September 29, 2011
ANDREA SHERRY, F/K/A ANDREA ZEBE, PLAINTIFF-RESPONDENT,
CHARLES W. ZEBE, JR., DEFENDANT-APPELLANT.
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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 original child support order, she concluded that child support should not be modified downward.
On the issue of counsel fees, the judge found that Andrea's counsel had submitted a very detailed bill requesting $88,089.06 to which the judge added $3000 "for the present motion" and awarded $91,089.06 to be paid within thirty days. Citing N.J.S.A. 2A:34-23 and Rules 4:42-9 and 5:3-5, the judge found under the first factor of Rule 5:3-5(c) that the litigation had been funded by Andrea's "generous husband," that Charles "has available cash [and] earned income to pay [Andrea's] counsel fees." With respect to the second factor, "the abilities of the parties to pay their own fees," Andrea had only imputed income and the monies provided by her husband whereas Charles had net income of approximately $330,000. As to the third factor, Charles's positions regarding Andrea's contributions were extremely unreasonable, and he pursued the application knowing that he would pay more in counsel fees than in college expenses whereas "[Andrea] never hesitated to agree to pay her portion of college." Rather, it was Charles that resisted paying his fair share. The extent of the fees and the amounts paid, the fourth and sixth factors, had been the subject of testimony at the hearing. No fees had been awarded previously, the fifth factor. Because the judge found that her order of January 7, 2005 was correct, she found that factor seven, the results obtained, were entirely favorable to Andrea and it was "[Charles] who wished to pursue this course." As to factor eight, $3000 was incurred to enforce an existing order.
On the issue of miscellaneous college expenses, the judge assumed that the $109 for Microsoft Home Office related to college, as did $527.88 for sorority dues. She found that dormitory furnishings were college expenses as was the cost for a nurse's uniform. A refrigerator and mirror for the dormitory were college expense, as were an alarm clock and outlets for the dormitory room, a laundry basket, a fan, hangers, a waste bas-ket, and an area rug. The total amount of dormitory and uniform expenses came to $611.66. The judge then found that contact lenses were not cosmetic but required for eye care and that, as a nurse, their daughter "might not be able to wear glasses in some circumstances." Because birth control was prescribed by a doctor, it was an included medical expense.
The judge ordered Charles to pay his seventy-five percent share of these expenses. An order was issued the same day which addressed all of the judge's findings. To alleviate concerns expressed by defendant's counsel, the judge extended the time to pay the counsel fees, miscellaneous college and medical expenses to forty-five days, but Appeal No. A-1532-09T1 followed in which Charles appeals the allowance of these expenses and the award of additional counsel fees in connection with Andrea's April 13, 2010, motion in aid of litigant's rights. Zebe II, supra, slip op. at 5-6.
While that appeal was pending, Charles sought a stay of the order to pay Andrea's counsel's fees, and Andrea cross-moved to enforce prior orders of the court, including the October 16, 2009, order. On January 22, 2010, the judge denied the stay and granted the cross-motion. The cross-motion order of January 22, 2010, required Charles to pay the $91,089.06 counsel fee award within ten days and directed him to pay his share of the college expenses as previously ordered. The order also required Charles to pay $120 for one daughter's room and board at college, $39.75 for her train travel to college, and $1200 as his share of the cost for two laptop computers for his daughters. Once again, the judge made no findings of fact and gave no explanation for her decision to compel him to pay these additional costs. Andrea's application for counsel fees was denied without prejudice.
On April 13, 2010, Andrea again moved to enforce the court's prior orders and renewed the application for fees. The judge found Charles in violation of litigant's rights and authorized the issuance of a bench warrant if the fees were not paid by June 1. As to additional counsel fees, the judge awarded Andrea $7700 for the motions decided on January 22 and $2635 for the fees incurred for the April motion.
Once again, we remanded for findings of fact respecting the additional college expenses and the award of counsel fees. As to the latter, we specifically noted, "There is no indication that the judge did anything other than award fees in the total amount requested, and it is quite apparent that the statement of services, at least with respect to the $7700 fee awarded . . . , includes billings for services rendered on appeal that the judge did not have the authority to award." Zebe II, supra, slip op. at 7.
The judge on remand supplemented the record with a decision on April 25, 2011, noting that "[t]his is the second remand in this case." She took note of the PSA in ¶ 18 that states: "College education expenses of the children shall include room, board, books, tuition, fees, laboratory fees, application fees, SAT review courses and SAT fees." She then found that "[t]here is no limiting language in the [PSA]. [Charles] agreed to pay his portion of college expenses, not simply college tuition." She then noted that her prior orders directed Charles to "pay 75% of the college[-]related expenses." That was the extent of her opinion with respect to the requirement that Charles pay the sums ordered on January 22, 2010.
With respect to counsel fees, the judge made findings of fact similar to those she made on October 16, 2009. She found that of the sum awarded in connection with the motions decided on January 22, 2010, $2100 was for services rendered in connection with the appeal and that this amount should be deducted from the $7700 award, although noting that this issue had been raised for the first time on appeal. She made no findings of fact with respect to the reasonableness of the quantum of fees awarded in either order. This case was resubmitted with the same docket number----A-5297-09T1.
In Appeal No. A-1532-09T1, Charles raises the following issues for our consideration with respect to the order of October 16, 2009:
POINT 1 - THE TRIAL COURT ERRED IN ORDERING [CHARLES] TO PAY SEVENTY[-]FIVE PERCENT (75%) OF COLLEGE EXPENSES.
POINT 2 - THE TRIAL COURT ERRED IN COMPELLING [CHARLES] TO PAY FIFTY PERCENT (50%) OF VEHICLE/TRANSPORTATION.
POINT 3 - THE TRIAL COURT ERRED IN AWARDING [ANDREA] COUNSEL FEES AND DENYING [CHARLES'S] EXPERT FEE ALLOCATION REQUEST.
POINT 4 - THE TRIAL COURT JUDGE MUST BE REMOVED FROM THIS CASE ON REMAND AND VENUE MUST BE TRANSFERRED.
POINT 5 - THE TRIAL COURT ERRED IN DENYING [CHARLES'S] EMANCIPATION APPLICATION.
POINT 6 - THE TRIAL COURT ERRED IN GRANTING [ANDREA'S] REQUEST FOR MISCELLANEOUS ADD-ONS TO CHILD SUPPORT.
POINT 7 - THE TRIAL COURT ERRED IN ADMITTING INCOMPETENT EVIDENCE ON MEDICAL ISSUE AND IN HOLDING THAT IT IS NOW THE STANDARD FOR A CHILD TO TAKE FIVE YEARS FOR A BACHELORS [sic] DEGREE EVEN IF MORE EXPENSIVE.
POINT 8 - THE TRIAL COURT ERRED IN SETTING CHILD SUPPORT.
In Appeal No. A-5297-09T1, Charles raises the following issues with respect to the January 22, 2010 order and ¶¶ 3 and 5 of the May 24, 2010,*fn2 which we have renumbered to follow the above issues:*fn3
[POINT 9] - THE TRIAL COURT ERRED IN ORDERING [CHARLES] TO PAY FOR TRAIN TICKET(S), COMPUTER(S), CANCELLATION FEE FOR ROOM AND BOARD, ETC. [POINT 10] - THE TRIAL COURT ERRED IN FAILING TO FIND THAT [ANDREA'S] COUNSEL FEE REQUESTS WERE REASONABLE. [POINT 11] - THE TRIAL COURT ERRED IN GRANTING [ANDREA'S] COUNSEL FEE REQUEST FOR SERVICES RENDERED IN THE APPELLATE DIVISION.
Andrea filed a cross-appeal in Appeal No. A-1532-09T1 from
¶ 5 of the October 16, 2009, but she later filed a motion to withdraw the cross-appeal that was granted on July 20, 2010.
After carefully reviewing the record in light of the written and oral arguments advanced by the parties, we find that issues presented by Charles in Points 5 and 7 are without sufficient merit to warrant discussion in this opinion, Rule 2:11-3(e)(1)(A), (E), and we affirm substantially for the reasons expressed by the Family Part judge in her oral opinion delivered on October 16, 2009. The findings and conclusions of the judge are supported by substantial, credible evidence in the record,
Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974), and we find no abuse of her discretion in deciding those issues; she did not "pursue a manifestly unjust course," Gillman v. Bally Mfg. Corp., 286 N.J. Super. 523, 528 (App. Div.) (internal quotation marks omitted), certif. denied, 144 N.J. 174 (1996).
With respect to Point 4, we find it unnecessary to reach the issue in light of our exercise of original jurisdiction.
As to Points 1-3, 6 and 8-11, our review of a family court's fact-finding function is circumscribed so that findings by the judge are binding on appeal if supported by adequate, substantial, and credible evidence. Cesare v. Cesare, 154 N.J. 394, 411-12 (1998); accord Rova Farms, supra, 65 N.J. at 484. Family Part judges who "hear the case and see the witnesses . . . are in a better position to evaluate the credibility and weight to be afforded testimonial evidence." N.J. Div. of Youth & Family Servs. v. I.Y.A., 400 N.J. Super. 77, 89 (App. Div. 2008) (citing In re Guardianship of D.M.H., 161 N.J. 365, 382 (1999); Pascale v. Pascale, 113 N.J. 20, 33 (1988)). "Where the issue to be decided is an alleged error in the trial judge's evaluation of the underlying facts and the implications to be drawn therefrom, we expand the scope of our review." N.J. Div. of Youth & Family Servs. v. G.L., 191 N.J. 596, 605 (2007) (internal quotation marks omitted). However, even in this latter instance, we still "accord deference to the trial court's findings unless they 'went so wide of the mark that a mistake must have been made.'" MacKinnon v. MacKinnon, 191 N.J. 240, 254 (quoting N.J. Div. of Youth & Family Servs. v. M.M., 189 N.J. 261, 279 (2007)), stay denied, 551 U.S. 1177, 128 S. Ct. 7, 168 L. Ed. 2d 784 (2007).
Our Supreme Court has observed that matrimonial courts pos- sess special expertise and experience in the field of domestic relations. Cesare, supra, 154 N.J. at 412. "Because of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court fact[-]finding." Id. at 413. While we remain cognizant that we owe no special deference to the trial judge's conclusions of law, Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995), we generally will not "second guess [a Family Part judge's factual] findings and the exercise of [his or her] sound discretion." Hand v. Hand, 391 N.J. Super. 102, 111 (App. Div. 2007). With these standards of review in mind, we turn to the remaining issues.
We first address Charles's claim that the judge erred in declining to modify his child support because the elder daughter no longer resides at Andrea's home. We reject this claim. The PSA addresses child support as follows:
9. [Charles] shall pay child support directly to [Andrea] in the amount of $25,000.00 per year, for the support of the two children unallocated as to the two children. Said payment shall be made and be paid on a monthly basis, with its entire payment being paid during the first week of the month that the child support is due. Said amount shall be increased to $30,000.00 at any time that alimony terminates or [Charles] is no longer paying alimony under the terms of this [PSA]. This agreement is based on [Charles's] 1995 Schedule "C" income of approximately $195,000.00 and [Andrea's] 1995 income of approximately $0.00.
10. Child support should continue until such time as the children are emancipated as defined by New Jersey law.
11. At the time that either child is to attend college or post[-]high[-]school education, then the child support figure may be modified based on either parties' contribution towards the college education expenses of the children.
Because Andrea is remarried and no longer receives alimony, under the terms of the PSA, Charles's annual child support is $30,000. The question is whether there is a changed circumstance that warrants modification of that amount. Emancipation is not an issue. Neither child is emancipated, and we have rejected Charles's claim that the judge erred in that regard. That leaves us to consider Charles's claim that modification was warranted because one child is not living at home and because of his contribution to college expenses for both children.
When divorcing parties have an agreement on child support, the amount may be modified based on changed circumstances. Lepis v. Lepis, 83 N.J. 139, 149 (1980). The parent seeking the modification has the burden of proving that modification is warranted. Id. at 157. Either a change in the children's need for support or a parent's ability to provide it may warrant modification. Id. at 151-52. Moreover, when a parent's earnings increase, our courts recognize that a child is entitled to share in a parent's good fortune. Dunne v. Dunne, 209 N.J. Super. 559, 567 (App. Div. 1986). Thus, when college expenses are incurred, the question is whether that additional expense requires a reduction in the amount of basic child support either because of a parent's inability to pay both or circumstances reducing the need for support, such as a reduction in housing costs attributable to the child's absence from the home.
In this case, the parties' agreement on child support is generally consistent with the foregoing principles. Where there are differences, the parents' agreement is more generous to the children than the law requires. This agreement does not provide for an automatic reduction of child support when a parent contributes to college, a child attends college away from home, or emancipation of one child. Instead, this agreement provides that payment of college expenses is a circumstance that may warrant a reduction in support. Moreover, the agreement does not provide for a reduction in child support on the emancipation of one of the two children. Instead, it provides that child support for the two children is unallocated and should continue until such time as the children are both emancipated.
On this record, we cannot conclude that the judge was wide of the mark in determining that Charles failed to meet the burden of establishing a change in circumstances warranting modification of child support. Between the time of the agreement and this hearing, his income had increased by more than $100,000, and he did not make any showing that he could not pay college expenses and child support. Similarly, the evidence failed to demonstrate that the children's need for basic support had diminished because one child was no longer in Andrea's home. The parties, apparently contemplating that Andrea would maintain the same residence as long as one child was not emancipated, agreed that child support would continue until both children were emancipated. Accordingly, we affirm the court's determination that Charles failed to establish grounds for modification of the $30,000 child support award.
We next address the issues raised in Points 2, 6, and 9 respecting the awards for transportation and college-related expenses. Charles asserts that the judge erred in compelling him to pay 50% of the cost of repairs for the elder daughter's car ($2683.70), and 75% of the cost of sorority dues ($527.88), a nursing uniform ($160), train tickets ($224.75), hotels ($213.62), software ($109.98), household items for the younger daughter's dormitory room ($478.41), laptop computers ($1202.15), and room and board ($120). Charles also appeals the decision to require him to pay his share, 75%, of un-reimbursed medical expenses including contact lenses and birth-control pills, which were also ordered on October 16, 2009.
The PSA defines "college education expenses" to include "room, board, books, tuition, fees, laboratory fees, application fees, SAT review courses and SAT fees."
With respect to the transportation expenses, i.e., repairs to the elder daughter's vehicle and Amtrak tickets, Charles argues that such expenses are included in child support and may not be separately ordered as an additional expense. Andrea responds that the judge did not misapply her discretion in ordering Charles to contribute to the cost of repairing the elder daughter's car as an extraordinary expense because he enjoys a very high standard of living and earns income in excess of the child support guidelines, relying on Isaacson v. Isaacson, 348 N.J. Super. 560, 579 (App. Div.), certif. denied, 174 N.J. 364 (2002). As to the Amtrak tickets, she argues that "the children are entitled to non-essential items that are reasonable, in their best interests and commensurate with the stan- dard of living enjoyed by the parties," relying on Dunne v. Dunne, 209 N.J. Super. 559, 567 (App. Div. 1986). She urges that the right to support belongs to the child and cannot be waived by the custodial parent in the PSA, citing Martinetti v. Hickman, 261 N.J. Super. 508, 512 (App. Div. 1993).
Although these principles of law have been correctly stated, they were misapplied by the judge in this instance, an error which we have review de novo. Manalapan Realty, supra, 140 N.J. at 378 ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.").
It is clear that where child support is awarded pursuant to the child-support guidelines, the sum awarded includes:
Transportation - All costs involved with owning or leasing an automobile including monthly installments . . . , lease payments, gas and motor oil, insurance, maintenance and repairs. Also, included are other costs related to transportation such as public transit, parking fees, license and registration fees, towing, tolls, and automobile service clubs. The net outlay (purchase price minus the trade-in value) for a vehicle purchase is not included. [Pressler and Verniero, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2321 (2012).]
We recognize that this is not a child-support guidelines case, but when parties provide for child support in a PSA, it should be construed in accordance with applicable law. That law recognizes that the costs of transportation, as described in ¶ 8 above, are to be considered in calculating child support. Isaacson, supra, 348 N.J. Super. at 583. We presume that the parties did so when they agreed that Charles would pay $30,000 in child support, whether that transportation was provided by the daughter through use of her own automobile or provided through the use of automobiles given to the children. The expense for repairing the car was part of child support and should not have been awarded separately. The same is true of train tickets. If the amount of child support was insufficient as a result of changed circumstances, then the relief available was a recalculation of child support, including non-essential items, ibid. (noting that "the fact that a parent may be driving a luxury automobile does not mean that a child of driving age will be entitled to a similar luxury automobile"), not an ad hoc award of child-support add-ons as was done here. The mere fact that the parties' incomes were above $187,200 did not justify the approach taken by the judge.
We next consider housing-related expenses. Appendix IX-A, ¶ 8, sheds light on these expenses as well, providing that child support includes the following:
Housing - . . . [L]odging while out of town, . . . furniture, . . . purchase . . . of household equipment . . ., laundry or cleaning supplies, cleaning and toilet tissues, household and lawn products, stationary, all indoor and outdoor furniture, . . . all small appliances and house[ ]wares (except personal care appliances), all household textiles (e.g., linens, drapes, slipcovers, sewing materials, etc.), and miscellaneous household equipment (e.g., clocks, luggage, light fixtures, computers and software, decorating items, etc.). [Child Support Guidelines, supra, Appendix IX-A to R. 5:6A at 2321.]
We reach the same conclusion with respect to housing-related expenses as we did with respect to transportation expenses and reverse the award of 75% of the expenses for hotels ($213.62), software ($109.98), household items for the younger daughter's dormitory room ($478.41), and laptop computers ($1202.15). These are all expenses included in child support. Ibid.
This leaves only sorority dues ($527.88), room and board ($120), and a nursing uniform ($160). Paragraph 18 of the PSA was very specific in delineating college expenses: "College education expenses for the children shall include room, board, books, tuition, fees, laboratory fees, application fees, SAT review courses and SAT fees." Clearly expenses for room and board are college expenses as defined by the PSA. Thus, the judge abused her discretion in requiring Charles to contribute to sorority dues and a nursing uniform.
Paragraph 14 of the PSA provides that Charles shall pay 75% of uncovered medical expenses. In Brzozowski v. Brzozowski, 265 N.J. Super. 141, 147 (Ch. Div. 1993), the court recognized "that [the] parent given the responsibility for the day-to-day rearing of the children should be able to discharge that responsibility" with respect to medical decisions. This holding was quoted with approval in Pascale v. Pascale, 140 N.J. 583, 606 (1995). The judge decided this issue consistent with the Brzozowski holding; we find no abuse of the judge's discretion in requiring Charles to contribute to them in accordance with ¶ 14 of the PSA.
Turning to the allocation of responsibility for college expenses, the judge found that Andrea's net available income was $110,000 per year and Charles's gross income for 2008 was $310,581, but "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." We will not disturb the judge's determination that $30,000 should be imputed to Andrea as income, which of course would be a gross figure. We disagree, however, with the judge's finding that Andrea receives approximately $80,000 from her husband as nontaxable available cash.
In her 2009 Case Information Statement (CIS), Andrea disclosed that her family's monthly shelter expenses were $6297.40; her transportation expenses alone were $1276.66; and her personal expenses alone were $3624.00; thus, her expenses totaled $11,198.06 per month or $134,376.72 per year, exclusive of transportation and personal expenses for the children. At the plenary hearing, she testified from a summary prepared with the assistance of her attorney that the average amount per month deposited into her Bank of America account for 2005 was $10,454; for 2006 was $11,016; for 2008 was $11,208; and through April 2009 was $10,542. Those deposits were made from child support and support from her husband. From those amounts, she paid all of the shelter expenses for her entire family and transportation and personal expenses for herself and the children.
However, she admitted on cross-examination that if she had included the children's expenses on her 2009 CIS, the total of all monthly expenses would be close to that disclosed in her 2007 CIS ($16,751), minus the reduction in the mortgage expense ($859.56). Thus, Andrea admitted, based on her 2007 CIS, that in 2009 she received $15,891.84 per month from her husband and from child support to meet the family's shelter expenses ($7314.40 - $859.56 = $6454.84); her and the children's transportation expenses ($2150); and her and the children's personal expenses ($7287). Of course, twenty-five percent of the shelter should be excluded to reduce the total by a figure representing the expense for Andrea's husband ($1613.71), bringing that expense down to $4841.13 per month. This yields total expenses for Andrea and her children of $14,278.13 per month ($15,891.84 - $1613.71 = $14,278.13). As so modified, the expenses for Andrea and the children total $171,337.56 per year, of which $141,337 is contributed by Andrea's husband while the rest is contributed through child support.
To that sum must be added the imputed income of $30,000, taking into account the effect of income taxes, which, assuming a forty-percent rate, would result in net annual income of $18,000. Thus, the judge miscalculated the annual cash available to the mother and children when she found that it was $110,000. Instead, the record establishes that it was about $190,000 including child support and imputed income.
The judge also erred in finding that Charles earned a net income of about $310,000 because she failed to reduce his net income by the amount of child support, making his net income $280,000.
To summarize, Andrea's net income was $190,000 and Charles's net income was $280,000 producing a total net income of $470,000. Andrea's percentage of total net income was forty percent. Thus, Andrea should have been responsible for forty percent of college expenses; Charles would be responsible for sixty percent. As a consequence, we find that the judge miscalculated the parties' proportionate responsibilities for college expenses and reverse this determination.
We turn to the issue of the custodial accounts for the benefit of the children. On remand, we reminded the judge that Newburgh had been decided fourteen years prior to the execution of the PSA in this case. Zebe I, supra, slip op. at 16. The Newburgh Court required judges to consider "the financial resources of the child, including assets owned individually or held in custodianship or trust" when determining the parents' contributions to the child's education. Newburgh, supra, 88 N.J. at 545. Because parties to a contract are presumed to contract "with reference to the existing law," Ravin, Sarasohn, Cook, Baumgarten, Fisch & Rosen, P.C. v. Lowenstein Sandler, P.C., 365 N.J. Super. 241, 248 (App. Div. 2003) (internal quotation marks omitted), we instructed the judge that she would have to consider the custodial accounts in deciding Charles's contribution to his daughters' educations absent an agreement by the parties that the children's assets and incomes should not be considered.
The judge ignored this mandate and, instead, found that Andrea never intended that the custodial accounts were to be used for the children's college educations. What Andrea may have unilaterally intended in 1996 is not determinative of the issue. See, e.g., Cooper River Plaza E., LLC v. Briad Grp., 359 N.J. Super. 518, 527-28 (App. Div. 2003) (finding that undis-closed intent is irrelevant to contract interpretation). Nei- ther is the location of the discussion about the custodial accounts in the section of the PSA governing distribution of the parties' assets determinative. Moreover, Andrea's designation as the custodian of these accounts is not inconsistent with the obligation at law of the children to contribute to their own college educations.*fn4
We therefore reverse the determination that the custodial accounts were not to offset a portion of Charles's responsibility for the college educations of his daughters. Twenty percent of the elder daughter's custodial account is to be used per school year to reimburse her parents for their contributions to her education from the filing of Andrea's initial motion until the elder daughter's graduation from college. As to the younger daughter, twenty-five percent of her custodial account is to be used per school year to reimburse her parents for their contri- butions to her education from the filing of Andrea's initial motion until the younger daughter's graduation from college. Forty percent of all sums withdrawn shall be paid to Andrea for her contributions to her daughters' college educations and the balance shall be paid to Charles.
This brings us to the issue of counsel and expert fees. Charles argues that the judge abused her discretion in ordering him to pay 100% ($99,324.06) of Andrea's counsel fees and all of business evaluator Thoma's expenses. We agree. Once again, the judge failed to make adequate fact-findings.
Pursuant to Rule 5:3-5(c), the judge, in her discretion, may make an award of counsel fees in a matrimonial action. In determining the amount of the fee award, the judge should consider 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. [Ibid.]
In addition, the party requesting the fee award must be in financial need, the other party must have the financial ability to pay, and if "those two factors have been established, the party requesting the fees must have acted in good faith in litigation." Guglielmo v. Guglielmo, 253 N.J. Super. 531, 545 (App. Div. 1992).
We will ordinarily disturb a trial court's determination on counsel fees only on the "rarest occasions," and then only because of a clearly mistaken exercise of discretion. Rendine v. Pantzer, 141 N.J. 292, 317 (1995). The exercise of judicial discretion "is not unbounded and it is not the personal predilection of the particular judge." State v. Madan, 366 N.J. Super. 98, 109 (App. Div. 2004). Moreover, the exercise of judicial discretion must have a factual underpinning and legal basis. Id. at 110. Applying these principles, we have explained:
Judicial discretion, sound discretion guided by law so as to accomplish substantial justice and equity, is a magisterial, not a personal discretion. It is legal discretion, in which the judge must take account of the applicable law and be governed accordingly. If the judge misconceives or misapplies the law, his discretion lacks a foundation and becomes an arbitrary act. When that occurs, the reviewing court should adjudicate the matter in light of applicable law to avoid a manifest denial of justice.
[Cosme v. Borough of E. Newark Twp. Comm., 304 N.J. Super. 191, 202 (App. Div. 1997) (internal quotation marks omitted), certif. denied, 156 N.J. 381 (1998).]
A trial judge's decision will constitute an abuse of discretion where "the 'decision [was] made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" United States v. Scurry, 193 N.J. 492, 504 (2008) (alteration in original) (quoting Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)).
We begin, as we must, with the reasonableness of the time expended and the hourly rates. Mani v. Mani, 183 N.J. 70, 95 (2005); Rendine, supra, 141 N.J. at 334-35. The judge made no fact-findings with respect to these two issues. Nor did she give any reason for ordering Charles to pay 100% of the expert's $23,853.98 in fees, contrary to Rule 1:7-4(a). Although we would ordinarily remand for fact-findings on these issues, the history of this litigation is so protracted and contentious that we will exercise our original jurisdiction to finally decide the issues. We start by deducting $18,303.26 for services rendered by Andrea's counsel in representing her in Zebe I. As we noted in Zebe II, supra, slip op. at 7, the judge had no jurisdiction to award fees in connection with an appeal. Although she did not do so with respect to the fee award she made after we decided Zebe II, she had included such fees in her earlier award. The $18,303.26 statement of services for this work covered the period from January 7, 2005, through September 13, 2006, when we decided Zebe I. Because the judge had no such jurisdiction, and because the time to apply for fees in connection with an appeal had expired, Rule 2:11-4 (ten days after determination of appeal), this amount is disallowed. We similarly disallow time billed on September 22, 2006, for preparing for appellate argument, arguing the first appeal before us, traveling to appellate argument, and conferring with Andrea on two occasions after oral argument but before our decision. The total billed for these services was $1950. Thus, the remaining amount of fees requested by Andrea that the judge had jurisdiction to consider was $79,070.80.
One factor that an applicant for fees must address is the qualifications of each person for whom an award of fees is sought. If that person is a paraprofessional, the affidavit of services "shall include a detailed statement of the time spent and services rendered by paraprofessionals, a summary of the paraprofessionals' qualifications, and the attorney's billing rate for paraprofessional services to clients generally." R. 4:42-9(b). With respect to attorneys, the affidavit of services must describe "the experience, reputation, and ability of the lawyer or lawyers performing the services." R.P.C. 1.5(a)(7); see also R. 4:42-9(b).
A careful review of the billing statements submitted to Andrea demonstrates that unidentified individuals with the initials JSP, DC, MAS, DB, TJ, MMR, and KMS performed services for which a total of $1922 was billed. Yet, the affidavits of services do not identify these individuals or set forth their qualifications and other information required by R.P.C.
1.5(a)(7) and Rule 4:42-9(b). As a consequence, $1922 is disallowed.
Before addressing the reasonableness of the remaining fees, we consider the reasonableness of the hourly rate. Shannon E. West, Esquire, was admitted to the bar in 2006, presumably at the end of her clerkship with the judge who presided over this matter because she began working on this matter for Chamlin, Rosen, Uliano & Witherington on October 11, 2006. Her firm billed for her services at the rate of $200. Although somewhat high for a new lawyer, we cannot say that the rate was unreasonable. Ronald B. Rosen, Esquire, was admitted to the bar in 1967 and is a certified matrimonial lawyer. His firm billed for his services at the rate of $300. We are satisfied that this rate is entirely reasonable. We turn, then, to the reasonableness of the services rendered.
We note that Rosen sent multiple letters to his client, on one occasion three in one week, most of which took no more than six minutes to prepare, and over the course of three years billed Andrea $1765 for these letters. Rosen also had thirty telephone conferences with Andrea or her husband, most of which also were no more than six minutes long, and over the course of three years billed Andrea $1850 for this work. West had twelve telephone conferences with Andrea or her husband over a two-month period, for which her firm billed Andrea $260, and sent five letters to Andrea, for which her firm billed $200. Although we recognize that Family Part clients may initiate more telephone calls than other clients, we are satisfied that the number of contacts by telephone and letter was excessive. In reaching this conclusion, we note that we have not included in-person conferences in this calculation. Accordingly, the reasonable amount of fees is reduced by $2000.
Additionally, Rosen prepared thirty-four memoranda to the file, many of which were prepared on the same day that a letter was sent to Andrea. Over the course of three years, Rosen allocated over ten hours to this endeavor. West spent two hours and forty-five minutes preparing six memoranda to the file. The total amount billed by both attorneys was $3600. We consider this amount excessive and reduce the total amount of fees by $1800. These reductions bring the total fees down to $75,270.80. After carefully reviewing the detailed billing statements, we find that amount to be reasonable in light of the length of time allocated to this matter, the length of the ple- nary hearing, the multiple issues to be decided, and the amount of work devoted to each issue.
In considering the first factor of Rule 5:3-5(c), the parties' financial circumstances, the judge considered Andrea's "generous husband" who funded her litigation, found that Andrea had only "imputed income" and "only the monies that her husband provides to her," and no "earned income." On the other hand, she found Charles earned about $330,000 a year. In making these findings, she seemed to give weight to the fact that Andrea had "no earned income" instead of acknowledging that Andrea voluntarily relied on her husband's generosity instead of using her skills to obtain gainful employment to support and educate her children, seemingly viewing "imputed income" as something other than a real consideration. The judge also failed to give proper consideration to Andrea's substantial assets. Had the proper analysis been performed, as discussed above, the judge would have found that Andrea had 32% of the combined assets and income. This comparison of assets and income demonstrate that Charles had twice the ability to pay his own fees and contribute to Andrea's fees than did Andrea, the second factor in the rule.
As to the third factor, the judge found that Charles's positions on what he should contribute to college "were never reasonable" and in fact were "extremely unreasonable." She found that Andrea "never hesitated to agree to pay her portion of college." These findings of "fact" were not supported by the record. Contrary to the judge's finding, Andrea's December 2004 motion sought to have Charles pay 100% of the college expenses. Charles, in response, requested that each party pay for college based on their "respective asset mixes." At one point, he suggested that Andrea pay one-third and he would pay the balance. Thus, it was Andrea, not Charles, who asserted an unreasonable position with respect to their daughters' educations, although Charles was also unreasonable in arguing that contacts lenses were cosmetic and birth control pills were not a necessary medical expense. However, the latter positions were truly minor compared to the larger issue of college expenses.
Although the judge found that the fees incurred by both parties, the fourth factor, were in the record, we have not been able to locate any evidence of the total amount of fees incurred by Charles. The total amount of fees incurred by Andrea, exclusive of appellate counsel fees, was $79,270.80. Additionally, at the time the judge determined the fee application in January 2010, no fees had been awarded, the fifth factor identified by Rule 5:3-5(c). At that time, the fees unpaid by Andrea were about $35,000, the sixth factor. The status of fees unpaid by Charles is unknown.
The judge also considered the results obtained, the seventh factor, and found that the order of January 7, 2005, was "the correct one and it was [Charles] who wished to pursue this course." The judge ordered Charles to pay Andrea's $3000 counsel fee for the cross-motion in which she sought reimbursement of certain expenses, and given that the judge ordered Charles to pay the expenses, deemed the cross-motion necessary and successful. The judge also ordered Charles to pay for all the costs associated with the business valuation expert, but did not give an explanation.
The judge's evaluation of the outcome of the litigation was flawed. Although the judge found that her original January 7, 2005, order was "correct" and it was Charles who improvidently chose to pursue the matter on appeal, thereby incurring fees, she failed to acknowledge that we found fault with her original opinion and remanded for further proceedings and fact-findings. We determined that Charles had a valid basis for appealing the judge's January 7, 2005, order. Further, the judge based her award of $3000 in counsel fees for the cross-motion on her belief that the relief sought by Andrea was warranted. However, the majority of the expenses Andrea sought was components of child support and should not have been added to Charles's obligations. Thus, Andrea was only partially successful on that motion. Moreover, the parties had a legitimate dispute as to the intended use of the custodial accounts, and neither party should have been penalized for advancing his or her respective position. In light of our determination of the issues on appeal, it is clear that Charles prevailed on some issues and that Andrea prevailed on others, but on balance Charles's success in advancing his position was more weighty.
Based upon the judge's numerous and significant erroneous fact-findings, she mistakenly exercised her discretion in ordering Charles to pay 100% of Andrea's counsel and expert fees. In weighing and balancing all of the factors to be considered in making a fee award, we conclude that some limited fees should have been awarded to Andrea, primarily because Charles had twice the ability to pay as she did and in part because she prevailed on some issues. We have determined that Charles should be ordered to pay 68% of Andrea's $75,270.80 in fees, or $51,184.14. Charles is entitled to recoup the excess sums paid for counsel fees from Andrea and her attorneys. With respect to the expert fees, we are satisfied that Charles should only have been required to pay 68% of $23,853.98, or $16,220.71. Charles is entitled to recoup the excess sums from Andrea.
The judge is to enter an order as follows: (1) Requiring Andrea to reimburse Charles in the amount of $5600.49 for items covered by child support;
(2) Requiring Andrea to reimburse Charles for any monies he paid for the college educations of his children in excess of 68% of total college expenses as defined by ¶ 18 of the PSA;
(3) Requiring Andrea, as the custodian of their children's accounts, to apply 20% of the 2004 balance in the older daughter's custodial account and 25% of the younger daughter's custodial account to their respective college educations for each school year commencing after Andrea's initial motion to compel Charles to pay 100% of their daughters' college education and to pay Charles 68% of the sums so allocated;
(4) Requiring Andrea and the firm of Chamlin, Rosen, Uliano & Witherington to reimburse Charles for all sums paid as and for counsel fees in excess of $51,184.14; and
(5) Requiring Andrea to reimburse Charles for all sums paid as and for expert witness fees in excess of $$16,220.71.
Affirmed in part, reversed in part, and remanded for entry of an amended final order implementing this opinion.