March 5, 2010
LISA MICCINILLI (F/N/A COLLINS), PLAINTIFF-RESPONDENT,
ROBERT COLLINS, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-238-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 20, 2010
Before Judges Carchman, Parrillo and Lihotz.
Defendant Robert Collins appeals from a November 21, 2008 Family Part order granting plaintiff Lisa Collins's*fn1 motion to enforce certain provisions of the parties' 1993 property settlement agreement (PSA) addressing payment of college tuition and other related expenses and denying in part defendant's cross-motion to retroactively terminate child support. In her decision, the motion judge granted plaintiff's motion and allocated college expenses at 54% for plaintiff and 46% for defendant. In addition, she ordered defendant to remain obligated to maintain a life insurance policy for the child's benefit in the principal amount of $500,000; denied defendant's motion to be designated as the parent of primary residence (PPR); and while denying defendant's motion to terminate child support, reduced defendant's child support obligation to $103.10 per week together with $30 per week towards arrears.
In allocating college expenses, the judge relied on the PSA and utilized pay stubs to determine "gross income." No information was forthcoming as to any additional income other than the wage information. Accordingly, consistent with the PSA, we remand for the limited inquiry and consideration of the gross income of the parties. In all other respects, we affirm.
These are the relevant facts before the judge on the motion and cross-motion. The parties were married September 1, 1989 and had one child, now age 19. On September 8, 1993, a final judgment of divorce (FJD) was entered providing the parties would share legal custody of the child - with plaintiff as PPR and defendant as parent of alternate residence (PAR) - and incorporated by reference the PSA. The PSA established the initial levels of child support as well as the parties respective obligations for contribution to college expenses and life insurance. The relevant provisions stated:
2. Child Support: The Husband shall pay to the Wife . . . the sum of ONE HUNDRED TWENTY-FIVE DOLLARS ($125.00)/per week . . . . [continuing] until the emancipation of the child. The child shall be deemed emancipated for the purposes of this Agreement upon the earliest happening of the following events:
D. The child attaining the age of EIGHTEEN . . . unless the child continues with higher education on a full-time basis, then the child shall not be deemed emancipated until after FOUR (4) continuous years of attending an institution of higher learning[.]
7. Higher Education for the Child of the Marriage: The parties shall each pay a portion of any such higher education expenses that the child incurs and their proportionate share shall be pro-rated on the basis of the ratio of their gross income at that time . . . . Higher education expenses include cost of tuition, room, board, books, fees and any and all other related expenses.
4. Until the child is emancipated, the Husband shall continue to maintain a certain life insurance policy . . . naming the child irrevocable beneficiary[.] The Husband shall provide proof of payment that said insurance policy is in full force an[d] effect to the Wife on a quarterly basis.
With the exception of cost-of-living adjustments (COLA), defendant's child support obligations have not increased in sixteen years or since the parties entered into the PSA. Since the divorce, plaintiff has moved to Warwick, New York and defendant to Ridgewood, New Jersey. During the summer of 2004, defendant filed a motion seeking to become the PPR and restrict plaintiff's parenting time. This motion was denied.
As the child began making preparations for college, defendant sought to negotiate an agreement for cost-sharing with plaintiff notwithstanding the language of the PSA. Despite disagreements as to the nature and roles of the parties in the negotiation process, defendant apparently agreed to contribute $13,500 per year towards the child's college expenses while continuing to pay $6,500 per year in "maintenance payments." By August 18, 2008, defendant had retained counsel, who sent a letter to plaintiff, which stated defendant "[wa]s not at all agreeable to what has been discussed with your current husband." Shortly thereafter, plaintiff alleges she was informed by the child's college choice - the University of Rhode Island - that defendant had failed to make any payments.
Plaintiff filed a motion to enforce litigant's rights seeking defendant's compliance with the college funding provisions of the PSA. The filing also "sought the production of Defendant's W-2 Wage Statement for the appropriate calculation of each party's pro-rated share of combined gross income" and "the continued payment of child support by [d]efendant consistent with prior [o]rders." This last demand specifically referenced defendant's failure to inform his employer regarding a recent COLA adjustment to his support obligation.
In response, defendant filed a cross-motion seeking to have the parties' respective assets included as gross income for purposes of determining their pro-rated shares of the child's college education and expenses, directing that any "additional college expenses" not previously agreed to by both parties be exempt from apportionment, declaring defendant to be the PPR "based upon the  child's residence with [d]efendant for the past eight (8) years[,]" ordering plaintiff to submit a completed Case Information Statement (CIS) and begin paying defendant the resulting amount of child support, terminating defendant's own support obligations retroactive to the date the child began attending college, and providing that the amount of the life insurance policy contained in Article V, ¶ 4 of the PSA be reduced to $100,000.
On November 20, one day after the judge issued a tentative decision, defendant submitted a certification from the child which purported to "set certain factual matters to rest.*fn2 " In her certification, the child claimed that she had in fact lived primarily with her father and stepmother since the 6th grade. She also acknowledged her intention to transfer from the University of Rhode Island to either Rockland County Community College in New York or Ramapo College in New Jersey and resume living with defendant. Finally, she related that her choice of New York address and driver's license - on which the judge based her previous day's finding that plaintiff was PPR - was made solely to avoid New Jersey's requirement that she wait until age seventeen to secure unsupervised driving privileges. In March 2009, the child submitted a second certification directly to the trial judge, contradicted her earlier statements and indicated that she "stay[s] at both homes now with equal time at both.*fn3 " She also requested that her residency be returned to plaintiff's residence as her mother has "always been my primary financial provider; it is the way it has always been and regarding my car, license, passport it is just more sensible."
Defendant also acknowledged his payment deficiency to the University of Rhode Island, that he had forged the child's name to a loan application to secure better terms and his responsibility to pay back that loan.
The judge rejected both parties' contentions, suggesting the pay stubs she had received from each were sufficient to allocate the financial obligations in dispute. Similarly, the judge agreed to consider the child's certification.
Defendant contended that the establishment of the child's past and future residence was critical to resolving the entirety of the issues before the court; however, counsel agreed with the judge that it would not affect college payments, even if the child had lived with defendant for the past eight years. Critically important, the child indicated in her original certification that she was transferring to a local college so that the issue of residence appeared to be fluid. While denying any retroactive reduction in child support, the judge did, however, grant defendant a credit on the shelter portion of child support expenses incurred while the child was living away at school.
Finally, the judge explained her calculation of the proper amount of college expenses and child support as follows:
THE COURT: Well, Counsel, let me tell you what I did and this wasn't asked for but again you get a practical judge who spends maybe more time than is prudent because I like to think of things through many different angles. If you look, and both submit [CISs], within your pay stubs and I look at the new incomes that everybody is making, odds are the child support amount is going to increase because they're both making more money and child support of course is always attributable to the child and I would use accurate figures. If you want me to tell you what that amount is, I didn't contemplate it in this order.
[DEFENDANT'S COUNSEL]: Did you give him credit for his two other children because that's why I submitted the [CIS] with his new wife's income because he has two other dependents, two other children? [ ]
THE COURT: We don't include [his new wife's] income and I generally don't. I understand there's case law that stands for the proposition that you could include new spouse's income. I only do it if it's an extraordinary amount or one's new spouse is making such a grandiose or greater amount than the other. I didn't see that here[.]
I ran them just on what their new incomes were and it's significantly higher. Nobody has made the application for it to happen.
I did it [on] my own accord so that I can look to see what the equity is attributed to. Of course it's [the child's] right as a child to always get current child support payments based on the parties' incomes, but I based [not using the CIS] on the fact that the child is going to college and they're both significantly contributing to the college costs.
The judge then entered a final order which provided in pertinent part that:
1. "Based upon the parties' submitted pay stubs," - which reflected plaintiff grossed $2545.80 per week and defendant $2164.09 per week - contributions for [the child's] college tuition, other related expenses and unreimbursed medical expenses would be set at 54% for plaintiff and 46% for defendant, pursuant to "[p]age 5, paragraph 7" of the PSA.
2. Pursuant to the PSA and Judge DeLorenzo's 2004 order, defendant remained obligated to maintain $500,000 in life insurance coverage for [the child's] benefit.
3. Defendant was required to notify his employer of the COLA applied to his support obligation and immediately begin payment of the adjusted sum and any arrears.
4. Despite "grant[ing] in part" defendant's application that each party be responsible for non-agreed upon expenses of the child's, providing that "Plaintiff shall supply the Defendant with receipts for such expenses within 20 days of accrual . . . and the Defendant shall pay his proportioned share within 20 days."
5. Denied without prejudice defendant's motion to be designated as PPR.
6. While not entitled to a total termination of support pursuant to the PSA, defendant was entitled to a reduction in support in the amount of a 45% credit for "shelter expenses and a reduced amount for variable expenses while the child is away at college." After these changes, defendant's support obligation was reduced from $143.00 per week to "$103.10 per week and $30.00 per week towards arrears."
7. Denied both parties' applications for counsel fees.
This appeal followed.
Because the issues before us are multifaceted, we set forth our standard of review, recognizing that different issues require different considerations for analysis. Our review of trial judge's factfinding is limited: any such findings will be binding on appeal "when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 412 (1998). Family Part factfinding receives particular deference because of "the family courts' special jurisdiction and expertise in family matters," id. at 413, and will be disturbed only upon a showing that they are "manifestly unsupported by or inconsistent with" the evidence. Bd. of Educ. of City of Clifton v. Zoning Bd. of Adjustment, 409 N.J. Super. 389, 425 (2009) (quoting Fagliarone v. Tp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963)).
Orders setting child support, even those arising from a private agreement, "may be revised and altered by the court from time to time as circumstances may require." N.J.S.A. 2A:34-23; see also Lepis v. Lepis, 83 N.J. 139, 146 (1980)(stating that alimony and support obligations "are always subject to review and modification on a showing of 'changed circumstances'"). "If circumstances have changed in such a way that [the support provision] would no longer be equitable and fair, the court [ ] remains free to alter the prior arrangement." Lepis, supra, 83 N.J. at 161 n.12. The burden of proving this change in circumstances rests with the moving party, Zazzo v. Zazzo, 245 N.J. Super. 124, 132 (App. Div. 1990), certif. denied, 126 N.J. 321 (1991), and the trial judge's guiding principle remains the "best interests of the children." Lepis, supra, 83 N.J. at 157 (quoting Hallberg v. Hallberg, 113 N.J. Super. 205, 209 (App. Div. 1971)).
Finally, since the judge was interpreting a settlement agreement, we must recognize that such agreements must be afforded special deference. "Settlement agreements in matrimonial matters, being essentially consensual and voluntary in character, . . . [are] entitled to considerable weight with respect to their validity and enforceability in equity, provided they are fair and just." Dolce v. Dolce, 383 N.J. Super. 11, 20 (App. Div. 2006)(internal quotations and citations omitted). Where the parties have agreed to provide for a child beyond what is legally required, courts must "giv[e] due weight to the strong public policy favoring stability of [consensual] arrangements[,]" Smith v. Smith, 72 N.J. 350, 360 (1977), before freeing a parent from his or her contractual obligations. Such agreements will be reformed only upon a showing of "unconscionability, fraud, or overreaching in the negotiations of the settlement[.]" Miller v. Miller, 160 N.J. 408, 419 (1999).
Although defendant raises numerous arguments on appeal, his primary issues address child support, college expenditures and counsel fees. We address these issues seriatim.
As a result of the November 21, 2008 order, defendant - who reported a gross income of $109,158.89 in 2007 - was ordered to pay $103.10 per week, plus arrearages, in child support. Defendant challenges the trial judge's calculation of his support obligation.
The standard for modification of a negotiated child support agreement has long been that of "changed circumstances." Smith, supra, 72 N.J. at 360; Clayton v. Muth, 144 N.J. Super. 491 (Ch. Div. 1976). Defendant alleges that the judge "erroneously denied [that he] made [a] prim[a] facie showing of numerous and substantial changes of circumstances" since the entry of the original support order in 1993. The difficulty with defendant's argument is while he cites specific guideline references in support of his claims, the judge did reduce his support focusing primarily on the child's attendance at college as the dominating factor.
He argues that the judge failed to consider his level of income, the two children which are the result of defendant's current marriage, the child's "residence with the defendant" and the mere passage of time*fn4 as the basis for overturning the support order. He further urges that the New Jersey Child Support Guidelines (Guidelines) should apply.
We first observe that the parties combined weekly income at the time of this application exceeded $4,700 per week. Moreover, the application for relief from the obligation to pay child support was premised, in part, that the child was attending college. The use of the Guidelines is mandatory in determining child support except on a showing of "good cause."
R. 5:6A. "Good cause" includes "the considerations set forth in Appendix IX-A." Ibid. That same provision excludes application of the Guidelines in the circumstances described here as it provides that the Guidelines "shall not be used to determine parental contributions for college . . . nor the amount of support for a child attending college." Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2401 (2010). As a result of the Guidelines' inapplicability, the decision to set support is discretionary, subject to the considerations of the factors enumerated in N.J.S.A. 2A:34-23.
The judge did not specifically cite the factors, referring instead to Kiken v. Kiken, 149 N.J. 441 (1997), and Hudson v. Hudson, 315 N.J. Super. 577, 584 (App. Div. 1998), for the proposition that defendant was entitled to a reduction "for shelter expenses and a reduced amount for variable expenses while the child is away at college." The diminution was accordingly made retroactive to the date the child began her attendance at the University of Rhode Island.
The record supports the reduction: both parents earned in excess of $100,000 per year; in fifteen years, plaintiff had never sought increased support; the child spent most of the year away from home; and college expenses would constitute the most important form of support for the foreseeable future.
Similarly, the judge correctly found that support should not be terminated entirely as plaintiff remained the PPR as of the date of the motion, and the child had not decided with whom she would live upon returning from school. While defendant did move to "have residential custody . . . based upon the [ ] child's residence with Defendant for the past eight (8) years," the judge properly noted that Judge DeLorenzo's 2004 order resolving the custody issue remained extant. Even in the absence of the order, support cannot be terminated retroactively pursuant to N.J.S.A. 2A:17-56.23(a).
Defendant argues that the judge did not consider the two children born of his second marriage in calculating child support. First, as we have noted, the guidelines do not apply. Moreover, our review of the record and the child support obligation imposed by the judge, considered with the level of income of plaintiff, defendant and defendant's present wife, leads us to conclude that the quantum of support would exceed the limited support ordered. In sum, even if the judge should have considered the two additional children and the "other dependent deduction" credit, see Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2390-91 (2010), defendant's support obligation would exceed that ordered by the judge.
Defendant asserts that the judge erred in allocating college expenses, the judge did not considering income other than earned income as revealed in the pay stubs. As we previously noted, the PSA provides:
The parties shall each pay a portion of any such higher education expenses that the child incurs and their proportionate share shall be pro-rated on the basis of the ratio of their gross income at that time. [(Emphasis added).]
Defendant challenges the trial court's methodology, failure to require plaintiff to submit an updated CIS, failure to apply the factors set forth in Newburgh v. Arrigo, 88 N.J. 529 (1982), and failure to consider "defendant's subsequent children" in performing its calculations.
While we agree that no CIS was required from plaintiff, in seeking relief under the terms of the PSA, plaintiff was required to present to the judge relevant information as to her gross income.
The Guidelines define "gross income" as all earned and unearned income that is recurring or will increase the income available to the recipient over an extended period of time. When determining whether an income source should be included . . . the court should consider if it would have been available to pay expenses related to the child if the family would have remained intact . . . and how long that source would have been available to pay those expenses. [Pressler, Current N.J. Court Rules, Appendix IX-B to R. 5:6A at 2408 (2010) (emphasis added).].
In addition to earned income, "gross income" under the Guidelines includes, but is not limited to, "gains derived from dealings in property," interest and dividends, rents, bonuses and royalties, annuities, life insurance, personal injury awards, profit sharing plans, the sale of or any earnings from investments, and income tax credits or rebates. Id. at 2408-09. Similar definitions are found in the Internal Revenue Code and New Jersey Gross Income Tax Act. See 26 U.S.C.A. § 61 (2002); N.J.S.A. 54A:1-1. In sum, nothing in the agreement suggests that the parties intended that any limitation be placed on the consideration of all income received by the parties in making the allocation.
We reject defendant's view that the judge erred by not considering the twelve-factor test set forth in Newburgh. While Newburgh may factor into a determination of whether a parent should contribute to college, they do not appear to be in dispute here, and as to the quantum of such contribution, those issues have been resolved by the parties in the PSA. In determining the issues here, we hearken back to the bedrock principle that "[t]he basic contractual nature of matrimonial agreements has long been recognized[,]" Pacifico v. Pacifico, 190 N.J. 258, 265 (2007)(citing Harrington v. Harrington, 281 N.J. Super. 39, 46 (App. Div. 1995)), and "courts should enforce contracts as the parties intended." Id. at 266. We find no error in the judge's not specifically addressing the Newburgh factors.
We disagree with defendant that an examination of gross income requires revelation of assets or a second spouse's income. Defendant misreads our decision in Hudson, supra, 315 N.J. Super. at 577. In Hudson, our concern about the subsequent spouse's income was relevant in so far as such income allowed a parent to meet his or her obligation to share in college expenses. Here, plaintiff does not resist her obligation to share in college expenses or the methodology prescribed by the PSA. She simply seeks an allocation, and her assets and the income and assets of her present husband are irrelevant. The only information that is applicable here is her gross income, which can be demonstrated by the relevant portions of her tax return. Defendant resists the quantum of contribution. We note also that the parties here, unlike those in Hudson are seeking relief under an extant PSA. That must be the primary focus of the parties and the judge. In that regard, no mention is made of any subsequent spouse's income, and we find no basis for the judge considering same in her analysis.
Finally, we reject defendant's argument that the judge erred by denying counsel fees. The judge found that both parties had the ability to pay their own fees and we find no basis for our intervention. Lastly, we recognize that in considering any additional adjustment to college contributions the judge may, at her option, revisit her reduction in defendant's child support obligation, as she deems appropriate.
We remand for consideration of the parties "gross income" consistent with this opinion. In all other respects, we affirm. We do not retain jurisdiction.