November 6, 2008
JAMES K. SIMON, JR., PLAINTIFF-APPELLANT,
RITA M. SIMON, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, FM-03-1086-01.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 16, 2008
Before Judges Fuentes and Gilroy.
Plaintiff James Simon appeals from the order of the Family Part denying his motion seeking a reduction in his child support obligation. The parties had three children, now ranging in age from eighteen to fourteen years old. Plaintiff raises two basic questions in this appeal: (1) whether a prior judicial determination concerning his reasons for leaving his job should be given preclusive effect in deciding this motion for a reduction in child support; and (2) whether the motion judge erred in denying his motion for a reduction in child support without a hearing.
After reviewing the record before us, and in light of prevailing legal standards, we reverse and remand the matter for further proceedings. We are satisfied that the trial court erred in denying plaintiff's motion without a plenary hearing. These are the facts developed before the Family Part.
The parties were married on April 1, 1989; they lived in Medford with their three children, two boys ages eighteen and fourteen, and a girl age seventeen. The parties executed a Property Settlement Agreement ("PSA") in May 2001, through which plaintiff agreed to pay child support in the amount of $360 per week until December 31, 2005, "at which point the [amount of] child support shall be determined based upon the Child Support Guidelines." The PSA was incorporated into a final judgment of divorce entered on June 21, 2001.*fn1
Plaintiff was employed by the Advanta Corporation in the years following the divorce.*fn2 His 2003 tax return listed wages of $187,188 and total income of $194,520, consisting of a base salary of $122,000 and a bonus of approximately $72,000. According to plaintiff, his total income for 2004 was $196,000, $122,000 base salary and a bonus of $74,000. However, his 2004 tax return lists wages of $246,911 and total income of $253,303. Bonuses were paid to "entice him to stay and liquidate [Advanta's] leasing portfolio." That process ended in February 2006, when he left Advanta.
In June 2005 plaintiff remarried; he, his new wife, and her three children initially lived in Princeton. He claimed that his 2005 salary, including a $95,000 bonus, was $217,000. This is not reflected in his joint tax return which he filed with his new wife. That document listed wages of $231,170 and total income of $235,458.
Soon after leaving Advanta plaintiff began to search for employment in the area. Unable to find a suitable job in the Princeton area, he eventually accepted the position of Vice President of commercial lending for the Suncoast Schools Federal Credit Union in Tampa, Florida. He began to work there on January 31, 2006, even though he did not leave Advanta until February 21, 2006; he accomplished this by using accumulated leave-time. Plaintiff's annual salary at Suncoast was initially $105,000. That same year plaintiff collected a final $62,500 "stay bonus" from Advanta.
Plaintiff initially lived with his father in Florida after accepting the position at Suncoast. This substantially reduced his parenting time with his three children. Eventually, his new wife Laura and her three children moved to Florida, and the family moved into a home in Apollo Beach. Laura also worked and received child support from her first husband, allowing her to contribute to her new family's living expenses.
Defendant resided with the parties' three children in a new home in Medford. She earned approximately $33,000 in 2003, and approximately $37,300 in 2005 while working two jobs. Although alimony payments had decreased, plaintiff continued to pay $360 per week in child support.
Defendant filed a motion seeking an increase in child support on April 13, 2006. She alleged that she had not been given any justification for plaintiff's relocation to Florida. Because plaintiff's parenting time had been reduced, she had been left with more responsibility in regard to the children's expenses. She argued that her financial pressures would only increase as the children grew older, because their expenses would increase at the same time that her alimony support would be ending. Thus, considering plaintiff's 2004 income of $253,353, defendant sought an increase in child support based on the Child Support Guidelines.
In his cross-motion to re-determine his child support obligation, plaintiff argued that he involuntarily left Advanta and was forced to take a substantial salary reduction. He was unable to obtain a position in the New Jersey area at a salary greater then he received at Suncoast. Based on his and defendant's respective incomes and the Child Support Guidelines, plaintiff sought to modify his support obligation to $479 per week.*fn3
In a responsive certification, defendant asserted that plaintiff had not been terminated by Advanta, but instead left voluntarily so that he could begin his retirement in Florida. She claimed that plaintiff could have earned far more in New York or New Jersey than he was earning in Florida. She argued that the court should use plaintiff's 2004 and 2005 income as a basis for calculating his child support obligation. Defendant did not offer any competent evidence with respect to plaintiffs ability to earn a higher salary in the New York/New Jersey metropolitan area.
In an order dated May 12, 2006, Judge Call found that plaintiff's 2006 salary of $167,500, consisting of his $105,000 salary from Suncoast and the $62,500 "stay bonus" paid that year by Advanta, would be the controlling figure in deciding the motion. The Judge also accepted defendant's income for that same year as $37,333. In this finding, plaintiff was not credited with any overnight visitations, given his Florida residence. Applying the Child Support Guidelines, Judge Call ordered plaintiff to pay $582 per week in child support.
Based on a reduction in salary from $167,500 per year (the figure used by Judge Call) to his then current salary of $109,200, plaintiff filed another motion seeking to further reduce his weekly child support obligation to $330. He derived this figure after applying the Child Support Guidelines. His March 2007 CIS listed gross assets of approximately $1.3 million, including his Florida house jointly owned with his present wife Laura; the property is valued at $609,000. He also listed a boat valued at $420,000, together with other financial assets. Laura submitted three W-2s representing her total gross wages of approximately $14,800. Plaintiff and Laura filed joint 2006 federal tax return reflecting adjusted gross income of $162,898.
In her cross-motion for an increase in support, defendant again relied on plaintiff's failure to exercise parenting time with his three children, and his income in 2004 and 2005. She specifically sought a ruling that the salaries for those two years be averaged for purposes of calculating his support obligation. Defendant again relied on the same arguments she raised before Judge Call. Her April 2007 CIS reflected a gross income of $42,780 in 2006 and average monthly gross income of $4000, resulting in a net monthly income of $2849 in 2007.
Plaintiff argued that Judge Call's May 12, 2006, order was dispositive as to his reasons for leaving Advanta, i.e., involuntary termination, and as to his 2006 salary, i.e., $167,500. Plaintiff contended he was thus entitled to a reduction in child support because his salary in 2007 was dramatically lower than the amount relied upon by Judge Call in fixing his child support obligation at $582 per week.
The motion was heard by a different judge. This judge directed the parties to present additional submissions regarding whether Judge Call's May 2006 order was binding as to plaintiff's departure from Advanta and his resulting 2006 salary. The judge noted that it would not be necessary to conduct a plenary hearing if those issues had previously been resolved.
The parties submitted arguments largely expressing their conflicting views about the binding effect of Judge Call's order. Notably, defendant also indicated her intent to submit a report from an employment expert. No report was ever submitted.
On June 11, 2007, the motion judge issued a letter opinion in which he concluded that Judge Call's prior Order had determined the income and relocation issues. The Certifications submitted by the parties in connection with the motion both address the question of whether plaintiff had properly relocated to Florida and whether he was appropriately employed in his new position for purposes of calculating his child support obligation. In his Order, Judge Call confirmed plaintiff's relocation to Florida and used [his] salary from Suncoast Schools FCU (and the bonus he had received in 2007 from Advanta) to determine his current child support obligation.
The court signed an order memorializing its decision and directing plaintiff to "re-file his motion to re-calculate child support payable to [defendant]."
Following the court's instructions, plaintiff filed his motion seeking to reduce his child support obligation to $330 per month. He predicted his salary for all of 2007 would be $114,800, including a $500 bonus. In her cross-motion, defendant reiterated the arguments previously rejected by the trial court. This time, however, she included a certification and report from Robert P. Wolf, Ed.D., who opined that plaintiff's "current earning capacity is approximately $250,000 annually and should be utilized for purposes of determining child support obligations."
This motion came before yet a different judge, who denied plaintiff's motion for a reduction in a "tentative" post-judgment decision. Specifically, this judge rejected plaintiff's argument that Judge Call's May 2006 calculation of his support obligation, based on his income of $167,500, foreclosed any argument by defendant that he was "voluntarily underemployed" in 2007. Although the judge found plaintiff's $167,500 salary in 2006 to be reasonable, that did not mean that his "alleged current income of $114,300 is an appropriate or reasonable amount of income to be accepted by this Court with regard to a determination of [plaintiff's] child support obligation."
The judge further found that plaintiff had presented "no explanation, either in his present certification or in prior certifications that have been reviewed by this Court, to explain why his income has declined approximately 50% over just two years. Importantly, [plaintiff] does not claim to be somehow disabled or otherwise incapable of earning at his prior level."
The court thus concluded that plaintiff's decrease in salary was the result of "voluntary choices . . . to leave his employment with Advanta, . . . relocate to Florida, and . . . accept a lower-paying position." While plaintiff retained the right to make personal choices about his livelihood and lifestyle, (such as the purchase of a $400,000 boat and the cost of maintaining three cars), the court admonished that "he may not do so at the expense of his unemancipated children."
Because there were no changed circumstances warranting a review of Judge Call's prior order, no additional discovery was ordered. The court awarded defendant $1500 in counsel fees incurred in defending against plaintiff's motion and in prosecuting her cross-motion. Following oral argument, the court adopted its tentative decision. In so doing, the motion judge made clear that he did not believe himself bound by Judge Call's prior order and determination. He gave the following explanation for his ruling:
Granted, Judge Call did deal with the relocation, did deal with income based on the application that was before him at that time. I do not though, however, interpret that to be binding this Court's hands to consider relevant factors and that doesn't necessarily mean the Court is revisiting the relocation issue. But what it is, it's considering the factors before it on this application as ordered by Judge Haas for plaintiff to come back and re-file for recalculation. Based upon that, the Court is going to maintain its tentative decision in this regard.
This appeal followed.
Plaintiff argues that the motion judges' factual findings and conclusions of law regarding his departure from Advanta, relocation to Florida, and resultant income should be reversed because those issues had already been decided differently by Judges Call and the motion judge who followed that original ruling. He further argues that the third judge's findings were not supported by sufficient competent evidence. Finally, plaintiff maintains that he presented a prima facie case of changed circumstances warranting a plenary hearing. We agree. Our decision is governed by the following legal principles.
The standard for modifying a court ordered support obligation is "changed circumstances." Lepis v. Lepis, 83 N.J. 139, 146 (1980); Zazzo v. Zazzo, 245 N.J. Super. 124, 132 (App. Div. 1990), certif. denied, 126 N.J. 321 (1991). A change in circumstances warranting a support modification can result from an alteration in the financial circumstances of either the supported spouse, the supporting spouse, or a combination of changes to both. Stamberg v. Stamberg, 302 N.J. Super. 35, 42 (App. Div. 1997); Italiano v. Rudkin, 294 N.J. Super. 502, 506 (App. Div. 1996). The party seeking such a modification has the burden of demonstrating that changed circumstances have occurred. Innes v. Innes, 117 N.J. 496, 504 (1990); Murphy v. Murphy, 313 N.J. Super. 575, 580 (App. Div. 1998); Zazzo v. Zazzo, supra, 245 N.J. Super. at 132.
N.J.S.A. 2A:34-23(a) describes the factors that a court must consider in determining the amount of child support to be paid by the supporting spouse. Our court rules codified the Child Support Guidelines to be applied in determining the level of child support. Child Support Guidelines, Pressler, Current N.J. Court Rules, Appendix IX to R. 5:6A (2008).
A plenary hearing should be conducted on a motion to modify support only if there are genuine issues of material fact that bear upon a critical question. Lepis v. Lepis, supra, 83 N.J. at 159; Barblock v. Barblock, 383 N.J. Super. 114, 124 (App. Div.), certif. denied, 187 N.J. 81 (2006); Isaacson v. Isaacson, 348 N.J. Super. 560, 579 (App. Div.), certif. denied, 174 N.J. 364 (2002). Thus, "[n]either compulsory discovery nor a plenary hearing is required until a movant provides sufficient evidence of a material changed circumstance." Larbig v. Larbig, 384 N.J. Super. 17, 23 (App. Div. 2006).
We now turn to plaintiff's argument concerning the preclusive effect of Judges Call's findings and conclusions regarding his departure from Advanta, relocation to Florida and resultant reduction in income. This argument is predicated on the doctrines of res judicata and collateral estoppel. Without the benefit of supporting legal authority, defendant argues that these doctrines do not apply to child support issues.
Judicial principles such as collateral estoppel and res judicata serve important judicial policy goals. They provide finality and stability, prevent needless and duplicative litigation, and reduce unnecessary burdens on scarce judicial resources. First Union Nat'l Bank v. Penn Salem Marina, Inc., 190 N.J. 342, 352 (2007); Hennessey v. Winslow Twp., 183 N.J. 593, 599 (2005).
The doctrine of res judicata is inapplicable here, because it is intended to prevent the re-litigation of the same controversy between the same parties. In re Estate of Gabrellian, 372 N.J. Super. 432, 446 (App. Div. 2004), certif. denied, 182 N.J. 430 (2005). By contrast, here plaintiff argues that defendant is precluded from challenging the earlier specific findings regarding his relocation to Florida.
Collateral estoppel, on the other hand, bars reconsideration of an issue of law or fact that has been previously determined, even though the second action is different from the first. Kram v. Kram, 94 N.J. Super. 539, 551 (Ch. Div.), rev'd on other grounds, 98 N.J. Super. 274 (App. Div. 1967), aff'd, 52 N.J. 545 (1968). The party seeking to assert collateral estoppel must demonstrate that:
(1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the court in the prior proceeding issued a final judgment on the merits; (4) the determination of the issue was essential to the prior judgment; and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding. [First Union Nat'l Bank v. Penn Salem Marina, Inc., supra, 190 N.J. at 352; (quoting Hennessey v. Winslow Twp., supra, 183 N.J. at 599).]
Judge Call's March 2006 post-judgment order granting defendant an increase in child support to $582 per week constituted a final judgment as to defendant's motion. By setting plaintiff's income at $167,500 for purposes of calculating child support, the court implicitly adopted plaintiff's position that he was forced to leave his job at Advanta and had to accept a lower paying position at Suncoast. Conversely, the court rejected defendant's contrary claims that:
(1) plaintiff's income should be set at his 2004-2005 level of approximately $250,000; (2) that he voluntarily left Advanta to begin an early retirement; and (3) that he could have earned a salary in New York or New Jersey that was greater than his Suncoast salary. We are satisfied that defendant is collaterally estopped from challenging these findings.
We turn next to consider whether plaintiff is entitled to a plenary hearing on his motion for reduction of child support based on his 2007 salary. In deciding this issue, plaintiff is obligated to establish a prima facie case of changed circumstances using $167,500 (the salary fixed by Judge Call) as a base line. That is, plaintiff must show that his 2007 salary of $114,300 is reasonable, and represents his best good-faith efforts at generating income, given his level of education, professional experience and economic conditions in his market area.
Here, defendant has produced an expert witness' report that challenges plaintiff's claims, and opines that plaintiff is deliberately under-employed. The court cannot resolve these conflicting positions without a plenary hearing where the witnesses' claims can be subjected to the rigors of cross-examination. At this hearing, although defendant is precluded from challenging Judge Call's finding that plaintiff relocated to Florida in good faith, she retains the right to challenge that plaintiff's current claim: that a $114,300 annual salary represents his best good-faith efforts at securing a job commensurate with his educational background and professional experience.
Reversed and remanded.