child support shall be payable directly to the Wife on or before the first day of each month. The parties agree and acknowledge that this monthly child support is based upon the Husband earning approximately $200,000.00 Dollars per year in gross income. Should the Husband's actual annual gross income exceed $200,000.00, then the Husband shall pay the Wife Fifteen point Six Percent (15.6%) of his gross earnings in excess of $200,000.00 as additional child support. This additional child support shall be paid to the Wife in a lump sum payment on or before February 15th of the following year. To verify the Husband's annual earnings, he shall provide the Wife with a copy of his W-2 and 1099 forms on or before February 1st of each year and a copy of Federal tax return by April 15th of each year.
(B) The parties shall pay the cost of the Wife's work related child care expenses in proportion to their respective incomes. The Husband agrees to pay Seventy-Five Percent (75%) of the child's summer camps, extracurricular lessons, sports, recreational programs and other activities.
Following the divorce, plaintiff remarried and became the father of twins on November 21, 2000. At the time plaintiff filed his motion to recalculate child support, on May 9, 2007, the twins were six and a half years old.
In his motion, plaintiff stated that his child support obligation had not been reviewed in the nine years since entry of the final judgment of divorce. He alleged "a change in circumstance warranting a recalculation of child support[,]" namely, the birth of his two other children. Plaintiff sought an "other dependent deduction" pursuant to the New Jersey Child Support Guidelines. Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2290-91 (2008). Plaintiff also noted the fluctuations in his income over the preceding six years, and sought to have the court use his three-year average income when calculating child support. Id. at 2309.
The record reveals that plaintiff's gross annual income for the years 2001 through 2006 was as follows:
2001 - $284,795
2002 - $332,224
2003 - $192,292
2004 - $148,443
2005 - $273,333
2006 - $485,856
Plaintiff also sought to eliminate the requirement that he pay fifteen point six percent of his gross annual income in excess of $200,000 as additional child support, which he contended was included in the PSA "in order to factor in [his] excess earnings over the amount covered under the child support guidelines." Plaintiff argued that "the current version of the Child Support Guidelines now fully covers [his] and [Defendant]'s combined net income." Therefore, he argued that child support should be recalculated using each party's current net income.
Pursuant to that formula, plaintiff submitted a Child Support Guidelines worksheet that set his obligation at $361 per week, and apportioned the parties' respective net incomes at eighty-one percent for plaintiff and nineteen percent for defendant. Plaintiff also sought to have the parties share the child's private school expenses according to those percentages.
Plaintiff further sought to require defendant to provide an accounting of any college funds she had established for the child. This request was based upon paragraph (6)(D) of the PSA, which provides:
Each party shall contribute to the college expenses of the child including application and testing fees, room, board, tuition, fees, transportation, books and related expenses in proportion to his or her income and each party's ability to pay. The college shall be selected by the child, with the agreement of both parents, giving due consideration to the financial ability of both parties to pay the costs. The parties agree that the Wife shall immediately open an account as custodian for the child's benefit to be used to pay a portion of the child's college expenses. Each party shall deposit at least $200.00 per month into the child's custodial account. Upon execution of this Agreement, the Husband shall immediately commence making monthly deposits into this custodial account and the Wife shall commence making such monthly deposits upon securing full-time employment. Such monthly deposits shall be made by the parties on or before the 15th day of each month. The Wife agrees to provide the Husband with annual statements from the child's custodial account upon request.
In her cross-motion, defendant sought to enforce plaintiff's obligation to pay fifteen point six percent of his gross annual earnings in excess of $200,000 as child support; to compel plaintiff to pay $44,593 representing his additional child support obligation for 2006 due pursuant to that provision; and to enforce various other support obligations in the PSA.
The trial judge decided these motions without oral argument. In his decision of June 29, 2007, the judge denied plaintiff's request to eliminate his obligation to pay fifteen point six percent of his gross annual income in excess of $200,000 as child support. The judge gave his reasons as follows:
The Court declines from altering the PSA to the extent that it awards 15.6% of the Plaintiff's earnings exceeding $200,000.00. While courts may modify child support obligations described in [a] property settlement agreement . . ., public policy favors enforcement of Property Settlement Agreements that are fair and just, as settlement of litigation ranks high among public policy goals. The parties' PSA reflects an exchange of bargained-for consideration; the parties agreed that the Plaintiff would pay a basic child support obligation based on his earnings of $200,000.00 in addition to 15.6% of his gross earnings exceeding said amount.
The Court's determination that the Plaintiff's obligation shall be modified only to the extent his income reaches $200,000.00 fully comports with the factors set forth in [N.J.S.A.] 2A:34-23(a). . . .
Given the Plaintiff's average income of nearly $300,000.00 in addition to his earning capacity to earn more, as evidenced by his 2006 earnings of $485,856.00, the Court declines from modifying the PSA in this regard. In light of this analysis and the strong public policy favoring the enforcement of property settlement agreements, the Plaintiff's support obligation shall be modified only as to the base amount. The parties shall comply with all other aspects of the PSA.
The judge granted plaintiff's request that the parties share the child's private school expenses in proportion to their income. Noting defendant's assertion that the parties had an "informal agreement" by which plaintiff was to pay 100% of those expenses, the judge "deem[ed] it equitable to require the parties to pay in proportion to their respective net incomes because [that] agreement was not memorialized in the PSA nor by way of a subsequent written agreement." The judge ordered that plaintiff be responsible for 100% of private school expenses for the 2006-2007 school year; thereafter, commencing with the 2007-2008 school year, the parties would share the expenses as ordered.
The judge ordered both parties to comply with paragraph (6)(D) of the PSA, requiring each of them to provide the other with accountings of college funds held on the child's behalf.
The court then determined plaintiff's child support obligation, attributing gross annual income of $200,000.00 to plaintiff and according him an "other dependent deduction" for the twins. Pursuant to the worksheet appended to the judge's order, plaintiff's recalculated child support obligation is $288.00 per week, or $1238.40 per month, a reduction in the $1500 per month amount set forth in the PSA. The parties' respective income percentages are 73% for plaintiff and 27% for defendant. The worksheet indicates that the "child support order for this case was . . . based on the child support guidelines award." That worksheet further provides: "As per parties' Judgment of Divorce, should the Plaintiff's actual annual gross income exceed $200,000.00, the Plaintiff shall pay the Defendant 15.6% of his gross earnings in excess of $200,000.00 as additional child support."
We concur with the trial judge's decision not to eliminate plaintiff's obligation to pay fifteen point six percent of his gross annual income in excess of $200,000 as additional child support. A trial judge's findings and conclusions "are considered binding on appeal when supported by adequate, substantial and credible evidence." Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). Furthermore, "[b]ecause of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding." Cesare v. Cesare, 154 N.J. 394, 413 (1998).
Moreover, the trial judge's decision is consistent with established case law supporting the enforcement of negotiated agreements. Our Supreme Court has recognized that the "settlement of litigation ranks high in our public policy." Nolan v. Lee Ho, 120 N.J. 465, 472 (1990). Matrimonial agreements in particular have a presumption of enforceability. Lepis v. Lepis, 83 N.J. 139, 148-49 (1980); Petersen v. Petersen, 85 N.J. 638, 642 (1981).
Negotiated matrimonial agreements will be set aside only in exceptional circumstances, such as fraud, duress, mistake or unconscionability. See Wertlake v. Wertlake, 137 N.J. Super. 476, 482 (App. Div. 1975); Peskin v. Peskin, 271 N.J. Super. 261, 276 (App. Div.), certif. denied, 137 N.J. 165 (1994). No such exceptional circumstances exist in this case.
The gravamen of plaintiff's "changed circumstances" claim was the fact that he has two additional children from his current marriage. Those children were born six-and-a-half years before plaintiff brought his motion. Plaintiff is entitled to an "other dependent deduction" pursuant to the Child Support Guidelines, which is "a mechanism to apportion a parent's income to all of his or her legal dependents regardless of the timing of their birth or family association[.]" Pressler, supra, Appendix IX-A at 2291. The trial judge accorded plaintiff this relief in recalculating his child support.
Considering the dramatic increase in plaintiff's earnings from 2005 to 2006, it appears that the timing of his motion may have been motivated by plaintiff's desire to eliminate application of the "fifteen point six percent" provision to such a substantial earnings amount in excess of $200,000. However, we concur with the trial judge that the parties specifically and knowingly bargained for this provision of their PSA and arrived at a mutually acceptable understanding that the child would benefit by receiving fifteen point six percent of plaintiff's income in excess of $200,000. The parties have lived in accordance with this provision of the PSA since their divorce in 1998.
Under the totality of circumstances, we conclude that the Family Part judge properly recalculated plaintiff's child support obligation by applying gross annual income of $200,000 for purposes of the guidelines calculation, and deviating from the guidelines by upholding the provision in the PSA requiring plaintiff to pay fifteen point six percent of his gross annual income in excess of that $200,000. This conclusion renders moot plaintiff's contention that this is an above-the-guidelines case. By capping plaintiff's gross annual income at $200,000, for the purpose of the guidelines calculation, the trial judge was presented with a case squarely within the income limits set by the guidelines. The trial judge did not confuse gross income with net income as plaintiff contended.
In his motion, plaintiff requested that if the judge upheld his obligation to pay fifteen point six percent of his income in excess of $200,000 as child support, those funds be deposited in a college account for the child. The trial court did not address this particular request for relief. Therefore, we remand this matter to enable the court to resolve this outstanding issue. In all other respects, we affirm the trial court's order of July 29, 2007.
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