March 20, 2012
JOEL SCOTT ISAACSON, PLAINTIFF-RESPONDENT,
LILY ISAACSON, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-1176-95.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 31, 2011
Before Judges Grall, Alvarez and Skillman.
Defendant Lily Isaacson appeals from a February 1, 2011 order denying her motion for an increase in child support. For the reasons that follow, we affirm.
Defendant and plaintiff Joel Scott Isaacson divorced on January 22, 1996. The parties had two children, born September 10, 1986, and June 1, 1989, who resided with defendant. Both are now emancipated.
At the time of divorce, plaintiff earned approximately $180,000 per year from his financial planning business. Pursuant to the property settlement agreement, he paid defendant $800 per month in alimony until June 1, 1997, and an additional $2600 in alimony until November 1, 1999. He also agreed to pay $1200 per month per child in support, eighty percent of the children's unreimbursed medical expenses, and for summer camp. Private school tuition was to be negotiated. During the following years, plaintiff and defendant resolved disputes through mediation.
In September 1999, defendant filed her first motion for modification, alleging that plaintiff's annual income had grown in the intervening three and one-half years to approximately $500,000, and that $2400 monthly in total child support would be insufficient after alimony ceased. Child support was accordingly increased to $1750 per child monthly, and plaintiff was required to pay seventy-nine percent of the children's $20,000 per year per child private school tuition.
Defendant appealed the order, which we modified, making plaintiff responsible for all of the children's private school tuition. Isaacson v. Isaacson, 348 N.J. Super. 560, 590 (App. Div.), certif. denied, 174 N.J. 364 (2002).
On April 24, 2006, defendant filed a second motion for upward modification of child support, alleging that the children's maturation warranted an increase. At that juncture, the oldest child had been away at college for approximately two years, at a cost of $45,000 per school year, paid for exclusively by plaintiff. Additionally, he had continued to pay $3500 per month in child support, not seeking a reduction even though the child did not live at home.
The items sought by defendant in the 2006 application included reimbursement for $78,000 she claimed she had borrowed from her mother to defray the costs of raising the children; the cost of cars for her daughters, as well as car insurance, maintenance and repairs; college prep books; clothing; and other incidental expenses she claimed exceeded the monthly child support. Defendant also sought extensive discovery of plaintiff's financial affairs.
Defendant's 2006 application resulted in a modification requiring that plaintiff pay an additional $400 per month directly to the child then in college as spending money, a practice he continued when the younger child started her college education. The actual child support amount was increased by only $60 per month, the cost of the children's cell phone bills. Additionally, plaintiff was required to pay all of the younger child's future SAT tutoring expenses.
Defendant appealed the 2006 order and we remanded the matter solely to allow limited discovery, and for the motion judge, once plaintiff's income was established, to reevaluate the application for an increase in child support. We also directed the court to reconsider the denial of defendant's request for reimbursement of tutoring expenses. Isaacson v. Isaacson, No. A-5703-05 (Apr. 25, 2008) (slip op. at 9-10).
Accordingly, on remand, the parties exchanged 2006 and 2007 tax returns, and up-to-date case information statements. See R. 5:5-2. Limited interrogatories were also propounded.
While the matter was pending, the oldest child graduated from college, in May 2008. Child support was reduced by half upon her emancipation.
In the interim, in the fall of 2007, the youngest child started college. In addition to paying approximately $45,000 per year for her college tuition expenses, plaintiff continued to pay $1750 monthly directly to defendant as child support, even though this child also lived on campus. Plaintiff paid for the youngest child's semester of study abroad in Rome and a summer semester at the London School of Economics. For the older child, plaintiff paid for a summer in Israel, and for both children, had paid for a semester of study in Israel during high school. Plaintiff also paid a year's worth of continued COBRA medical insurance for the older child at a cost of $7620.
The limited discovery established that plaintiff earned approximately $1.5 million in 2006 and approximately $2 million in 2007. In November 2009, he sold his business for a net of approximately $4 million, with an additional $1.7 million payment anticipated in 2010. In 2008, defendant earned $64,651 as a paralegal.
The remand hearings were conducted on July 8, 2010, and September 1, 2010. At their conclusion, plaintiff moved to dismiss defendant's application on the theory that she had not established the requisite need for additional support. The court reserved decision and rendered an opinion from the bench on February 3, 2011.
The judge concluded that defendant had not met her burden to establish that the children's expenses exceeded the child support she received. Defendant had presented documents, essentially worksheets, summarizing her costs of living, alleging she spent $5400 monthly to support her daughters. The court found these proofs wanting, as the worksheets had no corresponding receipts or other documents corroborating her figures.
Additionally, the judge calculated that plaintiff paid a total of $75,360 per year attributable to child support, college expenses, and spending money on behalf of the older child from 2004 to the date of her emancipation. As to the younger child, the figures were approximately the same: commencing in the fall of 2007, plaintiff paid approximately $45,000 for college tuition, plus $400 per month in spending money. Plaintiff paid the full $3500 per month in child support despite both children's attendance at college, never seeking downward modification until they were emancipated.
The judge enumerated the various "extra" expenses for which plaintiff paid, including study abroad, summers in Israel, and the additional semester at the London School of Economics. Plaintiff's extraordinary income enabled him to pay extraordinary expenses on behalf of his daughters.
The judge observed that defendant focused on plaintiff's refusal to purchase vehicles for his daughters once they were of driving age. Given plaintiff's complete responsibility for his daughters' education and related expenses, in addition to the child support, the judge decided that he "shared his financial wealth with them" sufficiently and that no increase in child support was required.
Defendant by way of appeal raises the following points:
I THE TRIAL COURT, IN DECLINING TO ORDER AN INCREASE IN CHILD SUPPORT IN THIS "HIGH INCOME EARNER" CASE, ERRED IN FINDING THAT AN INCREASE OF PLAINTIFF'S INCOME FROM $550,000 (PLAINTIFF'S INCOME THE LAST TIME CHILD SUPPORT WAS MODIFIED) TO A LEVEL IN EXCESS OF $1,500,000 IS NOT A "SIGNIFICANT CHANGE OF CIRCUMSTANCES" REQUIRING A COMMENSURATE INCREASE IN CHILD SUPPORT. See Walton v. [Visgil], 248 N.J. Super. 642, 649, 591 A.2d, 1018, 1021, 1022 (App. Div. 1991).
II THE TRIAL COURT ERRED IN GRANTING THE PLAINTIFF'S MOTION TO DISMISS, WHERE THE APPELLATE DIVISION'S REMAND SPECIFICALLY HELD THAT THE APPLICANT HAD ALREADY ESTABLISHED A PRIMA FACIE CHANGE OF CIRCUMSTANCES, WHERE SUBSEQUENT DISCOVERY WAS FACT-INTENSIVE AND CONTESTED, AND WHERE THE COURT GAVE DEFENDANT NO REASONABLE OPPORTUNITY TO OPPOSE AND ARGUE AGAINST THE MOTION.
III THE TRIAL COURT, FOCUSING SOLELY ON PLAINTIFF'S INCOME AND THE CHILDREN'S EXPENSES, ERRED IN FAILING TO GIVE DUE CONSIDERATION TO ALL OF THE STATUTORY FACTORS APPLICABLE TO APPLICATIONS FOR MODIFICATION OF CHILD SUPPORT, WHICH INCLUDE IN PARTICULAR ASSETS AND LIFESTYLE. See N.J.S.A. 2A:34-23. See Isaacson v. Isaacson, 348 N.J. Super. 579 (App. Div. 2002).
IV THE TRIAL COURT ERRED IN DENYING DEFENDANT'S MOTION TO RETAIN A FORENSIC ACCOUNTANT WHERE THE PLAINTIFF'S FINANCIAL SITUATION WAS HIGHLY COMPLEX AND PLAINTIFF'S OWN SUBMISSIONS GAVE RISE TO A REASONABLE SUSPICION OF INACCURACY, MISSTATEMENT AND/OR INTERMINGLING OF ASSETS AND LIABILITIES.
V THE TRIAL COURT ERRED IN DENYING DEFENDANT'S REQUEST FOR COUNSEL FEES WHERE DEFENDANT ACTED IN GOOD FAITH, THE ISSUES RELATED SOLELY TO THE SUPPORT OF THE CHILDREN, AND EVEN WITHOUT PROPER DISCOVERY, IT WAS CLEAR THAT PLAINTIFF'S ASSETS WERE VASTLY SUPERIOR TO THOSE OF DEFENDANT. See R. 5:3-5(C).
VI THE TRIAL COURT ERRED IN REFUSING TO ALLOW ANY MEANINGFUL DISCOVERY OF PLAINTIFF'S ASSETS, INCLUDING WHAT WAS LIKELY PLAINTIFF'S MOST SIGNIFICANT ASSET, HIS MAJORITY INTEREST IN A SUCCESSFUL INVESTMENT AND FINANCIAL ADVISORY FIRM.
VII THE COURT ERRED IN PLACING INORDINATE IMPORTANCE ON PLAINTIFF'S PAYMENT OF THE CHILDREN'S EDUCATIONAL AND RELATED EXPENSES, SINCE THOSE OBLIGATIONS ARE DIFFERENT AND TOTALLY SEPARATE FROM THE ISSUE OF CHILD SUPPORT, AND SHOULD NOT CONSTITUTE THE PRIMARY BASIS OF THE COURT'S DECISION ON THAT ISSUE. See Isaacson v. Isaacson, Docket No. A-5703-05T2, decided April 25, 2008.
VIII THE TRIAL COURT ERRED IN SELECTING THE TIME PERIOD TO BE COVERED BY DISCOVERY OF PLAINTIFF'S FINANCIAL INFORMATION IN THIS APPLICATION FOR MODIFICATION OF CHILD SUPPORT, WHERE THE MATTER REACHED DISCOVERY ONLY MORE THAN TWO YEARS AFTER THE FILING OF THE ORIGINAL APPLICATION.
Because we agree that defendant failed to establish that the needs of the children exceeded the amount of support paid, we affirm essentially for the reasons stated by the motion judge. We add the following brief comments.
By way of preface, we note that high income earners are required to share their wealth with their children. See Isaacson, supra, 348 N.J. Super. at 579. But the extent of the obligation is circumscribed by the children's needs, even if defined more expansively than in the more typical situation. Id. at 581, 583; Strahan v. Strahan, 402 N.J. Super. 298, 307-08 (App. Div. 2008) (explaining how to determine the reasonable needs of the children of high income earners). So, for example, plaintiff rightly paid all the expenses of the girls' college education, including spending money and trips abroad, while continuing to pay the full amount of child support. Usually, when a supported child lives away from home in college, a payor is entitled to some reduction in the obligation. Child Support Guidelines, Pressler & Verniero, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2513-14 (2012). No such reduction was sought here.
Addressing defendant's points in the order in which they are raised, we also note that plaintiff's significant change in income does not automatically warrant a proportional change in child support. This is particularly true here because commencing in 2004, two years before defendant filed her modification motion, plaintiff paid nearly $50,000 annually towards the older child's college tuition, and approximately $20,000 towards the younger child's private school tuition, in addition to monthly child support. Added together, during that time frame plaintiff was paying approximately $98,400 per year in total support.
Once both children were in college, that amount came to approximately $137,920 yearly, exclusive of sums paid for study abroad. Although no increase precisely mirroring plaintiff's vast increase in income resulted, a very significant increase in contribution occurred. Clearly, there was a significant change in plaintiff's circumstances, but there was a corresponding significant change in the amount of support he paid.
Defendant also claims she was not given an adequate opportunity "to oppose and argue against the motion" to dismiss her application. Our review of the record indicates the contrary. The trial judge attempted to enable defendant to present her case in the best possible light.
Neither do we agree that the matter was remanded because we found that defendant established a prima facie case of change of circumstances as to her children's needs. See Lepis v. Lepis, 83 N.J. 139, 157 (1980) (discussing the requirement of demonstrating changed circumstances). Our focus was the children's maturation, the absence of financial information, and the children's needs. Isaacson, supra, No. A-5703-05 (slip op. at 9-10). Therein lies the problem: defendant has not proven that their needs went unmet despite their maturation nor did she present all the financial information needed to pursue her motion for upward modification.
Plaintiff did not dispute his substantial earnings, as he engaged in business transactions in a regulated industry which compelled the filing of detailed income tax returns. Therefore defendant's application for the funds with which to retain a forensic accountant and to advance counsel fees was appropriately denied as unnecessary. The remand directing the completion of limited discovery was not intended to retry the divorce. Plaintiff readily admitted to his income. Defendant was not entitled to further explore plaintiff's financial situation in the absence of some substantiation of the children's needs exceeding what could be paid from the income he admitted earning. Plaintiff did not dispute that his assets were "vastly superior" to defendant's.
Certainly, as defendant claims, issues related to child support and education are, in the most literal sense, separate. In this case, however, they are integrally related. Plaintiff's substantial contributions towards the girls' education certainly should be taken into account in determining whether additional child support should have been paid. See Pressler & Verniero, supra, Appendix IX-A to R. 5:6A at 2514 (explaining that because college education is discretionary, it should not be considered a basic need).
Defendant's final point is that the trial court erred in limiting the time period for discovery to 2006 and 2007, because two years had elapsed since the filing of the last application for upward modification of child support. Because plaintiff's income was not significantly disputed, and defendant failed to establish needs of the children which could not be met by the current level of support, additional discovery would not have been meaningful. Since we find no error in the court's conclusion that defendant failed to prove any increased needs of her children over and above the child support she received, the trial judge did not err in denying her motion.
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