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Carolann Pilla v. Timothy Pilla

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


May 13, 2011

CAROLANN PILLA, PLAINTIFF-RESPONDENT,
v.
TIMOTHY PILLA, DEFENDANT-APPELLANT.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Gloucester County, Docket No. FM-08-832-97.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted December 14, 2010

Before Judges Yannotti, Espinosa and Skillman.

Defendant appeals from a post-judgment matrimonial order that denied his motion for a reduction in his child support payment, directed that the full amount of an investment account be distributed to plaintiff and awarded plaintiff counsel fees. For the reasons that follow, we affirm.

The parties were married for approximately eighteen years and had four children. Defendant is a vascular surgeon and, during the course of their marriage, plaintiff was not employed outside the home. They entered into a property settlement agreement (PSA) which was incorporated into their final judgment of divorce. Following the divorce, defendant remarried and had a child with his current wife. Plaintiff is now employed as a registered nurse.

Article III of the PSA addressed "Custody, Support, Maintenance and Education of Children." The parties shared joint legal custody; plaintiff was identified as the parent of primary residence. Pursuant to the PSA, defendant was required to pay plaintiff $650 per week child support for the four unemancipated children. Article III contains the following provisions relevant to defendant's motion:

Basis of child support: it is acknowledged that this is a non-New Jersey Child Support Guidelines case where consideration was given to various factors to include, but not be limited to, Husband's anticipated 1999 income from employment of approximately $320,000, Wife's 1999 income from employment $0.00, Husband's obligation to pay cost of private education for children, Husband maintaining medical insurance for the children.

It is specifically agreed that the amount of child support to be paid to Wife at the time of a child's enrollment in college shall be renegotiated at the time of that enrollment, taking into consideration the respective contributions made by each party to the child's college education and whether that child continues to reside for a portion of the enrolled year with Wife.

In 2004, defendant filed a motion in which he sought to be designated the parent of primary residence. He also asked for a modification of his child support obligation, contending that one of the children resided with him virtually full-time and two others spent fifty to sixty percent of the time at his residence. By order dated July 30, 2004, the court declared that the parties had joint legal and physical custody of the children and directed the parties and counsel to meet and determine the sharing of parenting time. The order also stated:

3. CONSIDERATIONS/FACTORS TO BE CONSIDERED IN DETERMINING MODIFICATION, IF ANY, TO DEFENDANT'S CHILD SUPPORT OBLIGATION SHALL INCLUDE BUT NOT BE LIMITED TO PARTIES CONTRIBUTION TO COLLEGE, TIMESHARING, OTHER DEPENDENT DEDUCTION. THE EFFECTIVE DATE FOR MODIFICATION TO CHILD SUPPORT, IF ANY, SHALL BE MAY 27, 2004.

Cost of living adjustments in 2006 and 2008 resulted in increases in defendant's child support obligation to $703 per week in 2006 and $744 per week in 2008.

In 2009, defendant filed another motion that sought, in part, his designation as the parent of primary residence for the three children who remained unemancipated and the termination of his child support obligation. The factual basis for defendant's motion was his assertion that his three college-age children resided with him. In support of his motion, defendant submitted an unsigned case information statement (CIS) with recent pay stubs and his 2007 tax return showing a total income that exceeded $522,000. He failed to provide information regarding assets, debts, or liabilities in the CIS. As part of his reply certification, he provided a Schedule K-1 for his share in his surgical partnership for 2008 showing he earned over $532,000.

Plaintiff opposed the motion. She filed a cross-motion that sought, in part: that defendant be ordered to turn over plaintiff's distribution of three accounts, including a Merrill Lynch investment account identified in the property settlement agreement and the July 30, 2004 court order, and counsel fees.

The court issued a tentative order addressing each of the forms of relief requested by the parties and then heard oral argument on those issues to which the parties took exception. The court issued a detailed written statement of reasons to accompany its order of February 18, 2010.

In denying defendant's request to terminate his child support obligation based upon changed circumstances, the court found defendant failed to prove a substantial change in circumstances. The court noted that, despite an increase in plaintiff's earnings, there remained a "very significant" disparity in the parties' incomes, with defendant continuing to enjoy "significant excess funds after deducting his CIS expenses from his net income." The court also specifically addressed the provision of the PSA that called for the renegotiation of child support upon a child's enrollment in college:

This language calls for consultation regarding college choice and renegotiation of child support to include disclosure of up to date financial information. Such information logically includes the anticipated (per the PSA and Judge Testa's 2004 Post Judgment Order) flow of information regarding the value of the Merrill Lynch college fund (controlled by defendant). Additionally and at a minimum, the parties' current non-business assets and income and the expenses of the proposed/actual college would need to be disclosed.

The Property Settlement Agreement language regarding the living arrangements of the children as related to calculating the plaintiff's child support refers to whether the children are residing with the wife (plaintiff) for a portion of the time that the child is not residing on campus. (Emphasis supplied by trial court.) Clearly the parties anticipated and planned for a post high school situation in which the unemancipated children would reside with each of the parties for significant amounts of time. In short, the children would have two non school year homes and specifically be able to spend summers and vacations at their mother's shore home. . . .

However, neither terminating the defendant's child support obligations or imposing a child support obligation on the plaintiff is supported by the limited analysis and incomplete information defendant provides in this portion of his application. [Emphasis added.]

On plaintiff's cross-motion, the court awarded plaintiff $2,500 in counsel fees. The court addressed each of the factors enumerated in R. 5:3-5(c). Regarding factors (1), the financial circumstances of the parties, and (2), the ability of the parties to pay their own fees or to contribute to the fees of the other party, the court stated:

Plaintiff's income is approximately 15% of the defendant's; she is earning at a maximum capacity or close thereto and unlike the defendant, has no business assets.

As to factor (3), the reasonableness and good faith of positions advanced by the parties, the court stated:

Defendant's position with respect to the distribution of the three Merrill Lynch accounts did not account for the agreements and calculations set forth in the post litigation correspondence of the parties' attorneys of January 2000, plaintiff's Exhibits J.,K. and L. He failed to provide the quarterly college fund statements for the past ten years as required by Judge Testa's 2004 Order and the PSA. Finally, defendant used a single potentially lower year of income (projected 2009) for purposes of analysis of child support obligations, rather than a reasonable figure annualized over two or more years. While it was not unreasonable for defendant to adopt a single year analysis argument, given the fluctuations in his income, a more comprehensive list of recent annual incomes would have been more relevant and useful to the court. These factors all increased the complexity and time required by both counsel to prepare for and argue this motion. Likewise, Plaintiff's position on the emancipation of the parties' oldest child and the resolution of property tax and insurance accounts for the Ocean City property also added unnecessary time and attention. However, the proportion of attorney preparation time and expense related to the defendant's unnecessary arguments and incomplete information was significantly greater than that required by plaintiff's.

The court found factor (4), the extent of the fees incurred by both parties, to be "[s]omewhat comparative and both attorney's actual time accounts and fees were reasonable," that factor (5), any fees previously awarded, was not applicable, and that factor

(6), the amount of fees previously paid to counsel by each party, was "[m]arginally relevant as neither party is destitute." Reviewing factor (7), the results obtained, the court stated:

The results were similar to the court's tentative motion ruling and the issues argued were primarily those the court outlines in factor three of the attorney fee award factors, thus increasing defendant's responsibility for incurring same.

As for factor (8), the degree to which fees were incurred to enforce existing orders or to compel discovery, the court referenced its analysis of factor (3) and stated further:

[T]he defendants non[-]disclosure of the Quarterly educational fund statements, and failure to follow up with the QDROs over a ten year period are both significant factors on the amounts of attorney fees expended in this motion.

Finally, as to factor (9), the court found no other factor bearing on the fairness of the award.

Regarding plaintiff's request for the distribution of the Merrill Lynch investment account that is a subject of this appeal, Article VI, ¶ 10(A) of the PSA provides:

There is a certain Merrill Lynch Investment account in the names of Husband and Wife. It is acknowledged that it has been from this account that Wife was advanced $80,000 against equitable distribution so that Wife could make settlement on the real property she purchased. . . . It is agreed that these funds are subject to a 50/50 split between the parties and, therefore, Husband shall receive a credit of $40,000 as to this advance of equitable distribution. It is further acknowledged that there remains in this account $11,430 which funds shall be divided equally between the parties. It is the further understanding of the parties that neither party is to be unequally obligated as to any tax obligation relative to this plan.

The disposition of this account had been a subject of the July 2004 order, which directed:

15. DEFENDANT SHALL SUPPLY PROOF WITHIN 60 DAYS THAT THE MERRILL LYNCH INVESTMENT ACCOUNT . . . HAS BEEN DISTRIBUTED PURSUANT TO F.J.D. ¶ VI.10.B. OR THE PARTIES SHALL TAKE IMMEDIATE STEPS TO DISTRIBUTE SAME.

At oral argument on the motion in 2010, counsel for plaintiff advised the court there was an agreement that as a part of considerations and calculations for credits and offsets in the final judgment, plaintiff was to receive the full amount of the Merrill Lynch account in question. It was defendant's position that this amount had been paid. Defendant's attorney confirmed the parties' agreement that defendant had to provide proof he paid this amount to plaintiff. As the agreement was described, if defendant failed to provide such proof, plaintiff was to receive the full amount. Defendant's attorney questioned defendant directly regarding the agreement and his obligation to provide proof the $11,000 had actually been given to plaintiff. Defendant stated that he did not know how he could provide proof but said, "I'll do whatever I can."

The court granted plaintiff's request regarding distribution of the Merrill Lynch account. However, the February 18 order tracked the language of the PSA rather than the agreement described in court. Thus, the court ordered the distribution to plaintiff of "one-half (1/2) of the $11,430 Merrill Lynch Investment Account [] as required under Article VI, paragraph 10A of the Property Settlement Agreement." The court found further that plaintiff was entitled to interest on that account from the time the final judgment of divorce was entered. The court filed an amended order on March 9, 2010, which directed that the full amount of the Merrill Lynch investment account be distributed to plaintiff "per consent of the parties."

In this appeal, defendant presents the following issues for our consideration:

POINT I

THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY NOT CHANGING THE PARENT OF PRIMARY RESIDENCE FOR THE PARTIES' UNEMANCIPATED SON TO DEFENDANT BASED UPON THE FACT THAT THE SON RESIDES WITH DEFENDANT

POINT II

THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN NOT TERMINATING AND/OR MODIFYING CHILD SUPPORT AWARD BASED UPON CHANGE OF PARENT OF PRIMARY RESIDENCE

POINT III

THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN FAILING TO ACCOUNT FOR DEFENDANT'S OTHER DEPENDENT DEDUCTION FROM HIS CURRENT MARRIAGE WHEN CALCULATING A CHILD SUPPORT AWARD

POINT IV

THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN FAILING TO SET THE MATTER DOWN FOR A PLENARY HEARING WHEN THERE WAS A MATERIAL FACTUAL DISPUTE REGARDING THE CUSTODIAL ARRANGEMENT OF THE UNEMANCIPATED CHILDREN BORN OF THE MARRIAGE

POINT V

THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN AWARDING COUNSEL FEES TO THE PLAINTIFF

POINT VI

THE TRIAL COURT ERRED IN AWARDING 100% OF DEFENDANT'S MERRILL LYNCH ACCOUNT [] TO PLAINTIFF

After carefully considering the record and briefs, we are satisfied that none of these arguments has merit. Further, in light of the fact that the amended order filed March 9, 2010, reflects an agreement placed on the record in open court and acknowledged by defendant personally, we are satisfied that the argument raised in Point VI lacks sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Points I through IV address the court's decision to deny defendant's motion to terminate child support without a hearing. A party who seeks modification of support obligations has the burden of showing "such 'changed circumstances' as would warrant relief . . . ." Lepis v. Lepis, 83 N.J. 139, 157 (1980). Moreover, in Lepis, the Court held that "a party must clearly demonstrate the existence of a genuine issue as to a material fact before a hearing is necessary." Id. at 159. We agree with the trial court that defendant failed to make the requisite showing for the relief requested or for a plenary hearing.

The trial court acknowledged that the PSA anticipated the renegotiation of defendant's child support obligation as the children enrolled in college. However, the trial court noted it was unable to determine this issue because defendant failed to supply financial information necessary to such a determination.

Defendant's motion to terminate his child support obligation was subject to the mandatory requirements set forth in Rule 5:5-4(a):

When a motion or cross-motion is brought for the entry or modification of an order or judgment for alimony or child support based on changed circumstances, the pleading filed in support of the motion shall have appended to it a copy of the prior case information statement or statements filed before entry of the order or judgment sought to be modified and a copy of a current case information statement. [Emphasis added.]

As we have stated,

This mandate is not just window dressing. It is, on the contrary, a way for the trial judge to get a complete picture of the finances of the movants in a modification case. This is important because the movant bears the initial burden in such a case under Lepis v. Lepis, 83 N.J. 139 (1980). [Gulya v. Gulya, 251 N.J. Super. 250, 253-54 (App. Div. 1991).]

See also Palombi v. Palombi, 414 N.J. Super. 274, 287 (App. Div. 2010).

Defendant failed to provide the financial information required by Rule 5:5-4(a). Although he submitted a CIS, dated June 16, 2009, it was unsigned. The only "present income" reported was defendant's weekly earned income and year-to-date income. The CIS indicated defendant had received "other supplemental compensation," but no information was provided about such compensation. The tax returns supplied were for 2007. Although defendant may have sought extensions for the filing of his 2008 tax returns, this does not explain the failure to provide any information regarding his income for 2008 or the assets owned in 2009. A review of his 2007 tax return shows that he and his wife reported interest income, investment account dividends, and capital gains from the sale of stocks, in addition to the income from his partnership. Plainly, such income reflected the ownership of assets. Yet, no assets are identified in the CIS submitted in support of his motion. The CIS also failed to disclose liabilities or any debts.

"[W]ithout knowledge of the financial status of both parties, the court will be unable to make an informed determination as to 'what, in light of all the [circumstances] is equitable and fair.'" Lepis, supra, 83 N.J. at 158. (Citation omitted.) The court here specifically identified the up-to-date financial information that was absent from defendant's submission, rendering it unable to make the informed determination anticipated by the parties in their PSA.

In addition, as noted by the court, the PSA anticipated that child support would be paid if the child in college "continues to reside for a portion of the enrolled year with Wife." (Emphasis added.) In the absence of any minimum standard for "portion" of the year, the defendant failed to make a prima facie showing of the substantial change in circumstances required for the relief sought.

Because defendant failed to make a prima facie showing of changed circumstances, there was no genuine issue of material fact requiring a plenary hearing for adjudication. See Isaacson v. Isaacson, 348 N.J. Super. 560, 579 (App. Div.), certif. denied, 174 N.J. 364 (2002); see Lepis, supra, 83 N.J. at 159. Accordingly, defendant's motion was properly denied.

Defendant also challenges an award of $2500 in counsel fees to plaintiff. He argues the award constituted an abuse of discretion because the court failed to consider relevant factors as set forth in R. 5:3-5(c).

We review an award of counsel fees for abuse of discretion. Where the judge follows the law and "makes appropriate findings of fact, a fee award is accorded substantial deference and will be disturbed only in the clearest case of abuse of discretion." Yueh v. Yueh, 329 N.J. Super. 447, 466 (App. Div. 2000); see also Barr v. Barr, 418 N.J. Super. 18, 46 (App. Div. 2011); Strahan v. Strahan, 402 N.J. Super. 298, 317 (App. Div. 2008).

Rule 5:3-5(c) grants the court discretion to award counsel fees in support and custody cases subject to R. 4:42-9(b), (c), and (d) and states:

In determining the amount of the fee award, the court should consider, in addition to the information required to be submitted pursuant to R. 4:42-9, the following factors: (1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties both during and prior to trial; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.

An award of attorney's fees may be made pursuant to this Rule in favor of any party, whether or not prevailing, "if deemed to be just." See, e.g., Kingsdorf v. Kingsdorf, 351 N.J. Super. 144, 158 (App. Div. 2002).

The court here addressed each of the factors in Rule 5:3-5(c), making specific findings as to applicable factors and finding other factors inapplicable. We are satisfied the award of $2500 in counsel fees was adequately supported by the record and the court's findings and did not constitute an abuse of discretion.

Affirmed.

20110513

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