February 1, 2012
RONALD VILLONE, JR., PLAINTIFF-APPELLANT,
KATHERINE VILLONE, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-1799-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 20, 2011 -
Before Judges Yannotti and Espinosa.
Plaintiff appeals from an order that denied his application for modification of alimony and child support paid to his former spouse. We reverse.
The parties were married on January 8, 1994 and had two children. They were divorced in 2004 and entered into a marital settlement agreement (MSA) that was incorporated into a supplemental judgment of divorce dated April 23, 2004.
In 2004, plaintiff was earning an annual salary of approximately $1 million as a pitcher for the Seattle Mariners. The MSA required him to pay $7,000 in monthly child support and, as corrected by consent order dated June 30, 2006, $12,000 per month "commencing on February 1, 2004 and continuing for nine (9) years thereafter until January 31, 2013[.]" However, plaintiff's earnings varied considerably based on his contracts. In their MSA, the parties agreed to criteria to be applied for modifications of the support obligations based upon changes in plaintiff's income or employment:
B. Payment of alimony in the sum as set forth in "A" shall continue, so long as the Husband has earnings from his current baseball contract, including licensing fees and endorsements, annually between the sum of Nine Hundred Fifty Thousand ($950,000.00) Dollars and One Million Five Hundred Thousand ($1,500,000.00) Dollars. In the event the Husband earns less than said sum, then the Husband has the right to apply to the Court for a reduction in alimony unless it can be otherwise negotiated by agreement between the Parties. If the Husband has earnings in excess of said sum, then the Wife may seek an increase in alimony from the Court.
C. If the Husband's baseball contract provides that he plays in the minor leagues and if he remains in the minor leagues for a period of sixty (60) days, then the Parties agree to re-negotiate alimony. In the event the Parties cannot come to agreement, the Husband has the right to seek the aid of the Court. If and when the Husband shall return to the major leagues and his earnings including salary, endorsements and licensing fees received within a calendar year, equal the sum of Nine Hundred Fifty Thousand ($950,000.00) Dollars to One Million Five Hundred Thousand ($1,500,000.00) Dollars then alimony will return to the sum as originally set forth commencing from the period of the return to the annual salary at the sums as set forth.
Paragraph II.A. of the MSA provided similar criteria for consideration of modifications to plaintiff's child support obligation:
Commencing on the first day of January, 2004, and continuing until emancipation or a change of circumstance as defined in Paragraphs B and C above, i.e., wherein the Husband's salary plus endorsements and licensing fees shall be reduced within the calendar year to a sum below Nine Hundred Fifty Thousand ($950,000.00) Dollars and above One Million Five Hundred Thousand ($1,500,000.00) Dollars, the Husband shall make direct payment to the Wife in the sum of Seven Thousand ($7,000.00) Dollars per month allocable to both children. The Husband shall have the right to return to the Court for a re-allocation of child support in the event his earnings being less than $950,000.00 inclusive of licensing fees, baseball salary and endorsements and if he returns to the minor leagues for a period in excess of 60 days.
In 2005, plaintiff signed a two-year contract with the Seattle Mariners, which paid him $2.2 million in 2005 and $2 million in 2006, including built-in performance based incentives. Defendant's motion for increased child support and alimony based upon this change in income was granted by the trial court, and plaintiff appealed. In an unpublished opinion, we affirmed the increase in child support but reversed the increase in alimony and remanded for further proceedings. Villone v. Villone, No. A-6292-05 (App. Div. Oct. 31, 2007) (slip op. at 1, 2). During the course of that opinion, we observed that the provisions in the MSA which permitted the parties to seek modifications based upon changes in plaintiff's income were "triggers" that, when met, constituted "the equivalent of a changed circumstance, which would then allow the court to consider a modification application without the necessity of the moving party demonstrating additional changed circumstances." Villone, supra, slip op. at 8.
The parties resolved the alimony issue through arbitration and entered into a consent order, dated January 28, 2009, which provided that "in any year where the Plaintiff's income exceeds $1,500,000.00, the payment to the Defendant for additional alimony shall be the sum of $40,000.00 and the payment for child support shall be the sum of $40,000.00."
In 2009, plaintiff signed a contract with the Washington Nationals and earned approximately $1.7 million for the 2009 year. As of April 2010, plaintiff was informed by the Washington Nationals that he would be assigned to pitch for its minor league team. Plaintiff pitched for the Washington Nationals' minor league team for over 150 days. His salary was approximately $59,000 for the year 2010.
In September 2010, plaintiff applied for a reduction in his alimony and child support obligations based on these changed circumstances. He certified that, as of August 13, 2010, he was released from the Washington Nationals and had no offers for the next season. Plaintiff was then forty years old. He stated that, due to age and potential health concerns, it was unlikely he would receive any offers and the reduction in his salary and termination as a ball player was "most likely . . . permanent."
He stated further that he had discussed the possibility of being a pitching coach with a few minor league teams but "the full-time pay for such a position for the entire season ranges from thirty thousand dollars ($30,000.00) to seventy thousand dollars ($70,000.00)." Plaintiff also stated that his personal circumstances had changed with the birth of a third child in June 2010. As a result, he stated that there was an uneven distribution of support among his three children. Plaintiff also cited defendant's full-time employment as an elementary school teacher as further evidence of changed circumstances.
In her opposition to the motion, defendant acknowledged that plaintiff had been in the minor leagues for more than sixty days and was therefore entitled to renegotiate the terms of his support obligation pursuant to the terms of their MSA. However, she argued that there was no change in circumstances that justified a modification of the obligations. She also pointed to plaintiff's case information statement, which reflected a gross income that exceeded $1.7 million in 2009, monthly savings of $162,000, and a home equity line of credit of $6.5 million as evidence that plaintiff's request was improper and "baffling." In his reply certification, plaintiff disputed defendant's allegations and stated that his income in 2010 was $56,900.
The court heard oral argument and denied plaintiff's motion, finding no changed circumstances and that plaintiff had presented insufficient information to show his change in circumstances was permanent. In his appeal, plaintiff argues that he is entitled to further discovery and a plenary hearing on his request for modification based upon the parties' MSA; that his proofs were sufficient to establish a prima facie case of changed circumstances even in the absence of the provisions of the MSA; and that the motion judge misapplied the law in refusing to find that the birth of plaintiff's third child constituted a change of circumstances warranting a modification of his child support obligation.
In reviewing a decision of a family court, we "defer to the factual findings of the trial court," N.J. Div. of Youth and Family Servs. v. E.P., 196 N.J. 88, 104 (2008), in recognition of the "family courts' special jurisdiction and expertise in family matters[.]" N.J. Div. of Youth and Family Serv. v. M.C. III, 201 N.J. 328, 343 (2010) (quoting Cesare v. Cesare, 154 N.J. 394, 413 (1998)) (internal quotation marks omitted). The decision to deny an application to modify or terminate support obligations is reviewed for an abuse of discretion. Larbig v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006).
It is only "when the trial court's conclusions are so 'clearly mistaken' or 'wide of the mark'" that we will intervene and make our own findings "to ensure that there is not a denial of justice." E.P., supra, 196 N.J. at 104 (internal citation omitted); see also Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). It is against these standards that we review the decision of the Family Part judge.
A party who moves for modification must make "a prima facie showing of changed circumstances[.]" Miller v. Miller, 160 N.J. 408, 420 (1999) (citing Lepis v. Lepis, 83 N.J. 139, 157 (1980)). Changed circumstances may be shown by an increase or decrease in the resources of the supporting spouse, an increase in cost of living, illness or disability arising after the original judgment or changes in the dependent spouse's lifestyle, among other things. Lepis, supra, 83 N.J. at 151. Upon such a showing, "a court may order discovery and hold a hearing to determine the supporting spouse's ability to pay." Miller, supra, 160 N.J. at 420 (citing Lepis, supra, 83 N.J. at 157-59).
Because matrimonial settlement agreements are "'essentially consensual and voluntary in character,'" they are "'entitled to considerable weight with respect to their validity and enforceability' in equity, provided they are fair and just." Dolce v. Dolce, 383 N.J. Super. 11, 20 (App. Div. 2006) (quoting Petersen v. Petersen, 85 N.J. 638, 642 (1981)); see also Lepis, supra, 83 N.J. at 153. Neither party has argued that the agreement is not fair and just. There is, then, no reason to depart from the general rule that "courts should enforce contracts as the parties intended." Pacifico v. Pacifico, 190 N.J. 258, 266 (2007).
In this case, the parties explicitly recognized in their agreement that plaintiff's career and earning capacity would vary over the years and that there were certain objective criteria that represented substantial changes in his income relevant to a determination of his support obligations. No change in the obligation was anticipated if plaintiff's "earnings from his current baseball contract, including licensing fees and endorsements, annually [are] between the sum of Nine Hundred Fifty Thousand ($950,000.00) Dollars and One Million Five Hundred Thousand ($1,500,000.00) Dollars." If plaintiff's earnings rose above or fell below this broad range, the agreement gave the interested party "the right to apply to the Court for a reduction [or increase] in alimony unless it can be otherwise negotiated by agreement between the Parties." The parties also agreed that plaintiff had the right to renegotiate if his "baseball contract provides that he plays in the minor leagues and if he remains in the minor leagues for a period of sixty (60) days[.]" The right to renegotiate was agreed upon with the understanding that plaintiff's stint in the minor leagues could be temporary, as the agreement provided:
If and when the Husband shall return to the major leagues and his earnings including salary, endorsements and licensing fees received within a calendar year, equal the sum of Nine Hundred Fifty Thousand ($950,000.00) Dollars to One Million Five Hundred Thousand ($1,500,000.00) Dollars then alimony will return to the sum as originally set forth commencing from the period of the return to the annual salary at the sums as set forth.
As we noted in our prior opinion, the agreement identified "triggers" that, when met, constituted "the equivalent of a changed circumstance, which would then allow the court to consider a modification application without the necessity of the moving party demonstrating additional changed circumstances." Villone, supra, slip op. at 8 (emphasis added). Although the parties may dispute other facts relevant to a consideration of plaintiff's support obligations, it is undisputed that plaintiff has played in the minor leagues for more than sixty days.*fn1
Pursuant to the terms of the parties' agreement, plaintiff's modification application constituted a changed circumstance that allowed the court to consider a modification application without plaintiff having to demonstrate any additional changed circumstances.
Because plaintiff thus satisfied his obligation to demonstrate a prima facie case of changed circumstances, the trial court had the authority to order discovery and a plenary hearing, see Lepis, supra, 83 N.J. at 157-59; Isaacson v. Isaacson, 348 N.J. Super. 560, 579 (App. Div.), certif. denied, 174 N.J. 364 (2002), but also retained the discretion to determine whether discovery and a plenary hearing were necessary because genuine issues of material fact exist. Lepis, supra, 83 N.J. at 159; Isaacson, supra, 348 N.J. Super. at 579; Dorfman v. Dorfman, 315 N.J. Super. 511, 515 (App. Div. 1998); see also Hand v. Hand, 391 N.J. Super. 102, 105 (App. Div. 2007). While "[c]courts have recognized that discovery and inspection of income tax returns should only be permitted for good cause[,]" it is nonetheless axiomatic that "without knowledge of the financial status of both parties, the court will be unable to make an informed determination as to 'what, in light of all the [circumstances] is equitable and fair.'" Lepis, supra, 83 N.J. at 158 (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)). Accordingly, in Lepis, this court held that a "prima facie showing of changed circumstances meets this good cause standard." Ibid.
As plaintiff has satisfied at least one of the triggers that the parties agreed would be the equivalent of a changed circumstance, he has also satisfied the good cause standard applicable to his request for discovery and a plenary hearing. The parties here have vigorously disputed plaintiff's financial circumstances and ability to discharge his support obligations, presenting issues of material fact the court must resolve in order to determine whether those obligations should be modified.
Under the circumstances here, the trial court erred in denying plaintiff's request for further discovery and a plenary hearing. We reverse that order and remand for further proceedings consistent with this opinion. We do not retain jurisdiction.