January 18, 2012
NINA SCIACCA, PLAINTIFF-RESPONDENT,
PETER HAGARTY, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, Docket No. FM-03-62-96.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 24, 2011
Before Judges Parrillo and Alvarez.
Defendant Peter Hagarty appeals from a March 11, 2011 order requiring him to contribute twenty-eight percent of his youngest daughter's college tuition and expenses. We affirm in part and reverse in part, and remand the matter for a plenary hearing on the issue of defendant's proportionate share of the obligation.
From the time of their divorce in 1997 to January 2009, defendant and plaintiff Nina Sciacca shared joint custody and equal time with their two daughters, the oldest of whom has long since been emancipated. In fact, the divorce decree required plaintiff to pay $57 per week in child support to defendant. The record does not reflect when that order was modified, or if defendant is currently ordered to pay child support directly to plaintiff on behalf of the remaining unemancipated child.
In January 2009, in the middle of her senior year in high school, the youngest child and defendant had a serious conflict, and she chose as a result to live exclusively with plaintiff. Prior to her departure from his home, defendant had assisted the child in preparing for her SAT exams, completing four college applications (including to Lake Erie College where she is now a student) as well as completing her financial aid submissions. The child's academic focus is on equestrian studies, as her ambition is to become a member of the Olympic equestrian team. The admission letter from Lake Erie College was sent to defendant's home because the college applications were mailed from that address. The financial aid letter from Lake Erie College was also sent to defendant's home.
In late February 2009, after the child's admission to Lake Erie College, defendant e-mailed plaintiff that because of his allegedly reduced income and the child "being very abusive to [defendant] both physically and verbally[,]" he was not going to "reward [her] with carte blanche towards her collegiate choices." Thus even after the child had decided to attend Lake Erie College, defendant continued to press her to visit and consider another less expensive school before making her final choice.
By spring 2009, plaintiff and defendant had begun the exchange of acrimonious e-mails regarding defendant's contribution towards the child's college education, which continued through to the filing of plaintiff's motion. Commendably, despite being unable to reach an agreement, both parents took the child to Lake Erie College for the start of her freshman year.
Defendant was diagnosed with prostate cancer on February 12, 2010. Two days prior to his scheduled surgery, he suffered a heart attack and a stint was placed in an artery. On a date not specified in the record, a second stint was implanted after a second heart attack. His cancer surgery was postponed to August 2, 2010. After surgery, defendant was medically cleared by his treating oncologist for work as of October 2, 2010, with an "excellent prognosis."
Defendant is an upholsterer. He was laid-off in 2008 and that year received unemployment compensation totaling $18,705. In 2009, he received $19,095 in unemployment compensation. He then started his own business, claiming to gross only $9390 from January 1, 2010 to October 30, 2010, resulting in a net of only $2895.
On October 22, 2010, plaintiff filed the motion to compel defendant to contribute to the child's college education which resulted in the order now appealed. On January 14, 2011, after oral argument on the application, the judge determined that defendant was obliged to contribute to the child's college tuition and expenses. He deferred calculating the amount until the parties supplemented the record, however, directing defendant to "provide  within thirty days, updated medical reports which will address the prognosis and defendant's ability to work as an upholsterer." The only additional material defendant submitted was the oncologist's letter clearing him for work as of October 2, 2010.
In his March 11, 2011 decision, the trial judge acknowledged that defendant was unable to work for brief periods of time in 2010 as a result of health issues. But as the judge correctly stated, temporary unemployment is not equivalent to a substantial change of circumstances. See Gertcher v. Gertcher, 262 N.J. Super. 176, 176 (Ch. Div. 1992).
Therefore, based on plaintiff's annual income of $90,054.36 and the income the judge imputed to defendant of $34,410,*fn1
defendant was ordered to pay twenty-eight percent of the child's tuition and expenses, plaintiff to pay the remaining seventy-two percent. The obligation was imposed retroactive to the fall of 2009, hence defendant owed plaintiff a total of $13,138.95 for two academic years in addition to twenty-eight percent of future costs and expenses. This appeal followed.
Defendant asserts the following points of error:
IN DETERMINING THE PARENTAL CONTRIBUTION TO THE CHILD'S COLLEGE TUITION AND EXPENSES, THE TRIAL COURT DID NOT ADEQUATELY WEIGH ALL OF THE FACTORS SET FORTH IN NEWBURGH V. ARRIGO AND N.J.S.A. 2A:34-23(A)
THE TRIAL COURT IMPROPERLY IMPUTED INCOME TO THE DEFENDANT AS THERE WAS NO FINDING THAT HE WAS VOLUNTARILY UNEMPLOYED OR UNDEREMPLOYED
GIVEN HIS ACTUAL INCOME FOR YEARS 2009, 2010 AND 2011, THE DEFENDANT'S EARNINGS WERE INSUFFICIENT FOR HIM TO BE ABLE TO PAY 28% OF HIS INCOME TOWARD [THE CHILD]'S COLLEGE TUITION AND EXPENSES
THE TRIAL COURT DID NOT ADEQUATELY CONSIDER THE ESTRANGEMENT BETWEEN THE DEFENDANT AND THE CHILD NOR THE UNDERLYING REASONS FOR THE LACK OF A MEANINGFUL RELATIONSHIP
ABSENT AN AGREEMENT BETWEEN THE PARTIES, THE PARTY SEEKING CONTRIBUTION FROM THE OTHER PARENT FOR THE COLLEGE TUITION AND EXPENSES OF A CHILD HAS AN AFFIRMATIVE OBLIGATION TO SEEK JUDICIAL INTERVENTION PRIOR TO INCURRING ANY COSTS
"In reviewing a trial court's conclusions in a non-jury civil action, [appellate courts] are bound to grant substantial deference to the trial court's findings of fact." Walles v. Walles, 295 N.J. Super. 498, 513 (App. Div. 1996) (citing Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974)). Thus, they should not be disturbed unless they are so contrary to the evidence as to conflict with the interests of justice. Rova Farms Resort, Inc., supra, 65 N.J. at 484.
Furthermore, the special expertise of the Family Part requires us to accord particular deference to factfinding by that court. Cesare v. Cesare, 154 N.J. 394, 413 (1997). In a child support action, "the award 'will not be disturbed unless it is "manifestly unreasonable, arbitrary, or clearly contrary to reason or to other evidence, or the result of whim or caprice."'" Gotlib v. Gotlib, 399 N.J. Super. 295, 309 (2008) (quoting Foust v. Glaser, 340 N.J. Super. 312, 315 (App. Div. 2001) (quoting Raynor v. Raynor, 319 N.J. Super. 591, 605 (App. Div. 1999))).
We address first those aspects of the trial judge's decision which we affirm. Defendant asserts that his current troubled relationship with his daughter excuses him from the obligation to help fund her college education. This position lacks merit.
Despite defendant's falling out with his daughter, he continued to have contact with her. Together he and plaintiff took the child to college at the start of her freshman year. Although the rift may not have healed, it is clear that defendant and his daughter enjoyed a close relationship until midway through her senior year in high school.
Defendant relies heavily on Gac v. Gac, 351 N.J. Super. 54 (App. Div. 2002), to support his position. In Gac, however, the parents divorced when their children were eight and five years old. Id. at 56. Over the years the father's attempts at contact, even through the mail, were harshly rebuffed. Id. at 58. He had no relationship whatsoever with his children. Id. at 57-58. When they were twenty-five and twenty-two, he sought to vacate his child support order by having the children declared emancipated. The mother cross-moved to have the father reimburse a substantial portion of the younger child's college education. Id. at 59. Gac states that there are circumstances between parent and child which make contribution towards college tuition and expenses inequitable, and that the Gac family may have been such an example. Id. at 64.
This situation, however, is entirely different. In Gac, the father knew nothing about his child's college education; he had not seen her in many years. See id. at 57-59. He did not in any sense participate in his child's life, much less the decision to attend college. Id. at 63-64. Thankfully, that is far from the case here. This child lived with her father through her senior year in high school and he was substantially involved in the college application process. Here, the relationship between parent and child is not so poor that to compel college contribution would be inequitable. Accordingly, we agree with the court's conclusion that defendant is in theory, depending upon his true financial picture, obligated to contribute towards her college education despite these current difficulties between father and daughter.
We also agree with the trial court's decision making the order retroactive to the child's first semester, subject of course, to a determination of his financial status. It is undisputed that plaintiff filed no formal application until a year after the child commenced college, but in the intervening months she and defendant constantly communicated regarding the subject, although unable to agree. Since the parties have engaged in some post-judgment litigation, it is not surprising that plaintiff would have attempted to press her demand for assistance outside the courtroom for some time before resorting to filing a motion.
Defendant also relies on Gac in support of his argument that no order can be issued retroactively. But here, unlike the situation in Gac, defendant was on notice that plaintiff expected him to contribute, and that if the dispute did not resolve amicably, they would return to court. See id. at 63. In Gac, had the father known of the substantial financial liability he potentially faced, he might have managed his finances very differently. But without any such notice, he had no opportunity to plan and was placed at a real financial disadvantage. Id. at 63-64.
This inequity is absent here where undeniably defendant was actively negotiating his share of the college expense before his daughter even commenced college. He knew full well that whether he agreed or not, the claim was going to be pursued. Retroactive orders increasing support to include college tuition costs are warranted when equitable, and such an order seems equitable here. See Keegan v. Keegan, 326 N.J. Super. 289, 294 (App. Div. 1999); see also J.S. v. L.S., 389 N.J. Super. 200, 207 (App. Div. 2006), certif. denied, 192 N.J. 295 (2007). We therefore affirm the requirement that defendant's contribution, if any, commence as of September 2009.
We note that this aspect of our decision is not intended to suggest anything more than, if, after a plenary hearing as described below, the trial court decides that defendant had the ability to contribute towards his child's college education, plaintiff's delay of almost a year before filing will not bar the imposition of a retroactive obligation. In other words, to the extent defendant had the ability to pay, any such order can be imposed retroactively.
Defendant also contends the judge erred by failing to individually consider each and every statutory factor found in N.J.S.A. 2A:34-23(a) as to child support and those enumerated in Newburgh v. Arrigo, 88 N.J. 529 (1982), with regard to college contribution and that as a result his ultimate conclusion must be rejected. We agree at least that Newburgh factor four, a parent's ability to pay, acknowledged to be the most significant, requires closer scrutiny than it received. See Moehring v. Maute, 268 N.J. Super. 477, 481 (Ch. Div. 1993);
Weitzman v. Weitzman, 228 N.J. Super. 346, 357 (App. Div. 1988), certif. denied, 114 N.J. 505 (1989). Accordingly, as we explain below, we reverse the judge's decision to impute income and his reliance upon that imputed income to calculate the parties' respective contributions.
A trial judge's authority to impute income in the process of assessing child support is well-established. The Child Support Guidelines indicate that the "'[t]he fairness of a child support award . . . is dependent on the accurate determination of a parent's net income. If the court finds that either parent is, without just cause, voluntarily underemployed or unemployed, it shall impute income to that parent . . . ." Pressler & Verniero, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2504 (2012).
In deciding whether to impute income, a court considers:
(1) what the employment status and earning capacity of that parent would have been if the family had remained intact or would have formed,
(2) the reason and intent for the voluntary underemployment or unemployment,
(3) the availability of other assets that may be used to pay support, and
(4) the ages of any children in the parent's household and child-care alternatives. [Ibid.]
Defendant maintains that because his lack of employment and income was due to circumstances beyond his control, the trial court's decision to impute income issued in error. He points out that he was out of work in 2010 due to health problems. Defendant did not, however, establish the precise length of time during which he was unable to work for medical reasons. It is evident that the interruption was only temporary.
But defendant also asserts that "his lack of work as an upholsterer is adversely affected by the general economic malaise." He reminds us, as he did the trial judge, that he lost his two previous jobs in the field, the last in 2008, due to a weakening economy.
Defendant therefore argues that a plenary hearing should have been conducted to allow him to present his true and limited income-earning capacity in his field. He argues in the alternative, that he should have been permitted to submit regular income reports because he is attempting to establish his own upholstery business.
A trial court's decision to impute income must be "based on a realistic assessment of capacity to earn." Storey v. Storey, 373 N.J. Super. 464, 474 (App. Div. 2004). In Ibrahim v. Aziz, for example, we noted that the payor, who was living in Egypt, was working under very different economic conditions, which made imputing income both unrealistic and inequitable. 402 N.J. Super. 205, 213-14 (2008). Under those circumstances, it would have been unfair to impute income as the payor genuinely had no prospect of being able to pay the amount sought. Id. at 213. Defendant essentially makes the same point, positing that the economic recession made it impossible for an upholsterer in Burlington County to earn the wages imputed to him.
We cannot say if it is reasonable for defendant to be starting a new venture as a self-employed upholsterer. At a plenary hearing, defendant has the opportunity to establish that his efforts at developing a business are likely to succeed. By the same token, the judge may conclude that the child's present needs preclude defendant from enjoying the luxury of starting a business at this time. See Arribi v. Arribi, 186 N.J. Super., 116, 117 (Ch. Div. 1982) (citing Robins v. Robins, 106 N.J. Eq. 198 (E.&A. 1930)).
In any event, in this case, it is a given that a parent's ability to pay is the single most important Newburgh factor, and one which requires greater elucidation by way of a plenary hearing. Defendant cannot be compelled to pay the percentage currently ordered unless the judge is satisfied, after a plenary hearing, that defendant is truly unemployed or underemployed voluntarily, thereby justifying the imputation of income.
Accordingly, we reverse the matter for a plenary hearing on the question of defendant's ability to pay. The percentage defendant is required to pay retroactive to the child starting school, may change as a result. On this record we cannot hazard a guess as to whether the final and fair outcome will be a greater contribution, lesser contribution, or the same as presently ordered.
Affirmed in part, reversed in part, and remanded for a plenary hearing.