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Donnelly v. Donnelly

February 2, 2009


On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Passaic County, Docket No. FM-16-971-03H.

The opinion of the court was delivered by: Fisher, J.A.D.



Submitted January 14, 2009

Before Judges Fisher, C.L. Miniman and Baxter.

In this appeal, we review the denial of defendant's motion for a downward modification of his alimony and child support obligations. We conclude that in denying the motion the trial judge properly exercised his discretion particularly when viewed against the judge's findings -- rendered after a multi-day plenary hearing approximately one year earlier -- that defendant's claim of his law firm's plummeting fortunes was "unconvincing." As a result, we affirm.

The parties were married in 1984 and had three children. This divorce action was commenced in 2003 and a property settlement agreement (PSA) was executed on December 10, 2003. The parties stipulated in the PSA that defendant Gregory R. Donnelly, an attorney, would pay plaintiff Elizabeth Donnelly $1,000 per week in permanent alimony and $350 per week in child support for the three children, who were born in 1994, 1995 and 1997. The PSA declared that the parties would share joint legal custody of the children, but that Elizabeth would "retain primary residential custody." A dual judgment of divorce, which incorporated the terms of the PSA, was entered on January 5, 2004.

The PSA indicates that the alimony award of $1,000 per week was based upon the imputation of income to Elizabeth in the annual amount of $20,000. It also expressly stated that an expert was retained to evaluate Gregory's income and the value of his business. The expert, according to the PSA, fixed Gregory's annual income -- for purposes of determining the appropriate level of alimony and child support -- at $185,000.*fn1

On April 21, 2005, Gregory moved for a reduction in his support obligations, claiming he was not earning at the $185,000 level. In his certification, Gregory criticized the expert for not "tak[ing] into account the steady decrease over the years." Gregory claimed that 1998 and 1999 were "banner years and represented the highest income [he] ever achieved since [he] began [his legal] career," and he had not since 2000 achieved the average yearly income adopted by the expert.

Gregory explained that his level of income suffered a steadfast decrease each year . . . primarily due to increased competition; rising office expenses and a decrease in gross income. The decrease in gross income is due to a marked decline in our personal injury and real estate practice. My personal injury practice has suffered a steady decrease as a result of the Lawsuit Threshold and my real estate practice has suffered due to the number of new attorneys in the area who are constantly vying for business.

Gregory then asserted that his gross earnings for the year 2004 were $97,983 and "far less [than] what [the expert] computed and is more in line with the steadfast decrease I had been experiencing." Asserting he had an after-taxes income of $79,983 for 2004, Gregory claimed that with his alimony and child support obligations (aggregating in the annual amount of $70,200), the carrying cost of partnership property (nearly $70,000 per year) and his personal expenses (estimated at $75,000), he was running at a significant deficit. He argued that it is "absolutely impossible for me to maintain my practice, maintain a living, pay [Elizabeth] and contribute to an asset for which [Elizabeth] is also an equitable owner when I have no means of obtaining the funds necessary to do so." As a result, Gregory claimed he borrowed in excess of $130,000 to meet his obligations.

On the return date, the judge made no ruling on the merits but instead provided the parties with an opportunity to engage in discovery. The judge conducted a plenary hearing over the course of a few days in December 2006, and denied Gregory's motion for reasons set forth in a thorough written decision, which included the following findings:

During this period of time that [Gregory] claims that his income has drastically reduced, he within a very short period of time after the [j]udgment of [d]ivorce, traded in a 2003 Lexus automobile for a 2004 model at a cost of $58,000.00.

He also sold a property in Pines Lake, and used part of the proceeds to pay down a line of credit by $90,000.00 and then bought a new home for $785,000.00 also in Wayne. In doing so he took a mortgage in excess of $600,000.00, all at the same time he claims that he was earning approximately $80,000.00 for the year. Just before this hearing, ...

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