September 21, 2010
JACK KURLANSIK, PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
ASHLEY MORIN, F/K/A ASHLEY KURLANSIK, DEFENDANT-RESPONDENT/CROSS-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Hunterdon County, Docket No. FM-10-031-99.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted August 3, 2010
Before Judges Axelrad and Espinosa.
Plaintiff appeals from the denial of his post-judgment cross-motion that sought, in part, the retroactive modification of child support. Defendant cross-appeals from the denial of her motion for counsel fees. We affirm in part and reverse in part.
The parties were married in June 1982 and had two children, Emily, born in 1988, and Jonathan, born in 1990. Plaintiff is a dentist with an established practice. Defendant is a dental hygienist. The parties agreed upon the terms of a property settlement agreement (PSA) that was incorporated in their final judgment of divorce in March 1999.
The parties agreed that they would enjoy joint legal and residential custody of the two children. Paragraph 4 provides:
Both parties agree to provide fully all support and remain in full force and effect. [sic] Both parties agree to provide fully all support and maintenance for the children while exercising parenting time. The parties acknowledge that Husband's income exceeds Wife's income and that the need for additional funds to provide for the children, while Wife is exercising her parenting time with the children, has been encompassed within the terms of the equitable distribution property settlement set forth hereinafter. [(Emphasis added).]
The terms of the equitable distribution settlement referred to are set forth in paragraph 16 of the PSA:
LUMP SUM EQUITABLE DISTRIBUTION
The parties agree that, in order to compensate Wife for her equitable share of Husband's dental practice and her waiver of alimony, as well as to provide additional funds for the support and maintenance of the children while Wife is spending parenting time with them, Husband shall pay to Wife a lump sum
a. From February 1, 1999 through January 31, 2004, the sum of Three Thousand ($3,000) Dollars per month;
b. From February 1, 2004 through January 31, 2009, the sum of Twenty Five Hundred ($2,500) Dollars per month; and
c. From February 1, 2009 through January 31, 2014, the sum of Fifteen Hundred ($1,500) Dollars per month.
Said installment payments shall be due and payable on or before the first day of each month.
It is the intent of the parties that this settlement encompasses additional funds needed by Wife for support and maintenance of the children while she has parenting time with the children. In the event Wife seeks child support from Husband, then and in that event, he shall have the right to reopen the issue of the lump sum distribution settlement and seek the appropriate reduction or credit. [(Emphasis added).]
The PSA also provided that defendant would be retained as a computer consultant by plaintiff's practice for fifteen years, even if she accepted gainful employment elsewhere, so that medical insurance could be provided to her. The parties agreed that her monthly earnings as a consultant and the monthly costs of her medical insurance would be credited up to a maximum of $1,500 per month toward plaintiff's monthly lump sum distribution payments.
The PSA addressed the children's college expenses by providing that each parent would "share in the payment of tuition fees, room and board expenses, if any, and other costs in proportion to their respective incomes at the time such fees, expenses, and costs are to be incurred."
The shared residential custody parenting time arrangement continued until approximately January 2004, when Emily began to reside primarily with defendant and remained there until she began her freshman year of college in September 2006. Jonathan continued in the shared arrangement until September 2006, when he began to reside with plaintiff on a full-time basis until he began college in August 2009.
The parties were unable to agree as to their respective obligations to contribute to Emily's college expenses. In December 2008, defendant filed a motion seeking, in part, a determination of the parties' respective obligations to contribute to Emily's college expenses and for counsel fees. Plaintiff filed a cross-motion seeking, in part, the following relief: (1) to impute income of $72,000 to defendant; (2) to include plaintiff's payments to defendant of $2,500 per month as income to her in determining defendant's contribution toward college expenses; (3) relieving plaintiff of the obligation to pay $75,000 of the $90,000 that remained of the lump sum equitable distribution under the PSA as unearned child support; (4) fixing child support for Emily retroactively to September 1, 2006; (5) fixing child support for Jonathan retroactive to July 1, 2006; (6) allocating the remaining equitable distribution payments for child support for the children.
By order dated January 27, 2009, the court established the parties' contributions for Emily's college expenses as 80% for plaintiff and 20% for defendant. Plaintiff's income was based upon a review of his federal tax returns for 2006 and 2007. The court refused to accept defendant's salary for a twenty-three to thirty hour work week as her income. The court imputed a gross annual income of $70,980 to defendant based upon a thirty-five hour work week at defendant's rate of pay of $39 per hour.
After carefully reviewing the pertinent provisions of the PSA and applicable law, the court denied plaintiff's requests to include the monthly payments made to defendant as part of her income. The court noted that the PSA included a waiver of alimony by defendant and an agreement that neither party would receive or pay child support to the other. Although each party agreed to provide fully for the children while exercising his or her parenting time, the PSA also acknowledged that defendant required additional funds to provide for the children while exercising her parenting time and that her need was "encompassed within the terms of the equitable distribution" provision in the PSA. The court noted that the equitable distribution provision that provided for a lump sum payment of $420,000 extended over fifteen years was explicitly designed "to compensate Wife for her equitable share of Husband's dental practice and her waiver of alimony, as well as to provide additional funds for the support and maintenance of the children while Wife is spending parenting time with them . . . ." The schedule of payments called for monthly payments of $3,000 for the first five years, $2500 for the next five years, and $1,500 for the last five years.
The court stated:
Therefore, while the payments Defendant receives from Plaintiff may adjust for a component of support for the children, to whatever extent this was considered in devising the lump sum figure, they are not per se child support. The bottom line is that Defendant received a lump sum settlement that is not divisible spousal support. She waived alimony and her interest in the Plaintiff's business, in lieu of this lump sum payment. The nature of the payment as installment type is a detail that does not transform those monies to alimony or some other type of funds to alter its nature to annual income. It is also irrelevant, for the purpose of determining whether these payments are income to Defendant, that some of the monthly funds are paid to Defendant through payroll at Plaintiff's business, and that therefore she incurs tax consequences on those funds. The installments benefit Plaintiff, at minimum, because they are more affordable than making a one time lump sum payment to Plaintiff of $420,000.
Further, the parties' agreement to adjust the lump sum to allow Defendant an offset for support of the children does not mean that a portion [of] Defendant's lump sum is an advance on child support paid to her by Plaintiff. This interpretation of the PSA, as suggested by Plaintiff, would necessarily require the conclusion that Defendant waived child support as well as part of the lump sum payment.
Paragraph 16 goes on to say that
It is the intent of the parties that this settlement encompasses additional funds needed by Wife for support and maintenance of the children while she has parenting time with the children. In the event wife seeks child support from husband, then and in that event, he shall have the right to reopen the issue of the lump sum distribution settlement and seek the appropriate reduction or credit.
The court found plaintiff's interpretation flawed in light of the prohibition against the waiver of child support and found "the more likely interpretation of this provision" as a "lump sum settlement payment which included several considerations and recognized the disparity in income between the two parties."
Therefore, the court concluded that the monthly payments made pursuant to this provision did not constitute income to plaintiff for the purpose of determining proportional obligations for college expenses.
Plaintiff filed a motion for reconsideration seeking, in part, reconsideration of the court's denial of his requests to fix child support obligations for both Emily and Jonathan, retroactive to September 1, 2006. The trial court granted that portion of the motion for reconsideration concerning child support for Emily and denied all other requests for relief.
In stating its reasons for this modification of the January 2009 order, the court noted that paragraph 4 of the PSA provided that each party would maintain and support the children during their parenting time. The court reasoned that because Emily is at college and does not exercise significant parenting time with either parent, she was not receiving support from her parents pursuant to the terms of the PSA, resulting in "an unacceptable failure to support a child." Accordingly, by order dated April 3, 2009, the court ordered, "Both parties shall contribute in proportion to their incomes, as determined by the court in paragraph 1 of the January 27, 2009 order, to Emily's Schedule A, B and C expenses*fn1 while she is at school and to continue to pay for her expenses occurring during each party's parenting time while she is back from school or on school break." Defendant was required to submit Emily's case information statement setting forth her expenses while at school and her income, if any. The obligation was made retroactive to December 24, 2008, the date that plaintiff's original cross-motion was filed.
In this appeal, plaintiff presents the following issues:
WHEN THERE WAS A CHANGE OF CIRCUMSTANCES, THE TRIAL COURT ERRED WHEN IT FAILED TO FIX PLAINTIFF'S CHILD SUPPORT FOR EMILY RETROACTIVE TO SEPTEMBER 1, 2006.
THE TRIAL COURT ERRED WHEN IT FAILED TO SET DEFENDANT'S CHILD SUPPORT OBLIGATION FOR THE PARTIES' SON JONATHAN.
THE TRIAL COURT ERRED WHEN IT DID NOT ORDER A PLENARY HEARING TO ADDRESS THE ISSUE OF THE CHILD SUPPORT/MODIFICATION OF PLAINTIFF'S MONTHLY PAYMENTS.
THE COURT ERRED WHEN IT FAILED TO INCLUDE MONIES RECEIVED BY DEFENDANT FROM PLAINTIFF AS INCOME TO HER FOR PURPOSES OF CALCULATING SUPPORT.
In her cross-appeal, defendant argues that it was an abuse of discretion for the trial court to decline to award her counsel fees.
With the sole exception of that part of the April 2009 order that required the parties to pay proportional shares of Emily's Schedule A, B, and C expenses while she is at school, we are satisfied that none of these arguments have merit.
Because matrimonial settlement agreements are "essentially consensual and voluntary in character," they 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) (quoting Petersen v. Petersen, 85 N.J. 638, 642 (1981)); see also Lepis v. Lepis, 83 N.J. 139, 153 (1980). A party who seeks modification of support obligations from the court must make a prima facie showing "that its terms, in light of changed circumstances, are unfair and unjust." Petersen, supra, 85 N.J. at 644; Isaacson v. Isaacson, 348 N.J. Super. 560, 579 (App. Div.), certif. denied, 174 N.J. 364 (2002). See also Lepis, supra, 83 N.J. at 148-49; Brawer v. Brawer, 329 N.J.Super. 273, 284 (App. Div.), certif. denied, 165 N.J. 138 (2000) (A property settlement agreement is "subject to amendment by the court when changed circumstances make its enforcement inequitable.").
Plaintiff argues that the following changes in circumstances rendered the parties agreement inequitable and therefore subject to modification by the court: a change in the shared parenting time arrangement that occurred when Jonathan began to reside with him on a full-time basis and the change that occurred when Emily began to attend college out of state. While those changes did occur, they fail to render the terms of the PSA unfair and unjust.
In this case, the trial court correctly noted that the "Lump Sum Equitable Distribution" provision of the parties' PSA conflated three components of more conventional agreements: defendant's claim to alimony, defendant's equitable distribution claim to plaintiff's dental practice, and additional payment toward defendant's parenting time expenses in recognition of the fact that her income was lower than plaintiff's. The parties each agreed to absorb the costs of child support for the children while they exercised parenting time. The scheduled payments were plainly not predicated upon any specific parenting arrangement. Moreover, although the parties acknowledged their commitment to their children's college education in paragraph 7 of the PSA, the schedule provided for decreases at five-year intervals that were unrelated to when the children would attend college. For example, the first decrease occurred shortly before Emily turned sixteen, when it was reasonable to expect that she would still be residing with her parents. Emily began college in September 2006 but the second decrease did not occur until February 2009, approximately two and one-half years after the parties could have reasonably expected a change in her living circumstances. The parties scheduled no change in payments for the time when Jonathan would be expected to begin college in August 2009. Finally, the parties agreed upon a schedule of the lump sum payments until January 2014, a date well after both children completed college and, presumably, no child support obligation would exist.
The failure of the scheduled payments to be tied to any actual expenses, parenting time arrangement, or timeframe that coincided with the parties' reasonable expectations as to when the children would be away at college, reflects an understanding and agreement by the parties that changes in those circumstances would not impact plaintiff's obligation to make the monthly payments designated as lump sum equitable distribution in the PSA. Furthermore, the parties even agreed as to the circumstance that would trigger plaintiff's right to re-visit this obligation, i.e., if defendant sought child support from plaintiff. We are, therefore, satisfied that plaintiff failed to make the requisite showing of changed circumstances to render the PSA inequitable. Therefore, we affirm the trial court's denial of his requests for a plenary hearing and an award of child support to him for Jonathan.*fn2
Plaintiff also asked the trial court to fix a child support obligation for Emily and make that obligation retroactive to September 2006, when she began college. In ruling on plaintiff's motion for reconsideration, the trial court concluded that because Emily was at college, she was not receiving support from her parents pursuant to the terms of the PSA and therefore ordered each party to make proportional contributions to Emily's Schedule A, B and C expenses while she is at school.
The trial court is afforded substantial discretion to determine child support awards and other support obligations. Pascale v. Pascale, 140 N.J. 583, 594 (1995); Foust v. Glaser, 340 N.J. Super. 312, 315 (App. Div. 2001). "If consistent with the law, such an award will not be disturbed unless it is manifestly unreasonable, arbitrary, or clearly contrary to reason or to other evidence, or the result of whim or caprice." Foust, supra, 340 N.J. Super. at 315-16 (quotation marks omitted) (citation omitted).
No change in the support arrangement was warranted because, as we have discussed, plaintiff failed to show that a change in circumstances warranted a modification of the PSA. In addition, the premise for the court's ruling was that, because Emily was living at school, she was not receiving support from the parties. It is true that the PSA did not specify the parties' obligations for Emily while at school. However, there is no support in the record for the conclusion that Emily was not receiving support from her parents. Finally, the PSA reflected an agreement by the parties that each would contribute toward the children's needs, with some additional funds being provided to defendant for that purpose. Paragraph 7 defined college expenses as "tuition fees, room and board expenses, if any, and other costs" and called for a division of obligations in proportion to the parties' income. That paragraph did not extend proportional obligations to expenses that would be included in Schedules A, B, and C and which would presumably be included in the support each parent provided individually to Emily and in that part of the lump sum equitable distribution payments that were intended to assist defendant in providing for the children.
We are, therefore, constrained to conclude that it was an abuse of discretion for the trial court to modify the agreement to require the parties to share Emily's Schedule A, B, and C expenses on an 80%/20% basis and reverse that portion of the April 3, 2009 order. All other aspects of the orders appealed from are affirmed.