September 26, 2011
BARBARA SAVINI, PLAINTIFF-APPELLANT,
PETER TRIESTMAN, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-149-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 13, 2011 -
Before Judges Carchman and Baxter.
Plaintiff Barbara Savini appeals from an April 23, 2009 Family Part order in which the judge declined to reverse a child support hearing officer's (hearing officer) ruling that the child support being paid by defendant Peter Triestman should not be adjusted to reflect the increase in the cost of living. We conclude the judge made insufficient findings of fact and incorrectly imposed the burden of proof on plaintiff rather than defendant. We reverse and remand for a rehearing.
On November 25, 2008, the Morris County Probation Department (Probation) notified defendant that in accordance with the provisions of Rule 5:6B, Probation had increased his monthly child support obligation to compensate for the increase in the cost of living in the preceding two years. In particular, Probation advised him that the 6.85 percent cost of living adjustment (COLA) it had imposed would modify his child support obligation by requiring him to pay child support of $3406 monthly, rather than $3188. Probation also notified defendant that if his income had not increased by at least 6.85 percent, he was entitled to request an administrative review of the COLA. Any such request for an administrative review would, however, need to be filed within thirty days.
Probation did not receive defendant's request for an administrative review until February 23, 2009, which was sixty days beyond the thirty-day deadline. Despite defendant's untimely request, Probation chose to entertain defendant's request for a redetermination because the probation officer to whom defendant claimed he had mailed his redetermination request on December 20, 2008 had subsequently become ill; and Probation concluded that any letter sent by defendant in December 2008 might have been mislaid.
On March 19, 2009, at the conclusion of its re-determination and administrative review, Probation notified the parties that the previously-imposed COLA "was not warranted," and consequently, defendant's child support obligation would be restored to the previous level of $3188 per month. At Probation's request, the judge issued an order on March 2, 2009, providing that defendant's child support obligation would "revert back" to the "correct obligation of $3188/month, effective 1/1/09." Plaintiff was advised that if she disagreed with Probation's decision, she was entitled to request a hearing before a hearing officer.
Plaintiff availed herself of that opportunity, but the hearing officer ruled in favor of defendant.*fn1 Plaintiff then filed an appeal to the Family Part from the adverse decision of the hearing officer. At the April 23, 2009 hearing in the Family Part, defendant did not appear. After being sworn, plaintiff attempted to persuade the judge that defendant's tax returns contained a "fraudulent entry" because, according to plaintiff, defendant claimed to have sold his building restoration business known as Triestman & Sons for $0, even though the business had been "valued at $70,000" shortly before. Plaintiff also maintained that, despite defendant's claim that he had sold the business, he still owned it and was deriving a significant income from it. Plaintiff urged the judge to disregard the "fraudulent [$70,000] paper write-off" reflected in defendant's 2007 federal income tax returns. As proof that Triestman & Sons was not defunct, plaintiff showed the judge a June 19, 2008 letter from the State of New Jersey, Department of Treasury, signed by the State Treasurer, showing that the business was still active and that defendant was its owner.
The judge denied plaintiff's motion to reinstate the COLA, stating:
[This] does not proof [sic] a fraud, Ma'am. There may be fraud, but there's not . . . proof of fraud. Certainly not enough that would establish for me to overturn the previous determination [sic].
You certainly raised issues that may be there, but you have no established proof.
After the judge ruled that plaintiff had failed to prove either that defendant's tax returns were fraudulent or that defendant was earning more income than he claimed, plaintiff reminded the judge that defendant's request for a re-determination by Probation was untimely. The judge rejected plaintiff's argument, finding that Probation was entitled to give defendant the "benefit of the doubt" in light of the illness of the first probation officer.
Without making any additional findings of fact, the judge announced his intention to "affirm the decision of . . . the hearing officer." The judge signed a confirming order later that day, denying plaintiff's appeal from the hearing officer's ruling and ordering that the COLA be vacated.
On appeal, plaintiff argues: 1) the judge erred in upholding defendant's request "for a COLA reversal" because Probation's final decision in favor of defendant was not supported by the evidence; 2) the judge erred in accepting Probation's interpretation of defendant's tax returns; and 3) the judge improperly applied the requirements of Rule 5:6B, as well as other applicable rules of court.
All child support orders issued after September 1, 1998, must be "adjusted every two years to reflect the [increase in the] cost-of-living." R. 5:6B(a). "The cost-of-living adjustment shall be based on the average change in the Consumer Price Index for the Metropolitan statistical areas that encompass New Jersey and shall be compounded." R. 5:6B(c). Before any COLA is applied to the then-existing child support order, the parties must be provided with notice of the proposed adjustment and an opportunity to contest the adjustment within thirty days of the mailing of the notice. R. 5:6B(d).
Although Rule 5:6B specifies two grounds upon which an obligor may contest the upward adjustment of the child support order, only one is relevant here:
An obligor may contest the adjustment if the obligor's income has not increased at a rate at least equal to the rate of inflation as measured by the Consumer Price Index[.] [Ibid.]
If either party challenges Probation's determination that a COLA is, or is not, warranted, the appeal is heard by a hearing officer. R. 5:25-3(b)(2)-(4). Any party dissatisfied with the recommendation of the hearing officer is entitled to file an appeal with the Family Part, which "shall conduct a hearing forthwith." R. 5:25-3(d)(2). The appeal before the Family Part "shall be heard de novo not on the record below." Ibid. (emphasis added).
Although presented as three distinct arguments, plaintiff's claims on appeal all share a common theme, namely: the judge misapplied the requirements of the applicable Rules of Court and improperly shifted the burden of proof to her. After carefully considering the record in light of the governing legal principles, we agree.
As we have already noted, Rule 5:6B requires an automatic COLA adjustment every two years unless the obligor demonstrates that his or her income did not increase in an amount equal to the then-prevailing cost-of-living increase, which in this case was 6.85 percent for the applicable two-year period. Therefore, if defendant's income increased by at least 6.85 percent during the twenty-four months prior to November 25, 2008, his child support obligation would be subject to the COLA required by Rule 5:6B.
To determine whether defendant's child support obligation should be subject to a COLA, the judge was required to make the following findings of fact: the amount of defendant's income at the time of the last COLA adjustment in 2006, the amount of defendant's annual income between 2006 and 2008, and, if defendant's income had increased, whether any such increase was at least 6.85 percent.
Here, the judge made none of those findings. Instead, he focused on whether plaintiff had demonstrated through appropriate proofs that defendant's 2006 and 2007 tax returns were fraudulent. While we recognize that it was plaintiff herself who introduced this argument at the hearing, the judge must make the required factual findings we have just described. He did not do so. Instead, his findings of fact were limited to the conclusion that plaintiff had not met her burden of demonstrating that defendant's income tax returns were fraudulent.
Although we surmise from the judge's comments that defendant's 2006 and 2007 tax returns showed a decrease in defendant's income, and although those tax returns are part of the record on appeal, this does not fulfill the need for fact finding required by Rule 1:7-4. In particular, the judge did not make the findings as to defendant's 2006, 2007 and 2008 income, nor did the judge state defendant's income at the time of the last COLA increase, or compare the two. The absence of such findings precludes appropriate review. Accordingly, we reverse the April 23, 2009 order and remand for further proceedings.
As we have noted, Rule 5:25-3(d)(2) requires the judge to consider the proofs de novo and "not on the record below." At a de novo hearing, the party seeking relief from the court bears the burden of proof. Here, because defendant seeks to avoid the automatic COLA provisions of Rule 5:6B, defendant, not plaintiff, must bear the burden of proof. During the remand, the judge shall not impose upon plaintiff the burden of demonstrating that the hearing officer reached an incorrect conclusion.
Finally, although not raised below, plaintiff argues on appeal that she was not afforded a sufficient opportunity to review defendant's income tax returns prior to the hearing in the Family Part. In particular, she maintains that she was afforded no more than five minutes to review those documents. Because the only relevant evidence at a Rule 5:25-3(d)(2) hearing is the obligor's income for the two years in question, the opposing party, here plaintiff, should be afforded a reasonable opportunity to review the tax returns that will be the subject of the hearing. On remand, the judge will provide plaintiff with such an opportunity. Moreover, the judge should review not only defendant's 2006 and 2007 income tax returns, but also his 2008 return. The W-2 and 1099 forms must be attached.
Reversed and remanded.*fn2