March 31, 2009
JILL SHEINBAUM, PLAINTIFF-RESPONDENT,
ROBERT CAMPBELL, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FD-02-250-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 13, 2009
Before Judges Fuentes, Gilroy and Chambers.
These two appeals were calendared back-to-back. We consolidate the matters for purposes of this opinion. The issues raised in these appeals pertain to the trial court's award of counsel fees to plaintiff Jill Sheinbaum and to the court's imposition of a per-diem monetary sanction against defendant Robert Campbell in the event he fails to timely pay court-ordered installments on the initial $68,000 counsel fee award.
In the appeal filed under Docket No. A-5174-06, defendant appeals from that part of the April 3, 2007 order awarding plaintiff $68,000 counsel fees and costs (collectively, counsel fees). Defendant also appeals from those parts of the order of June 4, 2007, that: denied his motion for reconsideration of the order of April 3, 2007; directed him to satisfy the $68,000 counsel fee award by paying equal monthly installments of $2,833.33 effective April 2007; directed him to pay the April and May 2007 installments within twenty days of order; and directed him to pay a $100 per-diem sanction if he is late in paying any monthly installment. In the appeal filed under Docket No. A-0124-07, defendant appeals from that part of the August 3, 2007 order that directed him to pay plaintiff an additional $1,500 in counsel fees. We affirm in part; reverse in part; and remand to the trial court for further proceedings consistent with this opinion.
The parties were married in November 2002 and separated in July 2003. One child was born of the marriage, Luke,*fn1 born October 2003. In February 2004, the parties were divorced pursuant to a Massachusetts decree. The decree, however, did not address issues of child support, custody, or parenting time. In the interim, plaintiff moved to New Jersey, and on June 29, 2004, filed a complaint seeking custody, child support, and an order limiting defendant's parenting time.
On August 5, 2004, the trial court entered an order awarding plaintiff temporary custody of Luke; directing defendant to pay child support in the amount of $382 a week; and providing defendant limited parenting time, pending his relocation to New Jersey. That order also directed that the parties were to confer on all issues concerning their son's health, education and welfare.
Defendant having relocated to New Jersey, the trial court entered an order without prejudice on September 9, 2004, directing joint legal custody of their son. Under this order, the parties had a continuing obligation to confer on issues pertaining to Luke; and plaintiff retained final decision-making authority pendente lite. By order dated October 25, 2004, the court appointed a parenting coordinator, with plaintiff to pay 40% of the coordinator's fee, and defendant to pay 60%.
On November 3, 2004, the court entered an order removing the supervision requirement of defendant's parenting time. On February 18, 2005, and May 9, 2005, the court entered orders that provided defendant with limited overnight parenting time. On October 21, 2005, defendant filed a motion seeking, among other matters, to increase his parenting time and to modify custody and his child support obligation. Plaintiff cross-moved to modify defendant's parenting time as well, and for other relief. On December 2, 2005, the court entered an order scheduling a plenary hearing and directing parenting-related evaluations and procedures, but otherwise maintained the status quo pendente lite.
The court conducted a seventeen-day trial on the disputed issues between August 9, 2006 and January 31, 2007. On March 12, 2007, the court rendered an oral opinion which, among other matters:
1) directed that plaintiff is to have sole legal custody of Luke, with sole decision-making authority concerning his health, education and welfare;
2) directed that except in an emergency, where notice cannot be provided beforehand, plaintiff shall provide defendant with reasonable notice prior to making major decisions pertaining to Luke;
3) directed each party to cooperate with, and provide full support to, Luke's doctors, educators, therapists, and all other persons in health, education and related fields concerning any treatment which their son receives pursuant to a doctor's diagnosis or a health or education professional's recommendation;
4) directed that each party is to receive complete information, as well as copies of all written reports from any medical provider, consultant, educational instructor, or therapist who treats, teaches, or provides therapy to Luke;
5) directed that defendant may contact any of Luke's healthcare providers, school teachers and school administrators for information concerning Luke, provided defendant gives plaintiff prior notice of his intention to do so;
6) fixed a parenting time schedule that provided defendant with overnight parenting time on alternate weekends and on other time periods and days throughout the year;
7) fixed defendant's child support obligation at $270 per week;
8) directed that the parties share certain expenses for their son's care, with plaintiff paying 26% and defendant paying 74%;
9) appointed a new parenting coordinator to serve for a period of twelve months;
10) directed defendant to reimburse plaintiff for a portion of Dr. Arnold Gold's neurologic evaluation fees;
11) denied defendant's application for counsel fees and costs;
12) directed defendant to pay $68,000 toward counsel fees that plaintiff incurred in prosecuting the action between October 1, 2005 through January 31, 2007; and
13) ordered the counsel fees to be paid pursuant to a schedule agreed upon by counsel, with the entire amount being paid within two years.
On April 3, 2007, the court entered an order confirming the relief enumerated above.
On April 12, 2007, defendant moved for reconsideration of that part of the April 3, 2007 order setting his child support obligation, requesting that the court utilize his 2006 tax return information not previously submitted to the court. On May 21, 2007, plaintiff cross-moved for enforcement of litigant's rights seeking, among other matters, payment of her counsel fee award. On June 4, 2007, the court entered an order denying defendant's motion for reconsideration; denying plaintiff's motion seeking to hold defendant in violation of her litigant's rights; but directing defendant to provide certain information concerning Luke.
In addition, the court directed defendant to: satisfy the $68,000 counsel fee award by paying equal monthly installments of $2,833.33, effective April 2007; pay the April and May 2007 installments within twenty days of the date of the order; and pay all future installments on the fifteenth day of each month. It also imposed a per-diem sanction of $100 per day if defendant failed to timely pay the court-ordered counsel fee installments. Lastly, the court awarded plaintiff an additional counsel fee of $1,500. On June 11, 2007, defendant filed his notice of appeal from the orders of April 3, 2007 and June 4, 2007.*fn2
Thereafter, on June 15, 2007, defendant moved for a stay pending appeal of the April 3, 2007 and June 4, 2007 orders pertaining to the $68,000 counsel fee award, the court-ordered counsel fee installments, and the $100 per-diem sanction. Plaintiff opposed and filed a cross-motion to enforce litigant's rights, seeking injunctive and enforcement relief on other matters. On August 3, 2007, the court entered an order denying defendant's motion for a stay, granting plaintiff certain relief, and awarding plaintiff an additional counsel fee of $1,500.
We first address defendant's appeal under Docket No. A-5174-06, challenging certain provisions of the April 3, 2007, and June 4, 2007 orders. Defendant argues that the court erred in awarding plaintiff $68,000 in counsel fees at the conclusion of the trial. Defendant contends that the award was an abuse of the court's discretion because plaintiff was ultimately unsuccessful in her "unrelenting and unsupported" position against him having overnight parenting time with Luke. Defendant asserts that the trial court abused its discretion in directing him to satisfy the $68,000 counsel fee award by paying equal monthly installments of $2,833.33 and imposing a $100 per-diem sanction if he is late in paying any monthly installment. In addition, defendant argues that the trial court erred in directing him to pay the entire $17,100 fee of the first parenting coordinator, Carol Weiss, a consulting psychiatric social worker.
"The scope of appellate review of a trial court's fact-finding function 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. However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
An award of counsel fees in matrimonial matters rests in the discretion of the trial court. R. 4:42-9(a)(1); R. 5:3-5(c); Williams v. Williams, 59 N.J. 229, 233 (1971); Eaton v. Grau, 368 N.J. Super. 215, 225 (App. Div. 2004). An exercise of discretion will not be disturbed in the absence of a showing of abuse. Chestone v. Chestone, 322 N.J. Super. 250, 258 (App. Div. 1999).
When reviewing an application for counsel fees, a court is guided by "the factors set forth in the court rule on counsel fees, the financial circumstances of the parties, and the good or bad faith of either party." N.J.S.A. 2A:34-23. In a family action, Rule 4:42-9(a)(1) authorizes the award of counsel fees and refers to Rule 5:3-5(c), which provides that a court should consider the following factors:
(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 positions advanced by the parties; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.
For a court to award counsel fees based on a party's bad faith, there must be evidence of something more than a showing of an unreasonable, mistaken or frivolous position. Kelly v. Kelly, 262 N.J. Super. 303, 308 (Ch. Div. 1992). There must be evidence that a party had malicious motives, was unfair, desired to destroy the opposing party, or used the court system improperly to force a concession which was not otherwise available. Ibid. "'[W]here one party acts in bad faith, the relative economic position of the parties has little relevance' because the purpose of the award is to protect the innocent party from unnecessary costs and to punish the guilty party." Yueh v. Yueh, 329 N.J. Super. 447, 461 (App. Div. 2000) (quoting Kelly, supra, 262 N.J. Super. at 307). It is against these principles that we consider defendant's arguments.
The trial court initially entered pendente lite orders in August and September 2004, granting plaintiff temporary physical custody of Luke, with both parties retaining joint legal custody. In February 2005, defendant obtained overnight parenting time. In May 2005, the court entered an order continuing defendant's overnight parenting time, subject, however, to modification after three months. Meanwhile, in October 2004, the court entered an order appointing Weiss as parenting coordinator. The order apportioned Weiss's fee 40% to plaintiff and 60% to defendant, subject to reallocation by the court. Defendant paid the entire amount of Weiss's fee, $17,100.*fn3
At trial, defendant sought to enforce the terms of the October 2004 order apportioning Weiss's fee. The court denied the request, reasoning that defendant was earning approximately $120,000; plaintiff was not working; and Weiss "wasn't evenhanded in her treatment of the parents," having taken "the father's side." Regarding the merits of the custody, parenting time and support issues raised by both parties, the court granted plaintiff sole legal custody and sole responsibility "for making major decisions concerning [the son's] health, education and welfare." Nevertheless, except in emergencies, plaintiff was to provide defendant with notice of "any major decisions for [Luke]." The court also directed plaintiff to seek defendant's input on their son's healthcare providers and on decisions affecting his education. Both parties were permitted to contact the boy's healthcare providers or teachers directly, but needed to inform the other party when he or she was going to do so.
The court rejected plaintiff's request to eliminate the child's overnight stays with defendant, and, in fact, increased the overnight stays to about eight per month. In addition, while Luke was with defendant, he needed to provide or allow the child's requisite therapy in his house. The court concluded that, although defendant ultimately accepted that therapy was needed, plaintiff was to determine the child's in-home therapy needs. The court also set a parenting time schedule for specific days, weekends and holidays. Defendant's child support was set at $270 per week, and the court established percentages for paying the child's other expenses.
Plaintiff's counsel fees totaled $118,136.15 (rounded in amount to $118,000 by the court) up to the time of the court's decision, which included plaintiff's payment of $8,825 for legal services in defending an administrative action defendant had filed with the State seeking review of Luke's Early Intervention Program (EIP) therapies. Defendant's legal fees were $75,000. The court noted that the parties were not challenging the services rendered or the amounts of the fees, only who would pay for what.
The court focused on each party's good or bad faith and ability to pay. It concluded that, while defendant's assertion of a "conspiracy theory" and his reporting to the State that plaintiff was "misu[sing]" therapy came "extremely close to bad faith" and was not in Luke's best interests, the court, nevertheless, found that defendant honestly believed that his son was receiving too much therapy. Therefore, the court concluded that defendant had not acted in bad faith.
The court rejected defendant's contention that plaintiff was "unwilling to share time with [Luke]," determining instead that plaintiff's reluctance to allow the child's overnight stays with defendant was based on defendant's refusal to accept the boy's diagnosis. At the same time, the court determined that defendant's refusal to accept Luke's diagnosis was fueled by plaintiff's refusal to allow more overnight stays, constituting what the court described as a "vicious cycle." Ultimately, the court concluded that defendant "came a hair's [breadth] from what [it] would view as bad faith litigation. I do not find that the mother engaged in . . . bad faith litigation."
Plaintiff stipulated to the court's imputation of $35,000 per year income, having previously earned about $50,000, but since having stopped working. Although defendant agreed to the imputation for purposes of determining child support, he did not agree to it for the purpose of determining counsel fees. The court accepted the $35,000 amount, however, because even though plaintiff was not then working, she had a "special needs child." Accordingly, the court determined that if plaintiff had been working at that time, she would have incurred "a large child care component," unnecessary under the circumstances. Applying the New Jersey Support Guidelines*fn4 to the parties' joint incomes, the court concluded that defendant earned 74% of the total income, and plaintiff 26% of the total.
The court next added the parties' counsel fees ($193,000) and multiplied that amount by 74% ($143,000). From that amount, the court subtracted the $75,000 defendant paid his own counsel, leaving a balance of $68,000. The court directed defendant to pay that amount of plaintiff's counsel fees. The court determined that, although the total amount of the fees was "a very large number," its decision reflected a result whereby the parties were each paying "their proportionate share." The court encouraged counsel to work out a payment schedule, and in the confirming April 3, 2007 order, required that the entire sum be paid within two years.
We address defendant's argument that the trial court erred in awarding plaintiff $68,000 in counsel fees. As before the trial court, defendant does not challenge the reasonableness of the hourly fee charged by plaintiff's counsel, nor the quantum or necessity of the services rendered. Defendant's primary contention is that the court abused its discretion in imposing the counsel fee because he prevailed in his position on overnight parenting time with Luke. Defendant asserts that the court should have given more weight to its decision on the overnight parenting time issue than other factors under Rule 5:3-5(c)(1)-(9). Not so. The "result obtained" is only one factor the court considers in determining a counsel fee award, and results do not necessarily trump or outweigh the other factors under the rule.
Here, the court agreed with defendant's request to continue Luke's overnight stays with him. Nevertheless, defendant's success on other issues was, at best, qualified. R. 5:3-5(c)(7). For example, although the court directed that Luke's overnight stays with defendant were to continue, and gave defendant the right to be informed of decisions made by plaintiff on the child's behalf, it granted plaintiff sole legal custody and gave her sole decision-making authority over Luke's education and healthcare, matters about which defendant wanted some control. The court also credited plaintiff's view of Luke's need for therapy over defendant's view, stating that "[the child] is lucky that his mother had expertise in this area and noticed that something was wrong with him as quickly as she did."
In addition, defendant's actions in pursuing part of this litigation were found by the court to be less than reasonable. As an example, defendant stated that he did not dispute Dr. Arnold Gold's or the other experts' recommendations about therapy; nevertheless, defendant continued making the need for therapy a point of dispute, asserting that plaintiff had not kept him fully apprised of Luke's treatments earlier on.
However, contrary to defendant's protestations, plaintiff did involve him in Luke's diagnoses. Defendant was present at both Gold's June and October 2005 evaluations. In addition, pendente lite plaintiff had sent defendant "some 80 . . . pages of emails" informing him of various developments concerning their son. Thus, although it is true that there were times when plaintiff did not keep defendant fully apprised of everything she was pursuing to confirm or address Luke's diagnosis, defendant did receive substantial information from plaintiff about his treatments.
Defendant contends that it was plaintiff that pursued unreasonable positions in the action, not he. He asserts that plaintiff unreasonably opposed his desire to have overnight visitation with their son, was at odds on that issue with her own expert, and ultimately lost on that issue. In support of his argument, defendant cites to the court's mid-trial "admonishment" to plaintiff that it was "very risky to put on an expert who you disagree with," because the court could decide that "you should pay more counsel fees." We disagree.
Plaintiff testified that although she believed Dr. Mathias Hagovsky was the best neurologist for her son, she disagreed with him about the overnight stays. Plaintiff explained that she opposed the overnight stays because of Luke's problems and his need for "consistency." The record supports plaintiff's position. Pendente lite, the doctors were unsure of the extent of Luke's problems, there was a possibility of autism-related causes, and defendant largely refused to acknowledge the possibility of such causes.
In light of the above circumstances, plaintiff's fear that such overnight stays with defendant were not in the son's best interests was not unreasonable. And while it is true that, because of defendant's administrative complaint, the State later amended its decision about the child's need for therapy and down-graded the number of weekly therapy hours to which he was entitled, the fact remains that all of the experts and the State essentially vindicated plaintiff's position that Luke required special and extensive therapy for his disability.
Even if plaintiff was mistaken in believing that overnight stays were not in Luke's best interest, the proper inquiry was not into her beliefs per se, but the good faith in which she held them. Under the circumstances here, the record provides "adequate, substantial, credible evidence" supporting the court's findings of the parties' relative intents. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974); see also Cesare, supra, 154 N.J. at 413 ("Because of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding.").
We are satisfied that the positions of both parties undoubtedly contributed to the amount of counsel fees incurred by the parties in the case. Defendant is correct that he ultimately prevailed on the question of their son's overnight stays with him (R. 5:3-5(c)(7)), going from six to eight overnights per month. Nevertheless, he was not provided with an unlimited number of overnights. By the same token, plaintiff's belief in the need for substantial therapy for their son was largely substantiated both in the administrative action and in opposing defendant's request for overnight stays.
Concerning the financial factors of Rule 5:3-5(c)(1) and (2), defendant notes that: at the outset of the case in 2004, plaintiff was making $50,000, not the $35,000 the court later imputed to her; in January 2006 she voluntarily decided to cut her hours to twenty-five per week and assume part-time status; and in August 2006 plaintiff decided to leave her employment after receiving a poor performance review.
Nothing, however, suggests that plaintiff's change in job status was in bad faith or even unreasonable under the circumstances of having a special-needs child who was with her most of the time. See Caplan v. Caplan, 182 N.J. 250, 270 (2005) (in determining how much income to impute, a court should consider "a party's responsibility for care of children, and, in particular, the care required for any special-needs child"). Defendant fails to address the special needs aspect of the court's determination or the fact that, by staying home with their son, plaintiff saved them both childcare costs that could have been substantial.
Defendant next asserts that a review of plaintiff's CIS and other information reveals obvious sources of loans or income that should have figured in a proper income imputation calculation. Not so. Plaintiff's August 2006 CIS reflects an annual salary of $36,000, clearly in line with the amount the court later imputed, though approximately $15,000 less than plaintiff's earlier salary. Plaintiff does not dispute that at the start of the litigation she earned approximately $50,000, and that pendente lite her CIS indicated large expenses suggesting she might have been receiving financial help from an undisclosed source.
Assuming that plaintiff had previously received family loans or gifts as defendant suggests, we are not aware of any authority for the proposition that such sources are per se to be considered in imputing income. There exists no standard by which such "income" sources could be deemed predicable or ongoing, and there is no legal compulsion for such sources to continue contributions which are, by their very nature, voluntary and unpredictable.
Nevertheless, proof that a party receives periodic or routine loans or gifts of relatives, or receives a large lump sum gift that generates income, may be relative in determining the party's "need" under a counsel fee analysis. See Argila v. Argila, 256 N.J. Super. 484, 494-95 (App. Div. 1992) (stating that a court should consider "income and available capital assets" in determining a counsel fee application). Here, however, the record does not contain such proofs, and defendant did not request an evidentiary hearing on the attorney fee application.
In addition, the award to plaintiff was based only partly on need, with the court also considering plaintiff's good faith and defendant's borderline bad faith as factors. See Lavene v. Lavene, 148 N.J. Super. 267, 277 (App. Div.) (directing a remand on a counsel-fee issue where the trial court failed to address the wife's good faith), certif. denied, 75 N.J. 28 (1977).
Defendant asserts that the court's "reliance upon gross income" and the Guidelines without taking into consideration such factors as living expenses and debts "resulted in a terrible injustice." While, ordinarily, a court should not just compare the parties' gross incomes without taking into account other relevant financial factors, Argila, supra, 256 N.J. Super. at 494, defendant fails to explain exactly how the court's ruling here ran afoul of this proscription. Beyond saying that the approach was "overly simplistic and unfair," he does not fault the principle of a court's applying the Guidelines as a gauge of the fair proportionality of legal fees. In fact, the Guidelines themselves are based on net income rather than gross income. Pressler, supra, at ¶ 11 ("Defining Income").
The court explained that it was making its award "proportional," tying the amount of plaintiff's award to the Guidelines. Thus, the court did not act arbitrarily and did not determine the $68,000 amount in a vacuum.
Nevertheless, in a related series of claims, defendant faults the court's counsel fee decision for not expressly addressing the other Rule 5:3-5(c) criteria. The failure to consider each factor on the record is not fatal to a counsel fee award. See Mani v. Mani, 183 N.J. 70, 94-95 (2005) (where the Court summarized the factors a judge should consider on a counsel fee award:
In a nutshell, in awarding counsel fees, the court must consider whether the party requesting the fees is in financial need; whether the party against whom the fees are sought has the ability to pay; the good or bad faith of either party in pursuing or defending the action; the nature and extent of the services rendered; and the reasonableness of the fees.). [(underscoring omitted).]
We conclude that the court's determinations in support of its counsel fee award satisfied that standard. In light of the parties' incomes, assets and expenses, the respective positions taken during the litigation and the fact that plaintiff ultimately paid approximately $50,000 of her own counsel fees, the court's award of counsel fees against defendant was not "so wide of the mark as to constitute a mistaken exercise of discretion." Chestone, supra, 322 N.J. Super. at 258. To the extent not addressed here, defendant's remaining arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Defendant objects to having to pay Weiss's entire fee, arguing that the court should have apportioned the fee as set forth in the October 2004 order. We disagree.
The October 2004 order providing that Weiss's fees be paid sixty/forty by defendant and plaintiff, respectfully, was subject to reallocation. As noted, a court may modify, change and amend its orders prior to final judgment. Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 257 (App. Div. 1987), certif. denied, 110 N.J. 196 (1998). In matrimonial cases especially, the court has ongoing power to enter orders regarding "the care, custody, education and maintenance of the children . . . as circumstances of the parties and the nature of the case" make necessary. N.J.S.A. 2A:34-23.
Here, the court found that Weiss had a pro-defendant bias, and even Weiss acknowledged that plaintiff had expressed to her an assumption that Weiss favored defendant. Defendant, however, got along well with Weiss and continued contacting her for assistance in seeking increased parenting time. Weiss was also able to obtain information from school officials that she presumably shared with defendant about the child. The subsequent parenting coordinator order provides that plaintiff will pay a portion of the new coordinator's fee. Under those circumstances, we do not conclude the court exceeded its discretion in making defendant pay Weiss's fee.
Thus, we reject defendant's challenges to the $68,000 counsel fee award and to the court's decision to have defendant pay Weiss's parenting coordinator fee.
Defendant argues next that the trial court erred in directing him to pay the $68,000 counsel fee award in twenty-four equal monthly installments. Defendant contends that the trial court erred in imposing a $100 per-diem sanction against him if he is late in paying any of the court-ordered monthly installments against the $68,000 counsel fee award. He asserts that the $100 per-diem sanction constituted an abuse of the court's discretion because at the time it was issued, he was not in violation of any court order. We agree.
That a court has the power to compel a litigant to comply with its order is not in dispute. R. 1:10-3; Ridley v. Dennison, 298 N.J. Super. 373, 381 (App. Div. 1997); Franklin Twp. Bd. of Educ. v. Quakertown Educ. Ass'n, 274 N.J. Super. 47, 55-56 (App. Div. 1994); Bd. of Educ. of Middletown v. Middletown Teachers Educ. Ass'n, 352 N.J. Super. 501, 508-09 (Ch. Div. 2001). The purpose of imposing sanctions under the rule enforcing litigant's rights, R. 1:10-3, is "to afford relief to a litigant who has not received what a [c]court [o]rder or [j]udgment entitles that litigant to receive." D'Atria v. D'Atria, 242 N.J. Super. 392, 407 (Ch. Div. 1990) (addressing former Rule 1:10-5, now part of Rule 1:10-3).
The nature of a proceeding to enforce litigant's rights is not for contempt under Rule 1:10-2, but to enforce a court's order under Rule 1:10-3. Ridley, supra, 298 N.J. Super. at 381. "Relief under Rule 1:10-3, whether it be the imposition of incarceration or a sanction, is not for the purpose of punishment, but as a coercive measure to facilitate the enforcement of the court order." Ibid. Thus, monetary sanctions under the rule need to be "related to the litigant's damages" and not punitive. D'Atria, supra, 242 N.J. Super. at 408.
Simply stated, "the sanction, while 'in an amount sufficient to sting and force compliance . . . must not be so excessive as to constitute ruinous punishment,'" Franklin Twp., supra, 274 N.J. Super. at 56 (quoting E. Brunswick Bd. of Educ. v. E. Brunswick Educ. Ass'n., 235 N.J. Super. 417, 422 (App. Div. 1989)). Before imposing a sanction, the court "must consider the offending party's ability to pay and the sanction's impact on that party in light of its income, status and objectives, as well as the sanction's impact on innocent third parties." Id. at 422-23.
Here, the court issued its trial decision, including the first counsel fee award, on March 12, 2007. On April 3, 2007, the court entered a confirming order directing that the counsel fees be paid through a plan to be agreed upon by counsel, but that the entire amount be paid within two years.
On April 12, 2007, defendant filed a motion for reconsideration, seeking to have the court use his 2006 income tax return in determining his child support obligation. Plaintiff filed a cross-motion, seeking to enforce litigant's rights pursuant to Rule 1:10-3. Among the relief sought was an order sanctioning defendant for failing "to respond to plaintiff's attorney's proposal for a payment plan."
In his responsive certification, defendant asserted that, prior to the time judgment was entered, he did not have the income information he was then providing in his motion because "my 2006 income tax return was not yet completed." The 2006 income was only "about $8,000" lower than his 2005 income. Otherwise, defendant contended that: 1) the counsel fee award was "manifestly unfair"; 2) "[p]laintiff's demand for monthly payments of $2,833.33 is not affordable to me and I cannot pay what I do not have"; and 3) because the court had given him two years to pay he was "discussing with [his] attorney options available to address these payments."
At argument on the cross-motions, plaintiff's counsel represented that he had proposed the monthly figure of $2,833.32 by taking the $68,000 award and dividing it by twenty-four months, the time period the court had given defendant to pay the award in full. Counsel stated that he "got no response back in terms of a plan, nothing. Zero." Defense counsel responded that he "had [defendant] looking into payments options," including borrowing the money. Defendant had returned to graduate school and was "dealing with the issue of student loans." The court then decided that "[a] financial sanction of $100 a day should be added until payment is made. I knew he could not pay it all at once, but he's just got to get it paid."
Defense counsel objected, arguing that on the existing record the court could not conclude that defendant had acted in bad faith.
We conclude that the trial court should not have directed defendant to satisfy the counsel fee award in twenty-four equal monthly installments or have imposed the $100 per-diem sanction for several reasons. First, defendant represented to the court in his certification that he did not have the financial wherewithal to pay the counsel fee award in twenty-four equal monthly installments but that he was "discussing with [his] attorney options available to address the  payments." Nevertheless, the court responded that defendant may have to borrow the funds and gave him twenty additional days to arrange the first payment. An evidentiary hearing should have been conducted as to defendant's then ability to pay the monthly installments, defendant having just returned to graduate school, before a sanction was imposed.
Second, defendant was not in violation of any prior order of court. The April 3, 2007 order directed him to pay plaintiff counsel fees in the amount of $68,000 with the parties' counsel working out a payment plan. The only time constraint contained in the order of April 3, 2007, was that the counsel fee award was to be satisfied within two years. The order was silent as to when counsel needed to agree upon a payment plan or any future action if counsel could not agree. Because defendant had not responded to plaintiff's counsel's offer to pay the counsel fee award in twenty-four equal payments, the court inferred that defendant would not pay the fee "on a timely basis without a large financial incentive to do so." However, defendant never stated that he was not going to pay the fee within the two-year period provided by the court, and the court never set an outside limit for the parties to reach an agreement as to a payment plan. Accordingly, we determine that the imposition of the per-diem sanction was premature.
Third, the court did not explain how it arrived at the sanction of $100 per day, rather than a smaller sanction amount per day or per week. Without such an explanation, we conclude that the amount imposed was arbitrary and punitive in amount. The court had recognized that defendant may not have had funds to pay the monthly installments, stating that defendant may have to borrow the money. If defendant was unable to borrow funds and was more than one month late in making an installment payment, the sanction would exceed the amount of that month's installment. The imposition of such a sanction, although certainly coercive in nature, becomes a punishment. Thus, we reverse that part of the June 4, 2007 order directing that defendant satisfy the initial $68,000 counsel fee award by paying twenty-four equal monthly installments of $2,833.33 a month, effective April 2007, and imposing a $100 per-diem sanction if defendant is late in paying any monthly installment. We remand to the trial court to reconsider its prior order directing defendant to satisfy the counsel fee award in equal monthly installments of $2,833.33. In reconsidering the issue, the court, if necessary, shall conduct a hearing to determine defendant's present ability to pay the attorney fee award.
We now address defendant's appeal from the order of August 3, 2007. Defendant argues that the trial court erred in awarding plaintiff counsel fees on his motion for a stay pending appeal of the earlier counsel fee award, and on plaintiff's cross-motion. We disagree. In family actions, because awards of counsel fees and costs are discretionary with the trial court, we will not reverse on appeal absent a showing of abuse of the court's discretion. Eaton, supra, 360 N.J. Super. at 225.
Following the April and June orders awarding plaintiff counsel fees and setting forth the per-diem sanction for late payment, defendant filed his appeal. Pending the appeal, defendant filed a motion for a stay. Plaintiff filed a cross- motion opposing the stay and seeking various forms of injunctive and enforcement relief in connection with the parties' ongoing parenting issues. She also sought counsel fees.
The trial court denied defendant's motion for a stay of the award of counsel fees and the per-diem sanction pending appeal, determining that there was no irreparable harm, stating that it was "money we're talking about" and "if my order [is] reversed, it would be very easy to solve that problem." Concerning plaintiff's cross-motion, the court granted her the relief sought regarding defendant's communications with the new parenting coordinator and Luke's school. It also directed that defendant pay amounts he owed for Gold's evaluations, and provide evidence he had obtained life insurance for Luke's benefit as previously ordered. Nevertheless, the court denied, for lack of evidence, that part of plaintiff's application seeking to enjoin contact between defendant and their son's care providers.
Defendant argues that the court erred in awarding counsel fees on his motion for a stay on the prior court orders. Defendant contends that the court never found that his application was made in bad faith and, as such, the court should not have imposed a "penalty" for his seeking the stay. We are satisfied that defendant misconstrues the reason for the imposition of the additional counsel fee award.
Although the August 3, 2007 order provides that the award of $1,500 counsel fees were "in connection with the presently-pending motions," we are satisfied from a review of the transcript that the court did not award counsel fees because of defendant's motion for a stay, but rather because of plaintiff's need to file a cross-motion to enforce her litigant's rights and of her success on that motion. At the end of oral argument on he cross-motions, the court inquired of plaintiff's counsel, "[w]hat are you asking for by way of counsel fees for this [cross-]motion?" (Emphasis added). Counsel requested $4,451 in fees and $23.50 in costs. The court responded: "I'm going to require [d]efendant to pay $1[,]500 in connection with the present motion. In my view, these motions were necessitated by his refusal to follow the letter and spirit of my decision. And while he remedied some of it prior to today, I have no confidence that he would have remedied it had the [cross-]motion not been filed."
Defendant does not appeal from the trial court's granting of the substantive portions of plaintiff's cross-motion, nor from the denial of his motion for a stay. Defendant only appeals the award of $1,500 additional counsel fee. We find no abuse of discretion in the court awarding that fee.
The $1,500 amount was not excessive, nor unreasonable, given that plaintiff's counsel had billed for approximately three times that amount. The court had presided over the trial and other subsequent proceedings, so it was well acquainted with the parties, their counsel, and the ongoing issues. In that respect the court's insights well justified its exercise of discretion in awarding a reasonable fee it deemed necessary given plaintiff's need to vindicate her rights. Although defendant continues to claim an inability to afford the payments ordered, the court noted that according to the parties' CIS, plaintiff made only "half as much" as defendant but her living expenses were greater than his. See Williams v. Williams, 59 N.J. 229, 233 (1971) (in deciding whether wife is entitled to counsel fees and costs, court primarily focuses on the wife's need, the husband's ability to pay and the wife's good faith).
Defendant asserts, however, that many of plaintiff's grievances had been resolved prior to her motion, or at least prior to the return date (payment of Gold's fee, vacation expenses, and proof of insurance). He also asserts that, with a parenting coordinator "in place," there was no need for plaintiff to have filed a motion concerning Luke's summer activities. In fact, at argument the court acknowledged that some of the issues that plaintiff had raised in her cross-motion had since become moot. But it also found that some of defendant's interim compliance had only resulted because of the pending cross-motion.
On the appeal filed under Docket No. A-5174-06, we affirm that part of the order of April 3, 2007, awarding plaintiff $68,000 counsel fees. We reverse that part of the order of April 3, 2007, directing defendant to satisfy the $68,000 counsel fee award by paying twenty-four equal monthly installments of $2,833.33 effective April 2007; directing defendant to pay the April and May 2007 installments within twenty days of date of the order; and directing him to pay a $100 per-diem sanction if he is late in paying any monthly installment. We remand the issue concerning defendant's satisfaction of the $68,000 counsel fee award for further proceedings consistent with this opinion.
On appeal filed under Docket No. A-0124-07, we affirm that part of the order directing defendant to pay plaintiff $1,500 in counsel fees.
Affirmed in part; reversed in part; and remanded to the trial court for further proceedings consistent with this opinion.