February 13, 2009
LORI CHOPOORIAN, PLAINTIFF-RESPONDENT,
DONALD CHOPOORIAN, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Morris County, FM-14-109-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 5, 2009
Before Judges Lisa, Reisner and Sapp-Peterson.
Defendant Donald Chopoorian appeals from two orders entered by the Family Part on December 7, 2007, denying his post-judgment motion to reduce his alimony and child support obligations and awarding counsel fees to plaintiff Lori Chopoorian. We affirm.
The parties were married on October 18, 1986. At the time of their 2005 divorce, the couple had two minor children. The August 16, 2005 final judgment of divorce incorporated their property settlement agreement (PSA).
There is no dispute that during the marriage, Donald operated a highly successful advertising business known as The Perfect Impression (TPI), which provided him with an annual income of over $900,000 in 2003. The parties also owned several valuable pieces of real estate.
The PSA provided for child support in the amount of $2083 per month, or $50,000 annually. Donald was also required to maintain a $500,000 life insurance policy for the children's benefit, and to maintain accounts for their secondary education. Donald further agreed to pay Lori $7,812.50 per month, or $187,500 per year, in permanent alimony. Significantly, with regard to future modifications to Donald's alimony payments, the PSA provided:
Husband's earned income as defined herein may increase to $650,000 gross per year (before taxes) before Wife is entitled to file a Motion to modify/increase alimony based on an increase in Husband's earned income. Husband's earned income must decline to $400,000 gross per year (before taxes) or below before he is entitled to file a Motion to modify/decrease alimony based on a decrease in earned income.
Wife's earned income may be $50,000 gross per year (before taxes) before Husband is entitled to file a Motion to modify/decrease alimony based on Wife's earned income. [(Emphasis added).]
Under the equitable distribution clause of the agreement, Donald was permitted to keep his "100% ownership interest in TPI." However, "[a]s consideration for Wife's waiver of all right, title and interest in TPI, [Donald] shall pay directly to [Lori] the sum of $1,300,000." These payments were to be made over the course of several years.
The PSA also distributed the parties' real property: a commercial building at 999 Tabor Road in Morris Plains (TPI), a rental property at 506 Main Street in Boonton, and a residence at 4 Audubon Trail in Boonton. The PSA awarded Donald the commercial and rental properties, and Lori the residence.
On December 28, 2006, Lori filed a motion in aid of litigants' rights, contending that as of October 15, 2006, which was slightly more than a year after the divorce, defendant had stopped making any payments of alimony or equitable distribution. In response, Donald filed a cross-motion seeking a temporary suspension of his obligations to pay alimony and equitable distribution, and a decrease in his child support obligation from $791 a month to $183 per month. In support of his application, Donald claimed that TPI had suffered a drastic downturn in its income, because its largest customer, Pfizer, had significantly reduced the amount of advertising and other services purchased from TPI.
At the motion hearing before Judge Hansbury, plaintiff did not contest that the income of defendant's business had dropped significantly. However, she questioned whether defendant's economic difficulties were as serious as he claimed. Plaintiff's counsel also indicated that she could not afford to retain a forensic accountant to review defendant's books and records. As Judge Hansbury noted in questioning defendant's counsel at the April 13, 2007 hearing, defendant's lifestyle and his conduct were not consistent with his claims of economic hardship:
When I looked at his financial situation as well as the information in the case information statement . . . some questions came up in my mind. The property settlement agreement is signed in August of '05. His '05 income was minus $86,000.
So it's worse now, but he still entered into these agreements at that time. His CIS indicates he has $115,000 in cash right now. Equity in his home of $125,000. Equity in the other property of $250,000. His assets are around $600,000.
His own budget includes over $25,000 a year for furniture, $350 a month to restaurants, dry cleaning $760 a month, . . . psychiatrist $290, orthodontist [$225], dentist [$]180, children's lessons [$]560, savings [$]465. . . . [H]is last alimony payment was in October. [In] November of '06 he enters into a [$465,000] mortgage . . . and he totally stops alimony . . . and commits himself to a new mortgage.
Despite some skepticism, by order dated April 13, 2007, Judge Hansbury suspended defendant's equitable distribution obligations for six months and temporarily reduced his alimony obligation by fifty percent for six months. He indicated in his oral decision that if, after six months, defendant continued to contend that his economic situation had not improved, the court would be inclined to hold an evidentiary hearing.
On July 18, 2007, approximately three months before the court was to reconsider Donald's ability to pay, pursuant to the April 13, 2007 order, Donald submitted another Notice of Motion seeking a second six-month reduction to his support obligations. Lori responded with a cross-motion to enforce litigant's rights, and for $5000 in counsel Fees.
Donald contended that he had renewed his modification motion before the end of the first six-month period because his financial situation had become significantly worse. Lori responded that Donald had not produced competent proof in the form of "information from his accountant," and had instead produced only "self-created" and "self-serving financial statements." She also pointed out that Donald had provided no evidence of what he had done to try to rebuild his business in the months since Judge Hansbury granted him a respite in April 2007. She contended that he still appeared to be living a relatively affluent lifestyle, and that "the Defendant pays all of his living expenses and support obligations through his business."
In reply, defendant filed a certification asserting that he was paying his living expenses through a line of credit, and that he had given plaintiff an opportunity for discovery of his finances. He still did not, however, provide a report from an accountant. While he denied that living expenses and support obligations were "reflected in the income and expense figures of [the] business," he asserted that "funds are withdrawn from my business . . . [and] then transferred to a personal bank account" from which those expenses were paid.
On December 7, 2007, a second Family Part judge issued two companion orders deciding the motions without oral argument or a plenary hearing. In the first order, the judge denied Donald's requested relief for a further suspension of his spousal support, and for downward modification of child support. In the second order, the judge required Donald to execute mortgages on certain real estate in compliance with the PSA, and further, required him to pay $2000 toward Lori's counsel fees.
In a written statement of reasons issued December 7, 2007, the judge concluded that Donald had not met his burden under Lepis v. Lepis, 83 N.J. 139, 157 (1980), to present a prima facie case of changed circumstances:
The court finds that defendant has not met his burden as he has not demonstrated a change in circumstance. Defendant asserts that he is experiencing an involuntary change in economic circumstances, but offers no proof to support his argument. Other [than] providing the court with a number of balance sheets that indicate that his business, The Perfect Impression, is struggling financially, defendant has not explained what has caused his business to decline. He also fails to provide the court with an explanation of what he has done to "rebuild and re-establish" his business. Both defendant and his attorney direct the court to defendant's February 8, 2007, certification for a narration of financial struggle that defendant's business has endured. Defendant certifies that the February 8, 2007, certification is attached as exhibit F to his current certification. However, exhibit F is comprised of copies of articles from newspapers and magazines and does not contain such a certification. It is defendant's responsibility to provide the court with all necessary documentation . . . to rule on an issue; defendant has failed to do so.
The judge also rejected defendant's request "that both parties be imputed income for the purpose of calculating child support based on Child Support Guidelines pursuant to R. 5:6A." In refusing to impute income to either party, the judge cited a paucity of proof as to the parties' "prior work history, occupational qualifications, educational background, or any job opportunities in the region," evidence the court would be required to consider under the Guidelines. See Child Support Guidelines, Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2324 (2009).
The judge awarded $2000 in counsel fees to Lori pursuant to Rule 5:3-5(c):*fn1
The court has considered plaintiff's request for counsel fees . . . including (1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the parties and (9) any other factor bearing on the fairness of the award. . . . [D]efendant is in a better financial position that [sic] plaintiff and has the ability to pay. . . . [D]efendant's motion lacked merit because he failed to provide evidence to support his allegation of financial difficulties.
Finally, the judge explained that "oral argument would not have advanced the court's understanding of these matters . . . . Reference to the PSA readily solved the matter. Moreover, oral argument would have caused the parties to incur further expenses that would not have affected the outcome here."
To be entitled to a modification of alimony and other support obligations, the moving party must show a permanent, rather than merely temporary, change in economic circumstances. See Lepis, supra, 83 N.J. at 151; Innes v. Innes, 117 N.J. 496, 504 (1990). The parties should not be put to the time and expense of an evidentiary hearing unless the moving party presents a prima facie case of changed circumstances, and unless there are material facts in dispute. Lepis, supra, 83 N.J. at 157-59. Particularly where such a motion is filed a relatively short time after the entry of a PSA, the Family Part has discretion in deciding whether the application warrants relief. See Donnelly v. Donnelly, ___ N.J. Super. ___ (App. Div. 2009) (slip op. at 12-14); Larbig v. Larbig, 384 N.J. Super. 17, 22-23 (App. Div. 2006). We will not disturb the court's decision on such a motion absent an abuse of discretion. Larbig, supra, 384 N.J. Super. at 21.
In this case, while we agree with defendant that the motion judge should not have denied defendant's request for oral argument, we find no abuse of discretion in the judge's decision to deny the motion. See R. 5:5-4; Filippone v. Lee, 304 N.J. Super. 301, 306 (App Div. 1997).*fn2 Based on our de novo review of the evidence presented,*fn3 we conclude that the denial of oral argument was harmless error, because defendant's evidence did not create a prima facie case of changed circumstances under Lepis.
Notably missing from defendant's proofs in support of his motion is any certified statement from an accountant concerning the finances of defendant's business. Instead, he attached balance sheets purporting to show the financial condition of his business.*fn4 Defendant's tax returns also raise questions. For example, attached to what appears to be defendant's individual form 1040 federal tax return for 2005, on which he reported earning no income from the business, is a pension and annuities statement which appears to show that his corporate 401K plan received $381,721 in contributions for the year ending 2005. It is not clear whether this is defendant's personal plan or the total plan payments for all of the employees of his business.
In short, it is not possible to draw meaningful conclusions based on defendant's submissions, without a detailed report from an accountant explaining the earnings and losses of the business and what income as well as other financial benefits defendant obtained from the business. As we indicated in Larbig, supra:
[I]t is the self-employed obligor who is in a better position to present an unrealistic picture of his or her actual income than a W-2 earner. In light of this self-evident fact, it would seem, as a general proposition, that what constitutes a temporary change in income should be viewed more expansively when urged by a self-employed obligor. [Larbig, supra, 384 N.J. Super. at 23.]
The record also raises questions about defendant's personal finances as well as those of his business. As plaintiff pointed out in her submissions to the trial court, at a time when defendant was claiming significant losses in income, he appeared able to sustain his own relatively affluent lifestyle at a rate of $13,000 per month, including current mortgage payments for an expensive house he bought after the divorce. Moreover, while defendant claimed to have a negative income at the time he signed the PSA, he agreed in that PSA to pay substantial sums in alimony and child support and agreed that he could not file a Lepis motion unless his income fell below $400,000. While "'changed circumstances' are not limited in scope to events that were unforeseeable at the time of divorce," Lepis, supra, 83 N.J. at 152, the evidence thus far casts doubt on defendant's claims of poverty.
The Family Part judge also properly denied defendant's request that the court impute income to him and to plaintiff. We agree with the judge that defendant did not provide sufficient evidence to support this request. For example, while defendant claimed to have received an offer of a sales job paying a $62,500 salary, plus commissions, he provided no information as to the amount of projected commissions he might be expected to earn. He also provided no evidence as to what other opportunities might be available to him. See Storey v. Storey, 373 N.J. Super. 464, 470 (App. Div. 2004)(discussing "factors relevant to the reasonableness and relative advantages of a career change").
In summary, we find no error in the trial court's decision to deny defendant further relief from his support obligations. We also find no abuse of the court's discretion in awarding plaintiff $2000 in counsel fees. See R. 5:3-5(c).
Our opinion is without prejudice to defendant's right to file a future, properly-supported Lepis motion in the event that his financial circumstances would justify such a motion.