January 13, 2009
CHRISTINA SCHWARTZ, PLAINTIFF-RESPONDENT,
ERIC C. SCHWARTZ, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-2494-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: December 10, 2008
Before Judges Parrillo and Lihotz.
Defendant Eric C. Schwartz appeals from a December 12, 2007 Family Part matrimonial order, which modified his alimony and child support obligations. Defendant argues the order is against the weight of the evidence in the motion record. We agree. Accordingly, we reverse the December 12, 2007 order and remand for further proceedings.
The parties were divorced on July 23, 2003. Incorporated into the final judgment of divorce (FJOD) was a negotiated property settlement agreement (PSA) resolving the collateral issues arising in the matrimonial matter. Defendant, who earned $250,000 annually as a National Vice President of Sales for Ferragamo, agreed to pay $2500 per month for the children's support, and $5000 per month alimony to plaintiff, Christina M. Schwartz.
The terms of the PSA provided the parties would share joint legal custody of the two children, born April 12, 1993 and June 2, 1997. Plaintiff was designated the parent of primary residence and defendant the parent of alternant residence. At the time, both parents resided in Englewood Cliffs and they stated, the children would remain "domiciled in the State of New Jersey[.]"
In the summer of 2004, defendant's employment with Ferragamo ended. He received twelve months' severance. Defendant obtained a job with a new company. However, his base compensation was set at $150,000. Defendant could earn an additional bonus based on the company's profitability.
In 2006, plaintiff requested to relocate to Florida. The parties discussed the proposed move, along with defendant's request for a reduction in the previously designated support obligations due to his changed employment. The framework for an agreement was reached. The comprehensive modifications of the PSA were placed in a proposed consent order. First, plaintiff and the children would relocate to Florida and defendant's parenting time would be modified. The actual schedule of parenting time needed to be finalized. However, defendant requested the children spend one weekend each month, half of the summer, and school breaks in New Jersey. He also agreed to visit with the children in Florida. Additionally, defendant's monthly support obligations were reduced to $3350 for alimony and $1650 for child support. This reduction was contingent upon defendant's verification of his change in income. Finally, defendant assumed the obligation to pay "all costs associated with his parenting time with the children in Florida and/or New Jersey," which included transportation costs and any expenses related to the exercise of parenting time for defendant or the children.
The parties agreed on a parenting time schedule. On July 1, 2006, plaintiff and the children moved to Florida. Defendant commenced making the reduced support payments. However, defendant neither executed the proposed consent order memorializing the agreement terms, nor provided documentation supporting his claims of reduced income.
Plaintiff filed a motion to enforce the support provisions of the PSA or, in the alternative, to modify support based upon defendant's income. She also sought payment of counsel fees and costs incurred to present the motion.
Defendant responded. He attached his 2006 W-2 from his new employer, Rafe Studios, LTD, reflecting annual wages of $164,139.64, and a pay stub, which stated defendant's year-to-date income as of October 31, 2007, was $144,045.77. Defendant noted he had paid the combined alimony and child support of $5000 since the move. Also, he paid the children's travel costs incurred during parenting time. Although the costs were not quantified, the children had traveled to New Jersey four times during the prior year and spent eight weeks with defendant during the summer.
Plaintiff argued the parties calculated alimony and child support applying a "formula" of forty per cent of defendant's gross income. Since defendant misstated his income as $150,000, she proposed the court order alimony and child support of forty percent of defendant's actual income. In this way, defendant underpaid and had accumulated an arrearage.
It appears the motion judge accepted plaintiff's argument. He stated:
Therefore, since the percentages was [sic] a reflection of the original agreement, I would have to decide now from a totality of the circumstances that just for equity those percentages should be used in regard to his earnings for '06 from July to December, and his earnings from the year --the entire year of 2007.
Therefore, based upon the one sixty-four and change for July through December, should have been [$]32,820. Thirty thousand was paid, so you get $2,820 as arrearages. . . . January 1st, '07 to December 31st, projected income of close to one seventy-three puts it at [$]5,760 per month. So that makes it [$]9,120. And I'm going to rule that the total arrearages . . . is [sic] $11,940 as of December 31, 2007 . . . .
The court also ordered a $500 counsel fee award to plaintiff.
The scope of our review is limited. "The general rule is that findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). Moreover, "[b]ecause of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding." Id. at 413. "Trial court findings are ordinarily not disturbed unless 'they are so wholly unsupportable as to result in a denial of justice.'" Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 475 (1988) (quoting Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974)); Roe v. Roe, 253 N.J. Super. 418, 432 (App. Div. 1992).
When confronted with a claim that the trial court erred in its determination of the facts, we consider "'whether the findings made could reasonably have been reached on sufficient credible evidence present in the record.'" Beck v. Beck, 86 N.J. 480, 496 (1981) (quoting State v. Johnson, 42 N.J. 146, 161-62 (1964)). See DeVita v. DeVita, 145 N.J. Super. 120, 123 (App. Div. 1976) (applying this standard in custody cases). Where our review addresses questions of law, however, we are not bound to defer to the legal conclusions of the lower court. See Balamides v. Protameen Chems., Inc., 160 N.J. 352, 373 (1999) (stating, matters of law are subject to de novo review).
In his appeal, defendant argues the implementation of a percentage of defendant's gross income to fix alimony and child support was error. We agree. Contrary to the court's determination, our review of the record discerns no support for an alleged agreement to fix support by using such a formula. Neither the PSA nor the proposed consent order contained such a provision. Moreover, the implementation of a formula percentage to determine child support or alimony, although attractive in its simplicity of application, ignores the clear requirements of the law and shirks the responsibilities of the court.
Agreements between divorcing spouses as to child support and alimony are "always subject to review and modification based on a showing of 'changed circumstances.'" Lepis v. Lepis, 83 N.J. 139, 146 (1980); Berkowitz v. Berkowitz, 55 N.J. 564, 569 (1970). "The party seeking modification has the burden of showing such 'changed circumstances'" as would warrant relief from the support . . . provisions involved." Lepis, supra, 83 N.J. at 157. Defendant could have requested a downward modification of support, based upon his modified ability to pay. Miller v. Miller, 160 N.J. 408, 420 (1999); N.J.S.A. 2A:34-23(a)(3). Recognizing this premise, the parties commenced negotiations to resolve the issues presented by defendant's reduced income and the parenting time changes brought by plaintiff's move.
The first issue for the trial court's resolution was whether, as a result of those negotiations, an agreement was reached to reduce defendant's financial obligations to the level stated in the proposed consent order. If the question could not be resolved after review of the parties' certifications, a plenary hearing should have been scheduled. See, e.g., Innes v. Innes, 117 N.J. 496, 520 (1990); Lepis, supra, 83 N.J. at 159; Accardi v. Accardi, 369 N.J. Super. 75, 87 (App. Div. 2004); Isaacson v. Isaacson, 348 N.J. Super. 560, 579 (App. Div.), certif. denied, 174 N.J. 364 (2002); Harrington v. Harrington, 281 N.J. Super. 39, 47 (App. Div.) ("[J]udges cannot resolve material factual disputes [based] upon conflicting affidavits and certifications."), certif. denied, 142 N.J. 455 (1995).
If the court found an agreement was reached, the terms of that agreement should have been enforced. If the court determined an agreement was not reached, it should have decided whether defendant's changed circumstances required a modification of support and, if so, fixed the appropriate level of alimony and child support based on the proven level of income.
We note neither party disputed a verified change in economic and other circumstances existed in 2007. Not only had defendant suffered a decrease in income, but also, plaintiff relocated with the children increasing the expenses incurred to effectuate parenting time. The motion judge's comments suggest he accepted the parties' agreement that defendant suffered an adverse financial change requiring a modification of his support obligations. The language of the proposed consent order states defendant must verify his income. Plaintiff argued the reduction was contingent on proof substantiating those assertions. Apparently, the judge also concluded the agreement for reduced support applied only if defendant earned only $150,000 per year. Unfortunately, the court expressed no findings on these issues.
The proposed consent order does not state what occurs if defendant's income deviated from the amount he represented as his base salary. Possibly, there would be no agreement as to the proposed modified level of support. Alternatively, if the parties agreed to accept the modified support amount when defendant's base salary was $150,000, a recalculation would have been necessary when the proofs evinced a modest deviation in 2006 to $164,139.64. The change necessary for a modification is a significant change. Such a standard requires more than a modest increase before the equitable remedy of modification is invoked. Glass v. Glass 366 N.J. Super. 357, 361 (App. Div.), certif. denied, 180 N.J. 354 (2004); Stamberg v. Stamberg, 302 N.J. Super. 35, 42 (App. Div. 1997). Similarly, the 2007 extrapolated income further rose to $172,854.92; would that cause an adjustment?
The motion judge set support at forty percent of defendant's gross income for 2006 and 2007. This cannot be sustained, as it was error. Although setting support rests in the sound discretion of the court, Innes, supra, 117 N.J. at 504, the limits of this discretion are breached when a motion judge calculates support as a percentage of gross income, rather than making crucial factual determinations and then determining the amount of alimony guided by N.J.S.A. 2A:34-23 and child support, by applying the provisions of the Child Support Guidelines, Rule 5:6A. Implementation of a percentage formula exercises no discretion and weighs no equities, two significant functions of a Family Part judge. The "standard" employed when fixing support is what "'the circumstances of the parties and the nature of the case shall render fit, reasonable and just.'" O'Neill v. O'Neill, 18 N.J. Misc. 82, 93 (Ch. 1939) (quoting N.J.S.A. 2A:34-23), aff'd, 127 N.J. Eq. 278 (E&A 1940).
Thus, we reverse the December 12, 2007 order, and remand to the Family Part for further proceedings. The court must determine the nature of the parties' agreement to modify support. If support must be redetermined, the court must review the current financial circumstances of the parties, as revealed in case information statements, which were not filed in this matter. As to alimony, the trial judge must consider and make specific findings under N.J.S.A. 2A:34-23(b) and evaluate the supported spouse's needs and the supporting spouse's ability to meet those needs, as well as his own needs. Following the alimony calculation, child support must be determined. The PSA calculated defendant's child support obligation in accordance with the Child Support Guidelines. See Child Support Guidelines, Pressler, Current N.J. Court Rules, Appendix IX to R. 5:6A (2007). We discern no basis to deviate from this general rule. Finally, the court must include an allocation of the extraordinary travel expenses incurred during parenting time resulting from plaintiff's relocation.
The absence of adequate findings, as we have identified in this opinion, necessitates a reversal to allow the trial judge to reconsider the issues. On remand, the judge must fully and specifically articulate findings of fact and conclusions of law.
R. 1:7-4; Curtis v. Finneran, 83 N.J. 563, 569-70 (1980); Heinl v. Heinl, 287 N.J. Super. 337, 347 (App. Div. 1996); Rosenberg v. Bunce, 214 N.J. Super. 300, 303 (App. Div. 1986).
Reversed and remanded for proceedings consistent with this opinion.
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