March 11, 2009
MICHAEL B. MILLER, PLAINTIFF-APPELLANT,
TRACY L. MILLER, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, Docket No. FM-03-1575-02W.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued February 25, 2009
Before Judges Cuff and Fisher.
By way of this appeal, plaintiff Michael B. Miller argues that the trial judge erred in modifying, on the return date of a post-judgment motion, the parties' property settlement agreement, by (1) ordering a change in the visitation schedule to permit defendant Tracy L. Miller two non-consecutive weeks of vacation time with the children; (2) permitting payment of child support through the probation department by way of wage execution; and (3) providing defendant with one of the two child tax exemptions. We affirm as to the first two issues, but vacate and remand as to the third.
The record reveals that the parties were married in 1991, had two children, who were born in 1995 and 1999, and were divorced by a judgment entered in 2002. The judgment incorporated the terms of the parties' property settlement agreement (PSA).
Pursuant to the PSA, the parties agreed to share joint custody of the children; a detailed parenting plan was included. Among the many other issues resolved, plaintiff was permitted two non-consecutive weeks of vacation with the children; no similar provision was included for the benefit of defendant, but she was the residential custodian of the children. In addition, based on plaintiff's $110,000 annual income and the imputation of a $15,000 annual income to defendant, plaintiff was required to pay $400 per week in child support and $100 per week in temporary alimony.
Defendant remarried, thereby eliminating plaintiff's obligation to pay alimony. Plaintiff, too, remarried.
Plaintiff lost his job in March 2005. When he did not readily find comparable employment, he moved to modify his child support obligation; defendant cross-moved, seeking the payment of all future support by wage execution and permission to claim one of the two children as a tax exemption on her future tax returns. The motion judge ordered a plenary hearing.
Before the plenary hearing occurred, the parties negotiated a consent order, which was entered on September 11, 2006. They agreed to a temporary reduction of plaintiff's weekly child support obligation to $125 for a period of eighteen months, commencing on August 11, 2006. The parties also agreed that updated financial information would be exchanged one month prior to the end of the eighteen-month period so that a revised child support obligation could be fixed "consistent with the parties' respective earnings at that point in time." In addition, they agreed that plaintiff would make arrangements for the payment of child support directly to defendant by way of wire transfer into her bank account. Lastly, the parties agreed that plaintiff would retain the right to claim both children as tax exemptions as set forth in the PSA.
On March 17, 2008, defendant provided plaintiff with her updated financial information and thereafter moved for, among other things, an upward modification of child support, an alteration of the parenting plan to allow her two nonconsecutive weeks with the children, the payment of child support through the probation department by way of a wage execution, and -- citing the fact that plaintiff's new wife had recently given birth to twins -- a modification of the PSA so that defendant could in the future claim one of the children as an exemption. On the return date, the motion judge increased the weekly child support obligation to $276.
The judge granted other relief, including the following three items that form the basis for plaintiff's appeal. That is, the judge required the payment of child support through the probation department by way of a wage execution, provided the two non-consecutive vacation weeks sought by defendant, and allowed defendant to claim one of the children as a tax exemption. We find insufficient merit in the wage execution and vacation issues to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). However, for the following reasons, we vacate that part of the order under review that modified the PSA so as to allow defendant to claim one of the children as a tax exemption.
The motion judge provided the following oral decision with regard to the tax exemption point:
There [have] been numerous changes in circumstances at this time which would include the, you know, her remarriage, the fact that she's no longer receiving alimony, the numerous jobs that the plaintiff has had. It is appropriate for the [c]court to also reconsider any of those support obligations. And he does have a new family and is able to claim the exemptions for that family as well. So with her having a different income tax bracket, it is an appropriate request, and I think it's only fair that she has, you know, she at least gets [one tax exemption].
Plaintiff does not argue that the motion judge was powerless to modify this term of the PSA. Plaintiff instead argues that the judge's conclusory determination as to what was "fair," supported solely by references to the recent additions to plaintiff's family and the elimination of alimony because of defendant's remarriage, was insufficient to support the order under review. We agree.
A Family judge has "the power to exercise authority to effectively allocate exemptions through use of its equitable power." Gwodz v. Gwodz, 234 N.J. Super. 56, 62 (App. Div. 1989). The allocation of tax exemptions is generally guided by the goal of maximizing the net income of the parties. Heinl v. Heinl, 287 N.J. Super. 337, 353 (App. Div. 1996). In order to make an informed decision as to whether there is a benefit in modifying the parties' agreement as to the allocation of tax exemptions, the Family judge must "quantify the effect of [the allocation] upon each party, and the extent to which it would require reconsideration of the child support provisions of the judgment." Gwodz, supra, 234 N.J. Super. at 62. As a result, the judge must "consider evidence and make findings respecting the extent of child support actually provided by each parent," determine whether "a change in tax exemptions is deemed warranted," and ascertain "whether change in the existing support orders is required to reflect the benefits achieved by the change." Id. at 62-63.
Here, the parties' circumstances had obviously changed since the formation of the PSA. Both parties had remarried, and plaintiff had two more children. These are circumstances that would permit reconsideration of the manner in which exemptions are allocated. But the record does not disclose the tax effect if one of the child tax exemptions was taken from plaintiff.
In addition, the judge must take into consideration the fact that the original agreement to allow plaintiff to have both tax exemptions was part of an agreement containing numerous other stipulations, and ascertain whether it is fair and equitable to take from plaintiff a right for which he had previously bargained. In considering when it is appropriate to modify a PSA, we recognize that Family judges are allowed "'greater discretion when interpreting such agreements.'" Pacifico v. Pacifico, 190 N.J. 258, 266 (2007) (quoting Guglielmo v. Guglielmo, 253 N.J. Super. 531, 542 (App. Div. 1992)). In engaging in this less rigid approach toward interpretation, however, Family judges must consider that a domestic agreement "ordinarily entails trade-offs between the parties," Ozolins v. Ozolins, 308 N.J. Super. 243, 249 (App. Div. 1998), a fact that is certainly suggested by the parties' PSA here, and warrants circumspection by the judge before setting aside or altering one provision that is likely intertwined with other provisions in a way that could "do mischief to the entire scheme." 2 Gary N. Skoloff & Laurence J. Cutler, New Jersey Family Law Practice § 5.8A at 5:232 (12th ed. 2006).
We affirm all aspects of the order under review with the exception of the provision that provided defendant with one of the child tax exemptions, as to which we vacate and remand for further consideration in conformity with this opinion. The judge may, if necessary, conduct an evidentiary hearing on this point. We do not retain jurisdiction.
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