On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Mercer County, FM-11-1010-02-C.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 9, 2008
Before Judges Fuentes and Chambers.
Defendant Richard W. Adams appeals from the orders of January 22, 2008, and February 20, 2008, denying his post divorce judgment application to modify his child support, limited duration alimony, and reimbursement alimony obligations and requiring that he pay arrears and plaintiff's counsel fees.
Defendant's alimony obligations may not be modified based on changed circumstances because the property settlement agreement prohibits modification of the alimony payments. However, we reverse and remand to permit the trial court to fix a reasonable schedule for payment of the alimony obligations based on defendant's current ability to pay. Defendant has made a prima facie showing of changed circumstances regarding his child support obligations, and we reverse and remand for discovery and, if necessary, a plenary hearing on those issues. We reverse and remand in order that a reasonable schedule for payment on arrears may be fixed. We also reverse the award of counsel fees.
The parties were married on July 15, 1989, and have three children. They were divorced on April 23, 2003. The Final Judgment of Divorce incorporated the parties' Property Settlement Agreement (PSA) dated March 24, 2003. Both parties are now in their forties, and plaintiff has remarried.
The PSA gave the parties joint legal custody of the children, with plaintiff having primary residential custody. Defendant was obligated to pay $5,000 per month in child support, but upon plaintiff's remarriage, that obligation would increase to $6,000 per month. As part of his child support obligations, defendant was also required to maintain health insurance for the children, and he was responsible for their unreimbursed health costs up to $7,500 per year and half of the unreimbursed costs above that sum. In addition, he was required to contribute up to $3,000 toward the costs of the children's camp, pool membership, and lessons.
The PSA required defendant to pay plaintiff both limited duration alimony and reimbursement alimony. Defendant was also obligated to contribute to plaintiff's health care costs for a three year period ending March 31, 2006.
The limited duration alimony was in the sum of $5,000 per month payable for a period of ten years. It would terminate upon remarriage of the wife or the death of either party, whichever occurred first. The agreement provided that "[t]he aforesaid alimony payments shall not be modifiable except that in the event HUSBAND becomes physically disabled or WIFE cohabitates with an unrelated male, then alimony pursuant to this paragraph shall be modifiable consistent with New Jersey case law."
The reimbursement alimony arose from a $350,000 loan that plaintiff made to defendant to enable him to purchase interests in two minor league hockey teams. Defendant's share of the proceeds of the marital home (less a payment of $8,500 to defendant from the proceeds) were given to plaintiff towards payment of the loan. The balance due of $220,823 was treated as reimbursement alimony. The PSA provided that "HUSBAND'S reimbursement alimony obligation shall be non-modifiable under Lepis v. Lepis,*fn2 shall not be subject to termination upon WIFE'S remarriage, and shall not be dischargeable in bankruptcy court." This obligation did not terminate upon the death of the parties. Defendant was obligated to pay this sum by March 1, 2004, and if he did not do so, he was to pay off the loan in thirty-six equal monthly installments with interest.
Due to defendant's difficulties in meeting the payments on the loan, two written amendments were made to the PSA. In the first amendment made in 2005, when $169,276.96 remained due on defendant's reimbursement alimony obligation, the parties agreed that defendant's payments would be reduced to $3,500 per month at 7.5 percent interest, and the payment would increase to $4,322.03 commencing on January 1, 2006.
In the second amendment in May 2006, when defendant owed $139,477.14 in reimbursement alimony, the parties agreed that defendant's payments would be reduced to $1,500 per month and would be increased to $3,122.16 per month commencing January 1, 2007, and the interest was reduced to six percent. This amendment also modified the payment schedule for the limited duration alimony. While defendant was still obligated to pay plaintiff the equivalent of $5,000 per month in limited duration alimony until February 28, 2013, or her remarriage, he was allowed to make the payments at the rate of $1,000 per ...