April 14, 2011
KIMBERLEY D. SORANTINO, PLAINTIFF-RESPONDENT,
DOUGLAS B. SORANTINO, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Cumberland County, Docket No. FM-06-359-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 13, 2010
Before Judges Sabatino and Alvarez.
Defendant Douglas B. Sorantino appeals from an August 14, 2009 order denying his motion: (1) to make previously awarded reductions in his child support and alimony obligations retroactive to February 11, 2009; (2) to further reduce child support and terminate limited duration alimony; (3) to permit him to cancel life insurance which secures payment of his limited duration alimony; (4) to find plaintiff Kimberley D. Sorantino in violation of litigant's rights for failure to respond to discovery demands or to comply with certain provisions of the parties' property settlement agreement (PSA) related to their children's automobiles.
In support of his appeal, defendant contends:
A. THE TRIAL COURT ERRED IN DENYING THE HUSBAND'S MOTION TO TERMINATE ALIMONY AND SUPPORT.
B. THE COURT'S AWARD OF ALIMONY AND SUPPORT ARE NOT SUPPORTED BY ADEQUATE, SUBSTANTIAL AND CREDIBLE EVIDENCE, AND THEREFORE, MUST BE REVERSED.
For the reasons that follow, we affirm, except that the matter is remanded for a hearing as to whether plaintiff's cohabitation should result in the termination or further modification of alimony.
Although represented by counsel in the trial court, both defendant and plaintiff now represent themselves on this appeal. The following facts are pertinent to our analysis. The parties married on February 14, 1987, and their two children are in college. Defendant was forty-two and plaintiff forty-one when the parties divorced on October 1, 2008. On that same date, the parties signed a PSA which was incorporated into their divorce judgment.
The parties agreed to share joint custody of the children, plaintiff being designated as the parent of primary residence.
Defendant was required to pay $200 in weekly child support plus one-half of the children's: college tuition and related expenses, car loan payments and car insurance, and uninsured healthcare costs. He was solely responsible for the daughter's orthodontic bills. Plaintiff was to continue the children's healthcare coverage through her employment as a school guidance counselor. Each party was required to maintain life insurance coverage of $100,000 per child, naming the other as beneficiary, until emancipation.
When the agreement was negotiated, defendant operated an established trucking firm trading as Sorantino Enterprises, Inc. It had twenty-six employees and approximately thirty-four tractor trailers and dump trucks. Defendant estimated his business liabilities at $1,628,924.75. The PSA did not call for plaintiff to receive any payment, nor any credit, on account of defendant's retention of the business. Defendant also retained ownership of two parcels of land. Presumably at least one was the business location. Defendant agreed to purchase plaintiff's interest in the marital residence, each party kept the retirement accounts in his or her own name, and paid for his or her own counsel fees.
Significantly, defendant agreed to pay plaintiff alimony in the amount of $800 per week for a term of six years as limited duration alimony. This figure was based on defendant's annual gross earnings of $250,000 and plaintiff's earnings of $70,000. Defendant was required to maintain a life insurance policy in the amount of $249,600, naming plaintiff as the beneficiary, which would decrease on an annual basis by the amount paid on the limited duration alimony, the purpose being to time the expiration of both obligations simultaneously.
The agreement stated, with regard to defendant's business, alimony, and child support obligations:
15. The parties acknowledge that Lehigh Hanson Heidelberg Cement Group/Mays Landing Sand & Gravel, the major client of Sorantino Enterprises, Inc. advised Sorantino Enterprises, Inc. by letter dated September 19, 2008, that Lehigh Hanson Heidelberg Cement Group was closing Mays Landing Sand & Gravel as of September 22, 2008 for production due to economic circumstances and that the services provided by Sorantino Enterprises, Inc. will no longer be required. (Exhibit "A") The parties had negotiated a settlement of this matter prior to receipt of the September 19, 2008 termination letter based upon a gross annual income of Two Hundred Fifty Thousand ($250,000.00) Dollars to Husband which included income to the business from the contract with Heidelberg Cement Group/Mays Landing Sand & Gravel, and a gross annual income to Wife of Seventy Thousand ($70,000.00) Dollars. The parties stipulate that the fact that Sorantino Enterprises was notified of the termination prior to the execution of this agreement shall not constitute a circumstance known or contemplated by the parties at the time of the execution of this agreement that would preclude an application by Husband for a modification of his alimony and child support obligations based upon a change of circumstances. Should the contract with Lehigh Hanson Heidelberg Cement Group/Mays Landing Sand & Gravel be terminated, Husband shall be entitled to make an application for modification of his alimony and child support obligations based upon a change of circumstances. The acknowledgment by Wife that Husband shall be entitled to make an application for modification of his alimony and child support as aforesaid, shall in no way be interpreted as an acknowledgment by Wife that Husband shall be entitled to a reduction of those obligations and shall not preclude Wife from asserting any facts, defenses or opposition to said modification application, with the determination as to the modification, if any, to be made by the Court.
The parties further agreed that, except for the alimony obligation, each was waiving his or her right to support from the other, "regardless of any change in circumstances."
The PSA also stated:
17. The parties disagree as to the marital standard of life enjoyed by the parties and the children during the marriage. Husband and Wife acknowledge that under the financial provisions of this agreement, they are unable to continue to live a lifestyle which is reasonably comparable to the lifestyle which they enjoyed during the course of the marriage. Nevertheless, Husband and Wife desire to enter into the terms of this agreement, acknowledging that the terms of same are fair and equitable to each of them. Defendant's first motion to terminate alimony and child support was filed February 11, 2009, four months after the divorce and execution of the PSA. On May 5, 2009, he filed a second application seeking essentially the same relief. His final application, resulting in the order now appealed, was filed July 7, 2009.
No copy of the order issued as a result of the February 2009 application is supplied in the appendix of either party. In the detailed May 28, 2009 order, however, the judge substantially reduced defendant's alimony payments from $800 to $480 per week, and slightly increased child support from $200 to $293 weekly.*fn1 Defendant's obligation to contribute half of his children's college expenses was not modified. In calculating child support, the court employed the child support guidelines, Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A (2011), and pegged defendant's annual income at $149,672 based on his 2008 tax return. Defendant's 2008 taxable income included earnings of $141,750 plus capital gains from the sale of property. The court's order reserved the issue of the retroactivity of alimony and child support modifications, and suspended enforcement of the orders for sixty days. Finally, the court granted defendant forty-five days for discovery, including depositions, with regard to plaintiff's alleged cohabitation and the effect such cohabitation might have on plaintiff's financial situation and on alimony.
The August 14, 2009 order being appealed denied defendant any further reductions in child support or alimony "based on a failure to establish a substantial change of circumstances under Lepis."*fn2 Defendant was again ordered to pay for the parties' daughter's orthodontic work as called for by the agreement, and was issued a $4540.56 credit towards arrears representing "back car payments and insurance payments for the children's cars" which plaintiff failed to make. The court also reserved the right to award counsel fees generated by that motion and any future applications premised upon "the deficiency of defendant's pleadings."
To complete the relevant history, it is necessary to note that defendant ceased his business operations almost immediately after the divorce. In a February 11, 2009 certification attached to his first modification application, defendant states that he "closed the doors" to his business on February 6, 2009, and issued final paychecks to his employees that same day. In the February application, defendant first mentions the prospect of bankruptcy, albeit without specifying whether such a petition would name his company, himself as an individual, or both. Defendant did not indicate whether he envisioned an outright discharge or a reorganization. The record does not contain any bankruptcy petition.
In a May 19, 2009 certification, defendant stated his only income after some unspecified time in February was $600 in weekly unemployment benefits. He claimed he had been actively looking for work but never documented any efforts to secure employment that would earn him income comparable to the $250,000 annual salary from his business.
Defendant stated in his certification:
I have a new job and I will start earning income next week driving a regional tractor trailer. My father purchased a used tractor and my efiance opened an LLC which will lease the tractor from him. As of the preparation of this certification no precise numbers have been agreed upon. Things had to be organized in this way due to my pending bankruptcy. . . . I anticipate that I will earn about $700 per week gross pay as the driver although that is uncertain as yet. [Emphasis added.]
During the course of oral argument on his last motion, defendant again described his new venture, stating, "I laid out how the business was set up. My father lent the money to my efiance. We were straight up about that. I'm getting ready to go through a bankruptcy. It couldn't be in my name."
In the interim, as a result of defendant's failure to pay, plaintiff claimed she was forced to leave the rental property where she and her children lived and move into a smaller home where she could share expenses with her paramour. The children's cars were repossessed. The daughter's orthodontic work was delayed while a collection agency chased her for payment. Plaintiff also asserted that all of defendant's paid-for business vehicles were either hidden, sold to prevent seizure by creditors, or in the possession of defendant's father.
In general, the "touchstone" of spousal support is the standard of living enjoyed by the parties before separation. Crews v. Crews, 164 N.J. 11, 16 (2000). In this case, however, the parties could not agree on, and no effort was made to document, a baseline marital lifestyle in the PSA. The parties may do so at their option and peril. See Weishaus v. Weishaus, 180 N.J. 131, 144 (2004) (observing "[a] trial court may forego [such] findings when the parties freely decide to avoid the issue as part of their mutually agreed-upon settlement, having been advised of the potential problems that might ensue as a result of their decision"). Nonetheless, it is evident that defendant's prior earnings of $250,000 per year enabled the parties to enjoy a better lifestyle than plaintiff's $70,000 annual salary.
A party may seek modification of a permanent alimony award where "changed circumstances have substantially impaired [his] ability to support himself . . . ." Lepis, supra, 83 N.J. at 157. The party seeking relief bears the burden of establishing a prima facie showing of changed circumstances, Miller v. Miller, 160 N.J. 408, 420 (1999), and courts will consider both the dependent spouse's needs and the paying spouse's ability to maintain the prior standard. Lepis, supra, 83 N.J. at 152. This includes "consider[ing] whether there are sufficient presently available funds to sustain the marital standard." Weishaus, supra, 180 N.J. at 145.
Limited duration alimony, however, is quite different. See Cox v. Cox, 335 N.J. Super. 465, 476 (App. Div. 2000). "An award of alimony for a limited duration may be modified based either upon changed circumstances, or upon the nonoccurrence of circumstances that the court found would occur at the time of the award[,]" and a court "shall not modify the length of the [limited duration alimony] except in unusual circumstances." N.J.S.A. 2A:34-23(c); see also Gordon v. Rozenwald, 380 N.J. Super. 55, 67 (App. Div. 2005).
We agree with the trial court that defendant's application to terminate limited duration alimony outright was unwarranted. As we have previously said:
[t]he heightened showing that this standard requires for modification of the term preserves the distinction between "limited duration" and permanent alimony. With regular extensions based upon comparative needs and ability to pay, "limited duration" alimony would soon become a substitute for permanent alimony "where it would [not] otherwise be awarded." The result would be a form of "substitution" as unfair to supporting spouses as use of limited duration alimony as a "substitute for permanent alimony" is to supported spouses. [Gordon, supra, 380 N.J. Super. at 67 (citations omitted).]
Generally, limited duration alimony is only available where there is a void in the type of support to which a dependent spouse would otherwise be entitled. Gordon, supra, 380 N.J. Super. at 65. It addresses "'cases generally involv[ing] a marriage of short duration where permanent or rehabilitative alimony [is] inappropriate or inapplicable but . . . economic assistance for a limited period of time [is] just.'" Ibid. (quoting Report of the Commission to Study the Law of Divorce, 35 (Apr. 18, 1995)). Limited duration alimony is intended to fill the gap where a spouse deserving of alimony after a short marriage would otherwise be unable to claim any support. It is designed for a dependent spouse who made important contributions during a short-term marriage and has the skills and education necessary to return to the workforce. Cox, supra, 335 N.J. Super. at 483.*fn3 Such a deserving spouse may not be entitled to permanent alimony, awarded only after a lengthy marriage.
In fact, the law specifically prohibits the award of limited duration alimony as a substitute for permanent alimony, "in those cases where permanent alimony would otherwise be awarded." N.J.S.A. 2A:34-23(c).
In this case, limited duration alimony was substituted for permanent alimony for reasons best known to the parties and their attorneys. This was a long-term, not a short-term, marriage. The discrepancy between the parties' incomes was quite substantial, at least in the years leading to the divorce. The length of the marriage and difference in earning potential might have warranted an award of permanent alimony if the parties had not otherwise agreed to alimony of limited duration.
In order to establish entitlement to outright termination - defendant's real request, couched in terms of a mere reduction in the payment amount - defendant must show "unusual circumstances." See ibid. When defendant entered into the agreement, he knew that he might lose his principal customer, as turned out to be the case. Business reversals of the sort defendant experienced were in the offing; they were actually referred to in the agreement. Hence, it cannot constitute unusual circumstances warranting reduction of the term, as required by the statute.
Certainly, defendant's statement that "I laid out how the business was set up. My father lent the money to my efiance. We were straight up about that. I'm getting ready to go through a bankruptcy. It couldn't be in my name," lends some credence to plaintiff's claims that defendant is hiding assets from his former business. Likewise, defendant's credibility was not enhanced by his statement to the motion judge that he agreed to the PSA only because the court "was forcing us into a trial that neither of us had any money for," suggesting the PSA was a sham, agreed to solely for the sake of expedience, without the intent to actually fulfill its obligations.
Our review of a current alimony award is limited. These rulings "are discretionary[,] and not overturned unless the court has abused its discretion, failed to consider controlling legal principles, or made findings inconsistent with or unsupported by competent evidence." Gordon, supra, 380 N.J. Super. at 76.
In this case, the judge's findings as to defendant's claimed decrease in earnings were more than adequate. The judge based his calculations of defendant's annual income in 2009 on his earnings in 2008. He questioned defendant's credibility due to the chronology of events: defendant divorced on October 1, 2008, closed the doors to his business on February 6, 2009, and signed a certification in support of his first application to modify support on February 11, 2009. Furthermore, defendant said he structured his new business with an eye to shielding the enterprise from a bankruptcy court.
We therefore share the motion judge's view that defendant's twenty weeks of unemployment should be viewed as a temporary and insufficient basis for modification of the alimony term, particularly since the court was skeptical of defendant's proofs of efforts to secure any employment, much less comparable employment. See Lepis, supra, 83 N.J. at 151-54 (holding that temporary changes in the ability to pay are an inadequate basis for modification of an order).
A payor who has the ability to earn a living, yet refuses to work, may not assert the inability to earn as grounds for paying a reduced amount of support. See Golian v. Golian, 344 N.J. Super. 337, 341 (App. Div. 2001) (allowing income to be imputed to a party "voluntarily unemployed or underemployed" without "just cause"). Our focus is not just on a payor's present earnings, but his or her potential for future earnings. Mowery v. Mowery, 38 N.J. Super. 92, 102 (App. Div. 1955), certif. denied, 20 N.J. 307 (1956).
The denial of defendant's request to modify alimony based on plaintiff's cohabitation, however, is not sustainable on the present incomplete record. Plaintiff does not dispute cohabitating and the PSA squarely identifies the consequences as controlled by current New Jersey statutory and case law. Those authorities, in turn, provide that cohabitation is sufficient grounds for the termination or modification of alimony, limited duration or otherwise, where the cohabitation provides the dependent spouse with a sufficiently material economic benefit. See Konzelman, supra, 158 N.J. at 196; Gayet v. Gayet, 92 N.J. 149, 153-55 (1983); Ozolins v. Ozolins, 308 N.J. Super. 243, 248 (App. Div. 1998). Since the trial court did not engage in any economic analysis on this issue, we are therefore constrained to remand for consideration of whether defendant's alimony obligation should be modified due to plaintiff's cohabitation.
Defendant further contends it was inappropriate for the court to require him to pay child support in addition to making college contributions, and that it was error to employ the child support guidelines in calculating support. We disagree with both contentions.
The law is well-established that child support remains payable even where the children are attending college full-time and living away from home. It traditionally continues until the child graduates from college. Patetta v. Patetta, 358 N.J. Super. 90, 93-94 (App. Div. 2003). This obligation is particularly significant where, as here, the child attends a nearby school and lives at home, as opposed to a dormitory setting. The parent of primary residence incurs the same expenses for shelter and related costs, whether the child is attending high school or college.
Similarly, the court's reliance on the child support guidelines was entirely proper; it was actually required. That the guidelines were not relied upon when child support was initially negotiated does not preclude the court from applying them in a subsequent review. In fact, the guidelines "shall be applied when an application to . . . modify child support is considered by the court[,]" and they may be disregarded only "where good cause is shown." R. 5:6A.
In summary, the findings of Family Part judges are entitled to particular deference in view of their special expertise in the field of domestic relations. Cesare v. Cesare, 154 N.J. 394, 412-13 (1998). With regard to review of an alimony award, we will defer to the trial judge's findings so long as "those findings are supported by substantial credible evidence in the record as a whole." Cox, supra, 335 N.J. Super. at 473 (quoting Reid v. Reid, 310 N.J. Super. 12, 22 (App. Div.), certif. denied, 154 N.J. 608 (1998)). Defendant's admitted 2008 income, stated expectation of business difficulties, and the commitment he made in the PSA, are collectively a sufficient basis for the judge's conclusion that he should be held to the agreement to support his children and pay limited duration alimony. Where we part company with the trial judge is the issue of plaintiff's cohabitation. On that change of circumstance, defendant is entitled to revisit whether plaintiff's cohabitation has had a sufficiently material economic impact to warrant review.
Affirmed in part, reversed and remanded for a plenary hearing in part.