On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Union County, Docket No. FM-20-1718-94.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Axelrad, R. B. Coleman and Lihotz.
These appeals, consolidated by our order dated October 23, 2009, each challenge different provisions of a June 27, 2008 post-judgment matrimonial order, granting plaintiff's and denying defendant's requests to modify provisions of the parties' Final Judgment of Divorce (FJOD). The June 27, 2008 post-judgment order terminated the child support obligation payable by plaintiff Tracy Emolo n/k/a Tracy DeGroot; denied the request of defendant John C. Emolo to terminate spousal support and instead extended defendant's obligation to pay plaintiff rehabilitative alimony at the rate of $3000 per month for five years; and awarded plaintiff $150,000 in counsel fees, payable by defendant at a rate of $1000 per month.
Defendant was first to appeal the June 27, 2008 order. He later amended his notice of appeal to include the subsequent order denying reconsideration and twelve prior orders. The thirteen points raised by defendant on appeal can be distilled to claims of error in denying his motion to terminate alimony. He attacks the court's factfinding and argues the court mischaracterizing the alimony award set forth in the parties' Property Settlement Agreement (the PSA) as "rehabilitative rather than limited term alimony" which allowed it to be modified. Also he argues the court erroneously placed the burden of proof on him to show plaintiff cohabited in violation of the PSA's terms. Additionally, defendant attacks discretionary rulings made by the trial court in precluding evidence and in awarding counsel fees.
Plaintiff, by her guardian, filed a separate appeal contesting the June 27, 2008 ruling, the denial of her motion for reconsideration and a prior order. In her appeal, plaintiff raises three issues, contending the trial judge erred in fixing the amount of the modified alimony award, failing to establish the marital standard of living and awarding her permanent alimony and in denying her request to set aside the initial alimony determination, which she asserts were a product of fraud. We affirm the determinations of the trial judge in all respects.
We recite only those facts necessary to provide the background of the issues raised by the parties on appeal. The FJOD, incorporating the parties' negotiated PSA, was entered on January 17, 1996.
In the matrimonial proceedings, the parties negotiated the terms of settlement of all issues other than the request for divorce. Defendant agreed to continue to pay unallocated weekly alimony and child support of $800, in accordance with the pendente lite order, until the former marital home was sold, at which time he would pay a fixed annual amount of child support, and "rehabilitative alimony" in declining stepped amounts over an eight-and-one-half-year period. Also, defendant agreed to "pay for any educational expenses which may be incurred for [plaintiff]'s education, and rehabilitation, to enable her to re-enter the work force" and consented he would not "seek or obtain a reduction in alimony if [plaintiff] earn[ed] an income."
On the date set for trial, plaintiff reconsidered and declined to execute the proposed PSA, principally objecting to the provision requiring the immediate sale of the former marital home. The matter was adjourned and the parties continued negotiating. Plaintiff was counseled against waiving permanent alimony and her right to establish the value of defendant's law firm. On January 12, 1996, the parties executed the PSA, which they incorporated into the FJOD.
Although we recognize all of the PSA's terms were integrated, we detail the support provisions which are at issue on appeal. Following divorce, defendant agreed to pay the first and second mortgages and property taxes on the former marital home, totaling $800 per week, consisting of $500 per week as child support and $300 per week as alimony. After eighteen months, plaintiff was to advise whether she sought to remain in the home or list the asset for sale. In any event, plaintiff would assume responsibility to pay the first mortgage and defendant would continue to pay the second mortgage and property taxes; child support of $10,000 per year plus private school tuition and all undergraduate and post-graduate college costs for the three children; and alimony in declining amounts over an eight-and-one-half-year period, beginning July 1, 1997 in the amount of $50,000 per year and declining to $25,000 per year, with termination on December 31, 2005. In addition, defendant agreed to advance $5000 toward plaintiff's "education and rehabilitation expenses to enable her to re-enter the work force," of which she would reimburse $2500 when the home was sold. Finally, defendant was obligated to pay the parties' marital debt, as well as all tax liabilities.
In addition to the death of either party or plaintiff's remarriage, which would result in the termination of alimony, the PSA stated "should [plaintiff] cohabit with an unrelated male, the alimony issue may be subject to modification . . . ." The PSA included a clause entitled "anti-modification," which left open the fact that "under certain circumstances," the "support provisions of this agreement may be subject to modification."
A tumultuous period of litigation commenced in 1998, when plaintiff moved to sell the marital home and to transfer residential custody of the children to defendant. Plaintiff expressed "financial difficulties" emanating from the restrictive provisions the PSA "rendered it impossible for [her] to maintain the marital standard of living, not only for [herself], but more importantly, for [her] children." Over the next several years, the parties sought court intervention regarding liens and judgments encumbering the property, plaintiff's obligation to pay child support, and the quantum of her interest in the proceeds of sale once the home was sold. Also, plaintiff filed a voluntary petition under Chapter 7 seeking to discharge her debts in bankruptcy.
The matter under review was filed on September 24, 2004. Plaintiff moved to modify the FJOD provisions. She sought to terminate her obligation to pay child support and receive an award of permanent alimony because she was unable to work as a result of a chronic, severe gastrointestinal disorder. Plaintiff also desired to vacate certain equitable distribution provisions, alleging she accepted them because of fraud and coercion. Defendant opposed the application and sought specific enforcement of the PSA's provision to terminate alimony on December 31, 2005. Following oral argument, Judge McDaniel ordered a plenary hearing, giving plaintiff the opportunity to prove she suffered circumstances warranting modification. At the conclusion of that hearing, the court found a prima facie showing of changed circumstances and scheduled an evidentiary hearing on whether a significant change in circumstances supported "modification of the previously agreed upon spousal support."
The hearing began on June 10, 2005, and extended over thirty-one days, concluding on April 17, 2007. The parties filed additional motions during this same period, which we need not detail.
In the course of the proceeding, the parties testified regarding their respective employment and earnings. At the time of divorce, defendant was employed as a licensed New Jersey attorney. He was a partner in a two-person law firm and worked part-time as assistant corporation counsel for the City of Paterson. The PSA recited his annual income was $260,000.
Plaintiff, a high-school graduate, had sporadically worked as a secretary during the first years of the parties' marriage. In 1982, shortly before the birth of their first child, plaintiff discontinued her outside employment until 1999, when she obtained a full-time position as a purchasing administrator with Dassault Falcon Jet, earning $30,000 per year. This employment ended in September 2000, and she has not worked since.
During the plenary hearing, defendant attacked plaintiff's need for alimony, presenting evidence that from September 2000 to November 2003, despite her unemployment, plaintiff's checking account reflected deposits that exceeded alimony by $160,000. He also presented proofs supporting his assertion that plaintiff was cohabiting with Richard Cacioppo.
Plaintiff explained the bank deposits as monetary gifts from Dr. Irving Paltrowitz and loans from Cacioppo. Plaintiff and Paltrowitz began dating in July 1999 and established a "romantic relationship." According to plaintiff, during their two-and-one-half-year relationship, Paltrowitz gave her money and numerous gifts. He even provided her with food because "she did not have money for food." She maintained that at no time did they live together.
Also, during this time plaintiff's health changed. Since May 1992 she had been regularly seeing psychiatrist, Dr. Amy Green, who was treating her for "suicide ideations," constant crying, depression, severe anxiety, and the difficulties associated with a "problematic marriage." In 2000, she began treatment for a "chronic, severe gastrointestinal disorder" with a physician in Paltrowitz's medical practice. On March 22, 2001, plaintiff exhibited a "very immediate suicidal ideation and intent," during an office visit with Dr. Green, who enlisted Paltrowitz's aid to convince plaintiff to voluntarily seek treatment at Mountainside Hospital's psychiatric unit. During the three-day hospital stay, plaintiff was diagnosed as suffering "major depression with suicidal ideation." Plaintiff additionally admitted she abused alcohol and engaged in the recreational use of cocaine.
Plaintiff's relationship with Cacioppo was also at issue. Defendant had hired a private investigator, who observed Cacioppo's vehicle parked overnight in the lot at plaintiff's apartment for a thirteen-day period in early 2006. He argued this was proof of her cohabitation and sought termination of any alimony obligation.
Plaintiff testified she became friends with Cacioppo shortly after they met in 2000. She readily admitted their relationship was "multifaceted," he helped her as a "caretaker" and guided her in legal matters, but they never enjoyed a "romantic relationship." Plaintiff acknowledged Cacioppo stayed in her apartment about one hundred nights per year and agreed that between 2001 and 2007, he had been there a minimum of seven hundred nights, last staying with her in March 2007. Both plaintiff and Cacioppo testified their relationship was platonic and he slept on the living room couch. Cacioppo explained his relationship with plaintiff changed over time from "casual friend, to close family friend, to . . . nursemaid[,]" which included taking plaintiff to numerous doctors, obtaining her medications, listening to her complaints and providing her with money and shopping services for daily survival.
Cacioppo loaned plaintiff money at the rate of $2500 per month, which was reduced to $2000 in August 2003, when plaintiff's car loan ended. Plaintiff testified she owed Cacioppo a total of $188,500 for monies loaned from June 1, 2000 through June 2006, and had executed a promissory note memorializing the debt. Cacioppo asserted the "original [note] was destroyed . . . in a farm roof collapse" but a substituted document was executed on June 1, 2003. He explained one reason for the June 1, 2003 document was plaintiff "was threatening suicide," and he desired written confirmation of the debt. An addendum to the note was executed on June 1, 2006.
In support of her assertion that she was unable to obtain employment because of her "chronic, severe gastrointestinal disorder" and her affliction with a "suicidal mental condition," plaintiff presented Dr. Green's expert testimony. Dr. Green related her diagnosis based on her past treatment, stating plaintiff suffered from "[d]ysthymic disorder, major depression, generalized anxiety disorder, and chronic posttraumatic stress disorder" resulting from her March 2001 stay at Mountainside Hospital. Dr. Green testified plaintiff was "very hopeful" following the divorce, but the prospect of plaintiff's post-divorce employment made her more depressed and anxious, shortened her attention span, made her hands shake, and left her preoccupied with her own problems and caused her to be inattentive to job-related tasks. All of this had a very negative effect on plaintiff's mental condition, leaving her "all gummed up" so that she "couldn't think" and was unable to function, pursue job training or maintain a job.
Dr. Green's last office visit with plaintiff was July 10, 2003. Thereafter, she conducted two "telephone session[s]" and a twenty to twenty-five minute conversation with plaintiff in the courthouse hallway in the midst of trial.
Defendant had obtained Dr. Green's session notes recorded during treatment. He compared the notes with submitted invoices for reimbursement from plaintiff's health insurance carrier. Defendant believed Dr. Green had billed and received payment from the insurance company for psychiatric treatment she had not actually provided to plaintiff. Rather than using this evidence in cross-examination of Dr. Green, defendant unilaterally sent the expert a letter on July 2, 2005, reciting he uncovered Dr. Green had been "paid for approximately 25 instances of reported treatment that did not take place." Defendant recited the insurance fraud statute, asserting he intended to alert the trial judge, noting "it is likely that the [c]court will order that a member of the Union County Prosecutor's Office be present during your cross-examination" to make a determination concerning "possible fraud." Defendant concluded with the suggestion Dr. Green obtain independent legal counsel.
On cross-examination, Dr. Green was asked when her relationship with plaintiff began, to which she replied: "Upon the advice of my counsel, and threats of the other counsel, I respectfully refuse to answer and I wish to assert my Fifth Amendment [p]rivilege against self-incrimination." The court advised Dr. Green the privilege did not apply to the inquiry. Before any further response by the witness, defendant's counsel insisted the witness invoked the right against self-incrimination, pursuant to N.J.S.A. 2A:84A-19 and since "she's going to do that on every question, I'm done." After further colloquy, defense counsel repeated the innocuous inquiry and Dr. Green repeated her prior response. Consequently, the trial judge excused Dr. Green and struck her testimony.
Plaintiff moved for the appointment of an independent psychiatrist to conduct a new evaluation at defendant's expense. The court granted plaintiff's request to replace the expert. In his letter opinion, the judge characterized husband's letter to Dr. Green as "disturbing," "improvident," and a plain "effort to intimidate the witness and either affect her testimony or to get her to decline testifying." The judge was critical of defendant's representation to Dr. Green that the court would have a prosecutor in the courtroom during her cross-examination and concluded "[i]t would be inequitable to punish  plaintiff by drastically affecting her ability to present her case [after] the elimination of a key and necessary witness." Defendant responded by requesting reconsideration of the order granting plaintiff time to hire another expert and moved for the judge's recusal. The motion was denied, but the court decided it would appoint the expert, naming Peter Michael Crain, M.D., as a psychiatric expert to address plaintiff's condition. The judge ordered Dr. Crain's fees to be paid by defendant.
Dr. Crain examined plaintiff and issued a comprehensive report, dated November 20, 2005, in which he concluded she had "mental disorders, diagnosed above, which render[ed] her unemployable." Dr. Crain's report stated, during their interview plaintiff's memory was "at times vague" and, at times, it was necessary to "jog her memory by reading sections from Dr. Green's office notes." Relying on background information obtained from plaintiff, Dr. Crain commented plaintiff "had not become involved with Richard Cacioppo until sometime in 2003, so that the suggestion that Richard had given her approximately $200,000 since 2000 was entirely wrong. In fact since July 2005, he was paying for her rent, now five months, approximately $9,760."
On December 7, 2005, the trial judge amended his appointment order, stating Dr. Crain "shall no longer serve as the Court Appointed Expert Witness." A subsequent order, accompanied by a letter opinion, recalled Dr. Green to continue her testimony. The order also limited "[d]irect and [c]ross[-]
[e]xamination of Dr. Green[, which] shall NOT include questions relating to Dr. Green's billing practices, or specific instances of Dr. Green's conduct, pursuant to N.J.R.[E]. 608[.]" Dr. Green resumed her testimony, which remained consistent with her prior diagnosis and conclusion.
Defendant called plaintiff as a witness to confront her with the information in Crain's report regarding the date she met Cacioppo and the funds he provided. Plaintiff testified Dr. Crain was a liar for writing that information in his report.
Presumably, at defendant's request, because the document was on defense counsel's letterhead, Dr. Crain filed a certification reaffirming the information he reported and, after reading the transcripts, stated plaintiff and Cacioppo had "lied under oath while testifying in order to mislead this [c]court in order to obtain money from [defendant] and that [plaintiff] has accused [him] of lying to this [c]court in order to hide the truth of what she said to [him] during the examination." Dr. Crain mentioned he was provided with additional documentation which he found contradicted plaintiff's statements made during his evaluation. Consequently, he retracted his prior diagnosis and opinion because he could not rely upon the "truthfulness" of the information provided to him.
A supplemental certification by Dr. Crain, prepared on plaintiff's counsel's letterhead, "disavow[ed]" any possible impression that the conclusory statements in his prior certification that suggested plaintiff and Cacioppo "misled the court" in an effort to extract money from defendant. Dr. Crain clarified his prior statements, restating his initial diagnosis and conclusion.
In a further effort to clarify his position, Dr. Crain sent a letter to defendant's counsel on March 27, 2007, stating plaintiff's assertions that she did not abuse alcohol or drugs were contradicted by the records from Mountainside Hospital; therefore, he could not "determine within a reasonable degree of psychiatric certainty that [plaintiff] can be considered disabled due to a psychiatric disorder."
Defendant presented Dr. Crain's testimony during his case. Dr. Crain maintained he was unable to opine on whether plaintiff was presently disabled because the information she provided during his evaluation was unreliable.
The hearing ended on April 17, 2007. On July 11, 2008, the Chancery Division Probate Part determined plaintiff was "an incapacitated person" and entered a judgment of guardianship and awarded letters of guardianship appointing Richard K. Cacioppo as the Guardian of plaintiff's person and property. On August 9, 2008, Cacioppo substituted himself as plaintiff's representative.
On September 5, 2008, the trial court mailed its order, dated June 27, 2008, accompanied by its seventeen-page written opinion, dated April 10, 2008. The parties' respective motions for reconsideration were heard on October 24, 2008, and were denied following oral argument by an order dated February 20, 2009. Additional motions addressing various issues not germane to this appeal were decided by the court and these appeals ensued.
Several of defendant's assertions challenge the court's findings underpinning the conclusion to modify the alimony provisions in the PSA. Others challenge discretionary determinations made during the proceedings. We review the general principles that guide our review of these issues.
Our review of a trial judge's findings is a limited one. Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963). We will not "'engage in an independent assessment of the evidence as if [we] were the court of first instance,'" N.J. Div. of Youth & Family Servs. v. Z.P.R., 351 N.J. Super. 427, 433 (App. Div. 2002) (quoting State v. Locurto, 157 N.J. 463, 471 (1999)), and will reverse only if we are convinced the trial judge's factual findings and legal conclusions "are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Fagliarone, supra, 78 N.J. Super. at 155. We must defer to the trial judge's findings of fact if supported by clear and convincing evidence in the record. N.J. Div. of Youth & Family Servs. v. P.P., 180 N.J. 494, 511 (2004); In re Guardianship of J.T., 269 N.J. Super. 172, 188 (App. Div. 1993).
Given the special jurisdiction and expertise of a family court judge, we accord deference to that judge's fact finding and conclusions which flow logically from those findings of fact. Cesare v. Cesare, 154 N.J. 394, 413 (1998); N.J. Div. of Youth & Family Servs. v. M.M., 382 N.J. Super. 264, 271-72 (App. Div.) (citing Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974)), rev'd o.g., 180 N.J. 261 (2007). We also afford deferential respect to a family judge's credibility determinations. N.J. Div. of Youth & Family Servs. v. H.B., 375 N.J. Super. 148, 172 (App. Div. 2005) (citing Rova Farms, supra, 65 N.J. at 483-84); Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
Moreover, we do not second-guess the exercise of sound discretion by a trial judge because we recognize "[j]udicial discretion connotes conscientious judgment, not arbitrary action; it takes into account the law and the particular circumstances of the case before the court." Higgins v. Polk, 14 N.J. 490, 493 (1954); see also DeVito v. Sheeran, 165 N.J. 167, 198 (2000) (appellate review requires substantial deference to a trial court's evidentiary rulings). However, a "trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, supra, 140 N.J. at 378.
The central legal issue impacting many of defendant's arguments is his challenge to the court's conclusion that the support provisions of the parties' PSA must be modified. On this issue, the court has the equitable authority to modify support obligations. Lepis v. Lepis, 83 N.J. 139, 149 (1980). However, "[a]n application to modify an agreement is an exception, not the rule[,]" as judges should contemplate that agreements entered into in good faith "shall be performed in accordance with their terms." Glass v. Glass, 366 N.J. Super. 357, 379 (App. Div.), certif. denied, 180 N.J. 354 (2004); see Avery v. Avery, 209 N.J. Super. 155, 160 (App. Div. 1986) ("there is a strong public policy favoring stability of consensual arrangements for support in matrimonial matters") (citing Lepis, supra, 83 N.J. at 141).
"The agreement between the parties -- the contract upon dissolution -- is entitled to significant consideration[,]" because agreements, by their very nature, carry with them a certain stability to be respected at the time of enforcement or in the event modification is at issue. Glass, supra, 366 N.J. Super. at 372; see Konzelman v. Konzelman, 158 N.J. 185, 193 (1999) (stating that voluntary agreements "enabl[e] parties to order their personal lives consistently with their post-marital responsibilities" and, therefore, are given "prominence and weight"); Conforti v. Guliadis, 128 N.J. 318, 323 (1992) (recognizing that "[m]arital property settlement agreements 'involve far more than economic factors' and must serve the strong public and statutory purpose of ensuring fairness and equity in the dissolution of marriages"); Petersen v. Petersen, 85 N.J. 638, 645 (1981) (reiterating the desirability of "[v]oluntary accommodations regarding matrimonial differences"); Ozolins v. Ozolins, 308 N.J. Super. 243, 249 (App. Div. 1998) (reversing the termination of alimony and finding that the judge erred when, among other things, "the judge did not factor in the principle that the amount of alimony here was set originally by the parties themselves," as such agreements ordinarily include trade-offs between the parties). Only where circumstances arise where enforcement of the agreement becomes inequitable should an exception be made to the strict enforcement of the agreement's terms. Glass, supra, 366 N.J. Super. at 379.
"Changed circumstances" resulting from a decrease in the supported spouse's income may warrant a modification of the alimony provisions initially agreed upon at the time of divorce, Lepis, supra, 83 N.J. at 151, "based upon equitable principles." Avery, supra, 209 N.J. Super. at 160.
The party seeking modification has the burden of showing such changed circumstances to warrant relief from the current support obligations. Lepis, supra, 83 N.J. at 157. "When the movant is seeking modification of an alimony award, that party must demonstrate that changed circumstances have substantially impaired the ability to support himself or herself." Ibid.
The determination of whether a support obligation should be modified based upon a claim of changed circumstances rests within the sound discretion of the Family Part judge. Larbig v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006) (citing Innes v. Innes, 117 N.J. 496, 504 (1990)); Steneken v. Steneken, 367 N.J. Super. 427, 434 (App. Div. 2004), aff'd as modified, 183 N.J. 290 (2005)). Considerations to be reviewed include "whether the change in circumstance is continuing and whether the agreement or decree has made explicit provision for the change." Lepis, supra, 83 N.J. at 152. Accordingly, each and every motion to modify support obligations "rests upon its own particular footing and the appellate court must give due recognition to the wide discretion which our law rightly affords to the trial judges who deal with these matters." Martindell v. Martindell, 21 N.J. 341, 355 (1956); see also Rolnick v. Rolnick, 262 N.J. Super. 343, 359 (App. Div. 1993).
Finally, we have upheld parties' agreements denying modification of spousal support, even when their respective financial circumstances change. Morris v. Morris, 263 N.J. Super. 237, 241-46 (App. Div. 1993). In Morris, the specific change alleged was the husband's decrease in income. Id. at 240. The trial court found this event was specifically contemplated by the agreement's provision, which allowed modification only upon husband's disability. Ibid. We upheld the trial court's denial of the husband's motion for reduction in alimony, with the proviso that despite the parties' anti-modification provision, modification of the support provisions of a spousal agreement rested within the court's discretion, where "the failure to modify would be unreasonable or unjust." Id. at 243-44.
Defendant contends the trial court's factual findings were not supported by the evidence of record, making the court's legal conclusions flawed. He broadly argues the trial judge's factual findings solely relied on testimonial evidence and incorrectly ignored the documentary proofs. This argument subsumes others that challenge the sufficiency of the proofs supporting the court's findings of changed circumstances sufficient to override the anti-modification provision of the PSA and that no findings were made regarding the source of funds used by plaintiff for her support. Defendant also argues the court's failure to find fraud was error. We address these contentions.
Defendant takes exception to the trial court's reliance on testimonial evidence without specific reference to his consideration of any documentary ...