October 10, 2008
JANET ASHWOOD (F/K/A KLENERT), PLAINTIFF-RESPONDENT,
W. THOMAS KLENERT, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Mercer County, Docket No. FM-11-579-03-C.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 24, 2008
Before Judges C.L. Miniman and Baxter.
Defendant W. Thomas Klenert appeals from a July 2, 2007 order that denied his motion to terminate his permanent alimony obligation. He argues that the trial court misapplied the law of changed circumstances when it evaluated the collapse of the company he owned and his termination from subsequent employment. He maintains that the judge should have found that these changed circumstances were permanent rather than temporary, and should have ordered the termination of his $3,000 per month alimony obligation. We affirm.
Defendant and plaintiff, Janet Ashwood, formerly known as Janet Klenert, were married on April 14, 1973. Twenty-nine years later, plaintiff filed a complaint for divorce. After an eight-day trial, Judge Accurso rendered a comprehensive written opinion that addressed an array of issues. The final judgment of divorce (JOD) was entered on June 19, 2006. Only limited portions of that opinion and JOD are pertinent to the issues defendant raises in the present appeal.
Among them is Judge Accurso's discussion of the collapse of the manufacturing company of which defendant was a co-owner for the fifteen years preceding the filing of the complaint for divorce. The company, known as Bess Manufacturing, Inc. (Bess), manufactured table linens, runners, doilies and decorative pillows. Toward the end of 2004, increasing strain between defendant and his two former business partners resulted in their agreement to purchase defendant's interest in the corporation for the sum of $900,000. In addition, defendant was to receive a four-year consulting contract for $100,000 per year beginning in January 2005.
Because Bess continued its downward slide after defendant left the company in 2004, his former partners had, at the time of the entry of the JOD, paid him only $115,000 of the $900,000 due as a result of the buy-out. Had defendant's former partners made each required monthly installment of $18,750, defendant would have received approximately $300,000 by the time the JOD was entered. The judge concluded that "[b]ecause of Bess's demise," it was "unlikely" that plaintiff and defendant would receive any amount close to the $1,300,000 owed by Bess to defendant.
At the time of the divorce trial, defendant was employed by Anchor Home Furnishings with an annual projected income of between $110,000 and $120,000. Based upon expert testimony, Judge Accurso concluded that defendant had an earning capacity of $120,000 per year and accordingly imputed to him that amount of income. She concluded that plaintiff had an earning capacity of $30,000 per year.
Judge Accurso's opinion also discussed plaintiff's inheritance from her mother, in the form of a testamentary trust with a current corpus of approximately $600,000. The trustees have refused to make any discretionary distribution of the corpus to plaintiff and were not obligated to make a mandatory distribution of trust corpus until June 21, 2008. Because no distributions had been made as of the date of trial, the judge concluded that, at least at that juncture, the inheritance should have no bearing on plaintiff's possible entitlement to alimony.
Ultimately, after considering the statutory factors contained in N.J.S.A. 2A:34-23(b), the judge ordered defendant to pay plaintiff $3,000 per month in permanent alimony.
Approximately two months after the JOD was entered, defendant filed his first motion to terminate that alimony obligation.*fn1 In his motion, he maintained that his monthly income had plummeted because he had been laid off from his employment at Anchor Home Furnishings (Anchor). He asserted that he had sought re-employment in the field of home furnishings, but had been unsuccessful in obtaining work. Consequently, he obtained a real estate license but had not yet earned any real estate commissions. In November 2006, Judge Fleming denied defendant's motion to terminate his alimony obligation, concluding that because defendant's reduction in income had lasted for only a few months, it was premature to consider the drastic remedy of eliminating defendant's spousal support obligation.*fn2
A mere four months later, on March 23, 2007, defendant filed his second motion to terminate his alimony obligation. It is from the denial of that motion that he now appeals. In support of that motion, he argued before the Family Part:
I have searched for employment on a continuing basis and have been unable to locate a position. I have now been unemployed for a period of six months. I would like to stress to the court that I am not an individual who avoids work. At the time of our divorce, and if Bess had complied with its agreement with me concerning the purchase of my interests in the business, the assets that I, and I alone, had acquired over our thirty-year marriage would have been approximately $3 million.... I want to assure the court that I have continuously looked for employment and would have accepted anything within reason. The facts are that I have not been offered any position, reasonable or not.... Despite the numerous applications and interviews which I have annexed hereto,*fn3 I have had no offers over the past 18 months other than from my friend who owned Anchor Sales and Marketing who offered me my position at a salary of $80,000 per year plus a bonus incentive. My employment at Anchor ended when Anchor lost its two largest customers and could no longer afford my salary.
I have no funds with which to pay my former wife her $3,000 per month in alimony and I have nothing on the horizon to suggest that I will be earning anything in the near future.
In her opposition to defendant's March 23, 2007 motion, plaintiff asserted that defendant's efforts to find work were insufficient and claimed that defendant failed to report his involvement in a business operated by his fiancée.
After oral argument, Judge Fleming issued an order and written opinion on July 2, 2007, in which he concluded that defendant had not "met his burden of demonstrating such a drastic change of circumstances that would warrant essentially the ultimate relief of terminating alimony." The judge reasoned:
The court shares some [of plaintiff's] doubt regarding defendant's good faith effort to find employment. If the parties remained married and faced this situation, it is reasonable to expect that defendant would find whatever work was available and/or consider selling some of his real estate assets. Defendant's decision to switch careers and enter the real estate field at a time of slow market sales and with no experience, causes the court additional concern.
However, it is not necessary for the court to resolve these perplexing factual issues on this record. The court is guided by the decision in Larbig v. Larbig, 384 N.J. Super. 17 (App. Div. 2006). There, the Appellate Division, recognizing that whether an alimony obligation should be modified based upon changed circumstances rested within a Family Part judge's sound discretion, upheld [the trial judge's] decision that a motion to modify alimony should be denied where it was filed "a mere twenty months after the parties' execution" of a property settlement agreement." [There, the trial judge] concluded, and the Appellate Division affirmed, that the defendant-movant had failed to demonstrate the change in circumstances was anything other than temporary. The Appellate Division went out of its way to explicitly state that the "timing of the motion certainly warranted [the] conclusion" that the alleged changed circumstances was temporary. If one motion filed twenty months [after the judgment] is temporary, then this court must find that two or three motions within twelve months is certainly temporary and thus, the present motion must be denied.
This conclusion is reinforced by other items in the record. First, it is clear that defendant has other real estate assets from which his alimony obligation can be paid.... [I]f the obligor has assets, he or she should not be relieved of the support obligation. [Citations omitted.]
We review a trial judge's denial of a motion to terminate alimony for an abuse of discretion. A trial court has broad discretion to determine whether circumstances warrant modification or termination of an alimony award. Innes v. Innes, 117 N.J. 496, 504 (1990). The trial court's determination of whether the movant has demonstrated changed circumstances is entitled to "substantial deference" and should not be disturbed unless the reviewing court is convinced the findings are "so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Walles v. Walles, 295 N.J. Super. 498, 513 (App. Div. 1996) (quoting Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974)). Therefore, an appellate court should not overturn a trial judge's determination absent an abuse of discretion. Larbig v. Larbig, 384 N.J. Super. 17, 23 (App. Div. 2006).
After an alimony award is made, the Family Part retains the power to revise alimony awards, modifying them as a change in circumstances requires. Innes, supra, 117 N.J. at 503. One circumstance that warrants modification of an alimony order is an increase or decrease in the supporting spouse's income. Id. at 504. In such a case, the party moving to terminate or modify alimony "bears the burden of making a prima facie showing of changed circumstances." Miller v. Miller, 160 N.J. 408, 420 (1999). The moving party must also demonstrate that the circumstances requiring the modification are not likely to change in the near future and are not merely temporary. Innes, supra, 117 N.J. at 504.
As we observed in Larbig, "[t]here is, of course, no bright line rule by which to measure when a changed circumstance has endured long enough to warrant a modification of a support obligation." 384 N.J. Super. at 23. Instead, Family Part judges are expected to consider all of the relevant circumstances presented and apply their expertise to determine whether the circumstances presented have continued for a sufficiently long period to entitle the moving party to a modification or termination of alimony. Id. at 22-23.
Because defendant's principal argument on appeal is that Judge Fleming misapplied Larbig, we discuss the pertinent portions of that opinion. In Larbig, approximately twenty months after the entry of the judgment of divorce, the defendant sought modification of his alimony, child support, and equitable distribution payments. Id. at 20. He argued that the fortunes of his business had declined enough to warrant a downward modification of his alimony obligation. Id. at 21. The trial court disagreed, and we affirmed, stating "we are satisfied that, in finding the alleged changed circumstances to be temporary at that point in time, [the trial judge] did not abuse his discretion. The timing of the motion certainly warranted that conclusion." Id. at 23.
As we have observed, Judge Fleming relied upon Larbig in support of his conclusion that filing two motions to terminate alimony within a mere nine months of the entry of the JOD was an insufficient period of time in which to conclude that the reduction in defendant's income was anything other than temporary.
Defendant attacks that conclusion on several grounds. First, he argues that "the real holding in Larbig... involves determination of whether the payments in question constituted alimony or a form of equitable distribution." We disagree. While defendant is correct that Larbig involved a discussion of whether equitable distribution could be characterized as maintenance and thus subject to modification based upon changed circumstances, id. at 28-29, another section of our opinion discusses, and ultimately affirms, the trial judge's conclusion that moving within twenty months to modify an alimony obligation was premature. Id. at 21-23. Consequently, we conclude that Judge Fleming's reliance on Larbig was correct especially where, as here, defendant has moved twice in nine months to terminate his alimony obligation.
Second, defendant argues that the facts underlying Larbig bear no similarity to those here. He asserts that in Larbig there was no suggestion that the defendant's business had suffered a downturn significant enough to render the defendant unable to make his alimony payments. This argument lacks merit. In Larbig, the defendant claimed "that things had changed for the worse at ASI, that his income had dramatically decreased, and that nearly all his income would, absent a downward modification, be expended on the monthly obligations imposed upon him by the [Property Settlement Agreement]." Id. at 22. Although the plaintiff in Larbig "hotly contested whether [her ex-husband's] business had truly fallen on hard times," ibid., we ultimately concluded that the trial judge correctly determined that a plenary hearing was not necessary to resolve those factual disputes. Id. at 23. We held that even if the condition of the defendant's company was as dire as he contended, the trial judge correctly concluded that the defendant nonetheless was not entitled to a downward modification of his alimony obligation because "in [l]ight of the timing of [the] motion, defendant had failed to demonstrate that... the change was anything other than temporary." Id. at 22-23.
However, defendant's contention here that the demise of Bess is a far more severe outcome than the downturn the defendant experienced in Larbig is of no moment. At the time the JOD was entered, the demise of Bess had already occurred. Moreover, Judge Accurso anticipated that defendant was unlikely to receive most of the $1,300,000 his former partners owed him. Thus, the demise of Bess that defendant points to as a change of circumstances is not a change at all because that very circumstance existed at the time the JOD was entered. The only change of circumstances is defendant's termination from his salaried employment at Anchor. Defendant's attempt to paint his own change of circumstances as markedly more severe than that presented in Larbig must therefore fail.
Defendant's loss of employment at Anchor, and his inability to find employment elsewhere, was the basis of defendant's first post-judgment motion, which Judge Fleming denied in November 2006. Four months later, in March 2007, defendant filed the identical motion, which Judge Fleming, relying on Larbig, denied. At the time defendant filed the motion that is the subject of this appeal, his loss of employment at Anchor, and resulting reduction in income, had existed for approximately nine months.
We agree with Judge Fleming's conclusion that the extreme remedy defendant seeks here, namely the total cessation of his alimony obligation, in two motions filed only months apart, was unwarranted. Defendant's loss of employment at Anchor had not lasted long enough to justify the conclusion that the resulting downturn in defendant's income was anything other than temporary. In light of the "wide discretion which our law rightly affords to the trial judges who deal with these matters," id. at 21 (quoting Martindell v. Martindell, 21 N.J. 341, 355 (1956)), we have been presented with no meritorious basis upon which to disturb Judge Fleming's reliance on Larbig or the conclusion he reached.
Defendant's remaining arguments lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).