December 19, 2011
EDWARD P. HARWELIK, JR., PLAINTIFF-APPELLANT,
JESSICA R. HARWELIK, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Hunterdon County, Docket No. FM-10-228-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted May 24, 2011
Before Judges Carchman, Graves and Waugh.
Plaintiff Edward Harwelik, Jr., and defendant Jessica Harwelik were married on August 3, 2000, and divorced on June 11, 2010. The parties have one child, a daughter, who is now seven years old. Prior to trial, the parties entered into a shared parenting arrangement that designated defendant as the parent of primary residence and plaintiff as the parent of alternate residence. However, the parties were unable to reach an agreement on child support.
Plaintiff argues on appeal that the trial court incorrectly calculated his alimony and child support obligations and his percentage contribution toward their child's unreimbursed medical expenses based on compensation that he is no longer eligible to receive. Plaintiff also claims the trial court erred in awarding counsel fees to defendant in the amount of $25,000 and in ordering the parties to place "a hold on [their daughter's] passport with the State Department." For the reasons that follow, we affirm in part, reverse in part, and remand for further proceedings.
The essential facts are not in dispute. Plaintiff is a college graduate with a degree in finance. He also completed course work at New York University in financial planning. Plaintiff was fifty-three years old at the time of trial and was employed as a manager at Verizon Communications, where he had worked for many years.
Defendant was born in Peru on March 27, 1972. While living in Peru, defendant finished high school, earned a secretarial certificate, and studied English as a second language. In 1992, defendant moved to Caracas, Venezuela, to continue her studies and to work. While living and working in Venezuela, defendant earned an Associates Degree in Human Resources, but the credits she earned are not transferable to the United States.
The parties met in Venezuela in 1995 while plaintiff was employed by GTE, which subsequently merged with Bell Atlantic to form Verizon. On August 3, 2000, the parties were married in Venezuela. They relocated to the United States later that same year.
After moving to the United States, defendant initially worked in a florist shop and then a restaurant. She also worked at a dentist's office for a short time, and she was an administrative assistant at a nursing home. Defendant did not work outside the home following the birth of the parties' child in 2003, but she continued to study English as a second language. Defendant also took some courses at Raritan Valley Community College. She testified that her goal is to become a teacher.
Plaintiff's complaint was filed in February 2007, and the trial was conducted on August 11, 12, and 13, 2009, and September 22, 2009. The parties were the only witnesses to testify. On June 2, 2010, the trial court placed its decision on the record, and a final judgment of divorce was entered on June 11, 2010.
Plaintiff testified he had been employed by Verizon for twenty-one years (although the company was not always known as Verizon). He explained that while he was a director at Verizon, his income was comprised of a base salary, short-term bonuses, and long-term bonuses in the form of restricted stock units (RSUs) and performance stock units (PSUs).*fn1 These stock units were granted in a given calendar year and vested three years later. Following the three-year vesting period, the value of the stocks was paid to plaintiff as part of his W-2 wages. As a director, plaintiff was also entitled to defer all or part of his short-term bonus.
In July 2006, when Verizon sold most of its international assets, plaintiff's title was downgraded from director to manager. As a result of the change, he was no longer eligible to receive long-term bonuses, although the bonuses previously granted would still vest and be fully payable. In addition, as a manager, plaintiff could no longer defer the short-term bonuses he received after 2006.
Plaintiff's earned income was $150,021.86 for 2002, $150,879.31 for 2003, $158,149.10 for 2004, $199,034.01 for 2005, and $232,919.49 for 2006. For 2007, plaintiff's earned income of $240,044.10 included a long-term bonus in the amount of $65,287 that had vested in 2007, an $8000 relocation benefit, and $80,908.59 of short-term bonus payments that plaintiff had deferred.*fn2
In 2008, plaintiff's earned income of $274,238.07 included a long-term bonus in the amount of $123,455 that vested on December 31, 2007, and in 2009, he received his final long-term bonus (that vested on December 31, 2008) in the amount of $146,585. Plaintiff indicated he would receive the remaining balance of his deferred income in the amount of approximately $80,000 either in 2010 or 2011.
Plaintiff testified that his average income for the five years preceding the filing of the divorce complaint was approximately $178,200 per year. However, he anticipated that his future income would be much less because he was no longer eligible to receive long-term bonuses.
The parties stipulated to the value of the marital bank accounts and certificates of deposit and agreed to distribute them equally. They also agreed to equally distribute the stipulated value of the marital portions of plaintiff's pension and his 401(k) savings plan. However, the stipulations did not cover the deferred compensation payment that plaintiff received in 2007 in the amount of $80,908.59 or the final deferred compensation payment in the amount of approximately $80,000 that plaintiff expected to receive in 2010 or 2011. The court found both payments were subject to equitable distribution, and it was "fair and reasonable for the wife to receive $80,000."
Based on plaintiff's earning history and his year-to-date income in 2009----which included his final long-term bonus of $146,585----the court calculated plaintiff's alimony obligation based on a gross income of $300,000 per year:
In 2009, husband was on track to earn approximately $300,000 based on his weekly salary and his year-to-date income as of July 11, 2009. And what the Court did was take his year-to-date income as of July 11, 2009, and simply add to it his weekly salary of $2500 times 25 weeks to come up with a total income for 2009 of $300,000. And that's the earned income. There's still unearned investment income and rent.
The Court finds it fair to fix his earned income for alimony and child support purposes at $300,000 per year. Due to the equitable distribution of assets, the Court will not impute unearned income to him based on prior years before the equitable distribution because some of the equitably distributed assets will go to the wife.
The husband's income at $300,000 per year . . . yields a . . . disposable income at $225,000. This equates to $18,750 per month. His budget is $9261 per month. He is more than able to pay alimony at $6500 per month.
The Court will order alimony at $6500 per month. It shall last for four years, the period of time that the wife needs to complete her college degree in accord with her rehabilitative plan. It shall commence July 1, 2010.
On appeal, plaintiff submits the following issues for our consideration.
STANDARD OF REVIEW.
THE TRIAL COURT ERRED IN CONSIDERING DEFERRED COMPENSATION AS A PART OF MR. HARWELIK'S INCOME FOR PURPOSES OF CALCULATING ALIMONY AND CHILD SUPPORT.
A. THE TRIAL COURT ERRED IN CONSIDERING DEFERRED INCOME THAT HAD ALREADY BEEN CONSIDERED IN ITS AWARD OF EQUITABLE DISTRIBUTION.
B. THE TRIAL COURT ERRED IN CONSIDERING DEFERRED COMPENSATION THAT HE NO LONGER RECEIVES FOR PURPOSES OF CALCULATING ALIMONY.
C. THE TRIAL COURT ERRED IN UTILIZING DEFERRED COMPENSATION HE NO LONGER RECEIVES IN CALCULATING CHILD SUPPORT.
THE TRIAL COURT ERRED IN FAILING TO AVERAGE MR. HARWELIK'S INCOME FOR PURPOSES OF CALCULATING ALIMONY.
THE TRIAL COURT ERRED IN ITS COUNSEL FEE AWARD TO THE DEFENDANT GIVEN ITS INCORRECT CALCULATION OF MR. HARWELIK'S INCOME.
THE TRIAL COURT ERRED IN ITS ALLOCATION OF UNREIMBURSED MEDICAL EXPENSES FOR THE MINOR CHILD.
THE TRIAL COURT INCORRECTLY ORDERED THAT THE PARTIES PLACE A HOLD ON THE CHILD'S PASSPORT WITH THE U.S. DEPARTMENT OF STATE AS NO SUCH MECHANISM EXISTS.
Plaintiff challenges the alimony award on a number of grounds. We reject his contention that the trial court "double counted" the deferred compensation he received in 2007 in the amount of $80,908.59, and the deferred compensation he expected to receive in 2010 or 2011. The trial court concluded it was more suitable to treat both of the deferred payments as assets that were subject to equitable distribution, and it awarded plaintiff $80,000, approximately one-half of the total value, "to pay for her education" and to provide her with "a cushion for emergencies." Thus, the deferred compensation payments were fairly distributed and the alimony award was based on plaintiff's 2009 income, which did not include either of the deferred compensation payments. Under these circumstances, there was no improper double-counting in this case.
Plaintiff also claims the court erred in failing to average his income for purposes of determining alimony. We do not agree. In Platt v. Platt, 384 N.J. Super. 418, 422 (App. Div. 2006), the plaintiff controlled a business and "determined the salary he would be paid each year." In that case, we found it was reasonable for the trial court to average plaintiff's income over a five-year period, including the two most recent years after the divorce complaint was filed, because he "chose to drastically reduce" his income even though his business was "doing well financially." Id. at 426-27. In this case, however, there was no claim that plaintiff manipulated his income, and we perceive no abuse of discretion by the trial court.
"We give deference to a trial court's findings as to [the] issue of alimony, if those findings are supported by substantial credible evidence in the record as a whole." Reid v. Reid, 310 N.J. Super. 12, 22 (App. Div.), certif. denied, 154 N.J. 608 (1998); see also Cesare v. Cesare, 154 N.J. 394, 411-12 (1998)
("The scope of appellate review of a trial court's fact-finding function is limited. The general rule is that findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence."). In this case, we are convinced from our review of the record that there was sufficient credible evidence to support an award of rehabilitative alimony for a period of four years so that defendant can obtain a college education. However, we have also concluded the trial court must reconsider the amount of the award because it was based on an income of $300,000, which included a substantial long-term bonus that plaintiff no longer receives. We therefore remand this issue and that of plaintiff's child support obligations to the trial court for further proofs and reconsideration.
In Point IV, plaintiff challenges the award of counsel fees to defendant in the amount of $25,000. An award of counsel fees in matrimonial matters is discretionary. R. 4:42-9(a)(1); R. 5:3-5(c); Williams v. Williams, 59 N.J. 229, 233 (1971). "In determining whether a counsel fee should be imposed, the court must look at the requesting party's need, the other party's ability to pay, and the good and bad faith of each party." Boardman v. Boardman, 314 N.J. Super. 340, 349 (App. Div. 1998).
That is what happened here, and we find no abuse of discretion or reversible error.
In his final point, plaintiff states there is no "passport hold" procedure available through the Department of State. Defendant agrees. We therefore reverse the part of the judgment of divorce that required the parties to "put a hold" on their daughter's passport.
The judgment entered by the court is affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. Jurisdiction is not retained.