May 24, 2010
STUART LANTZ, PLAINTIFF-APPELLANT,
IVY LANTZ, N/K/A IVY BROWN, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-586-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 15, 2009
Before Judges Grall, Messano and LeWinn.
Plaintiff, Stuart Lantz, appeals from two orders of the Family Part: the October 24, 2008 order denying his request to reduce his child support obligation for the parties' two children, and requiring him to pay to defendant, Ivy Lantz, $14,819.51 representing her equitable distribution share of certain stock options; and the May 27, 2009 order denying without prejudice his requests to reduce his alimony obligation to defendant, his contribution towards the children's college expenses and the amount of life insurance required to secure his support obligations. We reverse and remand for reconsideration of the reduction in child support. We affirm on all other issues.
The parties were married in 1985 and divorced in 2003. They have two children, a son born in 1987 and a daughter born in 1990. The property settlement agreement (PSA) incorporated into their divorce judgment provided for plaintiff to pay alimony of $3750 per month and child support of $370 per week ($1591 per month). These support figures were based upon plaintiff's imputed annual income of $170,000. The PSA further provided that the parties would share the children's college expenses in proportion to their incomes, unless plaintiff's income exceeded $170,000, in which case he would pay two-thirds of the son's college expenses.
Two additional provisions of the PSA are pertinent to the issues on appeal: Section 1.8 states: "In the event a child is attending school away from home, and not living in the home of [defendant], then [plaintiff] may be entitled to a reduction in child support"; and Section 5.6, which states:
[Plaintiff] has an interest in certain [s]tock [o]ptions and [s]tock [a]ppreciation [r]ights.... All stock options and stock appreciation rights granted prior to August 2002 shall be divided equally between the parties. The parties understand that such options and stock appreciation rights are not assignable. In order to effectuate this equal division, [plaintiff] shall hold 50% of such options granted and stock appreciation rights in constructive trust for the benefit of [defendant].
These stock options and rights were provided by plaintiff's employer at the time of the divorce, Lincoln National (Lincoln). In 2005, however, plaintiff left Lincoln for Summit Financial Resources. Lincoln thereupon advised plaintiff that any options or rights not exercised during his employment were terminated. It is undisputed that defendant's 50% share of the terminated options and rights was $14,819.51; and she made several demands upon plaintiff to reimburse her that amount. Plaintiff denied that he owed any obligation to defendant, as he had lost his share of this asset as well.
In June 2005, plaintiff filed a motion to reduce his alimony, child support, life insurance and college expenses obligations. The trial judge entered an order in July 2005 denying a reduction in child support and college expenses, but reducing alimony from $45,000 to $22,500 annually, and reducing plaintiff's life insurance obligation from $1 million to $600,000. This order was based upon the judge's finding that plaintiff's annual income had decreased to $108,000.
In October 2005, plaintiff filed a motion seeking to reduce his child support obligation; the judge denied this motion and again ordered plaintiff to pay his share of the son's college expenses.
On July 14, 2008, plaintiff filed the motion which is the subject of this appeal; he sought a reduction in child support based upon the parties' daughter's anticipated entry into her freshman year of college at the University of Miami, and their son's entry into his senior year at Bucknell University, in August 2008. Plaintiff contended that since both children would be living away from home during the school year, and he was obligated to pay two-thirds of their college expenses, he was entitled to a reduction in his child support payments to defendant.
Defendant filed a cross-motion seeking payment of her equitable distribution share of the Lincoln stock options and rights, and reimbursement for other expenses. On October 24, 2008, the trial judge heard oral argument and entered an order denying plaintiff's request to reduce his child support obligation. The judge also ordered defendant to pay to plaintiff his share of the net proceeds of the marital residence, less credits of $14,819.51 for her share of the stock options, $5600 as pre-payment of child support for the parties' son through May 2009, and $773.28 as reimbursement for other expenses incurred on behalf of the children. In addition, the judge reduced plaintiff's alimony obligation to $18,900 per year effective November 1, 2008.
The judge determined that plaintiff's child support for the parties' son should be paid by a credit of $5600 against his share of the sale proceeds of the marital residence; this represented child support at $800 per month from November 2008 through the son's college graduation in May 2009. The judge ordered that plaintiff continue to pay $800 monthly on behalf of the daughter and concluded that since plaintiff "will now have a reduced payment in child support for only one child..., that will give him some financial relief."
Regarding the stock options, the judge noted that plaintiff had voluntarily left his employment at Lincoln with no notice to defendant and without exercising his vested options. Plaintiff contended that he mistakenly believed he could "take [the vested options] with [him]" when he left; he acknowledged, however, that he never sought confirmation of that belief prior to leaving Lincoln.
The judge ruled that one-half the value of those options was due to defendant and that plaintiff's "actions or misinformation caused him to lose the asset[,]" adding:
You hold singularly the exercise of discretion as to what to do [with] the asset through your employment and it connects through your employment. You then determine through word of mouth that, in fact, it's something you can take with you rather than a written verification which that [sic] will be taken from the company [sic] or an exercise of the option when it has a value.
So while in fact it may be a unilateral mistake on your part because it can't be a mutual mistake because she has no knowledge of it, your act caused harm to her as an incidental beneficiary of that. So that's where you get to be held accountable....
[Y]ou owe her the value of that asset that, in fact, no longer exists that she counted on receiving because it's your singular act that caused its loss, not a drop in the stock market.
The reduction in plaintiff's alimony obligation was based upon the judge's finding that he had incurred a 17% reduction in annual income from $108,000 to $90,000. The judge ordered plaintiff to give defendant copies of his tax returns at the end of each year, and to pay additional alimony in the amount of one-half of any gross annual income earned in excess of $90,000, not to exceed $1875 per month.
On February 18, 2009, notwithstanding his pending appeal in this court,*fn1 plaintiff filed a motion in the Family Part seeking a reduction of his child support for the parties' daughter to $400 per month until he paid most of his credit card debt, reduction of his alimony obligation to $400 per month for the same period, elimination of his obligation to pay two-thirds of the children's college expenses, and a decrease in his life insurance for defendant's benefit to $150,000. Defendant filed a cross-motion seeking payment of support arrears and enforcement of the child support, alimony and college expense payments ordered in October 2008.
On April 7, 2009, plaintiff filed a motion in this court for a remand to the Family Part to entertain the pending motions. On April 27, 2009, we entered an order temporarily remanding the matter, requiring the remand proceedings to be completed within thirty days and allowing the parties to file supplemental briefs.
On May 27, 2009, the trial judge heard oral argument and entered an order (1) denying all of plaintiff's requests "without prejudice[,]" (2) declaring the parties' son emancipated as of May 31, 2009, (3) requiring plaintiff to produce all his tax documents for 2009, (4) ordering plaintiff to report to the judge bi-weekly "to provide updates regarding his income and his search for alternate employment[,]" and (5) granting defendant the right to apply for counsel fees.
In his oral decision from the bench at the conclusion of argument, the trial judge noted that he had reduced plaintiff's alimony obligation in October 2008 based on a projected annual income of $90,000, and that he did not "see [several] months later,... that that's not going to be achieved." The judge told plaintiff that, "[i]f it isn't achieved... [he] can come to [the judge] at the end of the year."
On appeal,*fn2 plaintiff contends that (1) a reduction in his child support is warranted by the change in circumstances of the children's attendance at college out-of state, and also pursuant to the PSA; (2) he is not responsible to defendant for the loss of the Lincoln stock options; and (3) because of the "drastic reduction in income, equity cries out for a significant reduction in his obligations for alimony, child support, college payments and insurance."
We first address plaintiff's request to reduce his alimony obligation. We note that the trial judge reduced that obligation on two occasions since the parties executed their PSA. Between July 2003 and October 2008, plaintiff's alimony obligation was reduced from $45,000 to $18,900 per year.
At the remand hearing on May 27, 2009, plaintiff acknowledged that he had provided defendant's attorney with his 2007 and 2008 tax returns, but without any 1099's or other supporting documentation appended. In his certification supporting his motion on remand, plaintiff attached "spreadsheets" reflecting his "1099 earnings for the year 2008[,]" but no other documentation. He further acknowledged that he earned $90,000 in 2008, which was the figure on which the trial judge premised his latest alimony reduction. Plaintiff pointed to changes in federal tax laws in 2001 as a major cause of the decline in his earnings; he failed to explain, however, how his income was at its highest when alimony was set in the 2003 PSA, notwithstanding the tax law changes two years earlier.
We have long recognized that the party seeking modification of support "has the burden of showing such 'changed circumstances' as would warrant relief from the support or maintenance provisions involved." Lepis v. Lepis, 83 N.J. 139, 157 (1980). Plaintiff has failed to demonstrate "changed circumstances" since the 2008 reduction of his alimony obligation.
Plaintiff has further failed to demonstrate that he has paid "diligent attention to business" in an effort to maximize his "earning capacity...." Bonanno v. Bonanno, 4 N.J. 268, 275 (1950). He stated to the trial judge that he had no prospects of earning comparable income in 2009, but failed to document what efforts he had made to find employment in his field of financial planning.
As the trial judge noted at the remand hearing, plaintiff's alimony reduction request was "premature[,]" as not even a year had elapsed since the last reduction ordered in October 2008. It is appropriate for the trial judge to evaluate a claimed change in circumstances from the time the support obligation was last modified. See Donnelly v. Donnelly, 405 N.J. Super. 117, 127-28 (App. Div. 2009). As the trial judge noted, since plaintiff works on commissions, his earnings could vary dramatically from month to month. The judge was not required to accept plaintiff's unsupported contention that he did not "have any prospects."
It appears that the judge, who had been responsive to plaintiff's alimony reduction requests in the past, recognized that those requests seemed to be coming more frequently. As the May 2009 order was entered (1) less than seven months after plaintiff's second alimony reduction since 2003, (2) contemporaneously with the emancipation of the parties' son and the termination of plaintiff's child support obligation for him, (3) without prejudice, and (4) on the condition that plaintiff personally report to the judge every two weeks "regarding his income and his search for alternate employment[,]" we find no abuse of discretion warranting reversal of the trial judge's alimony ruling.
For the same reasons, we affirm the judge's denial of plaintiff's requests to modify his contribution to college expenses and his life insurance obligation. Respecting the latter, we note that in July 2005, the judge reduced the amount of life insurance plaintiff was required to carry on behalf of defendant from $1 million to $600,000.
Regarding college expenses, as their son has now graduated, only the parties' daughter remains in college. As the trial judge noted, plaintiff had not explored the possibility of taking out loans with deferred payment schedules, in order to pay his share of this expense. Plaintiff claimed that he would not qualify for such loans, but then acknowledged that he had not attempted to apply for them, adding, "I guess we have to find a way to make sure we get the maximum loans."*fn3
Regarding defendant's right to equitable distribution of one-half the value of the stock options plaintiff forfeited upon his voluntary termination of employment with Lincoln, we affirm substantially for the reasons stated by the trial judge in his oral decision from the bench on the October 24, 2008. R. 2:11-3(e)(1)(A).
Finally, we address child support. At the May 27, 2009 hearing, the trial judge recognized that a reduction in child support generally is appropriate when a child attends college away from home. Nonetheless, the judge declined to reduce plaintiff's child support obligation for the parties' daughter.
As noted, the parties' PSA provides that plaintiff "may be entitled to a reduction in child support" when "a child is attending school away from home...." It is clear that the parties' daughter attends school "away from home." In addition, plaintiff is obligated to pay two-thirds of her college expenses. Moreover, the current child support amount was determined at the time of the PSA when plaintiff's annual income was $170,000.
For these reasons, we reverse the provisions of the October 24, 2008 and May 27, 2009 orders denying a reduction in plaintiff's child support obligation and remand for further proceedings on that issue.
Affirmed in part; reversed in part.