August 19, 2011
TRACEY EMOLO (N/K/A TRACEY DEGROOT), PLAINTIFF-RESPONDENT,
JOHN C. EMOLO, DEFENDANT-APPELLANT.
TRACEY EMOLO (N/K/A TRACEY DEGROOT), PLAINTIFF-APPELLANT,
JOHN C. EMOLO, DEFENDANT-RESPONDENT.
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 23, 2011
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 evidence (Point Eight). We are not persuaded.
Defendant's challenge strikes at the trial judge's credibility findings. Throughout his opinion, the trial judge discusses the conflicts he noted in the testimony of the parties. Specifically as to plaintiff's credibility, the court found her testimony credible and compelling, describing years of therapy in an attempt "to stabilize herself." He continued:
A great deal of the defense arguments in support of a finding that the plaintiff and her witnesses are not credible are overblown and melodramatic accusations without much substance. There are numerous examples of embellishments and mischaracterizations designed to paint a picture of [p]laintiff, her psychiatrist, her friend, and her lawyer as criminals. Examples of which are defense arguments  that: placed words in the mouths of witnesses; made accusations of perjury against  [p]laintiff; attempted to accuse  Cacioppo of criminal acts in California; made accusations against Dr. Green of [i]nsurance [f]raud[;] and made accusations against [p]laintiff's counsel that he intentionally hid and helped to manufacture evidence. Ultimately, with respect to the issue of credibility in this matter, I do find the [p]laintiff to be credible. While the [d]efendant claims that "the [p]laintiff filed this matter in bad faith with 'unclean hands' and has continued said bad faith through the course of these proceedings," I find that it is the [d]efendant who has engaged in a pattern of conduct against the [p]laintiff which can be characterized as being in bad faith.
A determination of a witness's credibility is a matter for the fact-finder, not the appellate court. Cesare, supra, 154 N.J. at 412. Because a trial court "'hears the case, sees and observes the witnesses, [and] hears them testify,' it has a better perspective than a reviewing court in evaluating the veracity of witnesses." Pascale v. Pascale, 113 N.J. 20, 33 (1988) (quoting Gallo v. Gallo, 66 N.J. Super. 1, 5 (App. Div. 1961)).
Plaintiff was cross-examined for twelve of the thirty-one days of this hearing. The facts surrounding her relationship with Cacioppo, the money he and Dr. Paltrowitz provided her, and the difficulties presented by her afflictions were largely based on testimony, supplemented by some documentation of her psychiatric and gastrointestinal treatments, psychiatric hospital admissions, and medications. Although the trial judge did not specifically address the various documents offered by defendant, his comments explicitly reflect he considered the evidence, but determined it was not persuasive.
More important, defendant points to no specific fact found by the judge that was clearly contradicted by a written document in evidence; he merely suggests the trial judge failed to adequately explain his decisions or refer to the 120 exhibits.
Finally, we note defendant's expert testified he could not properly offer an opinion because plaintiff's reporting during the evaluation was unreliable and contradicted by other information. The expert did not conduct objective intelligence, aptitude or employability testing.
Having listened to the testimony of all witnesses, observed the parties, and reviewed the documents submitted in evidence, the trial judge made credibility assessments and factual findings, which he explained in detail, and appropriately applied the law. We defer to the trial judge's findings, which we determine are not inconsistent with, but are supported by, the evidence of record. We will not disturb the trial court's factual findings and legal conclusions grounded on these facts and assessment of the witnesses' credibility. Rova Farms, supra, 65 N.J. at 484.
Defendant cites error in the court's findings that the circumstances presented were sufficient to allow modification of support (Point Two). Defendant contends the modified alimony award must be reversed in light of the PSA's anti-modification provision. We disagree.
The anti-modification provision in the PSA states:
Husband may not seek or obtain a reduction in alimony if wife earns an income. Wife may not seek an increase in the term or amount of the alimony, as [h]usband is giving up his right to seek reduction by virtue of [w]ife's employment and in consideration of [h]usband's assuming the obligation for all college and post-graduate educational expenses and room and board of all three (3) children, and [h]usband's [a]greement to not seek immediate sale of the marital home, while paying [t]he second mortgage and all real estate taxes thereon.
Wife has agreed to term alimony so that she and the children may remain in the marital home. However, it is understood that under certain circumstances, for example, [w]ife's move to Florida, the support provisions of this [a]greement may be subject to modification.
The trial judge relied upon the reasoning expressed in Morris, supra, 263 N.J. Super. at 242-43, when determining plaintiff presented the identified "certain circumstances," allowing modification. Further, plaintiff's unstable mental health and physical condition had prevented her rehabilitation and currently precluded her employment. The judge expressly found plaintiff presented "credible and compelling" testimony concerning "her physical and mental state" along with sufficient evidence to establish that she is currently unable to work to support herself.
That evidence also would rebut any presumption that the original terms of the agreement cannot be modified as well as establish the fact that unusual circumstances exist which warrant conversion of the term for spousal support.
In part, defendant's argument focuses on Dr. Green's testimony describing plaintiff's mental state spanning the fourteen years of treatment, stating plaintiff experienced "[a]ll of the psychiatric symptoms testified to by plaintiff's expert [as they] existed before the divorce." From this he concludes plaintiff's "diagnosed condition was the same on May 5, 2006 as it was in May 1992." We are not persuaded.
While it is clear plaintiff suffered from "depression with suicidal ideations" for a considerable period of time, evidence in the record supports the trial court's finding that her conditions were not static, but changed following the divorce and that these manifestations currently precluded her employment.
Dr. Green detailed plaintiff's cascading emotions over time, describing fluctuations in the level and severity of plaintiff's depression accompanied by more pronounced suicidal ideations. Dr. Green explained how plaintiff was "very hopeful" following the 1996 divorce, but the "mood crashed" and she became deeply depressed, seriously suicidal and required hospitalization. According to Dr. Green, plaintiff "kept rallying" over the years but "[s]he kept getting knocked down again." In Dr. Green's opinion, plaintiff's mental condition deteriorated over time and she was incapable of holding any kind of job following her departure from Dassault. Plaintiff slipped further into depression necessitating her admission into Mountainside Hospital's psychiatric unit in March 2001.
Plaintiff also depicted her mental and physical health symptoms including "[s]evere anxiety coupled with panic attacks. Depression. Sleeplessness. Heart palpitations. Severe abdominal cramps" and "[e]xtreme, severe, painfully distracting diarrhea." She testified she was forced to resign from her job with Dassault in September 2000, because of physical and psychological problems. She thought she could obtain another job but the physical symptoms "progressively got worse." Although her diagnosis was the same, the severity of plaintiff's mental illness increased, necessitating hospitalization at Mountainside. Further, Cacioppo discussed how plaintiff's mental and physical condition continued to decline since he met her in 2000.
In its opinion, the court noted plaintiff, while testifying, "often exhibited signs of being confused, if not disoriented." Even Dr. Crain noted plaintiff's inaccurate report of historic facts and her tangential logic when responding to direct questions. Although defendant subscribes motives of fraud and evasion to this conduct, the court viewed these signs as further proof of plaintiff's conditions, noting "[t]he many days that the [p]laintiff endured rigorous cross-examination did little to affect her credibility regarding her physical and mental state."
Although defendant identified several inconsistencies in plaintiff's recitation of events, he offered nothing to counter her evidence of infirmity. Generally, defendant asserted plaintiff was lying; the court viewed her testimony differently. The court relied upon and accepted as credible plaintiff's statements supported by Dr. Green and Cacioppo.
Moreover, the trial judge found the PSA allowed modification of support, albeit limited to special circumstances. Determining plaintiff's evidence evinced the type of special circumstance of change intended by the PSA, the court pondered concluded enforcement of the preclusive effect of the anti-modification provision would be "unreasonable and unjust." Lepis, supra, 83 N.J. at 153; Morris, supra, 263 N.J. Super. at 243.
We will not interfere with the court's finding that the anti-modification clause's standards were unreasonable and its application was obviated by plaintiff's debilitated condition.
In a separate point heading (Point Seven), defendant suggests the trial judge failed "to determine the true source and nature of more than $163,800 deposited by plaintiff into her personal checking account . . . ." The contention is inaccurate and rejected.
During a March 3, 2006 motion hearing, the trial judge found defendant's proofs, showing plaintiff made significant deposits into her account in excess of her alimony between September 2000 and November 2003, satisfied the required prima facie showing of a change in plaintiff's financial circumstances. The court allowed defendant to pursue his proposed inquiry into the source of these monies and their purpose designed to discern the necessity of continued spousal support.
As the lengthy evidentiary hearing carried on, plaintiff provided a great deal of testimony regarding numerous gifts and loans she received from Paltrowitz, Cacioppo, and other "family." Paltrowitz's and Cacioppo's testimony confirmed plaintiff's assertions. In weighing all of the evidence, the trial judge accepted as credible the testimony that the money provided plaintiff from Cacioppo was loaned and was not a form of support. The trial judge explicitly rejected defendant's assertion that Cacioppo "committed fraud when he testified that he loaned the Plaintiff money," finding the testimonial evidence was uncontroverted and there was "nothing . . . to establish any fraud."
The court determined she was "currently unable to work to support herself." Addressing the past receipt of funds, without expressly defining the source, the court stated:
With respect to the [d]efendant's argument that the [p]laintiff has received income from other sources which the [d]efendant claims are former and current boyfriends, there is insufficient proof to establish that she consistently received money which could be deemed (1) permanent income and (2) sufficient to support her. Access to a former boyfriend's credit card or cash to specifically buy gifts such as jewelry or clothes was obviously short-lived and not intended to give the [p]laintiff a means of support. Money received from witness Richard Cacioppo (up to $2,500 monthly) over several years, which the [p]laintiff and Mr. Cacioppo testified  was a loan[,] is, again, perhaps temporary in nature and certainly could not be considered permanent income to maintain the [p]laintiff. This [c]court concludes, based upon the nature of [plaintiff]'s and Mr. Cacioppo's testimony, that both were credible.
Further, the court found the promissory note was not fraudulent.
Our review of the factual findings of the trial court, set forth in its written opinion, the memorandum of decision denying reconsideration and supplemental statement of reasons once submitted pursuant to Rule 2:5-1(b), are supported by substantial credible evidence, Rova Farms Resort, Inc., supra, 65 N.J. at 483-84, and entitled to our deference.
On October 4, 2006, defendant moved for a finding that he had proved fraud in plaintiff's disclosures to Dr. Crain. Defendant argued the fraud acted as a waiver of plaintiff's attorney-client privilege. The unopposed motion was denied, which he claims was error. We disagree.
The attorney-client privilege "is the oldest privilege known to common law." Halbach v. Boyman, 369 N.J. Super. 323, 328 (App. Div. 2004). The Legislature has codified it in N.J.S.A. 2A:84A-20 and it is reaffirmed in N.J.R.E. 504(1). The protection of attorney-client privilege is not absolute and may be set aside for specific reasons, one of which is when the "communication in the course of legal services sought or obtained in aid of the commission of a crime or fraud . . . ." N.J.R.E. 504(2)(a).
Defendant's claims of fraud related to the date plaintiff met Cacioppo and when he began loaning her money (she testified 2000 but purportedly told Dr. Crain 2003). Emphasizing the statements attributed to plaintiff by Dr. Crain, defendant concludes the promissory note executed by plaintiff in favor of Cacioppo was fabricated, a fact of which plaintiff's attorney was aware.
The court concluded these proofs were insufficient to prove "a fraud was committed" and was not "indisputable evidence" that Cacioppo, plaintiff and her attorney attempted to "intentionally deceive" the court. Dr. Crain's initial statements were drafted by defendant's counsel and modified in a subsequent certification drafted by plaintiff's counsel. Further, the court rejected as illogical the leap required to conclude plaintiff's counsel was imbedded in the scheme of deception devised by Cacioppo and plaintiff to fabricate the claimed indebtedness to defraud the court. We agree and find no error in denying the motion to pierce the attorney-client privilege.
The next group of challenges attacks the court's exercised discretion in (1) denying defendant's use of evidence to test the credibility of Dr. Green; (2) termination of plaintiff's obligation to pay child support; (3) conducting two evidential hearings on whether plaintiff could sustain her burden that modification was warranted; (4) extending the term of rehabilitative alimony; (5) awarding plaintiff counsel fees; and (6) denying defendant's motion for sanctions.
Defendant claims the trial court erred in barring him from impeaching Dr. Green on the perceived irregularities in her payment requests to plaintiff's insurance carrier (Point One). He asserts Dr. Green was "shielded" from explaining what defendant characterizes as, "extremely reliable evidence that she had committed insurance fraud . . . ." Defendant contends the court's ruling undercut his constitutional right to confront a witness and "nullified a duly adopted evidence rule, circumventing N.J.R.E. 607." We disagree.
A trial court has broad discretion to control both the mode and manner of interrogating witnesses and presenting evidence. N.J.R.E. 611. "[I]n reviewing the trial court's decision to limit cross-examination, . . . [an appellate court] will not interfere with the exercise of the trial court's discretion 'unless clear error and prejudice are shown.'" DaGraca v. Laing, 288 N.J. Super. 292, 302 (App. Div.), certif. denied, 145 N.J. 372 (1996) (quoting Glenpointe Assocs. v. Twp. of Teaneck, 241 N.J. Super. 37, 54 (App. Div.), certif. denied, 122 N.J. 391 (1990)).
In this matter, although the court initially excused Dr. Green and struck her testimony, it reconsidered the issue on its own motion, entertained oral argument and rendered a written opinion and order on January 13, 2008 to allow the testimony to proceed. The court clearly stated it would not preclude Dr. Green from invoking her privilege so long as the question posed required a response implicating self-incriminating information, otherwise she would be instructed to answer. The court further exercised its discretion by limiting cross-examination to exclude inquiry into Dr. Green's possible inaccurate billing records because it was outside the realm of her testimony. While we do not adopt the rationale employed by the court in making its ruling, we nevertheless determine the court order does not evince an abuse of discretion.
The differences appearing in the dates of Dr. Green's session notes and the invoices she submitted for insurance payment does not automatically mean she committed insurance fraud. Before any conclusions regarding fraudulent billing practices impacting Dr. Green's credibility could be drawn, defendant would be first required to prove the inaccuracies and that billing requests were made when no services were rendered.
To allow the testimony to traverse that course would sidetrack the already protracted litigation. As the judge observed, "no administrative decisions or similar evidence" relating to the witness's character or reputation for untruthfulness was offered. See Delgaudio v. Rodriguera, 280 N.J. Super. 135, 141 (App. Div. 1995) (admitting prior administrative adjudications involving the defendant's record keeping to be used in a matter when the same conduct was at issue). The court's finding that the questionable billing practices could not be pursued as a means to test Dr. Green's credibility was well within its reasoned discretion in curbing what could have been an extended examination on matters not at issue.
Moreover, defendant suffered no prejudice from the ruling. The restriction did not preclude him from attacking Dr. Green's bias or credibility, including the number of sessions where she actually provided treatment, the length of time since she last treated plaintiff, whether plaintiff was on a medication regime or following recommended treatment, and the like. Defendant questioned Dr. Green on the basis of her conclusions and instances where she recorded facts in her session notes that were inconsistent with plaintiff's trial testimony. Defendant had ample opportunity to probe the witness's opinion and challenge her conclusions. No constitutional deprivation occurred.
Defendant challenges the provision of a November 5, 2004 order which terminated child support paid by plaintiff for the children who were in defendant's custody (Point Three). On November 22, 2004, defendant sought reconsideration, which was granted following a hearing on January 14, 2005. Plaintiff was ordered to pay support, but its collection pending the result of a plenary hearing was suspended.
Following the hearing, although the court did not find plaintiff was permanently disabled, it found she was not able to work. After considering the amount of support ordered in light of the evidence of plaintiff's fixed expenses, the court terminated child support as of September 24, 2004. Defendant suggests plaintiff should have anticipated the end of her term alimony award and should not have quit her job. This position was considered and the factual underpinnings on which it stands were rejected by the court as discussed above. Accordingly, we conclude defendant's argument lacks sufficient merit to warrant discussion in our opinion. R. 2:11-3(e)(1)(E).
In a murky presentation,*fn1 defendant contests procedures employed by the trial judge for the presentation of proofs (Point Four). From the submission, we glean defendant objects to the court's decision, following the initial hearing, to conduct further evidentiary proceedings to determine whether plaintiff's inability to continue working warranted a modification of support. Defendant argues the November 5, 2004 order granting a plenary hearing was to address the issue of whether plaintiff was permanently disabled. He believes relief should have been denied once plaintiff failed to produce expert or documentary medical proof of total disability. He asserts the court abused its discretion in scheduling a full evidential hearing. After that hearing the court concluded plaintiff was not permanently disabled, but sufficiently incapable of sustained performance at a job based on her described conditions, which satisfactorily proved changed circumstances such that a five-year extension of rehabilitative alimony was necessary to allow her to "rebound and join the work force as she originally contemplated."
On appeal, defendant asserts "[a]t no time . . . did the [trial] court announce that it had 'held' on 11/5/04 that [plaintiff] had demonstrated a prima facie case of 'an inability to become gainfully employed due to physical and psychological infirmities[,]'" and suggests the trial court "improperly" decided the case on "the untried issue" of plaintiff's inability to work rather than whether she was disabled. We are not persuaded.
From her first pleading, plaintiff advanced her need for additional support because she was unable to become gainfully employed due to illness. Also, the purpose of the November 5, 2004 hearing allowed plaintiff to present her prima facie basis for modification; it was not a full evidentiary hearing. In entering its order on January 24, 2005, the court found plaintiff's testimony met this minimum threshold and scheduled a full evidentiary hearing on plaintiff's modification request. Thereafter, it found plaintiff proved a significant, partial change had occurred, not a permanent one. The record also reveals the issues for resolution prior to the commencement of the evidentiary hearing on June 10, 2005, were whether plaintiff's exacerbated medical and mental conditions precluded her ability to obtain and maintain employment and, if so, whether a sufficient change in circumstances warrants a modified alimony award.
We reject the claim of abuse in the court's exercised discretion to proceed cautiously and first seek a prima facie showing of plaintiff's proofs before conducting a full hearing. Moreover, defendant's suggestion that he was unaware of the scope of the hearing is meritless. R. 2:11-3(e)(1)(E).
Defendant next asserts the trial court abused its discretion in extending the agreed upon term of alimony (Point Five). This contention is related to the legal challenge contained in a separate point heading that the court erred in concluding the PSA awarded plaintiff rehabilitative, not term alimony (Point Six). Our review combines these issues.
Woven throughout defendant's claims of error is the court's interpretation of the alimony provisions in the PSA. The interpretation and construction of a contract are matters of law for the court subject to plenary review on appeal. Kaur v. Assured Lending Corp., 405 N.J. Super. 468, 474 (App. Div. 2009); Sealed Air Corp. v. Royal Indem. Co., 404 N.J. Super. 363, 375 (App. Div.), certif. denied, 196 N.J. 601 (2008); Spring Creek Holding Co. v. Shinnihon U.S.A. Co., 399 N.J. Super. 158, 190 (App. Div.), certif. denied, 196 N.J. 85 (2008); Fastenberg v. Prudential Ins. Co. of Am., 309 N.J. Super. 415, 420 (App. Div. 1998). When interpreting a contract, "we first examine the plain language of the [contract] and, if the terms are clear, they 'are to be given their plain, ordinary meaning.'" Pizzullo v. N.J. Mfrs. Ins. Co., 196 N.J. 251, 270 (2008) (quoting Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001)). We neither "supply terms to contracts that are plain and unambiguous, nor do we make a better contract" for the parties than the one which they themselves have created. Maglies v. Estate of Guy, 193 N.J. 108, 143 (2007). See also Pacifico v. Pacifico, 190 N.J. 258, 266 (2007). This "is premised upon the principle that 'the parties to a dispute are in the best position to determine . . . [the] least disadvantageous' resolution and fashion an arrangement that meets their particular needs." Gordon v. Rozenwald, 380 N.J. Super. 55, 70 (App. Div. 2005) (quoting Peskin v. Peskin, 271 N.J. Super. 261, 275 (App. Div.), certif. denied, 137 N.J. 165 (1994)). It is only when "the terms of the contract are susceptible to at least two reasonable alternative interpretations, an ambiguity exists. In that case, a court may look to extrinsic evidence as an aid to interpretation." Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008) (internal citation omitted).
Also, we observe the Legislature amended the alimony statute in 1999 to add limited duration alimony (LDA) to the other three types of permissible alimony awards made by a court that already included permanent, rehabilitative or reimbursement alimony. See, L. 1999, c. 199, § 1 (eff. September 13, 1999) (amending N.J.S.A. 2A:34-23(b) to add LDA). Because the PSA was executed in 1996, the parties could not have intended to describe LDA. We are aware, however, that prior to the LDA amendment, matrimonial practitioners frequently incorporated provisions in PSAs for term alimony -- ending in a certain date -- in lieu of a permanent alimony award. See Frank Louis, Recent Alimony Developments, 1987 N.J. Family Law. 184 (1991) (stating "the majority of matrimonial lawyers have, at one time or another, recommended the concept of term alimony").
"The judicial deference to such specific, voluntary arrangements for termination of support was based upon the interests served by such specific agreements -- 'stability in support arrangements' and reduction of 'unnecessary' litigation." Gordon, supra, 380 N.J. Super. at 68.
Finally, in this regard, we determined the LDA amendment may permissibly be applied retroactively. See Id. at 70 (holding retroactive application of the LDA provisions was "consistent with the most reasonable interpretation of the Legislature's intention").
The parties' initial pleadings and motion arguments suggest uncertainty in the nature of the alimony award agreed to in the PSA. Defendant's first references identified the obligation as rehabilitative alimony; however, he later altered that reference and began describing the alimony as an unalterable "term alimony" with a definite end-date. Plaintiff testified that she was not told what type of alimony she was awarded, and at different times referred to the award as rehabilitative and term alimony. The parties' statements, however, are not dispositive.
The PSA itself contains ambiguities. The alimony provision states after an eight-and-one-half-year period "alimony shall terminate" on December 31, 2005. Another clause includes one sentence that makes reference to the parties' expectation of plaintiff's future reemployment, discusses defendant's payment of plaintiff's "educational expenses" for her "rehabilitation to enable her to re-enter the work force;" and another sentence that describes the parties' "term alimony" agreement. In light of this evidence, the court correctly found the PSA was ambiguous and permitted testimony regarding negotiations leading up to its execution. Chubb Custom Ins., supra, 195 N.J. at 238.
In opposing plaintiff's motion for modification, defendant suggested plaintiff was to start working in 1997. Plaintiff mentioned she considered starting a "nursing career." She then detailed the physical problems impeding her employment. Dr. Green testified plaintiff "was enthusiastic about pursuing some kind of job training" in 1996, but was unable to do so "in any coherent continuing kind of way" because of her personal "crises" that incapacitated and made her incapable of functioning or pursuing such training.
The court rejected defendant's assertion that the PSA required alimony terminated at the end of the term whether or not plaintiff is employed. The trial judge found "[p]laintiff bargained away any right to permanent alimony and received alimony on a sliding scale based upon an agreement which anticipated her entry or re-entry into the work force and ultimate ability to be self-sufficient."
The court noted limited duration alimony is appropriate only for marriages of short duration and may not be substituted where permanent alimony should otherwise be awarded, Cox v. Cox, 335 N.J. Super. 465, 476-83 (App. Div. 2000); N.J.S.A. 2A:34-23(c), facts that are not present in this case. Finally, as discussed above, the agreement included a proviso allowing for modification of support "under certain circumstances."
Accordingly, after considering all of the evidence, the court concluded the alimony award was rehabilitative, not limited.
The factors identified by the trial court reflect that the fixed period for support subject to termination was grounded upon the parties' perception that plaintiff would become economically independent. In other words, plaintiff's attaining economic sufficiency was intertwined with the termination of defendant's financial assistance.
"The basic premise of an award of rehabilitative rather than permanent alimony is an expectation that the supported spouse will be able to obtain employment, or more lucrative employment, at some future date." Shifman v. Shifman, 211 N.J. Super. 189, 194-95 (App. Div. 1986). "Effectively, rehabilitative alimony is term alimony payable for a reasonable period of time, beyond which it is anticipated such support will no longer be needed." Wass v. Wass, 311 N.J. Super. 624 (Ch. Div. 1998) (citing Dotsko v. Dotsko, 244 N.J. Super. 668, 677, (App. Div. 1990)). "[W]e have concluded that the fulfillment of an obligation to pay rehabilitative alimony does not per se prohibit a former spouse from thereafter seeking permanent alimony," Carter v. Carter, 318 N.J. Super. 34, 50-51 (App. Div. 1999), or an extension of the rehabilitative alimony, Shifman, supra, 211 N.J. Super. at 194-95. See also Crews v. Crews, 164 N.J. 11, 34 (2000) (holding a family court's equitable powers include the discretion to fashion alimony awards). Where the support was premised upon the occurrence of a circumstance relevant to the need for support, modification is permissible if that circumstance did not occur. Id. at 34. Therefore, an unrealized expectation about earning capacity amounts to a change in circumstance that permits modification of the duration of rehabilitative alimony. Ibid.
On appeal, defendant supports his claims of error by pointing out no definitive rehabilitative plan was included in the PSA as required by N.J.S.A. 2A:34-2(d). He also maintains any extension of the alimony term was improper because plaintiff made no efforts to become employed following divorce. We easily reject these contentions.
First, the statutory amendment requiring a detailed plan of rehabilitation was not imposed for more than three years following the parties' divorce. See L. 1999, c. 199, § 1 (eff. September 13, 1999). Second, plaintiff explained her child care responsibilities after the divorce thwarted her career aspirations. Thereafter, although she secured part-time and then full-time employment in 1999 and 2000, she was afflicted by gastrointestinal and mental illnesses, which caused her to leave her position. All of these facts -- the credited testimonial evidence of Dr. Green, Cacioppo, and plaintiff describing the debilitating physical and mental conditions plaintiff suffered, which prevented her continued employment -- were considered by the trial court, which found the circumstances were not anticipated or provided for in the PSA. Morris, supra, 263 N.J. Super. at 241-46.
Following our review, we will not disturb the trial court's determinations that the PSA awarded plaintiff rehabilitative alimony and plaintiff's inability to achieve re-entry into the work force was a result of physical and mental infirmities, as they are grounded on substantial credible evidence in the record. Rova Farms Resort, Inc., supra, 65 N.J. at 483-84. Consequently, we discern no error in the trial court's conclusions that plaintiff's proofs of "unusual circumstances" warranted extension of the stated term of alimony as enforcement of the PSA's provisions would be unfair and inequitable. Lepis, supra, 83 N.J. at 148-49.
In challenging the award of counsel fees and costs, based on counsel's affidavit of services rendered, defendant argues he had an expectation that no award would issue absent "further appropriate proceedings" including discovery and a plenary hearing on the amount sought. Defendant specifically challenges the legitimacy of the counsel fees sought, suggests plaintiff's fraud required him "to litigate more extensively," and supports his prosecution and defense of this litigation was motivated by good faith.
The award of counsel fees in a matrimonial matter rests in the discretion of the trial court. Chestone v. Chestone, 322 N.J. Super. 250, 258 (App. Div. 1999). Any fee award in a Family Part matter is governed by Rule 5:3-5(c), Gotlib v. Gotlib, 399 N.J. Super. 295, 314 (App. Div. 2008), which provides in pertinent part:
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; (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.
"We will disturb a trial court's determination on counsel fees only on the 'rarest occasion,' and then only because of clear abuse of discretion." Strahan v. Strahan, 402 N.J. Super. 298, 317 (App. Div. 2008) (citing Rendine v. Pantzer, 141 N.J. 292, 317 (1995)).
In awarding plaintiff's counsel the sum of $150,000 of the $304,234.61 fee requested for services rendered from October 12, 2000 through April 30, 2007, the trial judge articulated findings applying the factors set forth in the Rule. The court found a fee award was appropriate because plaintiff had little or no ability to pay the entire amount of her counsel fees; her application for modification of support relief was made in good faith; she prevailed on her request for modification of support; and in presenting her claims she had "incurred considerable legal fees," while defendant had not because he was represented by his law partner.
In fixing the amount of fees, the trial judge also assessed the reasonableness and good faith of both parties, along with the results obtained. Mani v. Mani, 183 N.J. 70, 94-95 (2005); Williams v. Williams, 59 N.J. 229, 233 (1971). Sprinkled throughout its opinion are the trial court's findings on these issues:
Defendant should pay approximately half of the [p]laintiff's legal fees. The [d]efendant has, throughout the course of this litigation, sought to delay the proceeding. Filing approximately nine motions and [o]rders to [s]how [c]ause, including multiple motions for the [c]court to recuse itself. He has appealed the [c]court's denials at least twice and both appeals were denied.
I find that it is the [d]efendant who has engaged in a pattern of conduct against the [p]laintiff which can be characterized as being in bad faith. Such tactics include defense counsel's letter to the [p]laintiff's witness, Dr. Green, following completion of her direct examination, but before cross-examination began. That letter resulted in a significant disruption to the hearing process and contained inappropriate representations in an effort to, no doubt, influence Dr. Green to withdraw from further testimony. Numerous motions were filed as well as a federal complaint in order to have this [c]court recuse itself from the matter. The [d]efendant's claims were void of any substance.
He submitted a letter to the [p]laintiff's psychiatrist after direct examination was completed and before cross-examination began making false representations of what the [c]court would do upon her return to court for cross-examination. Said letter resulted in considerable delay of the proceedings. The plenary hearing required approximately 23 days of testimony which included more that 12 days of [d]efendant's oftentimes repetitive cross-examination of the [p]laintiff. . . . .
On or about February 26, 2008, the [d]efendant once again sought to suspend the proceedings by filing a complaint in Federal District Court.
As previously mentioned, this [c]court received three letters from the [d]efendant himself and his attorney asking (1) that the [c]court "voluntarily enter an [o]rder for a stay," in light of their "application for a preliminary injunction in the District Court," (2) criticizing the [c]court for what he perceived to be an "attempt to obstruct the Federal judicial proceedings" and (3) admonishing the [c]court for its failure to recuse itself and for suppressing his rights. All of which resulted in considerable delay and additional expense for the [p]laintiff. These factors support a finding in favor of the [p]laintiff for the award of partial counsel fees.
We have considered each of the defendant's contentions attacking the fee award and find them wanting. The court made a finding regarding plaintiff's good faith; defendant's badges of bad faith (including submitting unreasonable filings, unrelenting claims of plaintiff's fraud rejection as unsustainable, and making presumptive comments in his letter to Dr. Green); and the total legal services rendered for which compensation was sought. These determinations are consistent with and supported by competent evidence in the record and demonstrate the court heard and addressed the relevant facts and claims made. Further, in the exercise of its discretion, the trial judge properly applied controlling legal principles. Accordingly, the court's ruling will not be overturned.
Guided by the standards governing the exercise of discretion, we review defendant's argument that the court erred in denying his motions for sanctions for a perceived discovery violation (Point Eleven) and recusal (Point Thirteen). We are not persuaded.
In examining Dr. Green's session notes, defendant saw a notation that "Irv" was providing plaintiff financial assistance. Defendant wrote to plaintiff's attorney accusing plaintiff of intentionally failing to disclose the identity of "an individual who provided . . . a substantial amount of financial support for the period of time that [plaintiff] had certified and testified to that her only income was from alimony." The brief response minimized the nature and extent of gifts provided and declined to reveal Irv's identity, stating the relationship ended in 2002. Counsel knew the reference was to Dr. Paltrowitz but asserted his identity was irrelevant and immaterial. Approximately one year later, defendant's motion for sanctions because of counsel's "concealment" of Dr. Paltrowitz's identity was filed.
A party may recover reasonable expenses incurred, including attorney's fees, from an adversary's violations of discovery obligations if resultant harm is shown. Baxt v. Liloia, 155 N.J. 190, 210-11 (1998). Any award is in the discretion of the trial court. Ibid.
Here, the court denied the motion based on defendant's failure to timely seek court intervention. Defendant offers no factual or legal basis to overturn that determination.
We also find no mistaken application of discretion or misapplication of law in the disposition of defendant's motion seeking the trial judge's recusal. Jadlowski v. Owens-Corning Fiberglas Corp., 283 N.J. Super. 199, 221 (App. Div. 1995), certif. denied, 143 N.J. 326 (1996). The record reveals defendant's motivation was driven by disagreement with the court's rulings, not because of a conflict or demonstrated bias. See R. 1:12-1(f) (stating a trial court has an obligation to recuse itself on its own motion or on a party's motion "when there is any . . . reason which might preclude a fair and unbiased hearing and judgment, or which might reasonably lead counsel or the parties to believe so").
Defendant first raised the request for recusal by adding it to his September 11, 2006 application seeking reconsideration and other relief. He asked for recusal if relief was denied. The court granting the motion in part, noting the cohabitation issue and the propriety of support modification were added to the issues to be tried. The judge's recusal was again sought and denied on January 19, 2007 and March 16, 2007. Each time the court explained it considered the request and it was denied. Defendant's arguments that the court did not properly explain the denial are erroneous. R. 2:11-3(e)(1)(E).
Defendant's last argument (Point Twelve) asserts the court incorrectly allocated the burden of proof on the issue of cohabitation. We disagree.
In Lepis, supra, the Court accepted as a changed circumstance "the dependent spouse's cohabitation with another . . . ." 83 N.J. at 151 (footnote omitted). The Court noted the impact of cohabitation, suggesting "alimony should decrease when circumstances render the original amount unnecessary to maintain the standard of living reflected in the original decree or agreement." Gayet v. Gayet, 92 N.J. 149, 151 (1983) (citing Lepis, supra, 83 N.J. at 153). The Court identified the essential issue is "[t]he extent of actual economic dependency, not one's conduct as a cohabitant[.]" Id. at 154.
Initially, defendant's proofs are that Cacioppo spent thirteen consecutive nights in plaintiff's apartment, had his own parking spot, and regularly provided her money. Plaintiff's pleadings also admitted that from 2002 through 2004, she received money by way of "gifts and loans from friends and relatives," which she used to pay her rent. The court reviewed this evidence and found it sufficient to allow the issue of cohabitation to be tried during the plenary hearing. On appeal, defendant asserts he submitted prima facie proof of cohabitation such that plaintiff was required to disprove the apparent economic benefit she received from Cacioppo. Defendant argues the court erred in its finding that defendant failed to sustain his burden of proof.
Defendant's assertion is flawed. A basic showing of money provided by Cacioppo or that he slept in plaintiff's apartment or even that the two dated does not prove cohabitation. The trial court found defendant's preliminary proofs, as rebutted by plaintiff's evidence, failed to sustain a finding of cohabitation.
Our courts have consistently viewed cohabitation as "tantamount to a marriage," Konzelman v. Konzelman, 307 N.J. Super. 150, 161 (App. Div. 1998), aff'd, 158 N.J. 185 (1999), where the couple acts as a "family unit" and there is relative permanency within the household, Gayet, supra, 92 N.J. at 155. In Crowe v. De Gioia, 203 N.J. Super. 22 (App. Div. 1985), aff'd o.b., 102 N.J. 50 (1986), we adopted the definition included in Black's Law Dictionary, that is, To live together as husband and wife. The mutual assumption of those marital rights, duties and obligations which are usually manifested by married people, including but not necessarily dependent on sexual relations[.] [Id. at 33 (quoting Black's Law Dictionary 236, (5th ed. 1979)).]
The Supreme Court reinforced this definition in Kozelman, supra, stating:
The ordinary understanding of cohabitation is based on those factors that make the relationship close and enduring and requires more than a common residence, although that is an important factor. Cohabitation involves an intimate relationship in which the couple has undertaken duties and privileges that are commonly associated with marriage. These can include, but are not limited to, living together, intertwined finances such as joint bank accounts, sharing living expenses and household chores, and recognition of the relationship in the couple's social and family circle.
A mere romantic, casual or social relationship is not sufficient to justify the enforcement of a settlement agreement provision terminating alimony. [158 N.J. at 202.]
In this matter, days of testimony were consumed discussing the extent and nature of the relationship between Cacioppo and plaintiff. Neither plaintiff nor Cacioppo denied he stayed at her home, had an assigned parking space or had access to her mailbox. However, as the trial court pointed out, defendant offered no proof showing the two held themselves out as a couple, had intertwined finances, joint credit cards, shared household chores, or assumed relationship roles similar to a those found in marriage. Moreover, the court found the credible evidence proved the money from Cacioppo was loaned to plaintiff, not his share of expenses or part of a shared living arrangement.
In finding plaintiff did not cohabit, the trial judge stated: [b]oth deny having any joint accounts such as savings, checking, credit card or other joint debts which would demonstrate a relationship that mirrors marriage. While they do seem to share some living expenses, such as the rental fee for Mr. Cacioppo's car in the [p]laintiff's apartment building, that would not support in and of itself a finding of co-habitation. Additionally, the fact that Mr. Cacioppo has loaned money to the [p]laintiff for an extended period of time also fails to establish shared living expenses, shared household chores or a financial connection which might establish co-habitation.
Defendant's reliance on our opinion in Ozolins v. Ozolins, 308 N.J. Super. 243 (App. Div. 1998) in misplaced. In Ozolins, supra, we defined a burden shifting rationale when addressing alimony modification in the event of cohabitation, holding "a showing of cohabitation creates a rebuttable presumption of changed circumstances shifting the burden to the dependent spouse to show that there is no actual economic benefit to the spouse or the cohabitant." Id. at 245. The change in the burden of proof we discussed was triggered once cohabitation was satisfactorily proven. Defendant's production of limited evidence was rebutted by plaintiff such that judgment in his favor could not be sustained.
We turn our attention to the issues presented by plaintiff in her appeal. Plaintiff raises several issues to challenge the modified alimony award. She argues the trial court applied an incorrect marital standard of living when determining the appropriate amount of alimony. Additionally, she asserts the court erred in not converting the award to one of permanent alimony. We are not persuaded.
Our review of the amount of an alimony award is limited. Gordon, supra, 380 N.J. Super. at 76. We will not overturn a trial court's determination of alimony "unless the court abused its discretion, failed to consider controlling legal principles or made findings inconsistent with or unsupported by competent evidence." Ibid. (citing Tash v. Tash, 353 N.J. Super. 94, 99 (2002)).
"We start from the bedrock proposition that all alimony awards . . . must . . . satisfy basic concepts of fairness." Steneken v. Steneken, 183 N.J. 290, 298-99 (2005). Parties are free to negotiate the issues of support and equitable distribution and the court is obligated to enforce a marital agreement when a party's acceptance was voluntary, consensual, fully informed, knowingly assumed, fair and equitable. Faherty v. Faherty, 97 N.J. 99, 107-08 (1984); Petersen v. Petersen, supra, 85 N.J. at 642.
Plaintiff's motion sought modification of the rehabilitative alimony award. Because of the extensive delay in reaching final disposition, the rehabilitative term expired and plaintiff timely moved to include modification of the term as well as the amount.
Concerning the marital standard of living, plaintiff testified the parties lived "a very lavish lifestyle" while married. Although she testified to certain facts, such as the parties held a "country club membership" and their children attended a "private school," her proffers were very generalized. She introduced her 1995 case information statement (CIS), which included a budget for herself and the three children of more than $16,000 per month,*fn2 but believed the expenses for the family totaled $28,000 per month. Plaintiff testified the alimony she received pursuant to the PSA was inadequate, and in a conclusory fashion, without expert evidence, she asserted that adjusted for the cost of living, she would need no less than $11,000 per month to meet her minimum needs and $40,000 per month to meet the lifestyle she enjoyed during the marriage.
Defendant disputed plaintiff's recollection of their lifestyle and expenses. He noted his income had not varied much over the years; the PSA stipulated his annual income was $260,000 and his 2004 income as reported on his CIS was $258,577. Further, he now had primary responsibility to provide for the children's needs.
The court repeated its prior finding that plaintiff had not proved she was disabled and not able to work. Although satisfied that her past problems thwarted her employment efforts, the court never stated she was not employable. The factual basis for this determination included that she was not currently being treated by Dr. Green, expressed no necessary medical regime and no longer had child care responsibilities.
Therefore, rehabilitative alimony remained the most appropriate form of support.
The trial judge noted the testimony of the parties reflected a lifestyle "somewhere around highest end/middle class to lower end of upper class, somewhere in there." Examining plaintiff's needs and defendant's ability to pay, the court found the monthly sum of $3000 would assist plaintiff in "continuing to live a lifestyle comparable to the one she enjoyed at the time of the parties' divorce and therefore should not be disturbed."
We have considered the entirety of the court's comments, which we agree could have been more precise. Curtis v. Finneran, 83 N.J. 563, 569-70 (1980). Nevertheless, we understand the court's opinion to have considered the conflicting versions of the facts and rejected plaintiff's contentions of lifestyle, finding instead that defendant's testimony, which more closely aligned with the alimony provided in the PSA, reflected their marital lifestyle. See Gordon, supra, 380 N.J. Super. at 77-78 (holding in determining the amount of the marital standard of living, a court could address and consider the "standard of support the parties incorporated" within their settlement agreement). See also Glass, supra, 366 N.J. Super. at 372-74 (stating that in determining the marital living standard, the "agreement between the parties -- the contract upon dissolution -- is entitled to significant consideration").
There is no evidence the alimony award in the PSA was not commensurate with the marital lifestyle. Further, there was no evidence presented of repressed income during the divorce, undisclosed income or other circumstances suggesting defendant's income and the alimony payments set forth in the PSA would be significantly lower than what was previously enjoyed while the parties were married. The expense assertion by plaintiff at trial could not be met on the agreed level of earnings of defendant. Rather, from the evidence in the record, the court could reasonably conclude the PSA alimony award of $50,000, decreasing to $25,000 per year, reflected a sum reasonably comparable to plaintiff's prior needs.
We also reject plaintiff's view that the court's use of the phrase marital lifestyle "at the time of divorce" ignored its responsibility to identify the marital standard of living "at the time of the marriage." See Crews v. Crews, supra, 164 N.J. at 25. In Crews, supra, the Court instructed, "The marital standard of living is essential to an analysis of changed circumstances regardless of whether the original support award was entered as part of a consensual agreement or of a contested divorce judgment." Id. at 25. We believe the court's reference to lifestyle at the time of the divorce was used to mean the marital lifestyle. More important, plaintiff's argument exalting the marital standard of living completely ignores the requirement to weigh the statute's other factors when considering the amount of support. N.J.S.A. 2A:34-23(b)(1) to (13).
Again, without the precision we would prefer, the court considered plaintiff's needs of $4669 per month reflected in her CIS, and defendant's CIS, listing income after taxes of $210,321, along with expenses of $19,415 (including almost $5000 for school costs), for himself and the three children, who were ages sixteen, nineteen and twenty-two. Plaintiff's demand was $22,000 per month, a sum that exceeded defendant's reported gross income. No court could award plaintiff support without balancing the needs of the children, defendant and the defendant's ability to pay. The court additionally considered the PSA as "evidential of the support the parties deemed appropriate." Gordon, supra, 380 N.J. Super. at 77-78. All of these factors were considered by the court, which fixed alimony at $36,000 per year for five additional years. This sum allowed plaintiff to meet her needs and afforded her time to obtain employment.
We also reject plaintiff's contention that the trial judge ignored his obligations when modifying alimony, which she contends should have been made a permanent award. Following our review, we conclude the trial court's findings, although brief, were sufficient to support its conclusion.
Very important to the court's conclusion not to reform the rehabilitative alimony award into a permanent alimony award was the lack of proof that plaintiff could not obtain employment. Plaintiff's proofs failed to show the inability to achieve economic self-sufficiency. Therefore, the alimony decision will not be set aside.
In Milner v. Milner, we stated, "if events subsequent to the divorce show that it is no longer reasonable to anticipate that the supported spouse will ever become economically self-sufficient, the alimony award should be converted from rehabilitative to permanent." 288 N.J. Super. 209, 215 (App. Div. 1996). In Crews, supra, the Court referred to our opinion as providing an example where "a rehabilitative alimony award was converted into a permanent alimony award when the supported spouse demonstrated that she had not achieved the level of self-sufficiency that would permit her to live at the standard of living established during the marriage." 164 N.J. at 31 (citing Milner, supra, 288 N.J. Super. at 215).
Plaintiff testified regarding her "chronic, severe gastrointestinal disorder," and past treatment but presented no medical proof of current treatment or that the symptoms remained unabated. A year after filing her motion she added long-term "suicidal" ideations as justification for her inability to rehabilitate herself.
On this issue, Dr. Green was the sole witness and she opined plaintiff was incapable of performing consistently as she had "irrational hopes" of gaining long-term employment that kept recurring because "[h]ope springs eternal" but plaintiff was incapable of holding onto any job that she might obtain. Dr. Green did not state plaintiff was permanently disabled and admitted she last treated her in 2003.
In its opinion, the trial court wrote: "Without sufficient evidence to determine . . . [plaintiff] is permanently disabled (and perhaps eligible for some type of benefits)[,] this [c]court will not convert the support from term or rehabilitative [alimony] to permanent." Thus, the court concluded plaintiff's evidence was insufficient to "show that it is no longer reasonable to anticipate that the supported spouse will ever become economically self-sufficient[.]" Milner, supra, 288 N.J. Super. at 215. We find no error in the trial judge's conclusion.
Plaintiff also challenges the trial court's rejection of her application to set aside the FJOD because the PSA was procured by "fraud in the inducement." The claimed fraud was defendant's alleged undervaluation of his law practice and possibly his income. We reject these claims as untimely and meritless. R. 2:11-3(e)(1)(E).
"'[T]he decision whether to vacate a judgment on one of the six specified grounds [of Rule 4:50-1] is a determination left to the sound discretion of the trial court, guided by principles of equity' and that decision must be left undisturbed unless a clear abuse of discretion appears." Del Vecchio v. Hemberger, 388 N.J. Super. 179, 186-87 (App. Div. 2006) (quoting F.B. v. A.L.G., 176 N.J. 201, 207 (2003)).
The proffer of fraud came more in plaintiff's September 22, 2004 motion for modification of alimony, made more than eight and one-half years following the entry of the January 1996 FJOD. Rule 4:50-2 provides that the "motion shall be made within a reasonable time, and for reasons [of fraud] . . . not more than one year after the judgment, order or proceeding was entered or taken."
The court considered the substantive arguments and determined the claims were not more than speculation based on comments made by her attorney in reviewing the PSA. The question of valuation of defendant's law partnership was well known at the time of divorce. The PSA states plaintiff was advised the terms "may not be in her best interest" and that "alternate settlement offers may better serve her interests," "nonetheless [plaintiff] made the voluntary decision to enter into this Agreement." We concur with the trial judge's determination that the bald allegations of fraud, unsupported by evidence, does not rise to meet the standard necessary to set aside a final judgment. We find no abuse of discretion. Del Vecchio, supra, 388 N.J. Super. at 186-87.
We have considered each of the arguments presented in plaintiff's and defendant's respective appeals. We are not persuaded the trial court erred warranting reversal. To the extent an issue may not have been distinctly addressed, we reject it as lacking sufficient merit to warrant extensive discussion in our opinion. R. 2:11-3(e)(1)(E). Having considered the arguments advanced in light of the record and the applicable law, we affirm on all issues.