August 17, 2011
AMY J. ROUBA, PLAINTIFF-RESPONDENT,
DUANE ROUBA, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-1248-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Telephonically argued: December 1, 2010
Before Judges A.A. Rodriguez and C.L. Miniman.
Defendant Duane Rouba (Duane) appeals from two March 1, 2010, post-judgment orders in this divorce proceeding modifying his parenting time and requiring preparation of joint 2008 income tax returns with equal responsibility for any taxes due.
He also appeals an April 16, 2010, order denying his timely motion for reconsideration of the March 1 orders. We now reverse and remand.
The parties were married in 1998 and have one daughter who was born in 2004. They were divorced on March 18, 2009, and the dual judgment of divorce incorporated their marital settlement agreement (MSA). Pursuant to the MSA:
The parties shall have joint legal custody of their daughter . . . and shall be bound by the custody and parenting plan annexed hereto . . . . The parties acknowledge that pursuant to Dr. Morton Fridman's recommendation, the parenting time schedule shall be implemented for a period of one year from the date of this Agreement and will be reviewed at that time.
Plaintiff Amy Rouba (Amy) was designated as the parent of primary residence, with Duane as the parent of alternate residence. A custody and parenting time plan was appended to the MSA. The regular overnight parenting time schedule, which was on a four-week cycle, provided that Duane would have overnight parenting time eleven out of twenty-eight nights.
When the MSA was executed, the parties resided in the marital home in Mendham, which was listed for sale. They agreed that, as long as they both resided together, they "shall be responsible for paying the current mortgage, taxes, homeowners['] insurance, utilities, and necessary repairs mandated in order to maintain the integrity of the property until sale on a fifty-fifty basis (50% each)." However, "[i]t is contemplated that [Amy] may relocate from the marital residence before the time of closing." Then, Amy would pay one-half of the mortgage, taxes, and homeowners' insurance, and Duane would pay for all utilities, lawn maintenance, and regular repairs up to $250 per occurrence. The custody and parenting time plan provided that Amy "shall be moving to . . . Metuchen . . . when [their daughter] finishes school in June 2009." The parties initialed a handwritten paragraph in the MSA concerning taxes: "The parties agree to consult with their accountant to determine the most advantageous filing for the tax year 2008." Both parties waived alimony.
Barely nine months after the divorce, Amy filed a notice of motion seeking, in part, "modification of [then] current parenting time schedule" and "requiring [Duane] to cooperate with the accountant for the parties and finalize the 2008 income tax returns of the parties no later than January 31, 2010." In her supporting certification, Amy asserted that she had relocated with her five-year-old daughter to her parents' home in Metu-chen, where their daughter was enrolled in a full-day kindergarten program. Amy stated that, when the parenting plan was finalized, "it was anticipated that both [parties] would be relocating to the Metuchen-Edison area and thus the travel time between the homes of the parents would be quick and easy." However, Duane continued to reside in the marital home, causing the typical travel time between the homes to last forty-five minutes to an hour.
Amy asserted that the "six hours or more each week" spent traveling between homes was "taking a toll" on their daughter. For example, "[s]ince school began, she ha[d] gotten sick on three Mondays . . . while coming in from Mendham, twice vomiting before she even got into the school at which time [Duane] turned around and brought her back to Mendham." Amy also recounted evenings when their daughter was "emotional," and one Thursday in December, she received "an hysterical call" from their daughter "begg[ing Amy] to come up to Mendham to see her." Amy stated that their daughter was "inconsolable" and "still crying" forty-five minutes later.
Amy related that the parties had presented the matter to Dr. Marcy Pasternak, a parenting coordinator, at a recent joint session. In a memorandum dated November 18, 2009, Dr. Pasternak stated:
It is recommended that Dr. Fridman conduct an evaluation update with regard to the specific issue of [Duane's] overnight parenting time on school nights. [Amy] has raised a concern regarding [their daughter's] well-being on these nights due to the geographic distance between the two homes. Among other concerns, she feels that [their daughter] has to wake up too early on school days when she has to travel from [Duane's] home to her school in Metuchen. [Duane] feels that [their daughter] is adjusting well and is not suffering. It appears that when Dr. Fridman recommended a parenting plan, he was of the understanding that both parents would be living geographically close to one another. It would be best to have Dr. Fridman evaluate what is in [their daughter's] best interest given the current geographic distance between the homes.
In her certification, Amy asserted that neither party had the resources to "afford to keep engaging professionals to evaluate this rather common[-]sense request" and proposed a modification of the parenting schedule to reduce overnight visitation with Duane.
Next, Amy asserted that the parties had not yet filed their 2008 income tax returns "because Duane delayed in providing the accountant with the information required to do so." Although she had received notice that Duane did provide that information in early December, "if more information is required or additional cooperation on the part of Duane does not occur, [she] request[ed] the right to request the [c]court's assistance in finalizing this matter as well."
On January 8, 2010, Duane filed a notice of cross-motion seeking, in part, that he "be granted leave to file his income tax returns separately." He also sought a directive that Amy not interfere with his parenting time by upsetting their daughter on the phone or picking her up early. In his certification, Duane opposed any modification of "the parenting schedule which was carefully and thoroughly negotiated at the time of [their MSA] in March 2009." He contended that, while Amy proposed three changes, each of which shortened or eliminated his parenting time, "[n]o effort whatsoever [was] made in anyway balanc[ing] the loss of time taken from [him] by extending [his] parenting time in other regards."
Duane disputed that "the possibility of a need for transportation . . . between Metuchen and Mendham was such an unexpected development." He urged that, upon the sale of the marital home, which was taking longer than expected, he intended to seek permanent residence in the Metuchen area. He contended that, at the time of divorce, these issues "were very foreseeable and [they] both agreed to abide by the parenting schedule for a one (1) year period." Duane also disputed that the travel arrangements negatively impacted their daughter.
Duane admitted that the parties had not yet filed their 2008 income tax returns but asserted that their accountant, Neal Axelrod, prepared a tax analysis for them at his request, which he appended to his certification. Axelrod concluded that "[t]here is an advantage of filing jointly as oppose[d] to separately" with the amount of the advantage changing based on who would claim an exemption for their daughter if filing individual returns, which he enumerated.
Duane asserted that Amy had refused to pay the accountant and that Axelrod's analysis "represent[ed] ballpark figures only." He urged that if Amy refused to pay or use Axelrod's services that he be permitted to file his returns separately, taking their daughter as a deduction for 2008. He would be willing to file joint returns if Amy (a) paid all federal tax due and (b) paid him "a sum equal to that which [he] would have received as a refund by filing separately."
Amy filed a reply certification on or about February 9, 2010, in which she urged that the parenting time provision was "never intended to be permanent." She appended a proposed, revised parenting schedule. Amy also sought an order requiring the parties to file joint tax returns for 2008 and share equally in any tax refund or liability.
The parties presented oral argument before the Family Part judge on March 1, 2010. Later that day, the judge entered two orders accompanied by a statement of reasons, in part imposing a new parenting time schedule "to be used when school is in session." The "Interim Parenting Plan" provided that Duane would have overnights with their daughter every other week on Friday and Saturday nights with parenting time extending to 7:30 p.m. on Sunday. Duane would also have dinner with their daughter each Monday and every other Thursday in the Metuchen area, not at his home.
The modifications were made "without prejudice and subject to review when the parties are living closer together, as intended under their MSA." Further, "[t]he parties' parenting plan under the MSA shall apply when [their daughter] is on school recess (i.e. spring & summer [b]reaks)[,] and [Duane] also shall enjoy alternating Wed[nesday] overnights when he will not have parenting time the following weekend, during these breaks." Further, the judge ordered that "Dr. Fridman shall be retained by the parties within 30 days to address and recommend a parenting plan to protect [their daughter's] best interests."
In her statement of reasons, the judge outlined her factual findings pertaining to parenting time. She found that it took about forty-five minutes, without traffic, to transport their daughter between Metuchen and Mendham. She noted that the parties had agreed to review the parenting time schedule one year from the date of the MSA and found that "although [Amy's] application is slightly premature, the [c]court is sympathetic to the difficulties that have ensued as a result of the parties living so far apart from each other while implementing their parenting plan." She granted Amy's request for a modification.
However, pending a review of the schedule by Dr. Fridman, the [c]court would eliminate the Thursday night overnights with [Duane] on those weeks when [their daughter] has school the following day . . . . This current schedule seems to unnecessarily disrupt the child's routine. Likewise, the [c]court also would eliminate [Amy's] breakfasts on the Saturdays following [Duane's] Friday night overnights, not only to add more time for [Duane] to enjoy [time] with [their daughter], but also to minimize the "back and forth" between the parties. . . . The
[c]court finds that until the parties are living within a shorter distance from one another, the parenting schedule should be modified without prejudice to review by the parties' mental health expert. Furthermore, the [c]court has considered the comments by Dr. Pasternak, who confirmed just a few months ago that it would be best to have Dr. Fridman evaluate [their daughter's] best interests, "given the current geographic distance between the (parties') homes.
She granted Duane's request that Amy "not interfere with his parenting time" without making factual findings about this.
The judge also ordered that the parties work with Axelrod to file their 2008 income tax returns in a manner "which most minimizes the tax consequences for both parties, collectively." She denied Duane's request for an order requiring Amy "to pay all [f]ederal [t]axes due and pay him a sum equal to that which he would have received as a refund by filing separately" pursuant to the terms of the MSA. She found that "the parties intended to minimize their tax consequences collectively" and that they "shall abide by [Axelrod's] recommendations in filing their 2008 tax returns, guided by the principle that [Axelrod] is charged with preparing a tax return(s) which most minimizes the tax consequences to both parties (versus one or the other)." Finally, the parties were to share any refunds or liabilities equally.
On March 18, 2010, Duane filed a notice of motion for reconsideration of the provisions pertaining to parenting time and the filing of the parties' tax returns, which Amy opposed. The judge denied Duane's request for oral argument and entered an order denying his application for reconsideration on April 16, 2010. In her statement of reasons, the judge explained that, while the interim parenting plan reduced the number of Duane's overnights, it still provided that he see their daughter six out of every fourteen days. The judge reiterated that she had "fixed only an interim schedule which [she] anticipated would be modified once the parties had an opportunity to meet with their experts, and the parties themselves contemplated reviewing their parenting plan by March, 2010, based on the language in their MSA." She found "no basis for reconsideration on this issue as no facts were overlooked, and the [c]court stands by the case law cited in its original [s]tatement of [r]easons from March 1, 2010[,] that it was to be guided by the best interest of [the child] in fashioning a remedy for the issues presented."
Further, the judge found that she could not consider calculations allegedly made by Axelrod pertaining to the parties' financial backgrounds, incomes, and tax liabilities as Axelrod had not submitted a certification. She reiterated that the MSA provision indicated "that both parties were to benefit from 'the most advantageous filing.'" Because the parties were married during the entirety of 2008 and had lived together and shared expenses, she was "hard-pressed to call the 2008 tax debt anything other than a marital debt which should be shared." Moreover, "there [was] no language in the MSA to suggest the parties would pay a liability or share a refund proportionate to their incomes." This appeal followed.
Duane argues that the judge erred in granting the relief sought by Amy because Amy did not establish a prima facie case of changed circumstances that affected their daughter's welfare. He also asserts that Amy did not seek an order compelling equal responsibility for unpaid taxes in her notice of motion and this relief should not have been granted based on her reply certification, to which he had no opportunity to respond. Last, he contends that the judge abused her discretion in denying reconsideration when he submitted facts establishing that he never agreed to equal responsibility for income taxes.
Amy responds that the judge's small adjustment in the parenting schedule is fully supported by the evidence. Further, she urges that the allocation of responsibility for the income taxes is supported by the language of the MSA and the circumstances leading to its execution.
When deciding matters involving child custody, "the court's primary consideration is the best interests of the children." Hand v. Hand, 391 N.J. Super. 102, 105 (App. Div. 2007). This requires focusing on "the safety, happiness, physical, mental and moral welfare of the children." Ibid. (internal quotation marks omitted). "The matter of parental visitation is not to be considered lightly," Wagner v. Wagner, 165 N.J. Super. 553, 557 (App. Div. 1979), but "custody is always temporary and can be reassessed based on a change in circumstances." Feldman v. Feldman, 378 N.J. Super. 83, 96 (App. Div. 2005). "A party seeking modification of a judgment, incorporating a [MSA] regarding custody or visitation, must meet the burden of showing changed circumstances and that the agreement is now not in the best interests of a child." Abouzahr v. Matera-Abouzahr, 361 N.J. Super. 135, 152 (App. Div.), certif. denied, 178 N.J. 34 (2003).
"A plenary hearing is required when the submissions show there is a genuine and substantial factual dispute regarding the welfare of the children, and the trial judge determines that a plenary hearing is necessary to resolve the factual dispute." Hand, supra, 391 N.J. Super. at 105; see also R. 5:8-6 (requiring the court to "set a hearing date" if it "finds that the custody of children is a genuine and substantial issue"). Even where a party waives a plenary hearing, "the matter of visitation is so important, especially during the formative years of a child, that if a plenary hearing will better enable a court to fashion a plan of visitation more commensurate with a child's welfare, nonetheless it should require it." Wagner, supra, 165 N.J. Super. at 555 (emphasis added).
When an issue of child custody or parenting time is presented and "[t]he trial court's order was based on its evaluation of conflicting affidavits and adopt[ed] the assertions of one party over the other without the benefit of a plenary hearing," Mackowski v. Mackowski, 317 N.J. Super. 8, 11 (App. Div. 1998), we have reversed and remanded for such a hearing, id. at 14; see also Wilke v. Culp, 196 N.J. Super. 487, 501 (App. Div. 1984) (finding that "[i]t is basic that a case should not be decided merely on the basis of conflicting affidavits"), certif. denied, 99 N.J. 243 (1985). Additionally, "disputes implicating the welfare of a child and involving conflicting contentions and opinions of lay and expert affiants must be submitted to a plenary hearing." Fusco v. Fusco, 186 N.J. Super. 321, 329 (App. Div. 1982).
We have recognized that the relocation of a child by the residential custodial parent from one location in New Jersey to another may have a significant impact upon the relationship between the child and the non-residential custodial parent that may constitute a substantial change of circumstances warranting modification of the custodial and parenting-time arrangement. [Schulze v. Morris, 361 N.J. Super. 419, 426 (App. Div. 2003).]
However, in this case, the judge did not find that plaintiff had proven changed circumstances. That threshold issue must be decided by her.
The MSA provided for a review of the interim parenting plan after one year, and the judge's order included a directive to meet with the psychologist to develop a more permanent arrangement. Typically, the judge's determination would be entitled to deference. Abouzahr, supra, 361 N.J. Super. at 157. However, when modifying the parenting schedule, the judge merely relied on factual assertions in the parties' affidavits, which con- tained conflicting accounts of any effects of travel time on their child. See Mackowski, supra, 317 N.J. Super. at 11. Although the judge discussed the best interests of the child, she failed to address the complete legal standard required for modification of parenting time arrangements. See Abouzahr, supra, 361 N.J. Super. at 152 (holding that party seeking modification of visitation must showing circumstances changed and agreement no longer in best interests of child); see also R. 1:7-4(a) (judge must find the facts and state legal conclusions).
Indeed, the judge had found that "[t]he parties differ as to whether [their child] is suffering as a result of having to get up early on school mornings, and as a result of being shuttled back and forth numerous times during the week." While the judge stated that the "schedule seems to unnecessarily disrupt" the child, she did not make any specific findings regarding the effects on her. For example, she did not find that the child was in fact tired on school days or carsick during the commute. Nor did she consider any negative effects on the child that could result from a reduction in time spent with her father.
Given the conflicting accounts of the parties and the lack of an evaluation by the parenting specialist, not even a temporary modification to the schedule should have been made without a more thorough review and input from third parties such as Dr. Fridman and the child's teachers. See Fusco, supra, 186 N.J. Super. at 329; see also Peregoy v. Peregoy, 358 N.J. Super. 179, 203 (App. Div. 2003) (noting that "a temporary decision to change custody can take on a life of its own, creating a new status quo"). Accordingly, we reverse the modification of the parenting time schedule and remand for a determination of whether Amy established a change of circumstances and, if so, for a plenary hearing on this issue. If a different outcome results, Duane is to be awarded make-up parenting time.
We turn to the issue of the 2008 income tax returns. "Where a dispute arises as to the application of a property settlement agreement, the court may apply basic principles of fairness and equity to resolve ambiguities." Guglielmo v. Guglielmo, 253 N.J. Super. 531, 541 (App. Div. 1992). Moreover, "[t]he law grants particular leniency to agreements made in the domestic arena, and likewise allows judges greater discretion when interpreting such agreements." Id. at 542 (citing N.J.S.A. 2A:34-23). This is because, "although marital agreements are contractual in nature, 'contract principles have little place in the law of domestic relations.'" Ibid. (quoting Lepis v. Lepis, 83 N.J. 139, 148 (1980)).
Generally, "courts should enforce contracts as the parties intended." Pacifico v. Pacifico, 190 N.J. 258, 266 (2007). Likewise, "it is a basic rule of contractual interpretation that a court must discern and implement the common intention of the parties." Ibid. A court should "consider what is written in the context of the circumstances at the time of drafting and . . . apply a rational meaning in keeping with the expressed general purpose." Ibid. (internal quotation marks omitted). However, when "interpreting the agreement, the court will not draft a new agreement for the parties." Massar v. Massar, 279 N.J. Super. 89, 93 (App. Div. 1995).
Duane contends that he and Amy never agreed to share their tax liabilities equally. In cases where parties to a contract "have not agreed with respect to a term which is essential to a determination of their rights and duties, a term which is reasonable in the circumstances is supplied by the court." Restatement (Second) of Contracts § 204 (1981) (emphasis added). As that section and its commentary reveal, it is intended to be applied in cases in which the parties failed to agree regarding an issue, generally because they did not anticipate that it would arise or merely overlooked it. Id. § 204 cmts. (1981). [Pacifico, supra, 190 N.J. at 266.]
"[A]ll property, regardless of its source, in which a spouse acquires an interest during the marriage shall be eligible for distribution in the event of divorce." Painter v. Painter, 65 N.J. 196, 217 (1974). However, "for purposes of determining what property will be eligible for distribution the period of acquisition should be deemed to terminate the day the complaint is filed." Id. at 218 (construing N.J.S.A. 2A:34-23). A marital debt is "directly traceable to the acquisition of marital property" while a non-marital debt is not. Clark v. Clark, 324 N.J. Super. 587, 596 (Ch. Div. 1999); see also Monte v. Monte, 212 N.J. Super. 557, 567 (App. Div. 1986) (stating same). Further, "[w]here a debt is challenged as non-marital, the owing party bears the burden to show that the debt is traceable to a marital asset." Clark, supra, 324 N.J. Super. at 597.
In this case, the divorce complaint was filed on March 24, 2008. Any income individually received by the parties subsequent to this date was non-marital property. See Painter, supra, 65 N.J. at 217; Clark, supra, 324 N.J. Super. at 596. The portion of income tax liability for income earned prior to this date would be traceable to a marital asset while the tax liability corresponding to income earned subsequently would not be. See Monte, supra, 212 N.J. Super. at 567.
Clearly, the judge erred in characterizing all of the parties' 2008 income tax liability as a marital debt and ordering the parties to share this liability equally when the MSA was silent on this point. Furthermore, determining "the most advantageous filing," as required by the MSA, does not mandate an equal division of the marital portion of the 2008 tax liability. Moreover, the fact that the parties agreed to share mortgage debt and other related living expenses does not change this result as those items involved debt arising from marital assets, not non-marital income.
Because the parties had not reached an agreement as to joint returns and the division of tax liabilities arising from income earned prior to March 24, 2008, the judge was required to consider all of the circumstances of the parties, including the propriety of filing joint returns and the under- or over-withholding of income taxes, and then to equitably distribute the tax consequences after applying all of the factors governing equitable distribution. See N.J.S.A. 2A:34-23.1; Bursztyn v. Bursztyn, 379 N.J. Super. 385, 398 (App. Div. 2005) (cautioning that courts "should avoid compelling parties to execute joint tax returns because of the potential liability to which the parties would be exposed"). We are, therefore constrained to reverse and remand the requirement for joint tax returns and allocation of any income tax liability for further proceedings consistent with this opinion.
Reversed and remanded for further proceedings consistent with this opinion.
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