January 21, 2011
BARBARA FORMAN, (F/K/A FROST) PLAINTIFF-RESPONDENT,
MARK FROST, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, Docket No. FM-03-1447-04W.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 15, 2010
Before Judges Axelrad and R. B. Coleman.
Defendant Mark Frost appeals from portions of a May 14, 2009 post-judgment order granting, in part, the motion of plaintiff Barbara Frost (now known as Forman) for enforcement of litigant's rights. Defendant argues that the Family Part judge erred in: (1) requiring payment of the equitable distribution award within 180 days, with the potential sanction of incarceration in the event of non-compliance; (2) denying his request to reduce his alimony obligation due to changed circumstances; and (3) awarding counsel fees to plaintiff based on findings of fact that do not have sufficient support in the record to warrant such award. We are not persuaded by defendant's arguments. Accordingly, we affirm the order as modified.
On June 1, 2004, after thirty-six years of marriage, plaintiff Barbara Frost filed a complaint for divorce against defendant Mark Frost. The final judgment of divorce, entered on August 25, 2006, by Judge Jeanne T. Covert of the Family Part, described the marital standard of living and the projected expenses of the parties based on that marital standard. The judge found that the parties lived an upper-middle class lifestyle that reflected expenditures between $28,000 and $30,000 per month and fixed defendant's alimony obligation at $9,500 per month.
Subsequently, on plaintiff's 2008 motion for enforcement of litigant's rights heard by Judge Patricia B. Roe, defendant cross-moved seeking, among other relief, a reduction in his alimony obligation. Defendant noted that Judge Covert found his gross annual income was $357,000, resulting in $214,000 annual disposable income, with $17,858 in disposable income per month. He argued that his alimony obligation should be modified because: (1) he had not drawn a salary from his law firm, Frost & Zeff, for the last two years, but instead drew money in the form of loans from the firm's line of credit; (2) Frost & Zeff was in a dire financial state; (3) his actual income via Frost & Zeff's income and credit line advances was only $304,000; (4) his compliance with Judge Covert's order to lift the lien on the marital home held by T.D. Bank North resulted in his being forced to resort to using Counsel Financial (CF) as a lender at an eighteen percent interest rate, since T.D. Bank North would not relinquish the lien unless it was paid in full; (5) the interest accrued from CF loans in the course of one year was $171,000; (6) he was paying approximately $30,000 per year for his son's graduate school and living expenses; (7) he wished to rent the marital home as plaintiff no longer resided there; and (8) he was "doing the best to tighten his belt," his example being that he traded in his Porsche and leased a BMW, saving $400 a month.
In an order entered August 1, 2008, Judge Roe denied defendant's application for an order reducing alimony, stating she was not "satisfied defendant ha[d] met his burden of demonstrating a substantial change in circumstance."
On February 27, 2009, plaintiff submitted a certification in support of a motion to enforce litigant's rights, and on April 16, 2009, defendant submitted a certification in opposition to that motion and in support of a cross-motion seeking a reduction in his alimony support obligation. Defendant again maintained that he had experienced "changed circumstances" that justified either a reprieve from or a reduction in the amount of his alimony obligation. He reiterated many of the circumstances the court had already rejected, regarding his law firm's dire financial straits and pending dissolution, his reduced income in 2007, his high interest loan and his attempt to "tighten his belt," and further argued that in 2008, Frost & Zeff operated at a loss requiring him to draw money solely from the firm's line of credit*fn1 , he opened his own firm and handled Frost & Zeff's outstanding cases on a contingent fee basis, and in February 2009, he was diagnosed with prostate cancer that extended beyond the margins of the prostate.
On May 14, 2009, Judge James W. Palmer, Jr. heard oral argument on the parties' motions and entered a post-judgment order that day, denying defendant's request for a reduction in his alimony obligation. Judge Palmer found:
In support of his contention of "changed circumstances," Defendant states that he was diagnosed with prostate cancer, he has only been able to take a salary in the form of loans from his law firm, his law firm is in the process of dissolving and the fact that his law firm has not been able to draw a profit in recent years. With the exception of his cancer diagnosis, the Court found these events insufficient to meet the "changed circumstances" burden when Defendant raised them in August of 2008.
The Court agrees with that finding in that these events are not permanent or significant changes that would warrant modification. Further, Defendant has stated that his law firm is in the process of dissolving. However, Defendant has [also stated] that he has opened his own firm, bringing with him many of the clients from Frost & Ze[ff]. In fact, Defendant certified that he was currently arguing a trial for a client. Therefore, although Defendant's firm may be dissolving, Defendant is clearly not without employment. Therefore, the Court finds a modification of Defendant's alimony obligation unwarranted at this time.
Judge Palmer ordered defendant to pay plaintiff the equitable distribution owed in the total amount of $461,646.01. Defendant admitted he owed this amount but claimed he did not have the funds to pay plaintiff. "The Court [did] not find this a sufficient justification to allow him to ignore his financial obligation any longer[,]" finding that he was "deliberately tying up his money elsewhere." Judge Palmer's order noted that if defendant again failed to heed the court's order that he pay plaintiff the three years past-due equitable distribution, "[p]laintiff may bring a motion for enforcement that includes sanctions ranging from further economic penalties to loss of driver's license to incarceration. R. 5:3-7(b)."
The judge also granted plaintiff's request for counsel fees and costs regarding the 2009 enforcement application, ordering defendant to pay $4,597.50 directly to plaintiff's attorney. Defendant filed a notice of appeal from Judge Palmer's May 14, 2009 order.
Although defendant devotes a substantial portion of his brief on appeal challenging the portion of Judge Palmer's order that threatens incarceration if defendant fails to pay, in her brief, plaintiff assents to the deletion of the discretionary sanction of incarceration from the May 14 order, and disavows any intention to seek incarceration in aid of her litigant's rights.*fn2 In light of that position, we decline to consider defendant's challenge to that provision as not warranted constitutionally or under the Court Rules, and we modify paragraph seven of the order to delete the reference to incarceration.
Besides, the issue of whether defendant may be incarcerated for his continued failure to pay plaintiff equitable distribution is premature. In Saltzman v. Saltzman, 290 N.J. Super. 117, 124 (App. Div. 1996), we found that a party's arguments on whether he should be incarcerated for failure to pay child support were interlocutory. We stated:
[W]here the issue to be determined at the post-judgment proceeding is whether plaintiff should be incarcerated for failure to pay child support and his sole ground for resisting payment [was] his alleged inability to pay, the order directing him to pay and the warrant to bring him before the court [we]re interlocutory. This [was] because his ability to pay and therefore whether he w[ould] be incarcerated to compel him to pay [we]re still to be decided at an ability-to-pay hearing. Cf. In re Carton, 48 N.J. 9, 24 . . . (1996) (a coercive civil order is interlocutory; an order of commitment to enforce it would be final) . . . . [Id. at 124.]
Here, defendant was neither incarcerated nor was a warrant issued to bring him before the court. Rather, the judge's order merely noted that plaintiff could bring a motion for enforcement that "include[d] sanctions ranging from further economic penalties to loss of a driver's license to incarceration."
Again, plaintiff has disavowed any intention to seek such relief and accordingly, we have modified the order.
Next, we address defendant's contention that the trial court should have modified his alimony obligation due to his change in financial circumstances. We find defendant's argument unpersuasive on this point.
Because of the special expertise of the Family Part judges, appellate courts "do not second-guess their findings and the exercise of their sound discretion." Hand v. Hand, 391 N.J. Super. 102, 111 (App. Div. 2007) (citing Cesare v. Cesare, 154 N.J. 394, 413 (1998)). See also Larbig v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006) (recognizing an abuse of discretion standard of review of a Family Part judge's determination whether to modify an alimony obligation based on changed circumstances). To vacate a trial court's findings and decision in a proceeding to modify alimony, the appellate court must conclude either that the trial court: (1) "clearly abused its discretion"; (2) "failed to consider 'all of the controlling legal principles'"; (3) was mistaken in its findings of fact; or (4) could not reasonably have reached its determination "on sufficient credible evidence present in the record after consideration of the proofs as a whole." Rolnick v. Rolnick, 262 N.J. Super. 343, 360 (App. Div. 1993) (citations omitted).
Courts have the equitable power to fix alimony and child support payments. N.J.S.A. 2A:34-23. The goal is to ensure that both spouse and children may continue to live as they had prior to the divorce. Weishaus v. Weishaus, 180 N.J. 131, 140 (2004); Lepis v. Lepis, 83 N.J. 139, 150 (1980). Those determinations are, however, "always subject to review and modification on a showing of 'changed circumstances.'" Lepis, supra, 83 N.J. at 146 (quoting Chalmers v. Chalmers, 65 N.J. 186, 192 (1974)); N.J.S.A. 2A:34-23.
A changed-circumstances analysis necessarily requires determining the starting point for such changes. Foust v. Glaser, 340 N.J. Super. 312, 316 (App. Div. 2001). Identifying "[t]he marital standard of living is essential to an analysis of changed circumstances regardless of whether the original support award was entered as part of a consensual agreement or of a contested divorce judgment." Crews v. Crews, 164 N.J. 11, 25 (2000).
However, in Donnelly v. Donnelly, 405 N.J. Super. 117, 127 (App. Div. 2009), we recognized that where a post-judgment hearing was already conducted to assess changed circumstances supporting a reduction in alimony, the judge in a later post- judgment motion regarding the same issue is not to disregard the earlier ruling. We have noted:
[T]he judge was not required to wipe the slate clean and consider a similar contention regarding . . . earnings less than one year after the prior order as if the earlier hearing had never occurred. To the contrary, the judge [is] required to consider not whether there [is] a substantial change since the PSA but whether there was a substantial change since he rendered his fact findings in [the prior post-judgment hearing]. [Ibid.]
Although defendant did not receive a plenary hearing, as did the defendant in Donnelly, his 2008 cross-motion for a reduction of his alimony obligation raised the same arguments as his 2009 motion. In 2008, Judge Roe made findings of fact in denying his request that were properly considered by Judge Palmer in 2009. As the Supreme Court explained:
When an alimony order is reviewed, the primary factors assessed to determine whether the former marital standard of living is being maintained are: "the dependent spouse's needs, that spouse's ability to contribute to the fulfillment of those needs, and the supporting spouse's ability to maintain the dependent spouse at the former standard." Other criteria include whether the change in circumstance is likely to be continuing and whether the agreement or decree explicitly provided for the change. Temporary circumstances are an insufficient basis for modification.
[Innes v. Innes, 117 N.J. 496, 504 (1990) (quoting Lepis, supra, 83 N.J. at 152).]
Generally, the courts will make modifications in order to render a situation equitable and fair. Dolce v. Dolce, 383 N.J. Super. 11, 19 (App. Div. 2006); see Lepis, supra, 83 N.J. at 161
n.12. However, the obligor has the burden of persuasion to prove changed circumstances, Storey v. Storey, 373 N.J. Super. 464, 473 (App. Div. 2004), that is "whether 'changed circumstances had substantially impaired the [spouse's] ability to support himself or herself.'" Foust, supra, 340 N.J. Super. at 316 (quoting Lepis, supra, 83 N.J. at 157).
It has been recognized that the increase or decrease in the supporting spouse's income may constitute "changed circumstances." Lepis, supra, 83 N.J. at 151; Martindell v. Martindell, 21 N.J. 341, 355 (1956). Additionally, a "change in . . . income" is "only one part of the calculus to be considered in ruling upon" a motion for reduction of alimony obligations. Donnelly, supra, 405 N.J. Super. at 129. The trial court's assessment "requires not only an examination of the parties' earnings but also how they have expended their income and utilized their assets." Id. at 130. Only after the moving party has made a prima facie showing of changed circumstances may the court order discovery and hold a hearing to determine the supporting spouse's ability to pay. Lepis, supra, 83 N.J. at 157.
"Courts have consistently rejected requests for modification based on circumstances which are only temporary . . . ." Lepis, supra, 83 N.J. at 151. Where a self-employed party moves for a reduction in alimony, "'what constitutes a temporary change in income should be viewed more expansively'" as such an individual is "in a better position to present an unrealistic picture of his or her actual income than a W-2 earner." Donnelly, supra, 405 N.J. Super. at 128-29 (quoting Larbig, supra, 384 N.J. Super. at 23).
Defendant argues that he has suffered from a permanent change in financial circumstances because (1) Frost & Zeff's cost of doing business has increased as a result of the divorce; (2) his income has decreased as a result of repaying loans for the firm at a much higher rate of interest; and (3) the financial condition of Frost & Zeff led to dissolution. He further argues that he should not be required to borrow money to meet his support obligations. Though he also cites his cancer diagnosis as a changed circumstance in his certification, he does not argue in his appellate brief that it has increased his cost of living or affected his ability to work.
Judge Palmer correctly stated that aside from the cancer diagnosis, defendant's arguments in support of a finding of changed circumstances are not materially different from those he posed in his previously denied application for a reduction of his alimony obligation in 2008. Furthermore, defendant offered no information regarding his personal income drawn from the firm's credit line in 2008 or 2009, and he did not present any facts showing a change of living circumstances besides downgrading from a Porsche to a BMW.
Like the defendant in Donnelly, supra, 405 N.J. Super. at 123, who similarly was a self-employed attorney alleging a decline in firm performance necessitating that he borrow money to meet his alimony obligations, defendant has not made a showing that his circumstances are anything but temporary. He has retained Frost & Zeff's clients and continues to work as an attorney.
Also similar to the defendant in Donnelly, defendant claimed a drastic reduction in income, but he continued to maintain the lavish lifestyle he enjoyed during his marriage. Id. at 129. If defendant has made additional changes to his lifestyle besides driving a BMW instead of a Porsche, he did not make any such adjustments known to the trial court.
Significantly, the fact that defendant must borrow money to meet his alimony obligations and maintain his lifestyle does not constitute a change in circumstances because the parties borrowed to maintain their standard of living during the marriage as well. Hughes v. Hughes, 311 N.J. Super. 15, 34-35 (App. Div. 1998).
As for defendant's argument that the trial court should have held a plenary hearing, we disagree. A plenary hearing is not required in an application for modification of alimony "when the material facts are not in genuine dispute"; however, when a party "clearly demonstrate[s] the existence of a genuine issue as to a material fact," a hearing should be held. Lepis, supra, 83 N.J. at 159. No such genuine issue of fact exists here.
Finally, defendant argues that we should reverse and remand on the issue of the trial court's award of counsel fees to plaintiff because the court did not make specific findings of fact with respect to this award. Rule 4:42-9, "Counsel Fees[,]" reads in relevant part: "(a) Actions in Which Fee Is Allowable. No fee for legal services shall be allowed in the taxed costs or otherwise, except . . . . (7) As expressly provided by these rules with respect to any action, whether or not there is a fund in court." One such rule that expressly provides for an award of counsel fees is Rule 1:10-3. Under Rule 1:10-3, "allowing for attorney's fees recognizes that as a matter of fundamental fairness, a party who willfully fails to comply with an order or judgment entitling his adversary to litigant's rights is properly chargeable with his adversary's enforcement expenses." Pressler, Current N.J. Court Rules, comment 4.4.5 on R. 1:10-3 (2011). "The authority to grant fees under this rule applies only to violations of orders and judgments," and "are awardable under this rule only to a party who has obtained relief." Ibid. (citing Haynoski v. Haynoski, 264 N.J. Super. 408 (App. Div. 1993); Jersey City Redev. v. Clean-O-Mat, 289 N.J. Super. 381, 401 (App. Div.), certif. denied, 147 N.J. 262 (1996)). As plaintiff prevailed on her motion for enforcement of judgment under Rule 1:10-3, it was within the court's discretion to award her counsel fees, and the absence of specific findings of fact to that issue do not nullify the court's exercise of discretion in that regard. Jersey City Redev., supra, 289 N.J. Super. at 405-06.
Affirmed as modified.