October 7, 2011
ROSEANN ETESON, PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
BRUCE ETESON, DEFENDANT-RESPONDENT/CROSS-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-1472-99.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 14, 2011
Before Judges Axelrad and Ostrer.
Plaintiff Roseann Eteson and defendant Bruce Eteson appeal and cross-appeal from aspects of the trial court's order deciding various requests for post-judgment relief. We affirm.
After almost nine years of marriage, the parties divorced in 1996. Plaintiff received primary residential custody of the parties' two daughters, born in 1991 and 1993. Their final judgment of divorce (FJD) provided that defendant was to pay plaintiff $1500 a month in child support. According to their pre-judgment case information statements (CIS), plaintiff earned no income, and defendant's gross earnings slightly exceeded $81,000. The parties agreed that child support would be modified based on changed circumstances consistent with Lepis v. Lepis, 83 N.J. 139 (1980). They also agreed that post-secondary educational costs would be shared "in accordance with their respective financial abilities at that time."
After the divorce, plaintiff entered the workforce. She stated that as of 2008, she earned over $133,000 a year as an electronics engineer for the United States Army. Defendant's income also grew substantially, exceeding $340,000 by 2008. Over the years, as their incomes rose, the parties privately agreed to modify child support. Defendant also agreed to pay child support through Probation, although the FJD allowed him to pay plaintiff directly.
Although their incomes ultimately exceeded the maximum subject to the Child Support Guidelines, defendant arrived at a proposed child support amount, acceptable to plaintiff, by extrapolating from the Schedule of Child Support Awards (Child Support Schedule or Schedule). He did so, notwithstanding that the Schedule and Considerations in use of Child Support Guidelines (Guidelines Considerations) disapproved of extrapolation. See Pressler & Verniero, N.J. Court Rules, Appendix IX-F (2011) (Child Support Schedule) ("DO NOT EXTRAPOLATE THESE SCHEDULES BEYOND $3,600 COMBINED WEEKLY NET INCOME."); id. at Appendix IX-A, ¶20(b) (Guidelines Considerations) ("[T]he court shall not extrapolate the Appendix IX-F schedules (statistically or by adding amounts from different income ranges)" beyond the maximum amount.).
Sometime around April 2008, the parties agreed privately that defendant's child support obligation would rise to $2450 a month, based on net-after-tax incomes of $83,921 for plaintiff and $156,852 for defendant. Defendant's income was based on two elements: (1) projected salary of $172,390, based on an annualization of his 2008 hourly rates; and (2) $67,060 in incentive plan payments received in 2008. These two elements totaled $239,450. In documenting this income, defendant provided plaintiff with a March 6, 2008 paystub and a copy of a 2007 Management Incentive Plan Payout Worksheet.
In performing his calculation, defendant claimed he used an out-of-date Child Support Schedule. Effective September 1, 2007, the schedule found at Appendix IX-F was modified. The new schedule increased the maximum net weekly income from $2900 to $3600 and generally reduced child support amounts for relatively high incomes. Compare Pressler, N.J. Court Rules, Appendix IX-F (2005) with Pressler & Verniero, N.J. Court Rules, Appendix IX-F (2011).
In the absence of a court order modifying the original $1500-a-month child support obligation, Probation began recording amounts over $1500 as overpayments. Consequently, the parties entered into a consent order on June 15, 2009 to formalize a new child support agreement that the parties reached in April 2009. The new agreement called for a monthly payment by defendant of $3200. The order also erased defendant's positive account balance with Probation. The preamble to the parties' pro se consent order governing defendant's child support obligation stated:
Bruce calculates the child support amount each year using his and Roseann's incomes and he provides all of the information used for the calculations to Roseann for discussion and agreement. The most recent child support amount of $3,200.00 per month began on April 1, 2009. Since learning of the new law [pursuant to which Probation would forward only the court-ordered amount], Bruce has paid this amount to Roseann, but only $1,500.00 via CS62147220A. Roseann's and Bruce's current total incomes are $132,884.00 and $342,870.00, respectively. They will update the Court in any year there is an increase or decrease.
In February 2010, plaintiff filed a motion seeking, among other forms of relief, an order (1) compelling defendant to file a CIS to disclose his tax returns and related tax documents for 2007, 2008 and 2009, and (2) allocating college expenses.*fn1
Plaintiff alleged that shortly after entering the 2009 consent order, defendant provided plaintiff with certain pay records reflecting, at least in 2009, that he received bonus income from an incentive plan that was not considered in prior years' child support calculations. She alleged that defendant had previously represented that his total income consisted of his salary and the single bonus program disclosed in 2008. She sought discovery to determine whether defendant withheld income that would have resulted in increased child support; if so, she sought a retroactive increase.
With respect to college expenses, plaintiff alleged that their eldest daughter was attending community college during that school year. Plaintiff claimed that she paid twenty-eight percent of her daughter's fall semester tuition, and twenty-five percent of her spring semester tuition. Defendant paid the balance.
In his cross-motion filed April 12, 2010, defendant sought a retroactive reduction in his monthly child support obligation to $1764, effective April 1, 2009, based on alleged mutual mistakes in the calculation of the mutually agreed child support. The alleged mistakes took three forms: (1) the use of the superseded Child Support Schedule; (2) the decision to extrapolate from the Schedule despite the instruction to the contrary; and (3) miscalculating the parties' incomes based on an understatement of their Social Security taxes, which resulted from a misplaced decimal point. Defendant also sought a declaration that the child support amount should be modified effective September 2011, unless an intervening change in circumstances warranted an earlier modification. Defendant sought other relief not the subject of appeal.
After considering the parties' certifications and counsel's oral argument, the trial court adopted its tentative written decision. R. 5:5-4(e). The court denied plaintiff's request to compel defendant to file a CIS and to produce documents related to his income in 2007 through 2009. The court held that the parties' settlement of child support for 2009 and previous years was entitled to respect and that plaintiff had not sufficiently alleged fraud or other compelling circumstances to justify the requested extensive discovery.
The court ordered the parties to exchange tax returns annually, on or before September 15, 2010 and each year thereafter, in order to accomplish the annual review of child support obligations as provided in the parties' June 15, 2009 consent order. The annual review would also allow for the appropriate income-based allocation of other expenses, such as unreimbursed medical expenses and college costs. Although the FJD provided for allocation of college costs according to "financial abilities," the trial court utilized relative incomes.
The court denied defendant's cross-motion to reduce retroactively the child support obligation of $3200 established in the June 15, 2009 consent order. The court found that the mutual mistake doctrine did not apply, particularly inasmuch as defendant reaffirmed, in a communication to plaintiff in August 2009 after conferring with an attorney, that the $3200 amount was acceptable. The court also denied defendant's request to modify child support prospectively, concluding that defendant had not demonstrated a change in circumstances.
Consistent with the deference ordinarily accorded discretionary decisions of Family Part judges, Donnelly v. Donnelly, 405 N.J. Super. 117, 127 (App. Div. 2009), we affirm substantially for the reasons stated in the trial court's written decision. We add the following comments.
Plaintiff seeks discovery and, ultimately, a retroactive increase in child support, based on her allegation that defendant misrepresented his income. She alleges that he represented in 2008 and in prior years, that the sole sources of his income were his salary and one bonus program. Indeed, defendant admitted in his certification before the trial court that he omitted other sources of income from his calculations in 2008 and earlier. However, he denied that the omitted sources were substantial or that they included the long term incentive bonus program, which produced a substantial bonus that he first factored into calculations in 2009. More significantly, defendant denied that he had represented to plaintiff in 2008 and earlier that his sole sources of income were those used in his calculations.
Plaintiff can identify no documents or other proof to corroborate her claim that defendant misrepresented that the sources of income used in his 2008 and earlier calculations were the sole sources of his income. Therefore, we shall not disturb the trial court's decision to deny discovery. See Dworkin v. Dworkin, 217 N.J. Super. 518, 525 (App. Div. 1987) (denying avoidance of property settlement agreement on grounds of fraud where "plaintiff's unsupported certifications, including her circumstantially uncorroborated claim of misrepresentation, were not sufficient to warrant either an order in her favor or a hearing to resolve a factual dispute"). The mere fact that one former spouse alleges fraud against another does not guarantee a complaining spouse relief, or even a hearing, particularly given our courts' predisposition to enforce settlements and to maintain the stability of prior arrangements. Id. at 524. See also Petersen v. Petersen, 85 N.J. 638, 642 (1981) (voluntary and consensual matrimonial agreements are entitled to "considerable weight with respect to their validity and enforceability"). We note that had the parties formalized their 2008 and earlier agreements in an order, a motion to modify based on fraud would have been untimely. R. 4:50-2.
Nor are we impelled to disturb the trial court's decision to accept
the parties' 2009 income shares as a proxy for financial ability to
pay college costs, at least while the parties' oldest child attends
community college and lives at home. See Gotlib v. Gotlib, 399 N.J.
Super. 295, 308 (App. Div. 2008) (stating that trial court has
substantial discretion in allocating college expenses).*fn2
The alternative would have been extensive and burdensome
discovery, and perhaps a plenary hearing, that would
not necessarily alter significantly the result achieved using income
However, once one of the parties' children enters a residential four-year college involving comparatively higher costs, then it would appear inappropriate to rely solely upon the parties' incomes as a proxy for their ability to pay. An ability-to-pay analysis would include consideration of the parties' savings and other assets, as well as their liabilities, in calculating their respective college contributions. Moreover, a child's attendance at a residential college may constitute a change in circumstances that would justify a re-evaluation of child support as well, taking into account the reduced costs of supporting the child at home, as well as the added obligation of supporting the child away at school through college costs. See Beck v. Beck, 239 N.J. Super. 183, 190-91 (App. Div. 1990) (father's assumption of substantial tuition obligation, along with other factors, justified hearing pursuant to Lepis, supra). However, we leave that decision to the trial court for determination at the appropriate time, cognizant that the movant bears the burden to make a prima facie showing of changed circumstances. Lepis, supra, 83 N.J. at 157-59.
Finally, the trial court appropriately rejected defendant's request to modify child support set forth in the 2009 consent order, based on alleged mutual mistake. To the extent defendant sought retroactive reduction of child support before he filed his cross-motion, his request was barred by the anti-retroactivity law. See N.J.S.A. 2A:17-56.23a ("No payment or installment of an order for child support . . . shall be retroactively modified by the court except for the period during which the party seeking relief has pending an application for modification . . . ."). We are aware of no exception to the anti-retroactivity law that applies to this case. Cf. Keegan v. Keegan, 326 N.J. Super. 289, 294 (App. Div. 1999) (allowing retroactive modification that increases support).
Nor do we find error in the court's conclusion that defendant did not establish a prima facie claim of mutual mistake warranting relief. "The doctrine of mutual mistake applies when a 'mistake was mutual in that both parties were laboring under the same misapprehension as to [a] particular, essential fact.'" Bonnco Petrol, Inc. v. Epstein, 115 N.J. 599, 608 (1989) (quoting Beachcomber Coins, Inc. v. Boskett, 166 N.J. Super. 442, 446 (App. Div. 1979)). Defendant alleged three mutual mistakes, all of which may be rejected.
First, it was implausible that the parties were mistaken about the appropriateness of extrapolating from the Schedule when defendant's own worksheets quoted the instruction disapproving extrapolation. Second, there was no basis to attribute to plaintiff the decimal point error that defendant made himself when he included Social Security taxes in his income calculations. Third, the parties' use of the superseded Schedule was not a mistake of an essential fact. As we have discussed, the parties used the Schedule as a construct, along with extrapolations, to arrive at a number that they independently accepted. The continuing applicability of the Schedule was not essential to the parties' agreement.
Moreover, the mistake was not so material as "to upset the very basis for the contract." Restatement (Second) of Contracts § 152, comment a (1981). To establish materiality in this context, "[i]t is not enough for [the movant] to prove that he would not have made the contract had it not been for the mistake." See id. at comment c. Rather, "[the movant] must show that the resulting imbalance in the agreed exchange is so severe that he cannot fairly be required to carry it out." Ibid. Particularly inasmuch as defendant declared in August 2009, after conferring with counsel, that he found acceptable his child support obligation established in the June 2009 consent order, one cannot conclude it would be unfair to require performance.
Finally, the court could reasonably have found that defendant bore the risk of any mistake in applying the Schedule. He presumably was aware, when he used the Schedule and performed his extrapolations, that he had limited knowledge as a non-lawyer of the Guidelines Considerations, and the Court Rules, statutes and case-law governing child support. Id. at § 154(b) ("A party bears the risk of mistake when . . . he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient. . . ."). Defendant took it upon himself to perform these calculations.
In sum, we defer to the trial court's decision on defendant's cross-motion, mindful that the power of the court to reform an agreement based on mutual mistake is grounded in equity, and the trial court is vested with "considerable discretion," which must be flexibly applied. Id. at Chapter 6, Mistake, introductory note.