January 12, 2012
VALERIE L. NEWMAN, PLAINTIFF-RESPONDENT,
JOHN C. NEWMAN, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Mercer County, Docket No. FM-11-1105-07C.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: November 30, 2011
Before Judges Axelrad, Sapp-Peterson and Ostrer.
In this matrimonial matter, defendant John C. Newman (husband) appeals from certain provisions of his dual final judgment of divorce. He asserts that the court failed to make adequate findings of fact, erred in determining the parties' incomes and the duration of alimony, and erred in awarding counsel fees to plaintiff Valerie L. Newman (wife). We affirm in part and remand for further proceedings.
The parties were married in October 1994. Two sons were born of the marriage, one in 1997, and the other in 2001. Wife filed a complaint for divorce in June 2007. Husband filed an answer and counterclaim. The court conducted a twelve-day trial in November and December 2008, and on December 21, 2008, rendered an oral decision that was memorialized in a dual final judgment of divorce (FJD) on December 22, 2008. Relative to this appeal, the court ordered husband to pay wife $2,250 monthly in limited duration alimony based on imputed incomes of $122,300 to husband and $45,000 to wife, and to pay $5,000 towards wife's counsel fees. This appeal ensued.*fn1
The following facts were presented in testimonial and documentary evidence at trial. As husband did not appeal his child support obligation, parenting issues, or equitable distribution, we will not reference those facts in this opinion. However, we do note that the FJD awarded the parties joint legal and residential custody of their sons, then age twelve and eight, with alternate weekly parenting time, and directed husband to pay $80 per week in child support in accordance with the guidelines.
At the time of the trial, wife was forty years old and husband was fifty-one years old. Both parties were high school graduates. At the time of the marriage, wife was employed by Merrill Lynch as an administrative assistant, earning approximately $28,000 to $30,000 per year.
Wife took a maternity leave following their first son's birth in l997, returning to part-time work at Merrill Lynch in January 2001. She also worked part-time at the Peddie Child Development Center. Their son was placed in full-time day care. Following a six-month maternity leave after their second son's birth in 200l, wife resumed part-time work with Merrill Lynch as an executive administrative assistant. In 2003, wife began working at her job full-time. She also had primary responsibility for the day-to-day needs of the children. Wife documented her gross income for three years as follows: in 2005, she earned $49,551; in 2006, she earned $62,283; and in 2007, she earned $64,979.
In May 2008, wife's position with Merrill Lynch was terminated and, after collecting severance, she began receiving unemployment benefits. Wife sought other employment, and in September 2008, she found a temporary position through Joule, Inc., an employment agency, and began working as an administrative assistant to the director of marketing at Church & Dwight. Wife stated she was paid on an hourly basis, earning $25 per hour, and working a 35-hour week. Her job did not include pay for sick, personal, or vacation days, although she was eligible for holiday pay if she worked a certain amount of hours with the company. Wife's understanding was that the job would likely continue into 2009. She provided no supporting documentation of her income.
Husband worked for thirty-two years at the Peddie School (Peddie), a private school in Hightstown. At the time of the parties' marriage, husband was either in transition between the maintenance department and his present position as director of building services or was employed in his present position.*fn2
Since June 2000, the parties have lived in a house owned by Peddie and located on its campus. The house was provided to husband free of charge; his employer also paid the utility, water and sewer charges, and costs of lawn care and snow and trash removal. In exchange, husband was responsible to respond to any emergencies that might arise on the campus.
Husband's documented gross annual income for the few years proceeding and throughout the trial was $86,500, exclusive of the value of the free shelter expenses at Peddie. Wife presented the testimony of Richard J. Carabelli of Martin Appraisal Associates, Inc., who was qualified as an expert in real estate appraisals. He explained his comparative analysis and conclusion that the "gross monthly rental potential" of the Peddie house was $2,900, based on the assumption the tenant would pay utilities and the landlord would pay taxes. He thus opined that the monetary value to husband of living in the Peddie house would be more than $2,900 per month, considering that Peddie paid for the utilities.
In summation, husband's attorney noted that custody was the primary issue at trial. In consideration of the parties' twelve and one-half-year marriage, he argued, "[i]t's a term alimony case at best." He further urged that wife's recent unemployment and decision to earn less money was "her choice" and requested that the court impute $58,938 in gross annual income to her, representing her average income from 2005 through 2008. After commenting on the parties' expenses listed in their case information statements (CIS), husband's attorney concluded that wife "needs at best about $1,600 a month to meet her budget or [$]372 [a week] for three years after the shore house is sold" as term alimony. He further noted husband had expended over $100,000 in counsel fees, had a balance due of $77,350, and claimed wife had acted in bad faith, particularly in connection with the custody matter. Husband opposed a counsel fee award in wife's favor and urged that he be awarded a fee.
Wife's attorney stated that his client lost her job in 2008 and secured other employment, and thus only earns $43,000 annually. He noted her testimony about working with the agency to secure better employment. He also commented on husband's failure to obtain a vocational evaluation to determine whether wife had "superior earning capacity" and the dearth of cross-examination demonstrating she failed to seek employment or turned down more lucrative employment. He further suggested it would be nonsensical for wife to "take an under[-]paying job to hope to get lucky on alimony." He discussed husband's consistent gross annual income of $86,500 plus the additional $2,900 per month minimum attributable to free shelter expenses, and the parties' monthly expenses. Wife's attorney left to the court's discretion the determination of permanent or limited duration alimony and the amount. He further informed the court he would be submitting a certification of services*fn3 and argued that wife had not acted in bad faith but, rather, her need to pursue the issues in court was well-intentioned.
Pertinent to this appeal, for alimony and child support purposes, the judge calculated husband's gross income at $122,300 per year, including the value of the Peddie shelter benefits, and imputed $45,000 gross income per year to wife. After analyzing the statutory factors, N.J.S.A. 2A:34-23(b), the judge concluded that ten years of term alimony was appropriate, payable at $2,250 per month. The judge also ordered husband to pay $5,000 towards wife's counsel fees.
On appeal, husband argues the court erred in: (1) failing to render adequate findings of fact and conclusions of law; (2) determining support by imputing income to him for the free housing he receives through his employment at the Peddie School; (3) determining wife's income for purposes of calculating support; (4) determining the duration of the alimony award; and (5) awarding wife a counsel fee.
"Trial judges are under a duty to make findings of fact and to state reasons in support of their conclusions." Heinl v. Heinl, 287 N.J. Super. 337, 347 (App. Div. 1996); R. 1:7-4(a). "'Meaningful appellate review is inhibited unless the judge sets forth the reasons for his or her opinion.'" Strahan v. Strahan, 402 N.J. Super. 298, 310 (App. Div. 2008) (quoting Salch v. Salch, 240 N.J. Super. 441, 443 (App. Div. 1990)). "Naked conclusions do not satisfy the purpose of R. 1:7-4. Rather, the trial court must state clearly its factual findings and correlate them with the relevant legal conclusions." Curtis v. Finneran, 83 N.J. 563, 570 (1980).
"We ordinarily remand to the trial court to make findings of fact if the trial court failed to do so." Strahan, supra, 402 N.J. Super. at 310. However, particularly when a judge has had the opportunity to observe witnesses at trial, we should only disturb his or her findings of fact when they are clearly mistaken and not supported by substantial credible evidence in the record. Cesare v. Cesare, 154 N.J. 394, 411-412 (1998); Rova Farms Resort, Inc., v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (l974).
The gist of husband's appeal, with the exception of the counsel fee issue, which we will discuss infra, is that the court overstated his income and understated his wife's income, and the duration of alimony was excessive. Moreover, in doing so, the court failed to render adequate findings of fact and conclusions of law. We disagree in all respects. Based on our review of the record and applicable law, we are satisfied the court made adequate findings of fact to support its conclusions, which are well-founded in the trial record.
Alimony is "an economic right that arises out of the marital relationship and provides the dependent spouse with 'a level of support'" that approximates the standard of living that existed during the marriage. Mani v. Mani, 183 N.J. 70, 80 (2005) (quoting Stiffler v. Stiffler, 304 N.J. Super. 96, 98 (Ch. Div. 1997)). Because the trial court has discretion to award alimony, review is limited to instances where the court made findings that were inconsistent with the evidence, or unsupported by the record. Gordon v. Rozenwald, 380 N.J. Super. 55, 76 (App. Div. 2005); Tash v. Tash, 353 N.J. Super. 94, 99 (App. Div. 2002).
The judge found husband was a "long time employee of the Peddie School, having worked his way up to be director of maintenance and facilities[,]" his salary at the time of trial was "approximately [$]87[,000] to $89,000 per year[,]" and it was undisputed he received a free housing benefit for several years that wife's expert valued at $2,900 a month. The judge noted that husband also received "free utilities, electric and gas, lawn care, snow removal, water and sewer and garbage removal" and that wife's attorney urged that his total gross income was $129,260. The judge concluded that, pursuant to Appendix IX-B of the Child Support Guidelines,*fn4 he must impute to husband as in-kind income his free housing because it reduces his personal living expenses. Accordingly, the judge determined that for alimony and child support purposes he would calculate husband's gross income at $122,300 per year.
Husband surmises that the court began with an income of $87,500 for him, and then added $2,900 per month to arrive at $122,300. Husband takes issue with this calculation, claiming his income was only $86,500 and not $87,500, and argues the court did not clearly articulate how it arrived at the final figure. He further argues the in-kind housing allowance should not have been imputed for alimony purposes unless the court also adjusted his shelter expenses, which had been listed as "zero" on his CIS; otherwise wife receives a "double dip" of his income. Husband also argues the fair market rental value of the free housing should have been reasonably reduced or discounted to take into account the nature of his job responsibilities, which required him to be available to his employer in the event of an emergency.
We are not so persuaded. Husband's gross annual income was "approximately" $87,000. We discern no error by the court in imputing the in-kind shelter expense as gross income to husband, and Carabelli's expert testimony supported utilizing a minimum of $2,900 monthly ($34,800 annually), representing the fair rental value of the property based on the tenant paying the utilities. Even utilizing husband's gross annual income of $86,500 as reflected in his 2007 W-2, it was well within the court's discretion to impute $1,000 a year more of in-kind income attributable to the additional benefits husband received from such items as free utilities, water and sewer charges, lawn care and snow removal.
We disagree with husband's argument that any in-kind imputation of income should have been offset by an adjustment to reflect a housing expense of $2,900 per month. In calculating term alimony, the court did not assume that husband actually had an extra $2,900 or so in cash each month with which he was able to pay alimony. Rather, after analyzing the statutory alimony factors, the court concluded that wife's need, and husband's ability to pay alimony, existed because husband had about $87,000 in income after shelter and wife had $45,000 before shelter. As the court noted, husband's monthly budget reflected in his CIS ($7,500) was significantly higher than wife's and children's ($6,000), even without a housing expense, primarily because husband was paying the carrying costs on the parties' shore house of approximately $2,500 per month. In the amended final judgment, however, the court directed the parties to evenly share this carrying cost. After the sale of the shore house, husband's monthly need would be reduced to $5,000 ($60,000 annually) while wife's and children's would remain at $6,000. The alimony award of $2,250 a month ($27,000 annually) increased wife's income to $72,000 before shelter and reduced husband's available income to approximately $60,000 after shelter. After accounting for wife's shelter costs, the court roughly equalized the parties' incomes. This was a fair and reasonable determination based on the evidence established at trial.
Husband presented no expert testimony to support his argument that the fair market rental value of his free housing should have been reduced or discounted to reflect that he was on call for emergencies at all times, nor did he present any evidence quantifying the reduction. Husband stated that his work day was generally eight hours long, but he occasionally worked additional hours for meetings. He did not provide evidence of any emergencies that required him to work unreasonable amounts of time which might make his living at the Peddie house inconvenient or unpleasant. Moreover, the unpublished case on which husband relies is neither binding on us, R. 1:36-3, nor is it applicable as the parties did not appeal the trial court's determination regarding the value of the house.
We turn next to husband's challenge to the court's imputation of a $45,000 annual salary to wife for alimony and child support purposes based on the temporary job she held at the time of trial in which she was earning $25 per hour for a 35-hour work week. The court rejected husband's position that wife should be imputed income of approximately $61,000, representing that which she was earning in 2007 during her last full-time position at Merrill Lynch. Based on the proofs presented at trial, the court did not find that figure "fair" as it was not convinced wife was "essentially underemployed" during the divorce proceedings.
The Child Support Guidelines, Pressler & Verniero, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2505 (2012) permits the court to impute income to a party who is underemployed based on potential employment and earning capacity, using the parent's work history, occupational qualifications and educational background. If potential earnings cannot be determined, the court may impute income based on the parent's most recent wage or recorded benefit. Ibid. Alimony awards must take into account earning capacity. Mahoney v. Mahoney, 91 N.J. 488, 504-05 (1982).
"Imputation of income is a discretionary matter not capable of precise or exact determination but rather requiring a trial judge to realistically appraise capacity to earn and job availability." Storey v. Storey, 373 N.J. Super. 464, 474 (App. Div. 2004). Imputation is in the discretion of the court, based on the evidence presented. Sternesky v. Salcie-Sternesky, 396 N.J. Super. 290, 307-08 (App. Div. 2007). A trial judge's decision to impute income of a specified amount will not be overturned unless the underlying findings are inconsistent with or unsupported by competent evidence. Gordon, supra, 380 N.J. Super. at 76; Rolnick v. Rolnick, 262 N.J. Super. 343, 359-60 (App. Div. 1993).
The court apparently accepted wife's testimony regarding her unsuccessful attempts to find comparable employment and her current earnings. We agree with husband that the court's explanation for the calculation of wife's income was not as clearly articulated as it should have been. Nevertheless, we are satisfied the record supported the court's finding that wife's current income of $875 per week, or approximately $45,000, was an appropriate indication of her earning capacity at the time, and thus discern no abuse of discretion in the ruling.
Contrary to husband's assertion, there was no evidence that wife voluntarily left her employment or intentionally reduced her salary as a litigation strategy. It is a matter of common knowledge that Merrill Lynch, along with other investment companies, significantly reduced its workforce as a result of the downturn in the economy. N.J.R.E. 201(a). Wife was one of many employees who lost their jobs and were put in the untenable position of being unable to replicate their prior incomes. Ibid. Wife testified that promptly after the May 2008 lay-off she "went out on job interviews[,]" "networked with people at Merrill Lynch[,]" and "created  account[s] on Monster.com [and] Careerbuilders[.]" She also "reached out to employment agencies to find temporary or even full time work [and] even temp to hire." Specifically, wife worked with Hobart West Solutions and Joule, Inc., and through the latter agency was able to secure in September 2008 the temporary position she held at the time of trial. Given the judge's ultimate determination of wife's income, it is apparent that the judge credited this testimony. The record supports that wife made considerable efforts to find comparable employment and accepted a lower-paying temporary position rather than remain unemployed.
Husband also takes issue with the judge's characterization of wife's income as "imputed" if it was, in fact, essentially her actual income. In this instance, the use of the term "imputed" is a distinction without a difference. Most likely the judge called it "imputed" income because it was a temporary job. If, in fact, in the future wife obtains permanent employment commensurate with her prior income level, husband can consider a motion for modification. See Mahoney, supra, 91 N.J. at 505 (holding that if the actual earnings of a party turn out to diverge greatly from the court's estimate, the alimony award can be adjusted); Lepis v. Lepis, 83 N.J. 139, 151-53 (1980) (holding that alimony can be modified based on a showing of substantially changed circumstances).
In determining that term alimony was appropriate, and setting the period at ten years, payable at $2,250 per month, the judge analyzed the factors enumerated in N.J.S.A. 2A:34-23(b). With respect to the parties' actual need and ability to pay, the judge found neither party would be able to maintain the standard of living they had enjoyed during the marriage. Nonetheless, the judge was committed to an award that would allow each party to reasonably approximate that lifestyle. The judge described the parties' standard of living as follows:
The parties' lifestyle during the bulk of the marriage was very good. They lived in a sizeable residence at low, if any, cost.
They took no[t] extravagant vacations, but owned a beach house. Although they did not socialize together much, they would eat out on occasion. The vehicles they drove were somewhat upper middle class vehicles, again nothing extravagant, but comfortable.
The judge found the twelve and one-half-year marriage was "fairly long[-]term." As far as parental responsibilities, the judge stated that husband was the breadwinner and wife had more daily responsibilities for the children. Neither party sought additional education or training. There were no significant assets to be invested by way of equitable distribution. The alimony award was taxable to wife and deductible to husband. The judge also noted husband was eleven years older than wife and allowed for the possibility that he would retire earlier than sixty-five, given the physical demands of his employment. After analyzing the parties' incomes and monthly budgets expressed in each party's CIS, the judge properly concluded wife needed alimony and husband was capable of paying it.
Husband does not claim alimony was not appropriate here. Nor does he challenge the legal standard applied by the judge. Instead, he challenges the factual findings which informed the judge's application of the first factor, "[t]he actual need and ability of the parties to pay," N.J.S.A. 2A:34-23(b)(1), the second factor, "[t]he duration of the marriage," N.J.S.A. 2A:34- 23(b)(2), and the fifth factor, ["t]he earning capacities . . . of the parties," N.J.S.A. 2A:34-23(b)(5). Husband argues the substantial credible evidence supported a much shorter term, such as three years, primarily relying on the similar incomes of the parties (utilizing wife's 2007 approximate income of $65,000) and their twelve-year "mid-term" marriage. We disagree.
"[T]he goal of a proper alimony award is to assist the supported spouse in achieving a lifestyle that is reasonably comparable to the one enjoyed while living with the supporting spouse during the marriage." Crews v. Crews, 164 N.J. 11, 16 (2000). In divorce actions, courts may award permanent, rehabilitative, limited duration or reimbursement alimony to either party, provided the factors enumerated in the alimony statute are considered. N.J.S.A. 2A:34-23(b).
"Limited duration alimony, like permanent alimony, is based primarily on the marital enterprise." Gordon, supra, 380 N.J. Super. at 66. Limited duration alimony is available to a spouse who made financial contributions to a relatively short-term marriage, because such a spouse is not entitled to permanent alimony or is in need of training or education to re-enter the workforce. Id. at 65. However, limited duration alimony may not be used if permanent alimony would otherwise be available. N.J.S.A. 2A:34-23(c); Gordon, supra, 380 N.J. Super. at 66.
The primary source to be considered in setting the amount of alimony is the supporting spouse's income. Steneken v. Steneken, 183 N.J. 290, 299 (2005). Central factors to be considered in awarding alimony are the duration of the award and the need for one spouse to receive and the other to pay. Stiffler, supra, 304 N.J. Super. at 98-99.
We give deference to a trial court's findings regarding alimony if they are supported by the record. Reid v. Reid, 310 N.J. Super. 12, 22 (App Div.), certif. denied, 154 N.J. 608 (1998).
To vacate a court's trial finding concerning alimony, we must conclude that the trial court clearly abused its discretion or failed to consider all of the controlling legal principles, or we must otherwise be satisfied that the findings were mistaken or that the determination could not reasonably have been reached on sufficient credible evidence present in the record after considering all of the proofs as a whole. [Gonzalez-Posse v. Ricciardulli, 410 N.J. Super. 340, 354 (App. Div. 2009) (citations omitted).]
As previously discussed, there was a significant discrepancy in earnings given that husband earned $86,500 in 2007 plus the housing. In contrast, the court found wife was not underemployed and her ability to generate income was that which she was earning in her temporary position at the time of trial, $45,000. The court's alimony award, taxable to wife and deductible to husband, would enable the parties to approximate the marital lifestyle and meet the expenses they each listed on their CIS.
The ten-year term of alimony for a twelve and one-half-year marriage was also reasonable under the circumstances. See, e.g., Gordon, supra, 380 N.J. Super. at 75 (affirming an award of limited duration alimony for fifteen years when the marriage had been fifteen years in length). In Gordon, the end date of the alimony coincided with the sixty-fifth birthday of the supporting spouse. Ibid. Here, the end date of the limited duration alimony coincides with husband's sixty-first birthday, and the court recognized he might choose to retire early given the physical demands of his job. Contrary to husband's assertion, the court did take into account that he is eleven years older than wife in setting the term, as it did not require him to pay alimony after an early potential retirement date.
Counsel fees, however, is a different matter. The judge awarded wife $5,000 in fees, stating:
 I do believe I can take into account [wife]'s good faith or bad faith . . . Addressing the factors in [R.] 5:3-5 I find that the financial circumstances of the parties are currently in flux, that there is a significant income disparity between [husband] and [wife], that it will be difficult for each party to pay their own counsel fees, much less contribute to the cost of the other party's fees.
Although this case was litigated over a number of issues, the two main issues in dispute remain the custody and [the property gifted by husband's father] that was hotly contested at trial. In both cases, [husband's] position was upheld . . . well was more successful before the [c]court. I am also mindful, however, that I accepted [wife's] testimony as to how this separation began. And I believe that under all the circumstances she is entitled to a counsel fee award, but not to the extent she seeks and not to the extent that the [c]court would otherwise order given her lack of success on the two main issues in this litigation.
Rule 5:3-5(c) permits the Family court to award attorney fees in a matrimonial action, within its discretion, based on a number of factors, including: the financial circumstances of the parties, the ability of the parties to pay their own fees or contribute to the fees of the other party, the reasonableness of the positions advanced, the extent of the fees incurred by both parties, and the results obtained. See also Williams v. Williams, 59 N.J. 229, 233 (1971) (stating that when awarding counsel fees, "courts focus on several factors, including the wife's need, the husband's financial ability to pay and the wife's good faith in instituting or defending the action"); Yueh v. Yueh, 329 N.J. Super. 447, 466 (App. Div. 2000) (holding that where a Rendine*fn5 lodestar "analytical framework is followed and the judge makes appropriate findings of fact, a fee award is accorded substantial deference and will be disturbed only in the clearest case of abuse of discretion").
We are mindful this is a nominal fee, as husband's attorney represented that his client had expended counsel fees in excess of $100,000 through trial. However, that does not excuse the court's obligation to perform some analysis and make some findings to support the award. It does not appear from the record that wife's attorney submitted a certification of fees before the award was made, R. 4:42-9(b), and even if he did, the court failed to make any findings regarding the hourly charges of wife's counsel, the hours reasonably expended, or the good faith of wife or bad faith of husband.
Based on our review of the transcripts, it appears the primary issue at trial involved custody. The alimony issue appealed by husband took up but a small part of the overall trial. Thus, as the record is deficient for us to make a meaningful review of the counsel fee award, we remand to the trial court for further findings.
The alimony award is affirmed. The counsel fee award is vacated and is remanded to the trial court for further findings consistent with this opinion. We do not retain jurisdiction.