June 29, 2011
ROBERT J. MCGUIRK, PLAINTIFF-RESPONDENT,
MICHELLE LYNN MCGUIRK, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-209-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted June 7, 2011 - Decided
Before Judges Messano andWaugh.
Defendant Michelle Lynn McGuirk appeals the order of the Family Part denying her motion for a reduction in the amount of child support payable to plaintiff Robert J. McGuirk.*fn1
The parties were married on June 11, 2000, and had two sons, born in March 2004 and January 2008, respectively. Due to irreconcilable differences, they divorced on October 8, 2009. The final judgment of divorce (JOD) incorporated a property settlement agreement (PSA) reached in July 2009.
Robert was a taxation director at Quest Diagnostics at the time of the divorce, earning approximately $280,000 per year in income and bonuses. Michelle was a director of credit risk management at Swiss Reinsurance Company (Swiss Re), and had earned approximately $260,000 per year in income and bonuses in the two years preceding the divorce. Based on the length of the marriage and the parties' individual earning capacities, they waived their respective rights to alimony. They evenly divided the proceeds of all jointly-held checking and savings accounts, and waived claim to any retirement funds, employment-related stock options, or deferred accounts acquired during the marriage.
Robert and Michelle shared joint legal custody of the two children, with Robert designated as the parent of primary residence. Michelle was to have overnight visits with the children on alternate weekends, amounting to fifty-two overnights per year, in addition to assigned holidays, summer parenting time, and two mid-week dinners every week.
Robert agreed to maintain medical insurance for the children, with the understanding that the cost of insurance would be incorporated into the calculation of Michelle's child support obligation. The parties were to be "equally responsible for any uninsured medical, dental, eyecare or prescription drug or other medically related expenses for the benefit of the children." The parties acknowledged that both minors required daycare because Robert and Michelle worked on a full-time basis, and consented to share daycare costs. Paragraph fifteen of the PSA obligated each of them to maintain life insurance policies in the amount of $500,000 for the benefit of the children for a period of twenty years following the date of the PSA.
For child support purposes, the PSA attributed base annual incomes of $208,000 to Robert and $185,000 to Michelle. There was a dispute as to whether a child support worksheet was attached to the PSA or the JOD. Neither document makes reference to such an attachment, although the PSA does refer to the guidelines. Michelle's appendix contains a copy of the PSA without a worksheet, whereas Robert's contains a copy of the PSA with an incomplete worksheet. In any event, the PSA specifically required Michelle to pay $297 per week in child support to Robert.
On July 30, 2010, Michelle filed a motion seeking, among other things, to (1) decrease her child support; (2) reduce her share of the child care costs; (3) revise her mid-week parenting schedule from two dinners to one; and (4) obtain repayment from Robert for alleged overpayments in child support.
Michelle premised her request for a reduction in support on an assertion that she was "terminated" by Swiss Re on July 7, 2010, and was relying exclusively on unemployment benefits because her employer did not provide her with severance pay. Michelle subsequently clarified her assertion, relating that Swiss Re had terminated her position and "offered her the choice to quit or take a demotion, and then claimed a Code of Conduct violation" to discharge her. Neither party provided any additional information regarding the circumstances of her discharge.
Michelle argued that the loss of her job represented a material change of circumstances warranting a reduction in support. She outlined her unsuccessful job search efforts. She also relied on a letter, issued by an organization of financial service professionals to its members, that generally asserted that many in the financial services industry were facing "unprecedented challenges" and that many of its members were unemployed or underemployed.
Michelle premised her claim that she had overpaid child support on three grounds. First, she claimed that the support amount set forth in the PSA did not accurately reflect her parenting time. Second, Michelle argued that her child support obligation was mathematically incorrect because it purportedly represented forty-nine percent of the basic child support amount instead of forty-seven percent, which she maintained was the correct calculation. Finally, Michelle claimed that she was entitled to repayment of $188 in unreimbursed medical expenses, because the child support guidelines already included such expenses in basic child support up to $250 per child.
Michelle's current case information sheet (CIS), and 2009 federal income tax return were submitted with her motion. Those documents reflected an adjusted gross income of $246,351.55 in 2009, $2150 in liabilities and $1,335,380 in gross assets comprised of $1,034,339 in unspecified retirement stocks and bonds, approximately $50,000 in savings, and $161,000 in a 401(k). According to Michelle, however, she could not liquidate many of her assets without incurring penalties.
Robert opposed the motion. He asserted that Michelle was a highly educated chartered financial analyst with an extensive professional record and substantial earning history. He argued that she had failed to establish that her unemployed status constituted a permanent change, and that she had sizable assets that could help pay her child support obligation until she becomes reemployed. According to Robert, in addition to the assets she reported on her CIS, he had paid her approximately $220,000 to buy-out her interest in the marital home.
Robert also denied that Michelle had overpaid child support, disputing her assertions that there had been any miscalculation. Robert also argued that the PSA provided that unreimbursed medical expenses would be shared equally. Finally, Robert argued that Michelle was not entitled to repayment because the parties had been represented by counsel when they entered into the PSA and the "$297 was part of the deal [they] agreed upon as part of the larger settlement."
Robert filed a cross-motion, which is not relevant to the issues raised on appeal, other than his request that Michelle provide evidence of her term life insurance coverage as required by paragraph fifteen of the PSA. Michelle opposed the cross-motion.
The Family Part judge heard oral argument on August 27, 2010. After the argument, the judge issued an order that denied Michelle's request for a downward modification of child support and the repayment of alleged child support overpayments. The judge granted her request to reduce her mid-week parenting time from two dinners to one and directed Michelle to furnish proof of life insurance pursuant to the PSA.
The judge supplemented the order with a statement of reasons. With respect to the reduction in child support, the judge noted that Michelle had been unemployed for only three weeks when she filed her modification request. Although the judge recognized that Michelle had submitted limited proof of her search for reemployment, the judge concluded that Michelle had not shown that her change in circumstances was "substantial and permanent." The judge was also "struck with the extent of [Michelle's] resources," and concluded that she was "capable of utilizing her investments to generate additional income to assist her in meeting her support obligations." The judge added that Michelle's failure to append her prior CIS as required by Rule 5:5-4(a) rendered her application "deficient on its face."
With respect to the request for reimbursement of purported overpayments, the judge observed that the parties had agreed to use base annual incomes that were substantially lower than what they were actually earning. She concluded that the parties' agreement, which specifically provided for $297 in child support, was fair, and that Michelle had not established a basis for rewriting its terms. The judge applied similar reasoning in denying Michelle's request for the repayment of funds paid toward unreimbursed medical expenses, noting that Michelle could not "now write a better agreement for herself than that negotiated at the time of final hearing."
On November 16, 2010, Michelle filed a notice of appeal, as well as a motion for leave to appeal as within time. In support of the motion, Michelle certified that she had been diagnosed with breast cancer on October 5, 2010. We granted leave to appeal as within time.
On November 17, 2010, the motion judge submitted an amplification letter pursuant to Rule 2:5-1(b). Without commenting on its significance, the judge observed that Michelle's diagnosis had been made after the motion was decided. The judge made the following addition to her prior holding with respect to Michelle's failure to append her earlier CIS.
Defendant did not advise the [c]court at the time of her motion that . . . [she had not filed a CIS] pendente lite. However, even if [d]efendant did not file a CIS prior to the final hearing, she is not relieved of her obligation to demonstrate to the [c]court what substantial changes in circumstances have occurred from the time of final hearing to the time she filed her application for modification.
With regard to Michelle's claim that she overpaid her share of unreimbursed medical expenses, the judge noted that the applicable rules permit parties to deviate from the child support guidelines.
On appeal, Michelle raises numerous arguments to support her overarching contention that the motion judge erred in denying her application for a reduction in support, adjustments to the terms set forth in the PSA, and a refund of the alleged overpayments.
We ordinarily accord great deference to the discretionary decisions of Family Part judges. Donnelly v. Donnelly, 405 N.J. Super. 117, 127 (App. Div. 2009) (citing Larbig v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006)). Similar deference is accorded to the factual findings of those judges following an evidentiary hearing, Cesare v. Cesare, 154 N.J. 394, 411-12 (1998), although no such hearing was held in this case. A judge's purely legal decisions are subject to our plenary review. Crespo v. Crespo, 395 N.J. Super. 190, 194 (App. Div. 2007); Lobiondo v. O'Callaghan, 357 N.J. Super. 488, 495 (App. Div.), certif. denied, 177 N.J. 224 (2003).
Having reviewed the argument raised by Michelle in light of the record before us and the applicable law, we have concluded that the issues raised on appeal do not warrant extensive discussion in a written opinion. R. 2:11-3(e)(1)(E). Consequently, we affirm essentially for the reasons stated by Judge Catherine I. Enright in her statement of reasons, as supplemented. We add the following.
In denying a reduction in child support, the judge relied on well-established principles of law. N.J.S.A. 2A:34-23 confers equitable powers on the trial courts to modify support orders, regardless of whether the initial obligation was established by judicial decree or by agreement. Lepis v. Lepis,
83 N.J. 139, 145, 148 (1980). In "an application to modify support, the moving party has the burden to make a prima facie showing of changed circumstances warranting relief prior to the court ordering discovery of the full financial circumstances of each party." Dorfman v. Dorfman, 315 N.J. Super. 511, 515 (App. Div. 1998).
Lepis stressed that our "[c]courts have consistently rejected requests for modification based on circumstances which are only temporary or which are expected but have not yet occurred." Lepis, supra, 83 N.J. at 151. Thus, "[t]he proper criteria are whether the change in circumstance is continuing and whether the agreement or decree has made explicit provision for the change." Id. at 152.
In Larbig, the trial court denied the payor-spouse's motion to reduce his support obligations because, in part, the modification motion had been filed only twenty months after the divorce judgment. Larbig, supra, 384 N.J. Super. at 19. We affirmed, observing that the short time between the final judgment and the modification motion "strongly suggested [that the] defendant's reduced income had not become permanent." Ibid. We further observed that there is no brightline rule by which to measure when a changed circumstance has endured long enough to warrant a modification of a support obligation. Instead, such matters turn on the discretionary determinations of Family Part judges, based upon their experience as applied to all the relevant circumstances presented, which we do not disturb absent an abuse of discretion. [Id. at 23.]
Here, Michelle made her application for an adjustment in her support obligation less than one month after her prior employment ended. She failed to present a prima facie case of changed circumstances.
In denying the other adjustments and refund sought by Michelle, the judge applied similarly well-established principles related to the settlement of litigated issues. "An agreement to settle a lawsuit is a contract which, like all contracts, may be freely entered into and which a court, absent a demonstration of 'fraud or other compelling circumstances,' should honor and enforce as it does other contracts." Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.) (quoting Honeywell v. Bubb, 130 N.J. Super. 130, 136 (App. Div. 1974)), certif. denied, 94 N.J. 600 (1983). "Settlement agreements in matrimonial matters, being 'essentially consensual and voluntary in character, . . . [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, supra, 83 N.J. at 153; Berkowitz v. Berkowitz, 55 N.J. 564, 569 (1970); Schlemm v. Schlemm, 31 N.J. 557, 581-82 (1960).
Separation agreements "'are generally favored by the courts as a peaceful means of terminating marital strife and discord so long as they are not against public policy.'" Dolce, supra, 383 N.J. Super. at 20 (quoting Konzelman v. Konzelman, 158 N.J. 185, 194 (1999)); see also Weishaus v. Weishaus, 180 N.J. 131, 143 (2004). "And while incorporation of a PSA into a divorce decree does not render it immutable, nor its terms solely governed by contract law, nevertheless, if found to be fair and just, it is specifically enforceable in equity." Eaton v. Grau, 368 N.J. Super. 215, 224 (App. Div. 2004) (citations omitted).
In the PSA, Michelle agreed to pay child support in the amount of $297, to share equally the cost of unreimbursed medical expenses, and to share daycare expenses equally. She agreed that she had been advised by independent counsel in reaching the agreement, that it was "deemed" by her "to be fair, adequate and satisfactory," and that she entered into it with "full knowledge of its contents." The judge did not err in enforcing the terms of the agreement.
Michelle's cancer diagnosis and subsequent treatment*fn2
were not known at the time her motion was considered and
decided by Judge Enright. Those facts, when further developed and
brought up to date, will provide a different factual basis for a
renewed motion by Michelle, and they might warrant a different result.
We cannot make that determination on the record before us. Any new
application must be considered by the Family Part and decided on the
basis of the then-existing facts and applicable law.
Finally, it appears that Michelle's medical condition may make it difficult or impossible for her to obtain the required life insurance, which she apparently did not have previously, allowed to lapse, or did not replace in a timely manner when her previous employment was terminated. In any renewed application to the Family Part, the judge will have to address that issue.