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Smith v. Smith

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 13, 2010

DEBORAH SMITH, PLAINTIFF-RESPONDENT,
v.
DEAN SMITH, DEFENDANT-APPELLANT.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Ocean County, Docket No. FM-15-1678-05C.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted May 10, 2010

Before Judges Lisa, Baxter and Alvarez.

Defendant Dean Smith appeals the June 5, 2009 order awarding child support and other financial relief, including counsel fees, to plaintiff Deborah Smith. For the reasons that follow, we remand the matter for a plenary hearing as to child support, reverse as to the effective date of the child support order, and affirm the award of counsel fees.

Plaintiff and defendant, who signed a property settlement agreement (PSA) and divorced on December 21, 2005, have two children, ages twelve and nine. Their divorce judgment incorporated the PSA.

The PSA designated plaintiff as the primary residential parent, although both parents shared legal custody of the children. The PSA called for defendant to pay $10,000 per year in child support, broken down into monthly installments of $833.33, beginning on the effective date of the PSA. Additionally, the PSA obligated defendant to pay seventy-five percent of the children's extracurricular expenses. Defendant was to provide the children's health insurance except if plaintiff was able to secure coverage either incidental to employment or at a lower cost than defendant's policy. Defendant agreed to pay seventy-five percent of unreimbursed medical expenses; plaintiff to pay the balance. Plaintiff was allocated both children as tax exemptions in 2005 and until a new child support amount was either agreed upon or was ordered.

The PSA also required defendant to pay plaintiff $54,250 per year term alimony in installments of $4520.87 on the first of each month. The final alimony payment was due on October 1, 2008.

The parties agreed that child support would be renegotiated after the thirty-six-month term of alimony ended; they were to exchange case information statements (CIS) four months prior to the end of the alimony term. The PSA specifically stated that "the allocation between alimony and child support... was selected, in part, for tax considerations." It was agreed that "[n]o payment or installment of this order for child support, or those portions that are allocated for child support, can be retroactively modified... except for the period during which the party seeking relief has pending an application for modification...." If either party defaulted "in the performance of any provision[]" of the PSA and the default resulted in the initiation of enforcement proceedings, the defaulting party would be responsible for "reasonable [c]court costs and attorney's fees...."

The motion judge conducted oral argument on plaintiff's application for child support and other relief on June 5, 2009, and entered the order from which this appeal is taken that same day. Defendant was ordered to pay $379 weekly based on his representation that he made $4181*fn1 per week, and plaintiff's representation that she earned approximately $2000 per month from her home-operated business. Because the judge credited defendant's assertion that plaintiff had an extensive prior employment history, he imputed $40,000 per year income to her based on her earnings potential, or the approximate $769 weekly figure he used in calculating support. He also imputed $25,000 in additional income to defendant, over and above his salary, because of certain benefits available through his businesses, including auto insurance, medical coverage, and income that he defers to his mother.

The motion judge made the child support order retroactive to November 1, 2008, because defendant's alimony obligations ended as of October 2008 and defendant paid nothing at all, neither child support nor alimony, after November 1, 2008. He further determined that commencing in 2009, each party was entitled to claim one child as a tax exemption. Once the older child became emancipated, the motion judge directed that the parties would alternate years claiming the younger child as an exemption. Because of the significant difference between defendant's annual income of approximately $192,400 per year, exclusive of "perks," and plaintiff's imputed income of $40,000 per year, the motion judge awarded plaintiff $2000 for counsel fees and $30 in court costs.

Defendant raises the following points on appeal:

POINT I

THE TRIAL COURT ERRED IN IMPUTING INCOME OF $40,000.00 TO PLAINTIFF.

POINT II

THE COURT ERRED IN ARBITRARILY INSERTING AN ADDITIONAL $25,000.00 AS PERKS TO DEFENDANT.

POINT III

THE CHILD SUPPORT GUIDELINE MUST INCLUDE A HEALTH INSURANCE COMPONENT FOR THE COST OF BENEFITS PAID BY DEFENDANT ON BEHALF OF THE MINOR CHILDREN.

POINT IV

THE COURT ERRED IN UTILIZING A SOLE PARENTING WORKSHEET.

POINT V

THE COURT ERRED IN RETROACTIVELY MODIFYING CHILD SUPPORT.

POINT VI

THE COURT ERRED IN DEVIATING FROM THE GUIDELINES IN FAVOR OF PLAINTIFF.

POINT VII

THE COURT ERRED IN ALLOCATING ONE CHILD DEPENDENCY EXEMPTION TO EACH PARENT WITHOUT MAKING A FINDING OF THE BENEFIT OR DETRIMENT OF SUCH ALLOCATION.

POINT VIII

THE COURT ERRED IN AWARDING COUNSEL FEES TO PLAINTIFF BASED ON A FINDING OF UNDUE PRESSURE.

It is apparent from our review of the record that the court was faced with a substantial amount of complex financial information regarding defendant's enterprises and income. He is a self-employed person involved in at least two businesses, and actually pays at least part of the income generated by one of them to his mother. The parties omitted important details in their motion papers, such as the expenses defendant claimed he was paying on behalf of the children and the monetary value of the very substantial benefits paid to defendant by his businesses, including the use of a vehicle and car insurance.

We accord particular deference to the factual findings of the Family Part due to its "special expertise in the field of domestic relations." Cesare v. Cesare, 154 N.J. 394, 412 (1998) (citing Brennan v. Orban, Jr., 145 N.J. 282, 300-01 (1996)). Those findings will be affirmed so long as they are "supported by adequate, substantial, credible evidence" in the record as a whole. Id. at 411-12 (citing Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974)). In our view, an inadequate record was created in this case. We simply do not have the "adequate, substantial, credible evidence" necessary to fairly assess the merits of the order. See ibid. (citation omitted).

We do not question the motion judge's good faith in attempting to address these complex issues in the absence of a hearing. Neither party requested one, although both were ultimately prejudiced by the court's reliance on a series of somewhat confusing documents that did not present a complete picture of either party's financial circumstances. This matter was not one which could be decided on the papers. It required "findings of facts on properly adduced evidence." Fusco v. Fusco, 186 N.J. Super. 321, 329 (App. Div. 1982).

Plaintiff's application for entry of a new post-judgment child support order is similar in nature to a post-judgment motion to modify child support, and we will apply the same standard with regard to discovery. Once the moving party has established "a prima facie showing of changed circumstances warranting relief[,]... the court [has] the right to order full discovery regarding the financial circumstances of the other spouse." Isaacson v. Isaacson, 348 N.J. Super. 560, 579 (App. Div. 2002). A ninety-day period of discovery is warranted in this case before a plenary hearing is conducted. See R. 5:5-1(e). The plenary hearing is to be scheduled promptly thereafter.

As we have previously said, "[d]isputes of material fact should not be resolved on the basis of certifications nor in reliance upon ambiguous terms in a property settlement agreement." Palmieri v. Palmieri, 388 N.J. Super. 562, 564 (App. Div. 2006) (citing Conforti v. Guliades, 128 N.J. 318, 328-29 (1992)). In this case, there were a number of genuine issues of material fact, much missing information, and reason to thoroughly probe the financial status and needs of both parties. A plenary hearing was required, as a prima facie showing of changed circumstances resulted from defendant's unilateral cessation of child support payments to plaintiff simultaneous to his cessation of alimony. See Isaacson, supra, 348 N.J. Super. at 579. Accordingly, all issues raised by way of motion and cross-motion - defendant's actual income, including the value of all financial benefits paid by his business enterprises, the imputation of income to plaintiff, the amount of income diverted to defendant's mother and whether that income should be included in defendant's annual earnings, and the allocation of the child dependency exemption - are all to be addressed by way of a plenary hearing.

As to defendant's contention that the motion judge erred in retroactively entering a child support order, we agree. The PSA entered into between the parties explicitly prohibited retroactive modification. Plaintiff implies that this was equivalent to the entry of a new order, and that therefore the anti-retroactivity language is inapplicable. Although we agree that this application is more like the entry of a new order, that is not a basis to ignore language the parties agreed to in their PSA. The judge awarded retroactive support because defendant acted in bad faith when he stopped paying child support at the same time he stopped paying alimony, to the detriment of his children. We may agree, but that does not avoid application of the clear language of the PSA. The earliest date upon which the child support order should have been made payable is March 2009, the date plaintiff filed her child support motion.

As an aside, our decision to remand the matter for a plenary hearing does not immediately vacate the current child support order. Defendant is to continue to pay pursuant to the current order until such time as a new order is entered and an appropriate adjustment can be made to his probation account.

As to defendant's contention that the counsel fee award was erroneous, we do not agree. Defendant's failure to make any child support payments during the months that he and his former wife attempted to negotiate the matter without success indicates, to at least some degree, bad faith. As the motion judge stated, "there is clearly a great divergence in income between the parties to the detriment of [p]laintiff," which also warrants issuance of an award of counsel fees. The judge's analysis, based on Williams v. Williams, 59 N.J. 229 (1971), was appropriate, albeit truncated. Defendant earns at least $192,000 per year, while his former wife was imputed income of only $40,000. Ordering him to pay the modest sum of $2000 plus $30 in filing fees seems eminently reasonable. In our view, the court correctly applied relevant standards and rendered an unassailable decision on the counsel fee issue. We affirm that aspect of the order.

Remanded for a plenary hearing in part, reversed in part, and affirmed in part.


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