March 21, 2011
JOAN DELGUERCIO, PLAINTIFF-APPELLANT,
ANTHONY DELGUERCIO, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-1741-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: September 20, 2010
Before Judges C.L. Miniman and LeWinn.
Plaintiff Joan DelGuercio*fn1 ("Joan") appeals from a June 30, 2009, order reducing the limited duration alimony due from defendant Anthony DelGuercio ("Anthony") and extending the term thereof. Because Anthony failed to demonstrate a prima facie case of changed circumstances justifying any relief, we reverse the order and remand this matter for further proceedings consistent with this opinion.
Joan and Anthony were married on June 28, 1992, and have two children. On December 19, 2007, the parties entered into an oral marital settlement agreement (MSA) that was placed on the record and incorporated into an Amended Dual Final Judgment of Divorce (JOD) entered on March 8, 2008. The parties stipulated that Anthony would pay limited duration alimony for seven years in the amount of $202 per week, less $50 to be applied to the repayment of a pension loan taken by Joan, which reduced the alimony payment to $152 per week.
Pursuant to the child support guidelines, child support was calculated at $175 per week based on Anthony's imputed income of $53,000 per year and Joan's imputed income of $23,000 per year*fn2 plus her seven-year term alimony of $202 per week. At the time of the JOD, Anthony was an unemployed union carpenter but expected to return to work at the level of income imputed to him in the MSA. Joan was then working part-time at a rate of less than $23,000 per year.*fn3 The parties stipulated "on the record that their lifestyle would be substantially similar based upon the alimony and division of assets pursuant to their agreement."
Subsequent to the divorce, Anthony paid alimony from his unemployment checks but fell into arrears when his unemployment benefits ceased. He took out a union loan to pay down the arrears. Anthony was hired as a plant worker by Design Display Group, Inc., in Carlstadt on March 24, 2008. According to Anthony, his employer was "based out of New York. . . . I'm not working in New York, but it's a [u]nion, local, so I'm working with two [u]nions to have a job." His 2008 W-2 from Design Display Group reported wages of $20,754.26 for the nine months that he worked. Pay stubs from March and April 2009 reflected an hourly rate of $13, which corresponds to approximately $25,000 per year. After taxes and miscellaneous deductions, including child support and alimony payments garnished by the Probation Department, Anthony's bi-weekly net pay during the first four months of 2009 was approximately $320. Although the alimony and child support payments pursuant to the JOD totaled $327 per week, the garnished amount was reduced to approximately $608 bi-weekly based on Anthony's actual level of income.
On or about April 25, 2009, Anthony moved for a decrease in child support and alimony. He sought a reduction in child support from $177 per week to $85 per week and a reduction in alimony payments from $150 [sic] per week to $85 per week, "due to employment status because of the severity of the economy." Anthony asserted that the Probation Department advised him to file this motion "since I have been financially disabled for a long period of time."
In an April 25, 2009 letter to the court submitted with his motion, Anthony stated that he was "presently seeking [c]counsel to file for bankruptcy." He further asserted that he had been actively seeking a new job since being unemployed prior to the divorce but that, "due to the economic crisis, it has been impossible for me to find a job making $53,000 a year. With the unemployment rate at an all time high, finding a second job has been impossible as well." On the Case Information Statement (CIS) appended to his motion, Anthony reported $620 in monthly expenses for rent, transportation, and miscellaneous personal expenses. He obtained medical, dental, prescription drug, and disability insurance through his employer and did not report any other assets. He had $51,000 in credit-card and miscellaneous debt as of April 18, 2009.
Joan opposed Anthony's motion and filed a cross-motion to enforce litigant's rights. She asserted that Anthony was "underemployed" and that "[h]e is a skilled union carpenter and well able to earn two or three times what he is earning now. He has also failed to demonstrate that he is looking for higher paying work or has made any effort to work overtime or a second job." She sought an order directing Anthony to comply with assorted provisions of the JOD not pertaining to alimony or the present appeal, including directives to procure health and life insurance and to pay unreimbursed medical expenses.
Anthony then filed a certification in response to Joan's cross-motion. He asserted that "the construction industry has been devastated" by the economy and that he was "lucky to have a job as [he had] survived layoffs from [his] present employer two times." He also expressed optimism that his situation was "temporary."
After being sworn in, the parties presented oral argument at the motion hearing on June 12, 2009. Although the parties were under oath and Joan was represented by counsel, there was neither direct nor cross-examination. During the colloquy with Anthony about the imputed income in the settlement agreement, the judge noted that Anthony had agreed to the MSA when he was unemployed and that "it's hard to say you got a decrease when you get a job for less [than $53,000], because you didn't have any income" at the time of the divorce. The judge further stated that "some people might not have entered into an agreement, not knowing that they have the income like you did.
But now you want to, a year later, turn around and say to [Joan], oops."
Before hearing from counsel for Joan, the judge suggested to the parties that they modify the alimony payments:
[P]erhaps we give [Anthony] a window--I'm just going to use an illustration of a year where he doesn't pay the alimony, but he adds that year on to the back-end. So your seven years essentially becomes eight. . . . So you don't lose any money; there's just a deferment. It's like reworking a contract . . . . To get the same amount of money, to give him a time to get healthy, so to speak, economically, to be able to reinstate that.
Counsel for Joan argued that Anthony had not made a prima facie showing of changed circumstances, which is required for alimony modification, because "he hasn't demonstrated why his income is what it is. He hasn't shown that he's working in another job." The judge replied, "We can now sort of take [j]udicial notice of this now. So . . . the rules of engagement under Lepis*fn4 have changed."
Before rendering an oral decision, the judge heard from both parties regarding their imputed and present incomes and employment. As to Anthony's imputed income in the MSA, the judge found that "it doesn't mean now we hold it to him when he doesn't earn it, when it's not circumstances he's created."
Counsel questioned that finding, and the judge explained that "[t]his guy's not a guy who's doing this to punish her" and that the basis of his finding was that "I listened to him." Joan's counsel argued that a plenary hearing and subpoena for union records were necessary to determine whether Anthony was earning wages appropriate for his skills and union position. Nevertheless, the judge ruled on the merits without giving Joan an opportunity for discovery and a plenary hearing.
The judge's decision was memorialized by a written order filed on June 12, 2009, and amended June 30, 2009, that temporarily modified the alimony payments. The order reduced Anthony's alimony obligation from $202 per week to $52 per week for one year, at which time Joan could apply for reinstatement or increase. The judge explained that he based the modification amount on Anthony's earnings of $26,000 per year but did not set forth his calculations. Anthony's alimony obligation was also "deferred" so that the term was "extended from seven years to eight years and any reduction shall be paid in full in the eighth year on a monthly pro rated basis." Moreover, if Anthony were to earn in excess of $26,000 during tax year 2009, documented by his W-2 form, half of the excess amount, up to the deferred amount of $7800, would be paid to Joan. Additionally, any tax refund received by Anthony was to be applied to the deferred portion of alimony. The judge then explained the tax consequences to Joan pertaining to the receipt of Anthony's tax refund. Child support remained unchanged. As the basis for his decision, the judge explained that he wanted to give Anthony "time to breath[e]," that the numbers would be "completely different" if he had to reapply the guidelines, and that "we're going to try and maintain this."
Shortly thereafter, Joan filed a Notice of Motion to Enforce Litigant's Rights and for Stay Pending Appeal, and Anthony filed a cross-motion to enforce litigant's rights. Joan filed a Notice of Appeal limited to paragraph 1 of the June 30, 2009, order. The trial judge denied the request for a stay pending appeal, and we denied her subsequent motion before us for a stay.
As a general proposition, "[t]he modification of alimony is best left to the sound discretion of the trial court." Innes v. Innes, 117 N.J. 496, 504 (1990). Furthermore, "[e]very application for alimony . . . rests upon its own particular footing and the appellate court must give due recognition to the wide discretion which our law rightly affords to the trial judges who deal with these matters." Martindell v. Martindell, 21 N.J. 341, 355 (1956) (citations omitted). Thus, To vacate a trial court's findings in a proceeding modifying alimony, an appellate court must conclude that the trial court clearly abused its discretion, Avery v. Avery, 209 N.J. Super. 155, 163 (App. Div. 1986); Gugliotta [v. Gugliotta], 164 N.J. Super. , 141 [(App. Div. 1978)], failed to consider "all of the controlling legal principles," Avery, supra, 209 N.J. Super. at 163, or it must otherwise be "well satisfied that the finding[s] [were] mistaken," Dale v. Dale, 13 N.J. Super. 59, 62 (App. Div. 1951), or that the determination could not "reasonably have been reached on sufficient credible evidence present in the record after consideration of the proofs as a whole." Gugliotta, supra, 164 N.J. Super. at 141. [Rolnick v. Rolnick, 262 N.J. Super. 343, 360 (App. Div. 1993).]
However, "Rule 1:7-4(a) requires that a trial judge disclose an analysis of the facts as they apply to the many applicable factors." Kas Oriental Rugs, Inc. v. Ellman, 407 N.J. Super. 538, 561 (App. Div.) (citation omitted), certif. denied, 200 N.J. 476 (2009). "Naked conclusions do not satisfy the purpose of R. 1:7-4. Rather, the trial court must state clearly its factual findings and correlate them with the relevant legal conclusions." Curtis v. Finneran, 83 N.J. 563, 570 (1980) (citations omitted). "Findings which fail to permit a meaningful review of the evidence relied upon to justify the decision do not satisfy the rule." Wertlake v. Wertlake, 137 N.J. Super. 476, 485 (App. Div. 1975) (citation omitted). Here, the judge provided minimal reasoning for his decision and did not articulate his legal conclusions at all, contrary to Rule 1:7-4(a), making meaningful review difficult.
Joan contends that the judge erred in modifying alimony without requiring Anthony to make out a prima facie case of changed circumstances, or at the very least, to make such a demonstration in a plenary hearing. She asserts that Anthony did not meet this threshold showing because he was unemployed at the time of divorce, and his circumstances have improved since then. Moreover, only eighteen months had elapsed between the divorce and motion hearing.
Joan also urges that the judge erred in taking judicial notice of the economy to establish "changed circumstances without specific evidence of how it directly affected [Anthony]." Next, she contends that the judge erred by "failing to take into consideration how the drastic reduction in alimony will affect the children of the marriage." Furthermore, Joan argues that the judge erred by making a credibility determination as to Anthony when he did not submit sufficient evidence to resolve the issue of whether he had been earning outside income, and when she had no opportunity to conduct discovery or to cross-examine Anthony at the hearing.
Anthony asserts that he made out a prima facie case of changed circumstances because he is "only making half of his imputed income because of the country's downtrodden economy." He asserts that he provided all financial documents as required by the judge and that he presented evidence of how the economy affected him directly.
"The basic purpose of alimony is the continuation of the standard of living enjoyed by the parties prior to their separation." Innes, supra, 117 N.J. at 503 (citing Mahoney v. Mahoney, 91 N.J. 488, 501-02 (1982)). "After initial alimony awards have been made, courts may modify alimony orders 'as circumstances may require.'" Ibid. (quoting N.J.S.A. 2A:34-23). Furthermore, "[t]he party seeking modification has the burden of demonstrating a change in circumstances warranting relief from the support or maintenance obligations." Id. at 504 (citing Lepis, supra, 83 N.J. at 157; Martindell, supra, 21 N.J. at 353). The same standard applies to the modification of both judicial decrees and consensual agreements, and "the terms of [spousal] agreements should receive continued enforcement without modification only so long as they remain fair and equitable." Lepis, supra, 83 N.J. at 148-49.
The moving party must meet the prima facie requirements for changed circumstances before a judge may order further discovery. Lepis, supra, 83 N.J. at 157. A plenary hearing is required where there are material facts in genuine dispute based on the parties' supporting documents and affidavits, not conclusory allegations. Id. at 159.
Factors demonstrating changed circumstances include an "increase or decrease in the supporting spouse's income." Id. at 151 (citing Martindell, supra, 21 N.J. at 355). Nevertheless, "[c]courts have consistently rejected requests for modification based on circumstances which are only temporary or which are expected but have not yet occurred." Ibid. (citing Bonanno v. Bonanno, 4 N.J. 268 (1950); McDonald v. McDonald, 6 N.J. Super. 11 (App. Div. 1949); Sassman v. Sassman, 1 N.J. Super. 306 (App. Div. 1949)). Other criteria to consider are "whether the change in circumstance is continuing and whether the agreement or decree has made explicit provision for the change." Id. at 152. While not dispositive, a court may also evaluate whether a party's conduct resulting in reduced income is voluntary and a product of good faith. Kuron v. Hamilton, 331 N.J. Super. 561, 571-72 (App. Div. 2000).
When a party seeks a reduction in alimony paid to an economically dependent spouse, "the central issue is the supporting spouse's ability to pay." Miller v. Miller, 160 N.J. 408, 420 (1999). Other considerations include the needs of the dependent spouse and his or her "ability to contribute to the fulfillment of [his or her] needs." Lepis, supra, 83 N.J. at 152; see also Walles v. Walles, 295 N.J. Super. 498, 513 (App. Div. 1996) (affirming a reduction in alimony and child support when "the motion judge set forth very clearly the basis of his decision" and analyzed the incomes and funds available to both parties). The downturn in our economy has not vitiated any of the standards for modification of alimony articulated in Lepis and its progeny.
In Larbig v. Larbig, 384 N.J. Super. 17, 19 (App. Div. 2006), the court affirmed a trial judge's denial of a motion for a reduction in alimony and child support because it was "filed only twenty months after entry of the judgment of divorce--a fact that strongly suggested defendant's reduced income had not become permanent." In that case, the parties' JOD incorporated an MSA that stipulated that alimony would be paid over a term of five years. Id. at 19-20. Finding that there is "no bright[-] line rule by which to measure when a changed circumstance has endured long enough to warrant a modification of a support obligation," id. at 23, we held that the trial judge did not abuse his discretion by rejecting the defendant's claim that a decline in his business and income less than two years after the divorce "warranted a downward modification [in alimony] or, at least, triggered a right to compulsory discovery and a plenary hearing on the subject." Id. at 21.
Conversely, in Beck v. Beck, 239 N.J. Super. 183, 190-91 (App. Div. 1990), we reversed a determination that a husband, whose business fortunes declined over a four-year period, did not demonstrate a change in circumstances warranting a reduction or termination of alimony and remanded for a plenary hearing on the issue. We stated that "the changed-circumstances determination must be made by comparing the parties' financial circumstances at the time the motion for relief is made with the circumstances which formed the basis for the last order fixing support obligations." Id. at 190. Although "intervening incremental changes may be individually insufficient to warrant relief . . . [, they] may eventually be sufficient in the aggregate." Ibid. Upon review, we found that the movant had made the requisite prima facie showing to warrant a plenary hearing considering the well-documented deterioration of his income since earlier modification hearings, the increases in his children's education expenses, and the supported spouse's increase in income. Id. at 189-91.
Even more precipitously than in Larbig, Anthony brought his post-judgment motion barely one year after entry of the JOD. See Larbig, supra, 384 N.J. Super. at 19 (two years insufficient). Unlike Beck, the record does not contain evidence of a well-documented deterioration of income over time.
Beck, supra, 239 N.J. Super. at 189-91. Indeed, if anything, Anthony's financial status has actually improved over time, albeit not to the level imputed to him at the time of the divorce. The record also does not contain a well-documented job search demonstrating Anthony's efforts to secure adequately remunerative employment during the eighteen months following his agreement to the MSA.
Given the limited documentation in the record, there was simply insufficient evidence to support a conclusion that Anthony made out a prima facie case of changed circumstances. The motion should have been denied without prejudice to another application at a time in the future when Anthony could establish a permanent change of circumstances. As a consequence, we vacate paragraph 1 of the order entered on June 30, 2009, and remand for further proceedings consistent with this opinion. This remand, obviously, will necessitate a reconsideration of the orders entered after June 30, 2009.
The Family Part judge hearing the matter on remand shall set forth on the record or in a written opinion a full analysis of the facts and relevant legal conclusions, Curtis, supra, 83 N.J. at 570; Kas Oriental Rugs, supra, 407 N.J. Super. at 561, after considering "all of the controlling legal principles." Avery, supra, 209 N.J. Super. at 163 (citation omitted). If Anthony can meet his prima facie burden on remand, then discovery and perhaps a plenary hearing would be necessary to fully resolve the alimony situation. Lepis, supra, 83 N.J. at 157, 159.
On remand, the judge must be cognizant of N.J.S.A. 2A:34-23(c), which prohibits a court from modifying "the length of the term [of limited duration alimony] except in unusual circumstances." We have noted this "heightened statutory standard," Gonzalez-Posse v. Ricciardulli, 410 N.J. Super. 340, 357 (App. Div. 2009), and the "presumption that the temporal aspect of such an arrangement be preserved," id. at 356 (citing Gordon v. Rozenwald, 380 N.J. Super. 55, 70 (App. Div. 2005)). Here, the alimony modification extending the payment term one year is not supported by adequate fact-finding on the record, and the judge failed to support his decision with legal conclusions on this issue. Curtis, supra, 83 N.J. at 570.
Where a judge resolves disputed issues of fact based on opposing certifications without an evidentiary hearing and expresses opinions respecting credibility, the matter should be remanded to another judge. Johnson v. Johnson, 390 N.J. Super. 269, 275-76 (App. Div. 2007); see also P.T. v. M.S., 325 N.J. Super. 193, 220-21 (App. Div. 1999) (proceedings required a "fresh judicial examination" by a different judge where the original judge reached conclusions "insufficiently supported by the evidence in the record" and made comments that "went considerably beyond what was needed or necessary to resolve the issue at hand"); Carmichael v. Bryan, 310 N.J. Super. 34, 49 (App. Div. 1998) ("Since the motion judge has expressed opinions regarding the plaintiff's intent in the process of weighing the evidence and may have a commitment to his findings, we conclude that it is appropriate the matter be assigned another judge." (citations omitted)). Because the judge here resolved factual disputes without an evidentiary hearing, we remand to the Family Part Presiding Judge for assignment to another judge.
Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.