On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-1838-94.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 9, 2011 (A-1532-09T1)
Submitted March 28, 2011 (A-5297-09T1) -Remanded April 8, 2011 - Resubmitted May 9, 2011
Before Judges Grall, C.L. Miniman and LeWinn.
Defendant Charles W. Zebe, Jr. (Charles), appeals from orders entered in this post-judgment matrimonial action on October 16, 2009, January 22, 2010, and May 24, 2010; plaintiff Andrea Sherry (Andrea), formerly known as Andrea Zebe, cross-appeals from the order of October 16, 2009. We now affirm in part and reverse in part. Because the record is adequate to permit us to resolve the issues on which we reverse, we exercise our original jurisdiction to bring this protracted post-judgment litigation to a conclusion.
We have twice considered issues raised with respect to the post-judgment applications of the parties. Sherry v. Zebe (Zebe I), No. A-2927-04 (App. Div. Sept. 13, 2006); Sherry v. Zebe (Zebe II), No. A-5297-09 (App. Div. Apr. 8, 2011). The facts relevant to the issues raised on this appeal have been adequately explicated in Zebe I and need not be repeated here. Zebe I, supra, slip op. at 2-8. There, we remanded for findings of fact and conclusions of law in support of the Family Part judge's determinations respecting Charles's responsibility to contribute to the cost of repairing the SUV used by one of the parties' daughters; Charles's responsibility to pay seventy-five percent of college-related expenses; and the use to which the custodial accounts could be put. Id. at 2, 13. We noted that there were clearly disputes as to these three issues, Id. at 13-14, and provided the following guidance to the judge when addressing them on remand:
[W]e note that the PSA does not require the father to provide [the elder daughter] with a motor vehicle. In addition, the definition of "college expenses" in the PSA does not include a motor vehicle. Thus, the request to compel the father to pay for repairs of the Infinity SUV given to [the elder daughter] for her use while in college must be evaluated in accordance with the law governing a parent's duty to support his or her children. Absent a duty, liability for the repairs cannot be imposed. Furthermore, the repair bill must be analyzed because only reasonable repairs can be reimbursed. Splitting the total bill in half is not a sustainable method of resolving the dispute.
Turning to the issue of college expenses, the Family Part judge must analyze and evaluate each of the statutory factors in N.J.S.A. 2A:34-23(a) and must also consider additional factors which have been imposed by case law before and after the adoption of N.J.S.A. 2A:34-23(a). See Newburgh v. Arrigo, 88 N.J. 529, 545 (1982); Raynor v. Raynor, 319 N.J. Super. 591, 616-17 (App. Div. 1999); Weitzman v. Weitzman, 228 N.J. Super. 346, 356-58 (App. Div. 1988), certif. denied, 114 N.J. 505 (1989).
Here, the judge imputed $50,000 of income to the mother without rhyme or reason. We do not know how that number was calculated. We note, however, that the mother's current spouse provides significant sums of money for the benefit of plaintiff and her children ($158,872) which far exceed the $30,000 paid by the father to the mother and for child support. That number must be considered by the court in imputing income to the mother.
One of the statutory factors that must be considered by the court is the income, assets and earning ability of the child. N.J.S.A. 2A:34-23(7). The parties, of course, are free to waive consideration of that factor, but absent such a waiver the court must examine [the elder daughter's] earning capacity and her income, if any. In this regard, the court must consider the custodial accounts held by the mother for the benefit of [the elder daughter]. At the time the PSA in this case was executed, the Newburgh case had been the law in this State for fourteen years. Therein, the Supreme Court required consideration of "the financial resources of the child, including assets owned individually or held in custodianship or trust." Newburgh, supra, 88 N.J. at 545. This factor must "be considered by the court in determining a parent's obligation to provide support for a child's education." Raynor[, supra, 319 N.J. Super. at 616].
The mother contends that the parties agreed that the custodial accounts would not be used for the education of the children. The PSA does not so provide. The court is thus required to determine whether, in fact, the parties had so agreed. If there was no such agreement, then the court must consider the custodial account for the benefit of [the elder daughter] when determining the amount of support to be provided by the parents.
To summarize, the Family Part judge must discuss each of the statutory and case law factors, find the facts, if any, relevant to each of these factors, and explain in detail the basis for each and every conclusion reached by the court with respect to the ultimate decision regarding contribution to [the elder daughter's] college education, including an analysis of how the court arrives at its ultimate conclusion. [Id. at 14-17.]
We also remanded Andrea's cross-appeal from the denial of counsel fees, noting that the Family Part judge merely denied the application without analysis of the factors to be considered in awarding or denying an award of counsel fees and without an explanation of the reasons for the denial.
In deciding the issue of legal fees the court must . . . consider each and every factor delineated in [Rule] 5:3-5(c). [Id. at 17-18.]
Subsequent to our decision, the parties engaged in discovery, and a plenary hearing was conducted on July 28, July 29, and August 4, 2009. When Charles learned that the elder daughter moved in with her boyfriend some time in 2008, he moved to emancipate her.
In her October 16, 2009, oral decision on the 2006 remand, the judge noted that the parties stipulated to the contents of the forensic report prepared by Withum Smith & Brown respecting Charles's income and the value of his practice. She found that his net income for 2005 was $311,633; his net income for 2006 was $328,637; and, although his tax return indicated that his gross income for 2008 was $310,581, "with perks added back, [the gross income] is probably more in line with his net income, although I believe it is even probably a little higher than that."
As to assets, the judge accepted the stipulation that the value of Charles's business was $584,000. He had net equity of $255,000 in his primary residence, $200,000 in his office condominium, $250,000 in his Florida home, $200,000 in his North Carolina home, and $890,000 in his A.G. Edwards account. As a consequence, he had total net assets of $2,379,000.
The judge found that Andrea, who is a homemaker, received between $8000 and $10,000 monthly from her current husband for expenses and $2500 per month in child support from Charles. The judge found the testimony offered by Steve Miller of the Miller Group respecting the $40,000 to $50,000 of income that should be imputed to Andrea for her first year of employment to be "rather incredible, especially since unemployment rates are so very high and [Andrea] has no experience or training." She found that Andrea was only "capable of earning an income at an entry level position in an office." As a result, she resorted to CBSalary.com and Indeed.com to determine the average salary for a receptionist in New Jersey ($32,043 and $31,000, respectively) and imputed $30,000 in income to Andrea.
As to Andrea's assets, the judge noted that the appraisal performed for Charles suggested the market value was $955,000.
Andrea had a $450,000 mortgage balance and, thus, based on that appraisal, Andrea would have a net equity of $505,000 in her primary residence. However, Andrea opined that her home was only worth $850,000, which would make the net equity $400,000. In addition, her IRA was worth $200,000 when the parties divorced, and "[a]s a result of the market, the value of that asset has fluctuated and according to [Andrea's] case information statement is valued at less currently." Andrea's father had "passed away and she inherited approximately $340,000." She found that "[t]he value of that was also diminished as a result of the market fluctuations." This led her to determine that Andrea's net worth was $920,000.
The judge then concluded, "So if we add the estimated net worth of each party together, it appears that [Charles] and [Andrea] have basically a 75 percent/25 percent allocation." As a consequence, despite fluctuations in value over the years since 2005, "they have not varied so much that the allocation has been inequitable since January 7th, of 2005 when I ordered that that be the allocation." She also found that allocation equitable when analyzing the available cash that each of the parties had. Charles had $330,000 yearly net income, and Andrea had "a yearly net available cash of $110,000. And this includes the imputed income of $30,000, the net for that and also the approximately $90,000 a year she receives from her generous husband, Mr. Sherry."
The judge found that Charles has the ability to pay all of the college expenses for both girls. Therefore, he had the ability to pay seventy-five percent of the college expenses, as she had ordered in 2005.
The judge next considered the factors identified by Newburgh, supra, 88 N.J. at 545, and N.J.S.A. 2A:34-23, and concluded that "we are left where we started and that is that [Charles] should pay 75 percent and [Andrea] should pay 25 percent of the college expenses for their daughters." She based this on the following findings of fact:
Both parties expected that their daughters would attend college. There is a sufficient amount of money which really diminishes any argument that the amount sought by the girls is too high . . . .
Both parties have the ability to contribute and the property settlement agreement specifically notes that [Charles] would contribute even if the law did not compel him to contribute. The daughters have the intelligence and the aptitude for college study. There are two accounts which have been held for the girls by [Andrea] pursuant to the property settlement agreement.
I find that had it been intended that those accounts be used for college expenses, the accounts would have been referenced under the section dealing with child support and college, not under the paragraphs dealing with equitable distribution. . . .
Although both girls have worked part time to earn some cash, it was never anticipated that they would need to earn money so as to contribute towards college. There has been no need on the part of either party to take out any loans or seek any grants.
As for the breakdown [in] the relationship between [Charles] and his
daughters, I find that such has
been of his own making .
. . . This cannot be used by [Charles] as a reason to diminish or do away with his obligation to support his daughters.
[Andrea] testified that she always considered the custodial accounts as available cash to give to the girls as a down payment on a residence or to start a business. It is her position that this money was never intended to be used towards college expenses. There is nothing submitted by [Charles] to dispute this position and I find that [Andrea's] position is the proper one.
And so I find that control of this money was specifically given to [Andrea] under paragraph 27 of the [PSA]. Therefore, I will not order that the money in these accounts be applied towards college. However, [Andrea] may use this money towards college expenses so as to defray some of her 25 percent share if she needs to and if she chooses to.
With respect to repairs for the elder daughter's car, the judge acknowledged that "the payment of child support covers transportation" and that ¶ 8 of the child support guidelines contained in Appendix IX-A to the Rules of Court states that child support includes "'[a]ll costs involved with owning or leasing an automobile' including . . . gas, insurance, maintenance and repairs." However, "because [Charles's] income was so much higher, it was only appropriate at that time to order that he pay a portion of the cost to repair the vehicle to get it in a condition that would transport [his daughter] safely," and the trial judge did not modify her order from January 7, 2005, that he pay fifty percent of that expense.
As to emancipation, the judge concluded that the elder daughter was still dependent on her parents for support. Although she lived with her boyfriend throughout the year, she was not independent because Andrea paid for her cell phone, car expenses, car repair, and food. Andrea also helped the older daughter do her laundry. The fact that she lived with her boyfriend was not different from living with a girlfriend as it was not a marriage-type relationship.
As to child support, the judge noted that the PSA provided for $30,000 as an unallocated sum and at the time of the hearing both girls were living outside the home----the elder daughter twelve months a year and the younger daughter during the school year. She found that, had an application for an increase in child support been made five or six years earlier, "the support obligation would have been increased." However, with the girls not living at home, the trial judge held that the sum of $30,000 is a sufficient amount to give them each some cash and some money during the school year for their expenses that [Andrea] pays for them out of the child support . . . .
. . . At the same time, based upon [Charles's] substantial income, I also find that it's not appropriate to diminish that child support amount once [the elder daughter] does graduate from college hopefully in May of 2010, and that it should continue as an unallocated amount until such time as [the younger daughter] is emancipated.
The judge felt the number was appropriate "using the child support guidelines only as a guide" because Charles "makes substantially more than what his tax returns seem to indicate" and the $30,000 support amount was based on his Schedule C income of $195,000. Thus, since Charles's net income increased substantially in the years following the ...