November 17, 2009
MAUREEN KELLY, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
PETER ARATO, JR., DEFENDANT-APPELLANT/CROSS-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, Docket No. FM-03-189-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 28, 2009
Before Judges Fisher, Sapp-Peterson and Espinosa.
In reviewing a post-judgment order, we consider, among other things, whether the judge correctly concluded that defendant should be required to pay alimony despite his exwife's remarriage. In reversing, we reject the argument that the parties' property settlement agreement (PSA), which makes no mention of remarriage, conclusively establishes that remarriage does not terminate the alimony obligation. Instead, we remand for an evidentiary hearing to establish the parties' intentions.
The parties were married in 1985. They had two children, who are currently twenty-three and nineteen years of age. The judgment of divorce, which incorporated the PSA, was entered on January 2, 2004.
The PSA contains the parties' stipulations that plaintiff Maureen Kelly would maintain custody of the children subject to defendant Peter Arato's visitation rights. Defendant agreed to make monthly payments to plaintiff of $100 in alimony and $3100 in child support. The parties also agreed that defendant would pay at least half of the children's college education.
Plaintiff remarried in June 2004, approximately six months after entry of the judgment of divorce. Defendant immediately stopped paying alimony. It was not until four years later, when defendant's attorney wrote of the need to modify the child support obligation based on one of the children's attendance at an out-of-state college, that plaintiff complained of the cessation of alimony and asserted an intention to seek enforcement of the PSA's alimony provisions.
After the parties were unable to informally resolve their differences, defendant moved in July 2008*fn1 seeking, among other things, an order declaring that alimony terminated when plaintiff remarried in June 2004 and for an order downwardly modifying the child support obligation. Plaintiff cross-moved seeking, among other things, a continuation of alimony and child support in the amounts set forth in the PSA and the payment of the alimony defendant failed to pay after plaintiff's remarriage. By order entered on October 3, 2008, the judge denied defendant's motion regarding the alimony and child support obligations and denied plaintiff's motion for the payment of the alimony that accrued from the time of her remarriage until the judge's decision.
Defendant appealed, arguing that the judge erred with regard to her holdings on both alimony and child support. He contends, in essence, that: the PSA did not require that he pay alimony after plaintiff's remarriage or, at the very least, the PSA's terms are ambiguous in that regard and an evidentiary hearing was required to ascertain the parties' intentions; and the college attendance of one or both children, as well as other circumstances, warranted a reassessment of the child support obligation. Plaintiff cross-appealed, arguing that the judge erred in refusing to order defendant to pay the alimony arrears and her counsel fees.
The Legislature has declared that an alimony obligation "shall terminate" upon the remarriage of the supported spouse. N.J.S.A. 2A:34-25. This statute memorializes "the strong public policy against enforcing support orders on behalf of remarried former [spouses]." Ehrenworth v. Ehrenworth, 187 N.J. Super. 342, 347 (App. Div. 1982). Despite the public policy, we have recognized that parties may contract for the continuation of alimony beyond the date of a supported spouse's remarriage. Id. at 349. Accordingly, we must initially turn to the PSA to consider whether the parties unambiguously agreed that defendant would remain obligated to pay alimony following plaintiff's remarriage.
The parties included in their PSA a provision that declares alimony would continue "for the natural lives of the parties, unless terminated by any one or more of the following" and then lists two events: repudiation or modification of the PSA by the written "mutual consent of the parties"; and defendant's death. Plaintiff argues that because remarriage is not included as an event that would terminate alimony the parties agreed it would continue. On the other hand, defendant argues that the parties did not have to expressly provide for what the Legislature commands and that the PSA's silence on that point reveals an intention that the right to termination set forth in N.J.S.A. 2A:34-25 would apply.
In most instances, we would find little merit in the contention that the complete absence of any mention of remarriage in a PSA would permit a finding that the payor spouse waived the right set forth in N.J.S.A. 2A:34-25 to have alimony cease upon the supported spouse's remarriage. By way of comparison, Ehrenworth dealt with the enforceability of a PSA that stated the husband's alimony obligation would continue to be paid "regardless of whether or not the [w]ife remarries." 187 N.J. Super. at 345. Here, the PSA makes no mention of remarriage, but it does have a provision that may be plausibly read as excluding any other terminating event than those listed. By the same token, the PSA's silence on the subject of remarriage also renders plausible the contention that defendant waived the rights set forth in N.J.S.A. 2A:34-25. In short, the language of the PSA neither conclusively establishes nor conclusively negates plaintiff's remarriage as an event that would terminate alimony. As a result, the judge was mistaken insofar as she held that, as a matter of law, the PSA required a continuation of alimony in this circumstance. The dispute cannot be resolved by resort to the four corners of the PSA. It requires a consideration of the parties' actual intentions at the time of formation.
The record does not reveal any clear information regarding the parties' true intentions. Neither party, in the competing certifications filed in the trial court, indicated they reached an understanding as to what would occur should plaintiff remarry. Indeed, there is no indication in the existing record that remarriage was even discussed during their settlement negotiations. Certainly, if the parties never reached an agreement that alimony would continue after plaintiff's remarriage, then defendant is entitled to the benefit of N.J.S.A. 2A:34-25 and its expression of the strong public policy that alimony end upon the remarriage of the supported spouse. See Flaxman v. Flaxman, 57 N.J. 458, 461 (1971) (holding that "[t]here is no question but that a valid second marriage extinguishes a wife's right to alimony from her first husband"); Ehrenworth, supra, 187 N.J. Super. at 347-48. "[T]he law is a silent factor in every contract[, and p]arties in New Jersey are likewise presumed to have contracted with reference to the existing law." Camden Bd. of Educ. v. Alexander, 181 N.J. 187, 195 (2004) (quoting Silverstein v. Keane, 19 N.J. 1, 13 (1955)). Absent an actual agreement to the contrary, the parties must be deemed to have contracted in a manner consistent with the mandatory directive of N.J.S.A. 2A:34-25. Should the judge find, following the conducting of an evidentiary hearing, that the parties did not agree about the impact of remarriage on the obligation to pay alimony, then defendant is entitled to an order declaring that the alimony obligation terminated on the date of plaintiff's remarriage.
In ascertaining the parties' intent, the judge may also consider surrounding circumstances. For example, the moving and opposing papers filed in the trial court demonstrate that plaintiff took no action and uttered no complaint when defendant stopped paying alimony upon her remarriage. She did nothing for approximately four years and only urged her interpretation of the PSA and her claim that alimony should continue when defendant suggested that child support should be modified. The subsequent conduct of contracting parties often reveals their actual intentions. Michaels v. Brookchester, Inc., 26 N.J. 379, 388 (1958). Here, plaintiff's lengthy slumber, which followed the cessation of defendant's alimony payments, suggests that plaintiff understood her right to alimony terminated when she remarried. On the other hand, plaintiff argues that she realized the alimony should continue but viewed a return to court on that issue as economically infeasible and that her delay should not be held against her. The judge should certainly make findings regarding the alleged reasons for plaintiff's delay when fixing the appropriate weight that should be given to her inaction following the cessation of alimony.
Defendant asserts that the PSA was drafted by plaintiff's attorney and plaintiff does not dispute that defendant was unrepresented when the PSA was negotiated and executed. The judge should weigh this additional circumstance, as well as any other relevant circumstances, in ascertaining the parties' intentions.
Defendant also argues the judge erred in failing to find that changed circumstances warranted a reassessment of the child support obligation. We agree.
The judge, in fact, did not examine defendant's claim of changed circumstances but instead mistakenly concluded that the terms of the PSA precluded modification of the child support obligation. That is, in denying defendant's motion, the judge held:
Per the [PSA] entered into by the parties,
[d]efendant has a child support obligation of $1,550 per child, per month. Specifically, the agreement states that this amount "shall be in addition to any payments provided for elsewhere in this agreement." The agreement further provides that [d]efendant is to provide at least 50% of the tuition and room and board for the parties' daughter[s'] college education[s]. As such, the [c]court finds it was the intent of the parties that [d]efendant's child support obligation would continue as agreed-upon until emancipation as set forth in Article II, paragraph 4 of the PSA.
The judge accurately stated that the PSA called for defendant to pay $1550 per month per child and that defendant also agreed to pay "at least 50%" of the children's college expenses. However, there is nothing about the PSA that would suggest defendant had bargained away his right to seek a modification of the amount of child support upon a showing of changed circumstances. It is true that the PSA stipulates the events that would call for a termination of child support, but the PSA does not declare or even suggest that the parties intended to dispense with the right of either party to seek a modification of child support. Accordingly, the judge erred in declining to consider the allegations of changed circumstances when ruling on defendant's motion.
Having carefully examined the parties' contentions, we conclude that defendant presented sufficient evidence of changed circumstances to warrant additional discovery and an evidentiary hearing. First, when defendant moved for a modification, it was undisputed that at least one of the children was enrolled in a college in Florida and the other had been enrolled in the same college but was not then attending due to a medical problem. These circumstances are far different from the situation as it existed when the parties were divorced. Although a parent receiving child support has certain fixed expenses that do not change when a child goes away to college, there are other expenses that are impacted by the child's absence from the home.*fn2
Second, it appears from the motion papers that, at the time of the divorce, defendant was earning approximately $66,000 annually while plaintiff was earning approximately $38,000 annually; those papers indicate that defendant now earns approximately $82,000 annually while plaintiff earns approximately $90,000 annually. These alterations in the parties' income since child support was fixed by the PSA present a changed circumstance that warrants a revisiting of that obligation. Lepis v. Lepis, 83 N.J. 139 (1980); Stamberg v. Stamberg, 302 N.J. Super. 35, 42 (App. Div. 1997) (holding that a movant may demonstrate changed circumstances not only by reference to a substantial change in the movant's income but also by a substantial change in the opponent's income).
Third, plaintiff has remarried. Although the child support guidelines exclude the income of another household member,*fn3 such as a new spouse, in calculating child support, a current spouse's income may have relevance to the extent its availability impacts the financial resources of the parent. For example, a current spouse may contribute toward roof expenses, thus alleviating the extent to which the parent has to contribute toward those expenses. That is a fact of interest in fixing a child support obligation. See Hudson v. Hudson, 315 N.J. Super. 577, 583 (App. Div. 1998).
All these circumstances, whether viewed collectively or individually, reveal that defendant presented a prima facie case of changed circumstances. The significant changes in the amount of the parties' income, the fact that at least one child is residing outside of the home for a substantial part of the year, and the potential indirect financial impact of plaintiff's remarriage, all have relevance in fixing a child support obligation.
Following our remand, the trial judge should ascertain the extent to which further discovery should be permitted beyond what the parties have already voluntarily exchanged and, if necessary, permit a brief period of discovery. Absent the parties' mutual agreement or their stipulation of all germane facts, the judge should conduct an evidentiary hearing in determining the proper amount of defendant's child support obligation.
In light of our disposition of the alimony and child support issues, we find it necessary to only briefly mention the remaining issues presented by the appeal and cross-appeal.
First, plaintiff has argued the judge erred in finding she was not entitled to past due alimony because of her delay in seeking relief. That contention may be rendered moot should the judge determine, after an evidentiary hearing, that the alimony obligation terminated with plaintiff's remarriage. Because we have directed the judge to consider plaintiff's delay in connection with an examination into the parties' intentions regarding the impact of remarriage, we do not foreclose the judge from reconsidering at that time her application of the doctrine of laches, if necessary. A court of equity may turn away a claimant who has delayed in seeking relief for an unreasonable and inexcusable length of time thereby causing prejudice to an adverse party. Lavin v. Hackensack Bd. of Educ., 90 N.J. 145, 151-52 (1982). The judge was certainly entitled to view the length of plaintiff's delay as unreasonable, but the judge's written decision does not reveal whether the judge made findings regarding plaintiff's purported reasons for the delay or made a determination that those reasons were not justifiable. In addition, the judge did not examine whether there was any change in the "conditions or relations of the parties" such that it would be "inequitable to permit the claim to be enforced." Id. at 153.
Second, we reject defendant's argument regarding the date upon which any modification of child support should apply. N.J.S.A. 2A:17-56.23a precludes the retroactive modification of child support to any date earlier than the date fixed by the last sentence of that statute. To the extent the statute permits a party to serve a "written notice" declaring a changed circumstance as fixing the earliest date upon which the modification will commence, the statute also requires that a motion for modification must be filed within 45 days of that "written notice" and, if not, "modification shall be permitted only from the date the motion is filed with the court." Although the parties have failed to identify the precise date that defendant's motion for a modification was filed -- we have assumed from what may be gleaned from the record that it was filed in July 2008*fn4 -- we reject the contention that a letter defendant wrote to plaintiff in March 2008 fixed the date upon which any future modification should commence because the subsequent motion was not filed within forty-five days of that letter. As a result, the effective date of any modification of the child support obligation should extend back no further than the filing date of defendant's motion.
Third, each party argues that the judge erred in failing to award counsel fees in their favor and both argue that the judge correctly denied their adversary's motion for fees. Whether either party may be entitled to an award of counsel fees should abide the outcome of the evidentiary hearing required by today's judgment.
Reversed and remanded for further proceedings in conformity with this opinion. We do not retain jurisdiction.