March 27, 2012
LUZ C. SKOBLAR, PLAINTIFF-RESPONDENT,
ROBERT A. SKOBLAR, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-2597-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted November 10, 2011 -
Before Judges Cuff and St. John.
Defendant Robert A. Skoblar appeals from the March 19, 2010 order of the Family Part denying his motion for modification of his alimony obligations, as well as other relief.
Having considered the limited record before us in light of the applicable legal principles, we conclude that the motion judge should have conducted a plenary hearing, one that develops the financial proofs more extensively, before denying defendant's motion in its entirety. Consequently, the matter must be remanded for such a hearing.
The parties were married in 1981 and had two sons born in 1985 and 1987. On May 31, 2005, plaintiff Luz C. Skoblar filed a complaint for divorce. The parties subsequently entered into a property settlement agreement (PSA), which resolved all issues between them, including setting defendant's alimony obligations to plaintiff. On June 21, 2006, the Family Part entered a Final Judgment of Divorce.
In 2009, defendant filed a motion for a downward modification of his alimony obligations. He also requested a court appointed forensic accountant to examine the financial status of both parties to determine whether a modification of alimony was appropriate. On September 4, the motion judge denied defendant's application for the appointment and the modification because defendant had not demonstrated a prima facie showing of changed circumstances.
In December 2009, defendant filed another motion for modification of alimony, and for other relief. Attached to defendant's certification were his case information statements (CIS), tax returns, and an analysis of his business income prepared by certified public accountants.
The motion judge, without a plenary hearing, found defendant had not adequately shown changed circumstances under Lepis v. Lepis, 83 N.J. 139 (1980), necessary to obtain relief. In denying defendant's application, the judge stated: "There is not enough evidence for me to determine that there is a prima facie case with what I have before me." We disagree.
Defendant has the burden of showing such "changed circumstances" as would warrant relief from the support or maintenance provisions involved. Martindell v. Martindell, 21 N.J. 341, 353 (1956). A prima facie showing of changed circumstances must be made before a court will order discovery of an ex-spouse's financial status. Lepis, supra, 83 N.J. at 157. "When the movant is seeking modification of an alimony award, that party must demonstrate that changed circumstances have substantially impaired the ability to support himself or herself. This requires full disclosure of the [obligor] spouse's financial status, including tax returns." Ibid. Furthermore, "[c]courts have consistently rejected requests for modification based on circumstances which are only temporary or which are expected but have not yet occurred." Id. at 151 (citing Bonanno v. Bonanno, 4 N.J. 268, 275 (1950)). Current earnings have never been viewed as "the sole criterion [upon which] to establish a party's obligation for support." Weitzman v. Weitzman, 228 N.J. Super. 346, 354 (App. Div. 1988) (internal citation omitted), certif. denied, 114 N.J. 505 (1989). "[A] court 'has every right to appraise realistically [a spouse's] potential earning power.'" Ibid. (alteration in original) (quoting Mowery v. Mowery, 38 N.J. Super. 92, 102 (App. Div. 1955), certif. denied, 20 N.J. 307 (1956)). A party's "potential to generate income is a significant factor to consider when determining his or her ability to pay [support]." Miller v. Miller, 160 N.J. 408, 420 (1999).
It is well-established that trial courts have "broad equitable powers . . . to review and modify alimony and support orders at any time." Weitzman, supra, 228 N.J. Super. at 353. See also N.J.S.A. 2A:34-23. In making such assessments, we are guided by the Supreme Court's holding in Lepis. First, the moving party must make a threshold prima facie showing that "changed circumstances have substantially impaired the ability to support himself or herself." Lepis, supra, 83 N.J. at 157. In considering a proffer of changed circumstances, it is often necessary for the court to delve into the financial status of both parties. Id. at 157-58. When such a showing is made, the court must next determine if a plenary hearing is warranted. Id. at 159. To obtain such a hearing, the moving party must "clearly demonstrate the existence of a genuine issue as to a material fact." Ibid. In making this determination, the court should look to the certifications and supporting documents of the parties. Ibid.
Once the plenary hearing stage is reached, there is no firm rule governing when an existing support obligation has ceased to be "'equitable and fair'"; rather, courts are to weigh several factors dependent on the nature of each case. Id. at 153 (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)). These factors include whether the change in circumstance is temporary or permanent; whether the change was voluntary; whether it was motivated by bad faith or a desire to avoid payment; and whether the change in circumstance renders the payor former spouse unable to pay. See Larbig v. Larbig, 384 N.J. Super. 17, 23 (App. Div. 2006) (finding a reduction in income to be temporary); Kuron v. Hamilton, 331 N.J. Super. 561, 572 (App. Div. 2000) (finding the movant's good faith to be an "ingredient" to consider); Deegan v. Deegan, 254 N.J. Super. 350, 355 (App. Div. 1992) (finding that a voluntary change such as retirement may sometimes justify a modification). Courts cannot fairly undertake this balancing of equities when they lack sufficient evidence in the record to do so. Deegan, supra, 254 N.J. Super. at 354.
Although the matter is not free from doubt, we are persuaded that defendant has advanced a prima facie showing of changed circumstances here to trigger a plenary hearing. His certification asserts no reduction in hours worked at his law practice or diversion of his time to other endeavors and does not appear to evince bad faith. Defendant's accountants' Analysis of Business Income, compiled from defendant's tax returns, which included a review of his business's bank statements, a summary analysis of his business expenses, payroll information returns and non-employee reporting information, from years 2003 to 2008, show a significant decline in income from 2006 to 2008. Defendant's certification also sets forth a continuing decline in his income during 2009.
The situation here differs from that in Larbig, supra, where the former spouse seeking to abate his alimony obligations filed his motion only twenty months after the divorce judgment, and where he had only experienced a reduction in his earnings for that short time period. 384 N.J. Super. at 22-23. Here, if defendant's certifications are accepted as true, his earnings have been depressed for nearly four years. See Beck v. Beck, 239 N.J. Super. 183, 189-91 (App. Div. 1990) (holding that a plenary hearing on a Lepis motion was warranted in a situation where, over a four-year period, the payor's income had diminished and the payee's income had increased). Defendant also contends plaintiff's income has increased as a result of her social security income.
We cannot conclusively determine from the record whether defendant is voluntarily underemployed by virtue of his diminution in income from his law practice. We also note that if the figures recited in defendant's CIS and certification are accepted as true, they suggest "changed circumstances have substantially impaired [his] ability to support himself." Lepis, supra, 83 N.J. at 157. In addition, if defendant's allegations are true, plaintiff's living costs appear to be considerably abated by her social security income.
Given the nature of this record, any dispute as to defendant's changed circumstances are best determined in a plenary hearing. In such a proceeding, the judge will have a chance to assess the credibility of defendant's assertions, as tested through the rigors of cross-examination. See Conforti v. Guliadis, 128 N.J. 318, 322-23 (1992) (requiring plenary hearings to resolve material factual disputes).
We do not predetermine the outcome of such a hearing. It may well be that defendant is not entitled to any reduction of his alimony, or only a partial abatement. We conclude the matter must be remanded for a full hearing in which the facts and equities can be developed and evaluated.
Prior to the plenary hearing, the parties shall exchange updated CIS forms, including tax returns, and any necessary discovery counsel wish to pursue. The Family Part also retains the discretion, if any alimony reduction is ordered, to preserve defendant's original December 2009 motion filing date concerning the computation of arrears, and potential credits or refunds.
Reversed and remanded. We do not retain jurisdiction.
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