March 14, 2012
WILLIAM ARTHUR CLAYTON, PLAINTIFF-APPELLANT,
SUSAN CLAYTON, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-1202-95.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 19, 2012 -
Before Judges Fuentes, Harris and Koblitz.
Plaintiff William Arthur Clayton*fn1 appeals from a March 9, 2011 order denying his application to terminate his alimony obligation. The motion judge instead reduced plaintiff's alimony obligation to his former wife, defendant Susan Clayton, after finding that her cohabitation with a male acquaintance and the attendant economic support she received constituted a change in circumstances sufficient to justify a reduction of her monthly alimony support from $2300 to $1426.*fn2 William argues on appeal that the cohabitant's financial support, coupled with Susan's income, represent a change in circumstances warranting termination of alimony. He alternatively argues that the relationship between Susan and her cohabitant is tantamount to marriage and, for that reason, should result in a termination of his alimony obligation. After reviewing the record in light of the contentions advanced on appeal and the reasons expressed by the judge, we reverse and remand for further proceedings. We leave to the judge's discretion whether additional testimony is required.
The parties were married in July 1970. Four children were born of the marriage, all of whom were emancipated at the time of the divorce. The parties separated in 1994, after which Susan lived in a two-bedroom apartment in Rockaway, New Jersey. Around the time of the separation, the couple entered into a property settlement agreement (PSA), which contemplated a monthly payment to Susan of $2000 per month for twenty years.
At the time of both the separation and the subsequent divorce, Susan was suffering from various mental health disorders. As a result, she received social security disability payments of $389 per month.
Due to Susan's disabilities, the court appointed a guardian ad litem (GAL) in February 1996 to evaluate whether the PSA proposed at the time of separation in 1994 was equitable to Susan. The GAL opined that Susan's disorder rendered it highly unlikely that she would become "income productive and self-sufficient." The GAL found the $2000 monthly alimony award "favorable" to Susan, but recommended that she not be held to the agreement because of "the length of the marriage, the disparity in the parties' historical earnings," Susan's needs, her inability to earn an independent living, and "other inequities in the balance of the [PSA]."
Ultimately, the parties agreed that William would pay Susan $2300 per month, or $27,600 a year, in permanent alimony. The agreement did not address cohabitation. The parties divorced in 1997.
Susan met Stuart Vreeland in 1995. She testified to an emotional connection, which culminated in an exclusive relationship beginning in 1999. In 2001, Susan purchased a townhouse with her retirement savings, which significantly increased her living expenses. Vreeland moved into the townhouse in 2002. As of when Susan filed her reply brief in this appeal in September 2011, Vreeland continued to live with her at her townhouse. Susan testified that she and Vreeland are no longer romantically involved and have separate bedrooms. After hearing Susan's testimony, however, the motion judge concluded it was "apparent that they behave as a couple providing both emotional and financial support" for one another.
As of the time of the hearing in January 2011, Vreeland had given Susan more than $40,000, which she characterized as primarily a series of loans, although neither the disbursement of funds nor the terms of repayment were memorialized in a written document.
By Susan's own account, Vreeland also paid Susan a total of more than $97,000 in monthly contributions between May 31, 2002, and April 1, 2010. Vreeland currently pays Susan a fixed amount of $1400 per month, he provides her additional money when she needs it, and he performs routine repairs around the home. She pays for groceries and cooks Vreeland's meals.
In addition, Susan is employed. She received a certificate in graphic design in 1996. In spite of the wording of the GAL's report indicating an inability to work, Susan claims she began working prior to the judgment of divorce in 1997. Susan testified that she earned almost $29,000 in 2008 and $27,100 in 2009. William earned approximately $74,000 in 1995 and more than $139,000 in 2009.
The judge found that Susan's cohabitation with Vreeland and his attendant economic support constituted a change in circumstances sufficient to justify a reduction of her monthly alimony downward from $2300 to $1426, a reduction of thirty-eight percent. The modification was made retroactive to the filing date of William's motion. The judge denied all other relief requested without considering either Susan's earnings or whether the money provided by Vreeland met the criteria for support rather than a loan.
Spousal agreements addressing alimony obligations "may be modified in light of changed circumstances." Konzelman v. Konzelman, 158 N.J. 185, 195 (1999). The decision of whether to modify or terminate an alimony obligation founded on a claim of changed circumstances "rests within a Family Part judge's sound discretion." Larbig v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006); see also Innes v. Innes, 117 N.J. 496, 504 (1990). Each motion to modify or terminate an existing alimony obligation "'rests upon its own particular footing and the appellate court must give due recognition to the wide discretion which our law rightly affords to the trial judges who deal with these matters.'" Larbig, supra, 384 N.J. Super. at 21 (quoting Martindell v. Martindell, 21 N.J. 341, 355 (1956)).
To vacate a court's order modifying alimony, an appellate court must conclude that the trial court clearly abused its discretion, failed to consider all of the controlling legal principles, or it must otherwise be well satisfied that the finding[s] [were] mistaken, or that the determination could not reasonably have been reached on sufficient credible evidence present in the record after consideration of the proofs as a whole.
[Rolnick v. Rolnick, 262 N.J. Super. 343, 360 (App. Div. 1993) (internal citations and quotations omitted) (alteration in original).]
In Lepis v. Lepis, the Supreme Court accepted as a changed circumstance "the dependent spouse's cohabitation with another . . . ." 83 N.J. 139, 151 (1980) (footnote and citations omitted); see Ozolins v. Ozolins, 308 N.J. Super. 243, 247-48 (App. Div. 1998) (discussing cohabitation as a basis for changed circumstances where the parties' PSA was silent on the issue). When seeking modification or termination of alimony on these grounds, the supporting spouse bears the burden to make a prima facie showing of cohabitation. Konzelman, supra, 158 N.J. at 202; Ozolins, supra, 308 N.J. Super. at 248-49. In Konzelman, supra, the Court explained:
The ordinary understanding of cohabitation is based on those factors that make the relationship close and enduring and requires more than a common residence, although that is an important factor. Cohabitation involves an intimate relationship in which the couple has undertaken duties and privileges that are commonly associated with marriage. These can include, but are not limited to, living together, intertwined finances such as joint bank accounts, sharing living expenses and household chores, and recognition of the relationship in the couple's social and family circle. [Ibid.]
After hearing testimony from both parties, the judge determined that William made a prima facie showing that Susan and Vreeland were cohabitants. The judge pointed to their shared financial and day-to-day household responsibilities, the exclusive and long-term character of their relationship, and the fact they held themselves out as a couple in the community. We defer to the Family Part judge's fact finding, particularly to the extent that it is based upon credibility determinations. Cesare v. Cesare, 154 N.J. 394, 411-13 (1998). As there was sufficient credible evidence in the record from which to find cohabitation, the judge's conclusion is entitled to deference. Rova Farms, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974); see Konzelman, supra, 158 N.J. at 202-03 (deferring to the trial court's finding of cohabitation).
Cohabitation without more, however, is insufficient to justify a reduction in or termination of alimony. Konzelman, supra, 158 N.J. at 196. Upon a prima facie showing of cohabitation, a rebuttable presumption of changed circumstances arises. Ozolins, supra, 308 N.J. Super. at 248-49. The burden then shifts to the dependent spouse "to show that there is no actual economic benefit" to either the spouse or the cohabitant. Id. at 245.
Cohabitation therefore constitutes changed circumstances "only if coupled with economic consequences" to either the cohabitant or the supported spouse. Konzelman, supra, 158 N.J. at 196. Moreover, "the economic benefit enuring to either cohabitor must be sufficiently material to justify relief." Ibid. (citing Gayet v. Gayet, 92 N.J. 149, 154-55 (1983)).
The judge found that Susan failed to sustain her burden of proving that she received no actual economic benefit. The judge found all of Susan's Case Information Statement (CIS) Schedule A (shelter) expenses and a portion of her Schedule C (personal) expenses to be shared with Vreeland. The judge then reduced William's alimony by thirty-eight percent after determining that Vreeland's $1400 monthly contribution satisfied that portion of the $3729 in expenses shared with Susan.
A supporting spouse's alimony obligation may be modified for changed circumstances if a dependent spouse "is being supported in whole or in part by [a] paramour." Garlinger v. Garlinger, 137 N.J. Super. 56, 64 (App. Div. 1975). In this respect, whether Vreeland's contribution covers more than or less than the cost of his own expenses is an important consideration. The judge, however, failed to directly address this question.
If Vreeland's contribution covers thirty-eight percent of their total shared expenses, then it can be said that Susan covers the remaining sixty-two percent. However, Susan's earned monthly income of approximately $1700 accounts for only forty-six percent of the cohabitants' $3729 in shared monthly expenses. When added together, Vreeland's monthly contribution and Susan's monthly income cover only eighty-four percent of the $3729 figure. It may be that William's alimony payments are being used to satisfy the remaining sixteen percent of their shared expenses, in which case those payments are possibly contributing to Vreeland's support, thereby entitling William to relief. See Konzelman, supra, 158 N.J. at 196; Garlinger, supra, 137 N.J. Super. at 64 (explaining that "if the paramour resides in the . . . home without contributing . . . toward the purchase of food or the payment of normal household bills," it may be reasonable to infer that a wife's alimony is being used, "at least in part, for the benefit of the paramour, in which case it could be argued with force that the amount thereof should be modified accordingly.").
Alternatively, if the cohabitants' shared expenses represent fixed expenses that Susan would incur regardless of whether or not Vreeland lived with her, then it can be said that Vreeland's contribution is being used to partially support Susan.
In both situations, "the economic benefit enuring" to either party might be "sufficiently material" to constitute changed circumstances, thereby justifying a reduction in William's alimony obligation. Konzelman, supra, 158 N.J. at 196 (citing Gayet, supra, 92 N.J. at 154-55).
A general determination of which expenses are "shared" does not provide sufficient clarity as to which expenses are covered by Vreeland's monthly contribution. On remand, the judge must make specific findings and determine whether Vreeland's contribution covers only his monthly costs or contributes to the support of Susan, or whether William's alimony payment is being used to support both cohabitants, either in whole or in part.
If the judge finds on remand that Vreeland's monthly payment contributes significantly to Susan's support, any reduction of alimony should be "in proportion to the contribution of the cohabitor to the dependant spouse's needs." Konzelman, supra, 158 N.J. at 196 (citing Gayet, supra, 92 N.J. at 154-55). If, on the other hand, the judge finds that Vreeland receives partial support through William's alimony payment, the judge must determine the extent to which that support entitles William to relief. See Garlinger, supra, 137 N.J. Super. at 64.
In addition to his monthly $1400 payment to Susan, Vreeland has given her over $40,000 during their cohabitation, an average of more than $300 a month. At the hearing, Susan characterized some of the funds as loans and some as money used on purchases for the home. She also testified that Vreeland has no secured claim to any of the funds, as they did not execute any loan documents or promissory notes.
The judge did not account for these funds or their impact on Susan's needs. Moreover, the judge did not establish whether these funds constitute support to Susan or a loan. See Tiernan v. Carasaljo Pines, 51 N.J. Super. 393, 404-05 (App. Div. 1958) (explaining the fundamental traits of a loan as "an advancement of money by the lender at the time of agreement, and a stipulation or agreement to repay it and generally with interest, at a future date, by the borrower."); see also Dickman v. Comm'r, 465 U.S. 330, 104 S. Ct. 1086, 79 L. Ed. 2d 343 (1984) (holding that inter-family, interest-free demand loans are taxable under federal law as gifts).*fn3 On remand, the judge should resolve these questions to more accurately determine the overall economic impact of these funds and whether that impact is "sufficiently material" to justify relief to William. Konzelman, supra, 158 N.J. at 196 (citing Gayet, supra, 92 N.J. at 154-55).
Also, the judge failed to determine what impact, if any, Susan's earnings should have on William's application to terminate alimony. According to Susan's unrebutted testimony, she first became employed full-time just prior to the final judgment of divorce. The judge noted that "[Susan's] position has improved since the time of the divorce as she has a job that provides her with a monthly salary of $1,700.00." The judge discussed Susan's employment only within the context of Susan's request for an increase in alimony. Thus, the judge failed to make any explicit findings concerning whether such employment constitutes a change from the time of the divorce and, if so, whether it reduced Susan's economic needs so as to justify decreasing William's alimony obligation further. See Lavene v. Lavene, 162 N.J. Super. 187, 203 (Ch. Div. 1978). On remand, Susan's employment should therefore be reviewed within the context of William's request for termination of alimony, while taking into consideration her undisputed testimony that she began working even before the final judgment of divorce.
William also contends that Susan's long-term cohabitation with Vreeland should be viewed as tantamount to marriage warranting termination of alimony on that basis alone. This contention is without sufficient merit to warrant a discussion in a written opinion. R. 2:11-3(e)(1)(E). It is well settled that New Jersey does not recognize common law marriages. See, e.g., Crowe v. De Gioia, 90 N.J. 126, 132 (1982), where the Supreme Court reiterated its refusal "to view non-marital relationships as if they were lawful marriages" because "[t]he Legislature has proscribed common law marriages." Ibid. (citing N.J.S.A. 37:1-10).
Reversed and remanded for further proceedings in accordance with this opinion. We do not retain jurisdiction.