Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

Walsh v. Walsh

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


May 13, 2010

MARJORIE M. WALSH, PLAINTIFF-RESPONDENT,
v.
J. GARVIN WALSH, DEFENDANT-APPELLANT.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-973-02.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued April 21, 2010

Before Judges Graves, J. N. Harris and Newman.

Defendant, J. Garvin Walsh, the former husband of plaintiff, Marjorie M. Walsh, appeals from orders setting the amount of his alimony obligation for the year 2008, denying his motions for recusal of the trial judge, and denying his motion for reconsideration of the order denying recusal. We reverse the order of alimony and remand for recalculation of the alimony award. We affirm the orders denying recusal of the trial judge.

We need not trace the extended history of this case which was before this court in Walsh v. Walsh, No. A-4046-03 (App. Div. Aug. 11, 2006). That decision affirmed in part, reversed in part, and remanded for further proceedings consistent with that opinion. We also reversed and remanded for additional proceedings on the cross-appeal. The trial court rendered a decision on remand and that decision is before our court which was heard back-to-back with this appeal on April 21, 2010.

Turning to this appeal, defendant raises the following issues for our consideration:

POINT I

THE TRIAL COURT'S AWARD OF ALIMONY WAS UNDERTAKEN WITHOUT SUFFICIENT FINDINGS OF FACT OR CONCLUSIONS OF LAW, IS NOT SUPPORTED BY THE EVIDENCE IN THE RECORD, AND SHOULD BE REVERSED.

POINT II

THE TRIAL COURT ABUSED ITS DISCRETION BY MAKING AN AWARD OF ALIMONY WITHOUT GIVING PROPER CONSIDERATION TO APPELLANT'S NEEDS.

POINT III

THE TRIAL COURT ABUSED ITS DISCRETION BY MAKING AN AWARD OF ALIMONY THAT EXCEEDED APPELLANT'S ABILITY TO PAY.

POINT IV

THE TRIAL COURT ABUSED ITS DISCRETION BY MAKING AN AWARD OF ALIMONY ON THE BASIS OF AN IMPERMISSIBLE IMPUTATION OF INCOME, AND ON AN ANTICIPATED LIQUIDATION OF APPELLANT'S ASSETS.

POINT V

THE DECISION OF THE TRIAL COURT TO IMPOSE AN ADDITIONAL $2,000 PER MONTH ALIMONY OBLIGATION ON APPELLANT IN ORDER TO PREVENT FORECLOSURE ON THE MARITAL HOME ADDRESSED AN ISSUE THAT WAS NOT BEFORE THE COURT, AND THUS WAS A MISTAKEN EXERCISE OF DISCRETION WHICH SHOULD BE REVERSED.

POINT VI

THE RECORD BELOW PROVIDES A REASONABLE BASIS FOR APPELLANT'S BELIEF THAT THE TRIAL COURT HAS RENDERED AN UNFAIR AND BIASED HEARING AND JUDGMENT IN THIS MATTER. ON THE BASIS OF THAT REASONABLE BELIEF, JUDGE HANSBURY SHOULD BE DISQUALIFIED FROM FURTHER PARTICIPATION IN THIS MATTER, AND THE DECISIONS OF THE COURT BELOW SUBSEQUENT TO ITS DENIAL OF APPELLANT'S MOTION FOR DISQUALIFICATION (March 28, 2008) SHOULD BE REVERSED.

I.

Before addressing defendant's contentions as to the alimony calculation, it is well to consider the controlling principles of law. An alimony order is subject to review and modification upon a showing of changed circumstances. N.J.S.A. 2A:34-23; Lepis v. Lepis, 83 N.J. 139, 145-46 (1980); see Crews v. Crews, 164 N.J. 11, 24 (2000). The party seeking such modification has the burden of demonstrating that changed circumstances have occurred. Innes v. Innes, 117 N.J. 496, 504 (1990); Murphy v. Murphy, 313 N.J. Super. 575, 580 (App. Div. 1998). One changed circumstance that can result in a downward modification is a decrease in the supporting spouse's income. Crews, supra, 164 N.J. at 30; Halliwell v. Halliwell, 326 N.J. Super. 442, 448 (App. Div. 1999).

Thus, when the supporting spouse seeks a decreased alimony obligation due to changed financial circumstances, evidence regarding that spouse's changed circumstances "would be material in determining whether [that spouse] can show that changed circumstances have substantially affected his or her ability to support himself or herself and the supported spouse." Crews, supra, 164 N.J. at 30-31. In establishing alimony, a court may "take into account assets received by either party in the equitable distribution of the marital property." Miller v. Miller, 160 N.J. 408, 420 (1999). In short, in an application brought by a supporting spouse for a downward modification in alimony . . . the central issue is the supporting spouse's ability to pay. A supporting spouse's potential to generate income [through both earned income and the use of other assets] is a significant factor to consider when determining his or her ability to pay alimony. [Miller, supra, 160 N.J. at 420 (emphasis added) (citations omitted)].

The Miller Court further reiterated that the same factors applied in initially establishing alimony should be considered on a motion for a modification of a support order; namely, the dependent spouse's needs, that spouse's ability to contribute thereto, and the supporting spouse's ability to maintain a dependent spouse at the former standard of living. Id. at 424.

To vacate a trial court's findings concerning alimony, we must conclude that a trial court "clearly abused its discretion, failed to consider all of the controlling legal principles, or must otherwise be well satisfied that the findings were mistaken or that the determination could not reasonably have been reached on sufficient credible evidence present in the record after considering the proofs as a whole." Heinl v. Heinl, 287 N.J. Super. 337, 345 (App. Div. 1996).

The trial court found in its May 2008 bench opinion that defendant's income was between $40,000 and $50,000. However, the court later noted that although defendant's income was in that range, it had "confidence in [defendant's] ability and he has confidence, more importantly, in his ability to increase that income." Based on that finding, defendant argues that the court impermissibly imputed income to him in setting his alimony obligation. We disagree.

A court can impute income to a party for support purposes when the party is, without just cause, intentionally and voluntarily underemployed or unemployed. Caplan v. Caplan, 182 N.J. 250, 268 (2005); Golian v. Golian, 344 N.J. Super. 337, 341 (App. Div. 2001). Stated differently, when a spouse is not earning his or her true potential income, "an imputation of income based on that potential is appropriate." Stiffler v. Stiffler, 304 N.J. Super. 96, 101 (Ch. Div. 1999). Accord Halliwell, supra, 326 N.J. Super. at 448 (potential earning capacity of party, not his or her actual income, should be considered). The imputed income figure is one the party is capable of earning. Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998). Before imputing income, however, a judge must first find that the spouse was voluntarily underemployed or unemployed without just cause. Caplan, supra, 182 N.J. at 268.

Here, the court found that defendant was terminated by Lehman Brothers through no fault of his own, and that he made good faith efforts to obtain new employment that culminated with his new position with AXA. Because the court expressly found that defendant was not voluntarily underemployed, it was mistaken to the extent that it may have imputed income to him.

The trial court did not explicitly state in its bench opinion that it imputed income to defendant in this respect.

Moreover, defendant submitted a certification in April 2008 in which he conceded that his salary from AXA that year would be about $58,000. To the extent the court may have imputed an annualized salary of approximately $60,000 to defendant, its decision, while not necessarily legally supported, was ultimately correct.

In fact, in its subsequent July 25, 2008 letter opinion following the first ability-to-pay hearing, the court found that defendant's income for alimony purposes was almost $58,000. In short, there was no error to the extent the court concluded that defendant's income was approximately $60,000 in its initial bench opinion.

In determining the amount of alimony, plaintiff's CIS expenses were $8,500 per month and the court accepted that figure. Given the $4,000 in monthly alimony ultimately awarded to plaintiff, her monthly shortfall would be $2,500, $8,500 in monthly expenses, less $6,000 in monthly alimony and imputed income, as the court found.

The court found that defendant would suffer a monthly income shortfall "of roughly the same amount" as plaintiff, based on a $4,000 monthly alimony obligation. That finding is not supported by the record. Equally as important, the court made no specific findings regarding defendant's needs in either his bench opinion or the July 25, 2008 letter opinion. As a result, the court did not sufficiently address the central issue in any alimony modification case, the supporting spouse's ability to pay. A reversal and remand is in order so that adequate findings of fact supported by the record can be made.

To be sure, a court must consider the supporting spouse's ability to contribute to the supported spouse's needs. As previously noted, the central issue is the ability to pay. Miller, supra, 160 N.J. at 420. Further, Rule 1:7-4(a) provides that a "court shall, by an opinion or memorandum decision, either written or oral, find the facts and state its conclusions of law thereon in all actions tried without a jury." The rule has been interpreted as requiring a trial court sitting without a jury to clearly state its factual findings and "correlate them with relevant legal conclusions." State v. Locurto, 157 N.J. 463, 479 (1999) (quoting Curtis v. Finneran, 83 N.J. 563, 570 (1980)). Accord Rolnick v. Rolnick, 290 N.J. Super. 35, 42 (App. Div. 1996).

Here, the court made no detailed findings in its bench decision regarding defendant's needs. While the trial court did state at one point in that decision that it would address defendant's ability "to pay [alimony] to [plaintiff], given his substantially reduced expenses," the court did not do so.

Similarly, the court made no such findings in its subsequent July 25, 2008 letter opinion following the first ability-to-pay hearing. Even though the court made findings regarding plaintiff's income and expenses, and defendant's income, its failure to make any findings regarding defendant's expenses, other than to note that they were "reduced," make it impossible to determine whether defendant has the ability to contribute $4,000 a month towards plaintiff's needs.

In a related argument, defendant claims that the court's conclusion that the parties would suffer equal monthly shortfalls is not supported by the evidence. Plaintiff's monthly income shortfall, including $4,000 in alimony, would be $2,500. On the other hand, defendant's gross income for 2008 was approximately $60,000. Notwithstanding defendant's argument that the court incorrectly rejected his business deductions without explanation, defendant had, at most, $5,000 per month in earned income.

The court correctly imputed income to defendant from his financial assets in its July 25, 2008 letter opinion following the first ability-to-pay hearing. In Miller, supra, 160 N.J. at 423-25, our Supreme Court expanded the notion of imputed income by holding that it was appropriate to impute income to a spouse based on his or her substantial investments in non-income producing stocks. The Court ruled that income could be imputed based on the interest one could earn on his or her financial assets based on the five-year average return on the Moody's Composite Index for A-Rated bonds. Id. at 424-26.

To the extent that the court concluded that defendant could liquidate most of his assets for this purpose, we disagree. Defendant's interests in the marital residence and his own residence were already mortgaged. It is difficult to believe that defendant could obtain further mortgages on either property given his financial condition and plaintiff's concurrent interest in the marital residence. At most, defendant had approximately $36,000 in remaining financial assets, including a Fidelity account, Lehman Brothers assets, and partnership interests available to invest.

The five-year rate of return on the Barclay's 7-10 Year Treasury Bond Index, an index comparable to the aforementioned Moody's Index, was 6.07% as of June 30, 2009. At that rate, defendant would have imputed unearned income of approximately $2,185 per year ($36,000 x 6.07% = $2,185.20) or approximately $182 per month ($2,185.20 / 12 = $182.10).

However, in his January 2008 CIS, defendant listed monthly total expenses of $11,947. If defendant's approximate monthly income of $5,200 was reduced by the $4,000 monthly alimony obligation imposed on him, he would experience a shortfall equal to his $12,000 in expenses less $1,200 in remaining gross income, approximately $10,800 per month.

Furthermore, defendant's January 30, 2009 CIS listed total expenses of $14,867, including the $4,000 monthly alimony obligation imposed upon him. Using those figures, defendant's monthly shortfall would remain substantially greater than plaintiff's.

Even if the trial court properly imputed income at the rate of six percent, as discussed, on defendant's entire non-retirement asset base of approximately $1,023,000 (both houses, the vehicles, stocks and bonds, defendant's interest in partnerships, and defendant's interest in the AXA life insurance policy), defendant's imputed unearned income would be about $62,096 per year ($1,023,000 x 6.07% = $62,096.10) or $5,175 a month ($62,096 / 12 = $5,174.68). His total income would be $10,375 a month. Even then, his monthly shortfall in 2009 would be $4,492, much larger than plaintiff's $2,500 shortfall.

In sum, the court made no findings of fact regarding defendant's monthly needs in any of its decisions. It is impossible for us on review to conclude that the trial court properly considered the central issue before it, defendant's ability to contribute to plaintiff's needs. The evidence of record does not support the court's conclusion that defendant and plaintiff would experience almost equal monthly shortfalls in income if defendant was obligated to pay $4,000 in alimony per month.

We also agree with defendant's claim that there was insufficient evidence to support the court's conclusions that the marital residence was in danger of foreclosure and that, therefore, defendant needed to contribute $2,000 a month towards its expenses to prevent that result.

In its initial bench opinion, the court expressed concern about a potential foreclosure on the marital residence if it awarded plaintiff only $500 in monthly alimony. After finding that defendant's alimony obligation "without regard to the house, would have been $2,000," the court required defendant "to come up with another $2,000 whatever way he can to make sure that [the marital home] didn't go into foreclosure." The court's order memorializing that opinion required that $2,000 of defendant's alimony obligation was dedicated to plaintiff's shelter expenses.

There was no evidence to support the court's foreclosure concern. Rather, during oral argument before the court rendered its bench opinion, plaintiff's counsel argued only that if there should be a reduction in the alimony, I suggest that . . . the equity in the house, meaning the marital home, [plaintiff] should be given a credit every month against the equity that [defendant] has, so when the house is sold -- [plaintiff's] not getting money today, but she will be in essence reimbursed or credited once the house is sold.

So, there's money in the -- marital home, equity in the marital home, which I believe the Court can structure a remedy which would not require [defendant] to continue with his obligation in the sense of taking money out of his pocket and giving it to [plaintiff], but she would have the benefit of maintaining that by getting that credit.

In short, even plaintiff did not want to "tak[e] money out of [defendant's] pocket" via a specific obligation to contribute to the monthly mortgage; rather, she was satisfied with receiving a credit once the house was sold.

Additionally, the court did not consider the impact that defendant's alimony obligation would have on his ability to continue to meet his own monthly mortgage costs. Given plaintiff's implicit recognition that defendant may not have $4,000 to give her monthly, and that defendant's financial shortfall will be significantly greater than plaintiff's, we reverse and remand the alimony order for further consideration.

As a final observation, we note that the trial court recognized in its bench opinion that the $2,000 award "is probably more than [it] would find if this were an initial hearing." Because the same standards apply to an initial alimony proceeding as to a modification proceeding, the court needs to explain its decision in that respect as well.*fn1

Because we have reversed and remanded for recalculation of defendant's alimony obligation, we need not address defendant's argument that the court erred in implicitly requiring him to sell assets if necessary to meet his $4,000 monthly alimony obligation. See N.J.S.A. 2A:34-23(b)(10) (stating the court shall consider the "equitable distribution of property ordered").

II.

Defendant argues that the trial court should be required to recuse itself in the event of future proceedings in this matter. The parties have advised us that the trial judge has been rotated out of the Family Division last September or October and likely would not be involved in any remand. Nonetheless, we will address the recusal issue.

In general, "[a] [trial] judge must conduct a trial in a fair and impartial manner." Mercer v. Weyerhaeuser Co., Inc., 324 N.J. Super. 290, 297-98 (App. Div. 1999). The trial judge must not only be impartial, he or she must also give the appearance of impartiality. DeNike v. Capo, 196 N.J. 502, 514 (2008); Band's Refuse Removal, Inc. v. Borough of Fair Lawn, 62 N.J. Super. 522, 548 (App. Div.), supplemented, 64 N.J. Super. 1 (App. Div. 1960), certif. denied, 34 N.J. 67 (1961).

Rule 1:12-1(f) governs recusal motions based on claims of court bias. It provides that "the judge of any court shall disqualify himself on his motion and shall not sit in any matter . . . when there is any other reason which might preclude a fair and unbiased hearing and judgment, or which might reasonably lead counsel or other parties to believe so." Rule 1:12-2 provides that a party, on motion filed before trial or oral argument, can seek a judge's disqualification. The decision on whether a judge should recuse himself from hearing a matter lies within the sound discretion of that judge, and the judge's decision should not be reversed on appeal absent an abuse thereof. State v. Marshall, 148 N.J. 89, 276, cert. denied, 522 U.S. 850, 118 S.Ct. 140, 139 L.Ed. 2d 88 (1997); Chandok v. Chandok, 406 N.J. Super. 595, 603 (App. Div.), certif. denied, 200 N.J. 207 (2009); Panitch v. Panitch, 339 N.J. Super. 63, 66 (App. Div. 2001).

A trial court has an obligation to recuse itself if it is satisfied that there is an objectively reasonable belief that the proceedings before it were unfair. DeNike, supra, 196 N.J. at 517; Chandok, supra, 406 N.J. Super. at 606. Thus, disqualification may be required upon the mere appearance of bias, and not actual prejudice, by the court. Id. at 603-04.

It is not only unnecessary, but improper, for a trial judge to recuse himself at the mere suggestion that he should be disqualified. Rather, recusal is appropriate only when the alleged cause of the recusal is known by the trial judge or is shown to be true in fact. Id. at 603; Panitch, supra, 339 N.J. Super. at 66; Hundred E. Credit Corp. v. Eric Schuster Corp., 212 N.J. Super. 350, 358 (App. Div.), certif. denied, 107 N.J. 60, 61 (1986).

Defendant filed a motion in March 2008 seeking the court's recusal. He relied on several bases in filing the motion: (1) the court's extraction of data from a "source external to the record" in order to inflate his income when the court issued its divorce judgment and established defendant's alimony obligation; (2) the court's award of expert fees and the cost of a discovery master to plaintiff based on the services provided by them at trial; (3) the court's misinterpretation and misapplication of the Appellate Division's decision in Docket No. A-4046-03 that remanded the matter; (4) the court's mishandling of several discovery issues; (5) the court's misuse of the child support guidelines in establishing defendant's support obligation; and (6) the court's general "disdain" for defendant, a pro se litigant.

During oral argument on March 28, 2008, defendant asserted that the court relied on external sources of evidence in reaching its conclusions and that the court's alleged errors further demonstrated its bias. Defendant was unable to identify any such evidence nor could he point to why the court might be biased against him. The court explained to defendant that it did not look beyond the record before it, that any errors made entitled defendant to an appeal, not the court's recusal, and that it held no bias towards him.

Following argument, the court rendered a bench decision denying defendant's recusal motion. The court noted that it had no personal feelings for either party, that this court largely affirmed its findings except for the court's calculation of defendant's income, and that defendant's position was largely founded on his misunderstanding of the law. Moreover, the court considered only the evidence properly before it and no evidence outside the record, and noted that if it had made errors, defendant's recourse was an appeal.

In April 2008, defendant sought the trial court's reconsideration of its denial of the recusal motion, claiming that the court's March 2008 decision was based on subjective, rather than objective, findings of facts and conclusions of law. Defendant then repeated the same bases for recusal he had relied upon earlier.

The court denied the motion in May 2008, finding that it made subjective findings because defendant's arguments were subjective in nature. That is to say, defendant was not claiming any objective conflict of interest such as an improper relationship between the court and a party. Moreover, defendant's remaining arguments for recusal raised issues either that had been appealed to this court under Docket No. A-2200-07, the back-to-back appeal, or that the court had considered and rejected previously.

Defendant's subsequent motion seeking disqualification again in September 2008 was denied in October 2008.

Defendant first restates his complaint that because several of the trial court's findings were not supported by the record, "those findings must have emanated from a source external to the record." An adverse decision in a prior proceeding does not justify an inference of bias, unless the error is so blatant as to support such a claim. Marshall, supra, 148 N.J. at 276.

There is no indication or evidence, other than defendant's mere supposition, to support his claim that the court considered material outside the record. While we agree that the trial court was mistaken in recalculating defendant's alimony obligation following the modification hearings, we do not see where it relied on external sources of evidence. Rather, the court simply misapplied the evidence before it.

Defendant insists that the court misinterpreted and misapplied this court's remand in Docket No. A-4046-03. Not so. This court upheld most of the trial court's findings regarding alimony except to the extent that the trial court improperly applied a cost of living increase to defendant's salary, and failed to consider defendant's post-complaint earnings. Those errors do not demonstrate bias. Nor did the trial court improperly rely on any external sources of evidence.

Defendant reiterates those specific instances of bias that he believes sufficiently support his subjective belief of bias, thereby warranting recusal.

Defendant first claims error in the court's decision to award fees despite the lack of affidavits of service. Again, this is a legal issue that is being addressed in the companion appeal, Docket No. A-2200-07.

He next claims that although plaintiff failed to provide discovery in advance of the hearings regarding his motion to modify alimony, the court denied his enforcement motion, leaving him without the benefit of any evidence regarding plaintiff's financial situation.

In fact, the court responded to defendant's enforcement motion with a May 14, 2007 order in which it compelled plaintiff to provide answers by June 1, 2007, to several questions posed in interrogatories defendant served on her. However, the court agreed with plaintiff that several of the questions posed by defendant were overly broad and burdensome, while others were deemed irrelevant. While defendant might not agree with the court's discovery rulings, there is no evidence that those decisions were the product of bias towards him. To the extent the court did err, defendant could have, but did not, appeal.

Further, the court's denial of defendant's initial modification motion was amply supported by the fact that his income in 2006 and 2007 was virtually unchanged, given the sale of his Restricted Stock Units (RSUs), from the income this court found he earned during the marriage.

In short, defendant has not demonstrated an objectively reasonable belief that the court's discovery decisions were biased against him as to require the court's recusal.

Next, defendant relies on the court's opinion, under Docket No. A-4046-03, following remand, in which it awarded him only a $17,540 credit for taxes that he paid on plaintiff's behalf. Once again, this is a legal ruling now on appeal under Docket No. A-2200-07. Even assuming he were correct, there was again no demonstration of bias.

Finally, defendant reiterates that his second recusal motion was improperly denied in October 2008. Defendant based that motion largely on the court's conclusion, in its May 2008 order following the first ability-to-pay hearing, that a prior settlement between the parties involving a personal injury claim plaintiff filed against defendant pursuant to Tevis v. Tevis, 79 N.J. 422 (1979), resulted in an inequitable distribution of the marital residence.

However, the trial judge addressed that argument in detail in his October 2008 letter opinion. The court noted that its finding that the settlement recognized a "wrongdoing" was not based on external evidence as defendant suggests, but rather was based on the court's close involvement in the matter "for several years." While the court accepted defendant's claim that he did not admit liability in the settlement, the fact remained that plaintiff would be entitled to a larger portion of the proceeds from the sale of the martial residence given that settlement. As the court found, "[t]he reason for the credit is irrelevant to the analysis." We agree.

While the trial court was mistaken in calculating defendant's alimony obligation, we do not detect any bias on the court's part. The other court rulings challenged by defendant were not erroneous and do not call for recusal. Unlike defendant, we do not harbor an objectively reasonable belief that the court was biased, nor do we discern that one could objectively believe that the proceedings were unfair. We recognize that defendant is a dissatisfied litigant. If dissatisfaction with a court's ruling were the equivalent of bias, no court would be immune to the charge.

Reversed and remanded for recalculation of defendant's alimony obligations; affirmed on the denial of recusal of the trial judge. Jurisdiction is not retained.


Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.