January 5, 2010
LEE M. FOX, PLAINTIFF-RESPONDENT,
EILEEN R. FOX, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Gloucester County, Docket No. FM-08-357-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 19, 2009
Before Judges Lisa, Baxter and Alvarez.
Defendant Eileen R. Fox appeals from an alimony award entered post-divorce, claiming it is inadequate, and the denial of her request for counsel fees and costs. For the reasons set forth below, we affirm.
Plaintiff Lee M. Fox and defendant married on June 4, 1988 and have two adult children. The parties separated on August 18, 2003; a dual final judgment of divorce was granted on February 17, 2006. In the divorce action, each was made responsible for their individual counsel fees.
Defendant appealed but almost immediately sought a temporary remand to the trial court for reconsideration of alimony in light of her Social Security Disability (SSD) award. An order was entered remanding the matter for that purpose on January 31, 2007.
As a result of the remand hearing, the trial court on January 11, 2008 ordered plaintiff to pay $492 per week in permanent alimony until February 2009, when the payment would decrease to $365 per week due to defendant's anticipated eligibility for Medicare.*fn1 On January 31, 2008, an amended order was entered, which is unrelated to this appeal. Plaintiff simultaneously filed a motion seeking reconsideration of the January 11 alimony order and requesting the court to compel defendant to provide proof of medical insurance coverage. Defendant cross-moved for a recalculation of alimony based on changed circumstances triggered by the sale of her residence in Clayton, New Jersey, the loss of rental income that had been imputed to her as the owner of the Clayton property, and her relocation to Kentucky. In an April 18, 2008 order, the court granted plaintiff's request to compel defendant to provide proof of health insurance and denied both parties' requests for reconsideration of the January 11 alimony order. Thereafter, in orders dated July 28, 2008 and August 11, 2008, the court also denied defendant's motion for reconsideration of the denial of her request for counsel fees and costs.
Plaintiff is in the business of repairing school bus seats and also conducts antiques auctions. Plaintiff's position throughout all proceedings in the trial court has been that despite defendant's physical conditions, she is able to work on at least a limited basis. Defendant suffers from lupus and progressive hearing loss. She received approximately $110,000 by way of equitable distribution, including her share of the proceeds of sale of the marital home.
Plaintiff's most recent case information statement (CIS) indicated 2004 net income of $41,700, plus an additional $2020 in unearned gross income. Defendant's February 20, 2008 CIS indicated net 2007 income from alimony of $22,210 as well as monthly unearned income of $771 in SSD. She currently pays her brother $1000 monthly rent for the modular three-bedroom, two-bath home she now occupies in Kentucky. According to the settlement statement attached to defendant's moving papers, she netted only $7600.20 from the sale of the home she purchased individually in New Jersey after the sale of the marital residence. The home was actually in foreclosure at the time of sale. While residing in that second property, defendant had unrelated adults living with her who paid no rent. At the time of the remand hearing, defendant claimed she had no health insurance because she could not afford any, and that she had not had health insurance since the divorce trial. She further testified that she could not afford to pay for regular doctor visits or medication for her lupus condition without insurance. She also claimed that to have maintained medical insurance after the divorce would have cost her $328.55 monthly for a policy having a $10,000 deductible.
Defendant has not worked, or attempted to find work, since October 2003 because of her medical conditions. She did acknowledge at the remand hearing having worked a couple of auctions earning $360 in one year. She testified that she was permitted to earn up to $900 a month without the loss of SSD.
Defendant's position was that her medical expenses would decrease substantially once she was on Medicare, but she did not provide more detailed information with regard to those expenses. Defendant's SSD payments of $771 per month began in February 2007. She became eligible for Medicare as of February 2009.
Defendant's points on appeal are:
POINT I. THE COURT ERRED IN FAILING TO CALCULATE THE DEFENDANT'S TAX CONSEQUENCE WHEN DETERMINING HER NEED FOR SUPPORT.
POINT II. THE REMAND JUDGE ERRED IN ARBITRARILY DESIGNATING A DATE FOR THE DECREASE IN SUPPORT WITHOUT CONSIDERING THE COST OF MEDICARE AND A MEDICARE SUPPLEMENT AND ASSUMING THAT THE DEFENDANT WOULD NO LONGER HAVE MEDICAL INSURANCE COSTS.
POINT III. THE REMAND JUDGE ERRED AND ABUSED HER DISCRETION BY DETERMINING THAT THE DEFENDANT WAS ABLE TO GENERATE INCOME FROM A NON ASSET.
POINT IV. THE REMAND JUDGE ERRED IN FAILING TO THE DEFENDANT [SIC] WITH AN AWARD OF FEES AND COSTS AND FAILED TO CONSIDER THE STATUTORY CRITERIA FOR AN AWARD.
The ordinary standard for modifying support post-judgment under Lepis v. Lepis, 83 N.J. 139 (1980) is "changed circumstances." See generally Donnelly v. Donnelly, 405 N.J. Super. 117 (App. Div. 2009) (explaining the Lepis requirements).
As a general matter, alimony "is an economic right that arises out of the marital relationship . . . [.]" Mani v. Mani, 183 N.J. 70, 80 (2005). It "provides the dependent spouse with 'a level of support and standard of living generally commensurate with the quality of economic life that existed during the marriage.'" Ibid. (quoting Stiffler v. Stiffler, 304 N.J. Super. 96, 99 (Ch. Div. 1997)). These objectives of alimony are codified in a thirteen-factor test set forth in N.J.S.A. 2A:34-23b. Modest fluctuations in income, particularly over a short period of time, do not automatically require alimony to be recalculated. See Larbig v. Larbig, 384 N.J. Super. 17, 22-23 (App. Div. 2006).
We will not overturn alimony awards unless we conclude that the trial court "clearly abused its discretion, failed to consider all of the controlling legal principles, or . . . [are] well satisfied that the findings were mistaken or that the determination could not reasonably have been reached on sufficient credible evidence after considering the proofs as a whole." Heinl v. Heinl, 287 N.J. Super. 337, 345 (App. Div. 1996) (citing Rolnick v. Rolnick, 262 N.J. Super. 343, 360 (App. Div. 1993)); see also Reid v. Reid, 310 N.J. Super. 12, 22 (App. Div.), certif. denied, 154 N.J. 608 (1998) (stating that alimony awards should be affirmed if supported by substantial credible evidence in the record as a whole).
Defendant contends that the court erred in failing to appropriately consider tax consequences to defendant in calculating the amount of alimony. We are not entirely clear on the precise nature of the asserted error; however, the trial court's final judgment of divorce stated the obvious, that defendant would be taxed on the alimony award as income and plaintiff would be able to deduct it from his gross taxable income.
The January 11, 2008 decision increasing defendant's alimony to $492 a week, automatically decreasing upon defendant's receipt of Medicare, did not change the tax consequences to either party. Although the court made a passing reference to the fact that defendant might be able to deduct her medical expenses, the judge's calculation of a fair amount of alimony did not hinge upon that possibility. The judge merely reiterated that, as with any other alimony order, the payments would be taxable to defendant and deductible by plaintiff.
Defendant's reliance upon Streader v. Streader, 18 N.J. Super. 433, 437 (App. Div.), certif. denied, 10 N.J. 145 (1952) is misplaced. Nothing in that case required the judge to do more than acknowledge that the payor can deduct alimony and the payee must declare it as income. Defendant does not provide any justification, legal or otherwise, for the suggestion that the award should be increased to compensate for the fact the payments are taxable income.
The remand judge was well aware that defendant was renting in Kentucky, thereby losing some of the tax benefits of home ownership she enjoyed prior to the move. That factor alone, however, did not constitute so significant a change of circumstances such as would warrant an increase in alimony.
Defendant also contends that the automatic reduction in alimony scheduled for February 2009, when she became eligible for Medicare, was error. It is her position that the reduction does not take into account her Medicare insurance premiums or any other unreimbursed costs associated with her medical care.
Defendant had the opportunity to present more detailed information about these alleged expenses and chose not do so. She merely agreed that her need for alimony would decrease once she was eligible for Medicare. If, in hindsight, she should have addressed the issue in some other fashion, that alone does not justify reversal of the order.
The court explained that the $127 per week reduction beginning in February 2009 when defendant would become eligible for Medicare, "represents the cost of health insurance in the amount of $6600 per year which is the amount utilized to determine the defendant's need for this benefit." Defendant's own submissions were in accord.
On appeal, defendant contends that this date for a decrease was arbitrary, yet does not explain the error the court allegedly made in the selection of the date. Defendant had the opportunity to produce evidence which would establish why no reduction should ensue, and did not do so. Under the circumstances, we do not think it appropriate, as defendant requests, for the matter to be remanded yet again for defendant to be given another opportunity to provide information. No explanation is proffered as to why she did not supply the details previously.
Defendant also contends that the remand judge erred by continuing to impute income to her even after the sale of her New Jersey real estate. Income was imputed to defendant because she allowed adults not related to her to live with her without paying rent. The imputed income came to $450 per month. On the subject, the remand judge stated the following:
At the time the matter was tried Ms. Fox represented her budget. That was based on the circumstances where she was living at a home that she had purchased. The Court acknowledges that it was under sheriff's sale, but that the need or the basis for the request for alimony was assuming or based on Ms. Fox paying the bills for that residence. She now has moved to another residence in Kentucky. She says her rent is $1,000 a month. The Court does note and it doesn't appear to be disputed, that it is her brother who's the landlord that's renting her this property, and the Court does not find that the imputed income that I imputed to her previously of 450 per month for a rent [sic] is a substantial changed circumstance that would warrant me increasing Ms. Fox's alimony.
Quite frankly, she's renting, according to the documentation that's provided, a three-bedroom home with at least two bathrooms. I would understand or I would not think her brother is going to deny her the opportunity to take on tenants or bring in a boarder if she so desires. Nonetheless, I already made a finding that based on the marital standard of living the income that Mr. Fox made of $68,000 per year at the time of the divorce as determined by Judge McMaster that quite frankly Mr. Fox has any [sic] ability to pay any more alimony than that which the Court ordered.
The court also said: based [on] her renting a three-bedroom home there's no preclusion of subleasing or otherwise. It just says that she would have to get the permission of the landlord, which is her brother. So she certainly has the ability if she would like with a three-bedroom, two-bathroom home to take on a boarder or a tenant if she so desires, but, again, the Court does not find that $104 per week that I imputed is a substantial change that would warrant me increasing the alimony.
In addition to noting that defendant was again living in a home large enough to accommodate renters, the court reiterated that plaintiff did not have the ability to pay additional alimony. Although defendant's contention is that the court essentially imputed income to her from a nonexistent asset, that is a mischaracterization of the court's analysis. The court ruled that defendant had not met her burden of proving a substantial change in circumstances because all she did was replace one three-bedroom home with another. Additionally, defendant's brother stated on the record that he had waived the $2000 security deposit called for by the lease, which defendant implied she had paid. The court questioned defendant's credibility as to her financial needs because of her inflated budget. We accord great deference to the credibility determinations made by the trier of fact, particularly by the matrimonial courts. Cesare v. Cesare, 154 N.J. 394, 412 (1998). Therefore, there was no error in the court maintaining alimony at the same level.
Lastly, defendant contends that the remand court erred in failing to award counsel fees and costs. Because the court awarded defendant an increase in alimony but did not award counsel fees and costs due to defendant's "bad faith in failing to negotiate and . . . unreasonableness in requesting excessive alimony," defendant contends the court's analysis was illogical and factually flawed.
The award of counsel and expert fees in a matrimonial matter rests in the discretion of the trial court. Williams v. Williams, 59 N.J. 229, 233 (1971); Heinl v. Heinl, supra, 287 N.J. Super. at 349-50; Fellerman v. Bradley, 191 N.J. Super. 73 (Ch. Div.), aff'd, 192 N.J. Super. 556 (App. Div. 1983), aff'd, 99 N.J. 493 (1985). Absent a clear abuse of discretion, a trial court's award of counsel fees should not be disturbed. Strahan v. Strahan, 402 N.J. Super. 298, 317 (App. Div. 2008) (citing Rendine v. Pantzer, 141 N.J. 292, 317 (1995)).
Rule 5:3-5 lists the factors to be considered in deciding the question of counsel fees:
(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 both during and prior to trial; (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.
Focusing on the reasonableness and good faith of the positions advanced by the parties, the court found defendant's credibility, good faith, and the reasonableness of her position, doubtful:
Regarding her health, Defendant testified that she suffers from Lupus. However, she testified she has not taken her Lupus medication since her medical insurance lapsed after the February 2006 Dual Final Judgment of Divorce. Defendant did not produce current or past due medical bills even though she is uninsured and testified that her past due bills are "up at the Appellate Division." Defendant complained that she could not afford medical insurance since after the divorce yet received more than $157,000.00 from equitable distribution and an inheritance of $50,000.00 in addition to Plaintiff's alimony payments of $325 per week.
Regarding her employability, while the Defendant claimed she went on a two month vacation to Florida for health reasons, her daughter, who resided with her testified that Defendant went to Florida to be with her boyfriend and help him clean up his hurricane damaged property. Defendant's daughter testified that it was virtually impossible to reach the Defendant by telephone as the single telephone line always rang busy because of Defendant's continuous computer usage of up to 10 to 12 hours a day. Yet, Defendant testified that she is exhausted, has to lay down and sleep every couple of hours in the afternoon and has no energy to do anything and that is why she has not even attempted to work since 2003.
Regarding the tenants and Defendant's residence, Defendant testified that she last made a mortgage payment in October, 2006. She made no attempt to make any further payments, has made no attempt to contact her mortgage company, has not listed the property for sale until recently, never offered a Deed in lieu of foreclosure, never filed for bankruptcy and yet refused rent from her tenants. She admitted that she took a vacation to Kentucky leaving her bills unpaid during this period of time while the tenants continued to reside in the property rent free.
As to the reasonableness of Defendant's position, Defendant submitted in her Plenary Hearing Brief and Summation that she has a present need, before taxes of $54,060 per year alimony. Utilizing Judge McMaster's calculation of need, she submits she has a shortfall in her budget of $420 per week. Defendant's request for $420 per week in addition to the current $325 per week payment is unreasonable based on the marital lifestyle standard and all other factors addressed in the opinion. Defendant's budget was admittedly exaggerated and included usage of the property and the utilities by the tenants. She receives yearly SSD of $9,564. If her request of $420 per week is granted, her income would be $48,304, far greater than the standards enjoyed by Defendant during the course of the marriage. There was a resulting inability to negotiate due to the unreasonableness of Defendant's excessive request for alimony. Despite the fact that the Court awarded Defendant additional alimony to sustain her standard of living and to obtain health benefits due to her disability, based on the totality of the circumstances and testimony in this matter, the Court will not award Defendant counsel fees.
As the court summarized it, although plaintiff had the greater ability to pay counsel fees, defendant's "credibility continues to be at issue with the Court." Because she relocated to Kentucky within a month after testifying about her New Jersey expenses without any mention of the projected move, the court felt that "clearly at that time [defendant] had no intention of remaining in the home in Clayton, [and she] knew that she wasn't going to be incurring those expenses."
In this context, there is no merit to defendant's contention that the trial court failed to consider the appropriate factors on remand. The court appropriately focused on defendant's credibility. Defendant had access to substantial funds from the sale of the marital home, her share of the marital businesses and from her inheritance, yet failed to obtain health insurance or medication for her lupus condition or even to pay the mortgage on her new home. At the same time, defendant took trips to Florida and Kentucky and allowed others to reside rent-free in her home. Her claim of need was accordingly found to be exaggerated. The court therefore did not abuse its discretion in denying defendant an award of fees.
Accordingly, we affirm.