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Wendy L. Crescenzo v. John Crescenzo


August 15, 2011


On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-1973-06E.

Per curiam.


Argued April 13, 2011

Before Judges Fuentes, Ashrafi and Nugent.

Plaintiff Wendy Crescenzo appeals from a December 23, 2009 order of the Family Part that modified the amount of permanent alimony defendant John Crescenzo must pay, declined to compel him to obtain additional life insurance coverage to protect future alimony payments, and denied reimbursement of her attorney's fees. Although the Family Part's decisions relevant to modifying alimony indicate the court considered several of the relevant statutory factors of N.J.S.A. 2A:34-23b, the record does not show that all factors were adequately addressed. Furthermore, the amount of alimony ordered has led the parties to conclude that the court used a simplified mathematical formula to set alimony based only on earned income of the parties. We reverse in part and remand for further proceedings in conformity with the statutory requirements.

This case unfortunately illustrates continuing involvement of the Family Part in the divorced parties' financial affairs after a final judgment of divorce has been entered. An award of permanent alimony that was properly granted after a thirty-six year marriage, followed by immediate changed circumstances in the available earned income to pay that alimony, has resulted in almost continuous litigation in which neither party can find satisfaction and accumulating attorney's fees deplete the parties' financial resources.

Wife and husband in this case were married in 1971 and divorced after a two-day trial in 2007.*fn1 At the time of divorce, the parties were in their late fifties, and their two children were emancipated. Relevant to issues of financial support, the Family Part determined that husband earned about $221,600 per year from his executive position at Sanofi Aventis Pharmaceutical, and the court imputed income of $14,870 per year to wife. A judgment of divorce was entered on June 27, 2007, awarding wife permanent alimony of $95,000 per year, payable in monthly installments of $7,916.66.

Even before the entry of the judgment, however, husband was laid off from his job at Sanofi Aventis in April 2007. Consequently, the parties filed motions pertaining to alimony and other matters, which the court denied at that time by orders dated October 22, 2007. In accordance with the court's instructions following trial, the parties negotiated and submitted an Amended Dual Judgment of Divorce incorporating their agreement on additional issues.

The amended judgment, dated December 17, 2007, repeated the permanent alimony obligation as previously stated, and it required that husband secure a life insurance policy of $500,000 for the purpose of protecting wife's alimony payments. The judgment required that wife be named as the owner and beneficiary of the policy. It permitted a policy with a decreasing face amount, reducing the benefit payable upon husband's death over a period of years based upon life expectancy tables.*fn2 The judgment further stated that if husband could not reasonably procure $500,000 in life insurance coverage, the court would entertain a motion to modify that obligation based on costs. Also, the amount of life insurance coverage could be modified if in the future the court reduced husband's alimony obligation.

On January 18, 2008, the Family Part denied husband's renewed motion to recalculate his alimony obligation because of his unemployment and health problems. On appeal, we ordered a limited remand concerning the alimony obligation, and the Family Part scheduled a plenary hearing for May 2008. Before the hearing occurred, the parties reached agreement and presented a consent order that was eventually filed on August 12, 2008. The consent order reduced husband's alimony obligation to $36,000 per year because of his unemployment. The appeal pending before us at that time was dismissed.

After the consent order, husband remained unemployed and did not make timely payments of $3,000 per month. In 2009, the parties again filed motions pertaining to alimony. On March 6, 2009, the Family Part denied without prejudice husband's request to modify his alimony obligation, stating that husband had not demonstrated a substantial and permanent change in circumstances that would warrant a plenary hearing. In addition, the court granted wife's request for proof of life insurance but modified husband's obligation, reducing the amount of required insurance benefit to $189,000 because of his reduced alimony obligation.

The parties then filed yet another set of motions. After hearing oral argument on July 16, 2009, the Family Part denied without prejudice husband's request to modify his alimony obligation and wife's request for proof of life insurance. Instead, the court scheduled a plenary hearing to be held in August 2009: 1) to address whether husband's unemployment status constituted a permanent change in circumstances warranting a reduction in his alimony obligation; 2) to require husband to provide proof that he attempted to secure a life insurance policy pursuant to the March 6, 2009 order; and 3) to address both parties' request for counsel fees.*fn3

After conducting the plenary hearing, the Family Part issued its decision in a letter-opinion of September 9, 2009.

The court concluded that husband's unemployment and ill health demonstrated a significant change of circumstances under Lepis v. Lepis, 83 N.J. 139, 151 (1980), warranting a reduction of his alimony obligation. The court imputed income to husband of $65,000 based on his prior work history and job search and made reference to income of $14,870 imputed to wife at the time of trial. The court concluded:

Using these numbers and the other factors under [N.J.S.A.] 2A:34-23(b)1-13, previously addressed, a yearly alimony figure of $15,000.00, payable in monthly installments of $1,250.00 would best address the current situation, effective June 11, 2009. Arrears shall be paid in the amount of $300.00 per month.

Addressing the issue of life insurance, the court stated that, considering husband's financial situation and good faith, a $189,000 ten-year term policy was sufficient because the expense "to change this policy for a ten year term to a twenty-year term will be cost prohibitive." Finally, the court reviewed the factors listed in Rule 5:3-5(c) pertaining to an award of attorney's fees and denied both parties' request in that regard.

The court entered an order on September 9, 2009, which mistakenly stated husband's alimony obligation was $1,500 per month. The order also stated that if husband's income rose above $65,000, alimony would be adjusted. The order required husband to maintain the term life insurance policy for $189,000, naming wife as the sole beneficiary. On September 30, 2009, the court entered an order correcting the alimony figure to $1,250 per month.*fn4

Before the September 2009 orders were issued, husband's attorney wrote to the court and wife's attorney on August 27, 2009, that husband had obtained new employment and would have a yearly income of $95,000. Court staff did not provide counsel's letter to the Family Part judge before the September 2009 orders and the court's letter-opinion were issued.

Wife filed a motion for reconsideration of the September orders based upon husband's re-employment. After hearing oral argument, the court entered an order on December 23, 2009, that:

1) raised husband's alimony obligation to $2,000 per month, and $400 per month toward arrears; 2) denied wife's request to modify the September 9, 2009 order as to sufficiency of the ten-year term insurance policy; and 3) denied both parties' request for attorney's fees. Wife filed a notice of appeal from the December 23, 2009 order.

The judge of the Family Part then issued a letter-statement pursuant to Rule 2:5-1(b) explaining further his December 23, 2009 order. In addition to relying on the changed circumstances standard of Lepis, supra, 83 N.J. 139, the judge suggested that the findings of September 9, 2009, still applied to the December 23, 2009 order with the single change that husband's income was now $95,000 rather than the imputed $65,000 while he was unemployed.

On appeal, wife argues: 1) the Family Part arbitrarily set defendant's alimony obligation without adequate explanation; 2) the ten-year term life insurance policy is not sufficient and contrary to the parties' agreement, especially since husband has new employment; and 3) wife is entitled to reimbursement of her attorney's fees for the motions.

We review the Family Part's decision on alimony for abuse of its discretionary authority. See Innes v. Innes, 117 N.J. 496, 504 (1990); Cox v. Cox, 335 N.J. Super. 465, 473 (App. Div. 2000). In Gonzalez-Posse v. Ricciardulli, 410 N.J. Super. 340 (App. Div. 2009), we elaborated on what our standard of review entails:

To vacate a trial court's finding concerning alimony, we must conclude that the trial court clearly abused its discretion or failed to consider all of the controlling legal principles, or we must otherwise be satisfied that the findings were mistaken or that the determination could not reasonably have been reached on sufficient credible evidence present in the record after considering all of the proofs as a whole. [Id. at 354.]

Here, the Family Part's letter-opinion of September 9, 2009, and supplemental statement of March 26, 2010, provide reasons for setting alimony under the changing circumstances of husband's unemployment and subsequent re-employment. However, the court's reasons do not address all factors relevant to setting the amount of alimony.

N.J.S.A. 2A:34-23c requires that the court "make specific findings on the evidence" regarding statutory factors relevant to an award of alimony. Those factors are listed in N.J.S.A. 2A:34-23b:

(1) The actual need and ability of the parties to pay;

(2) The duration of the marriage or civil union;

(3) The age, physical and emotional health of the parties;

(4) The standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living;

(5) The earning capacities, educational levels, vocational skills, and employability of the parties;

(6) The length of absence from the job market of the party seeking maintenance;

(7) The parental responsibilities for the children;

(8) The time and expense necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, the availability of the training and employment, and the opportunity for future acquisitions of capital assets and income;

(9) The history of the financial or non-financial contributions to the marriage or civil union by each party including contributions to the care and education of the children and interruption of personal careers or educational opportunities;

(10) The equitable distribution of property ordered and any payouts on equitable distribution, directly or indirectly, out of current income, to the extent this consideration is reasonable, just and fair;

(11) The income available to either party through investment of any assets held by that party;

(12) The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a non-taxable payment; and

(13) Any other factors which the court may deem relevant.

In Carter v. Carter, 318 N.J. Super. 34, 42 (App. Div. 1999), we held that when ordering alimony, the court "must adhere to the statutory requirement in every case, whether contested or uncontested." That is, the court must make findings of fact and determine a fair amount of alimony based upon the statutory factors. See also Rule 1:7-4 (statement of judge's findings of fact and conclusions required for judgments and appealable orders); Heinl v. Heinl, 287 N.J. Super. 337, 347 (App. Div. 1996) (remand necessary because of Family Part's "[n]aked conclusions" inadequately supported by findings of fact in accordance with the statutory provisions authorizing an award of alimony); Schwarz v. Schwarz, 328 N.J. Super. 275, 282 (App. Div. 2000) ("an articulation of reasons is essential to the fair resolution of" a child support dispute).

Here, some of the statutory factors are self-evident and do not require discussion or detailed findings. For example, the length of the marriage and wife's primary role as a homemaker and caregiver for the children appear not to be matters in dispute that require detailed fact finding. Moreover, the Family Part's decisions were certainly more than bare conclusions. But the court did not state findings of fact pertaining to issues such as wife's need for alimony to support herself, the effect of equitable distribution on each party's financial circumstances, the ability of the parties to approximate the marital standard of living through the financial resources now available to them, and whether income was available to either party through investment of assets or other resources. Although the court mentioned that husband's assets were depleted during the period of his unemployment, and wife's careful management of her assets had preserved some resources for her, the court's remarks were generalized statements that do not set forth how those factors were assessed in determining a fair amount of alimony that husband must pay.

Wife argues, and husband appears to acknowledge, that the Family Part may have used an impermissible formula to determine the amount of alimony, rather than applying the factors required by N.J.S.A. 2A:34-23b to the facts shown by the evidence. Wife contends the court subtracted her imputed income from husband's income and then awarded her thirty percent of the resulting figure by each of the September 9 and December 23, 2009 orders. The resulting figures match such a formula. In September 2009, subtracting about $15,000 imputed to wife from $65,000 imputed to husband leaves a remainder of $50,000, and thirty percent of that amount is the $15,000 per year alimony awarded at that time. In December 2009, subtracting $15,000 from the $95,000 actual new income of husband leaves a remainder of $80,000, and thirty percent of that amount is the $24,000 awarded.

We decline to conclude that the Family Part used such a formula. Nevertheless, we agree with wife that use of a percentage formula based only on earned or imputed income is not authorized by law. Such a formula does not weigh and balance particular factors as listed in the statute and as might affect each individual case.

We also note that neither the court at the time of the 2007 trial nor the parties in their August 12, 2008 consent order resorted to such a formula to determine an appropriate amount of alimony. The original $95,000 per year alimony that was awarded in June 2007 is approximately forty-six percent of the difference between the parties' incomes using the above formula, and the $36,000 agreed by the parties in August 2008 is approximately seventy-two percent of the difference. We do not suggest that either of those percentages is appropriate in determining husband's alimony obligation at this time, but the figures illustrate that a percentage amount is not consonant with either the court's prior fact findings after trial or with the parties' agreement when circumstances of husband's employment changed.

Because specific findings and conclusions relevant to determining modification of alimony were not made in accordance with all relevant factors under N.J.S.A. 2A:34-23b, we reverse so much of the order of December 23, 2009 as fixed alimony at $2,000 per month and remand to the Family Part to make more detailed findings of fact and reconsider the amount based on those findings. We do not preclude the court from determining that $2,000 is the appropriate amount but require adequate support in the record for its determination.

As to the issue of life insurance, we conclude the Family Part did not abuse its discretion or misinterpret the provisions of the amended judgment of divorce permitting modification of the amount and term of life insurance that husband must provide. We see no basis, however, for omitting the requirement that wife be designated the owner of the life insurance policy as well as its sole beneficiary. Presumably, such a designation gives wife control of any changes that could be made to that policy.

Furthermore, because we are remanding so that the Family Part can reconsider the amount of alimony, the court should also reconsider whether the $189,000 face amount and ten-year term of the policy husband obtained remain a just resolution of the dispute now that he is re-employed. In that respect, the court can consider its award of alimony on remand, whether alternative life insurance is available at reasonable cost through husband's new employment, and any other circumstances that might affect the parties' original intent at the time of the 2007 amended judgment of divorce in providing adequate insurance coverage for the wife's future alimony expectations.

Finally, we discern no abuse of discretion in the Family Part's application of the factors listed in Rule 5:3-5(c) and its determination not to award attorney's fees to either party. See Gotlib v. Gotlib, 399 N.J. Super. 295, 314-15 (App. Div. 2008); Eaton v. Grau, 368 N.J. Super. 215, 225 (App. Div. 2004).

Affirmed in part and reversed in part and remanded. We do not retain jurisdiction.

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