June 1, 2012
MICHAEL F. BELL, JR., PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
MARGARET D. BELL, DEFENDANT-RESPONDENT/CROSS-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Camden County, Docket No. FM-04-600-06B.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 7, 2012
Before Judges Parrillo, Grall, and Alvarez.
In this post-divorce judgment matter, plaintiff Michael Bell, Jr., appeals from a March 7, 2011 order of the Family Part denying his motion to reduce or terminate alimony to defendant Margaret Bell and to discontinue his obligation to maintain a life insurance policy on her behalf. Both parties also appeal that portion of the order awarding defendant $12,000 in counsel fees. We affirm save for the attorney fee feature, which we remand for a recalculation of the amount.
The parties were married on October 6, 1989,and divorced on February 26, 2007. They have one child, who is now emancipated. In their dual judgment of divorce (FJD) with stipulations, the parties, who were both represented by counsel, agreed that support obligations would be based on an annual income of $191,000 for plaintiff and $40,000 for defendant, and thus set plaintiff's permanent spousal support for defendant at $800 per week. The agreement contained a provision that plaintiff could seek to terminate or modify alimony in the event that defendant began cohabiting with another man. Plaintiff also agreed to have a life insurance policy with defendant as the beneficiary, with the benefit starting at $300,000 and decreasing by $50,000 every five years.
Three years after the FJD, on May 18, 2010, plaintiff moved to reduce alimony, terminate alimony arrearages and eliminate the life insurance requirement. The basis for relief was the changed circumstance of his purported reduced income, although in a reply certification to defendant's opposition, he alleged the additional reason of defendant's cohabitation with another man. A four-day plenary hearing on both issues was held, at which the following facts were adduced.
At the time of the divorce, plaintiff worked as a salesman for State
National Training Service (State National), a company owned by his
mother that helped train job-seekers to take civil service exams
through a "home study" course. Prior to State National, plaintiff
worked at National Training Service, which was owned by his father.
Plaintiff reported a total income of $115,954 in 2007.*fn1
His 2008 1040 reports a total income of $111,729.
In approximately July 2008, the Attorney General of New York began investigating State National's business practices. According to plaintiff, in November 2008, he lost his job at State National due to the negative publicity surrounding the investigation. The Bell family, however, continued to operate the same type of business as State National under different names. Thus, in December 2008, DeWaf, Inc., owned by plaintiff's father, was incorporated. DeWaf conducted business as Public Service Pathways and Career Development since the name of State National "was dirtied."
In early 2009, plaintiff began collecting unemployment benefits in the amount of $1,118 every two weeks. Around this time, plaintiff stopped paying alimony and on July 6, 2009, he was incarcerated for support arrearages. He was released upon a $10,000 payment made by his family and thereafter Probation began garnishing his unemployment checks. Plaintiff's 2009 1040 reports a total income of just $31,851.
Despite his termination from State National in November 2008, plaintiff still drove a company car and assisted State National during the New York State investigation. He also continued performing services for the company, including recording a voice message to solicit new students "around a year after the shut down of State National."
Although out of work since November 2008, the earliest documentation of a job search is January 28, 2010, when plaintiff posted his resume on CareerBuilder.com. According to that site, plaintiff applied for sixty-three positions on January 28, 2010, nine positions the next day, and thirty-seven positions on February 1, 2010. There is no documentation of any job searches thereafter. Plaintiff received a few interview requests and invitations to job fairs, however, he did not attend any of the conferences. Plaintiff admitted turning down approximately thirty job offers, and that he was not "looking for a job . . . as eagerly as [he] should have . . . ."
By the time of the plenary hearing in January 2011, plaintiff had remarried and just began working as a salesman for Metro Media Productions, a company owned by his father. According to plaintiff, he currently earns only $600 per week, although no documentation was offered supporting this figure, and his parents supposedly continue to pay his $2,600 monthly rent.
After her divorce, defendant met Robert Worthington, a widower, in September 2007 and shortly thereafter became engaged to him. They each have maintained a separate residence, assets and financial accounts over the years. Although the engagement was eventually called off in September 2010, the two maintain a relationship. In fact, defendant continues to be employed by Worthington as a personal assistant and secretary, earning $500 a week together with health insurance.
Throughout their relationship, defendant borrowed money from Worthington, evidenced in each instance by either a promissory note or mortgage. These loans were occasioned by the need to buyout plaintiff's interest in the marital home and make up for missed alimony payments plaintiff owed defendant. For instance, the first mortgage was for $74,600 on October 7, 2007 to assist defendant in refinancing her home. Borrowings of $201,000 on January 7, 2008 and $3,400 on January 18, 2008 followed. After plaintiff stopped paying alimony, defendant borrowed additional money from Worthington on April 15, 2009, "to help offset the missed alimony payments owed to [defendant] by [plaintiff] for the months of December, 2008 through April, 2009."
On November 3, 2009, defendant took out a mortgage for $297,352.08 from Worthington. This was intended largely to refinance the October 7, 2007 and January 7, 2008 notes. On November 6, defendant borrowed another $8,100 from Worthington "to help offset the missed alimony payments owed to [defendant] by [plaintiff] for the months of May, 2009 through October, 2009." She borrowed $3,000 for real estate taxes on November 18, 2009; $5,775 on December 30, 2009 to pay child support to plaintiff; and $10,200 on June 5, 2010 "to help offset the missed alimony payments owed to [defendant] by [plaintiff] for the months of November, 2009 through June, 2010." Defendant signed another mortgage note on June 10, 2010 for $26,502.92 in order to pay a balance of $8,602.92 on the November 3, 2009 mortgage and other expenses. On September 5, 2010, defendant borrowed $1,500 from Worthington for home repairs.
According to Worthington, he fully intended to be paid back and the mortgages were to secure his interests. Defendant also understood that Worthington's heirs intended to collect the debts if they have not been paid off at time of Worthington's passing. As the record indicates, any money given to defendant by Worthington has been in the context of loans, mortgages, or their employment relationship.
At the conclusion of the plenary hearing, the Family Part judge, crediting defendant's proofs and discrediting plaintiff's testimony, and finding plaintiff had not shown either cohabitation or changed circumstances, denied the relief requested by plaintiff and awarded defendant $12,000 in counsel fees. As to the former, the court concluded:
As to Mr. Worthington, who was the first witness, the Court found Mr. Worthington to be a credible witness. . . .
However, Mr. Worthington made it clear that the financial benefits he was providing to Mrs. Bell were being provided to her because of the financial circumstances she found herself in and, in fact, these advances were evidenced by notes and in several cases by mortgages that were executed by [Mrs.] Bell. There was no indication that these were not proper mortgages that were intended to reflect a repayment.
I do find based upon the testimony of the witnesses, the testimony that was provided by Mr. Worthington and [Mrs.] Bell that the cohabitation as I've established under New Jersey case law has not been established.
There has been a showing, clearly, that there is an intertwining of various businesses that have been operated by the Bell Family.
I cannot find Mr. Bell's testimony credible to this end. I cannot find the testimony credible that he is unemployed and does not have a source of income. His . . . lifestyle belies that fact. His lifestyle belies the fact that he simply collected unemployment, took no action to gain employment. There was much testimony about -- and there was, in fact, substantial papers submitted to the Court showing alleged attempts to gain employment, but it was clear Mr. Bell did nothing to gain employment and when questioned about this, he indicated that the jobs which were available he did not seek employment for because of the fact that they were commission jobs or they did not provide benefits.
I find watching Mr. Bell in his testimony that his testimony is simply not credible.
Clearly, the lifestyle that I have observed and appears through the case information statement that was submitted by Mr. Bell belies the argument that he's totally unemployed and has only received unemployment insurance.
The case information statement submitted by Mr. Bell shows last year his earnings were in the amount of $8,000 and that certainly belies the lifestyle that he has demonstrated. It does not appear that Mr. Bell has suffered as a result of the alleged diminution of his wages.
This Court is satisfied that the various businesses now operated under the umbrella, DeWaf, Inc. do have the ability to generate income to Mr. Bell and in fact have generated income to Mr. Bell.
The fact that he testified that he spends, you know, several hours on a daily basis there while he collected unemployment, as an aside, indicates to the Court that these were being operated -- are being operated and based upon the exhibits showing monies that are passing through these various businesses, I am satisfied that there was sufficient income available to Mr. Bell so as to require him to continue to make the alimony obligations that he was obligated to make under the property settlement agreement.
For that reason, I am going to deny his application to terminate or to vacate the alimony.
As I've indicated with reference to cohabitation while there is certainly a somewhat unusual situation that Mrs. Bell finds herself in with Mr. Worthington, Mr. Worthington has indicated that he's cognizant of the financial problems Mrs. Bell has encountered as a result of Mr. Bell's failure to meet his obligation and has been a source of benefit to her through the loans that he has made, but I am satisfied there has not been a requisite showing that there [is] cohabitation that would terminate the alimony.
I'm also satisfied that there has not been an appropriate showing of changed circumstance because I do find Mr. Bell has the ability to continue to make the alimony payments that he obligated himself to as a result of the settlement that was spread upon the record when the final judgment of divorce was entered in this matter.
On appeal from this determination, plaintiff argues:
I. THE RELATIONSHIP BETWEEN [DEFENDANT] MARGARET D. BELL AND ROBERT WORTHINGTON IS SUCH THAT [DEFENDANT'S] ECONOMIC NEEDS HAVE DECREASED WHICH JUSTIFY A REDUCTION OR ELIMINATION OF ALIMONY.
II. MICHAEL BELL HAS SUFFERED A SUBSTANTIAL CHANGE OF CIRCUMSTANCES IN HIS INCOME WHICH IS NOT TEMPORARY AND JUSTIFIES A REDUCTION IN ALIMONY.
III. THE LIFE INSURANCE OBLIGATION OF MICHAEL BELL SHOULD BE ELIMINATED.
We find no merit to these contentions, Rule 2:11-3(e)(1)(E), and affirm substantially for the reasons stated by Judge John Kelly in his oral decision of February 4, 2011. We add the following comments.
Ordinarily a court may terminate or modify alimony payments due to the dependant spouse's cohabitation with another if "the relationship has reduced the financial needs of the dependent former spouse[,]" Gayet v. Gayet, 92 N.J. 149, 150 (1983), however "an agreement between the parties to allow cohabitation to terminate alimony obligations can be a valid basis for discontinuing alimony, without regard to the economic consequences of that relationship." Konzelman v. Konzelman, 158 N.J. 185, 196 (1999). In order to modify alimony based on cohabitation, the party seeking such relief must prove the existence of a cohabitation relationship. Id. at 202.
"A mere romantic, casual or social relationship is not sufficient to justify the enforcement of a settlement agreement provision terminating alimony." Ibid. Rather, the requisite relationship is one that is "close and enduring and requires more than a common residence, although that is an important factor." Ibid. It is an "intimate relationship in which the couple has undertaken duties and privileges that are commonly associated with marriage[,]" including, but 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. In Konzelman, for instance, the Court found a cohabiting relationship warranting the modification of support where the dependant spouse "lived together most of the time" with her boyfriend, "had a joint savings account," and the boyfriend "paid for improvements in the residence[,] . . . shared in various chores around the house . . . [and] paid for their vacations together." Konzelman, supra, 158 N.J. at 202.
Governed by the above principles, we are satisfied there is sufficient credible evidence to support the trial court's determination that defendant and Worthington are not cohabiting. Cesare v. Cesare, 154 N.J. 394, 411-12 (1998) ("The general rule is that findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence.").
Here, defendant and Worthington do not share financial accounts or assets. Worthington does not pay defendant's day-to-day expenses. They each maintain their own separate residence, and defendant rarely spends the night at Worthington's home. The fact that they have taken vacations together and have occasionally spent the night with one another is, of course, not dispositive of cohabitation. See Palmieri v. Palmieri, 388 N.J. Super. 562, 565 (App. Div. 2006) (rejecting supporting spouse's "suggestion that essentially any relationship, romantic or not, with any person who stayed overnight in [ex-wife's] home, would result in a forfeiture of her right to receive alimony"). The "important factor" of a common residence, Konzelman, supra, 158 N.J. at 202, has not been met in this case, and neither have the other indicia of a marriage-like relationship. Ibid.
Although defendant may be economically dependent upon Worthington, her dependence arises, in large measure, from plaintiff's failure to meet his financial obligations to her. More significant, the money loaned to defendant is secured by legal instruments, belying any suggestion they were gifts of affection, rather than binding contractual obligations arising from arms-length transactions. Under these circumstances, cohabitation has not been established.
Nor has plaintiff proven "changed circumstances." "The party seeking modification has the burden of showing such 'changed circumstances' as would warrant relief from the support or maintenance provisions involved." Lepis v. Lepis, 83 N.J. 139, 157 (1980). This determination lies within the trial court's discretion and will not be overturned "absent an abuse of discretion." Larbig v. Larbig, 384 N.J. Super. 17, 23 (App. Div. 2006). The deference usually accorded a Family Part judge's findings of fact and legal conclusions is "especially appropriate when the evidence is largely testimonial and involves questions of credibility. Because a trial court hears the case, sees and observes the witnesses, [and] hears them testify, it has a better perspective than a reviewing court in evaluating the veracity of witnesses." Cesare, supra, 154 N.J. at 412 (internal citations and quotation marks omitted).
Here, the trial judge specifically found plaintiff's testimony as to his finances and employment status was not credible. And when considered with the fact that his employment has always been with family-owned companies, the trial court's finding that plaintiff was voluntarily underemployed becomes even more compelling. Indeed, "'what constitutes a temporary change in income should be viewed more expansively when urged by a self-employed obligor,' as here, who is 'in a better position to present an unrealistic picture of his or her actual income than a W-2 earner.'" Donnelly v. Donnelly, 405 N.J. Super. 117, 128-29 (App. Div. 2009) (quoting Larbig, supra, 384 N.J. Super. at 23). And equally well-founded is the trial judge's determination that plaintiff did not pay "diligent attention to business" in conducting his job search. Bonanno v. Bonanno, 4 N.J. 268, 275 (1950).
Under the circumstances, deferring to the trial court's credibility and fact findings, we discern no abuse of discretion in its denial of plaintiff's motion to modify or terminate his spousal support obligation. For these very same reasons, the court properly denied plaintiff's motion to eliminate his obligation to provide life insurance for defendant's benefit. Indeed, given plaintiff's history of failing to pay alimony, the need for such security is all the more evident.
Lastly, both parties challenge the counsel fee award of $12,000 to defendant. We believe an award to defendant was a valid exercise of the court's discretion but, as does defendant, we find fault with its calculation.
Attorneys fees in family matters are appropriate upon a court's consideration of (1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties both during and prior to trial; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.
This court "will disturb a trial court's determination on counsel fees only on the 'rarest occasion,' and then only because of clear abuse of discretion." Strahan v. Strahan, 402 N.J. Super. 298, 317 (App. Div. 2008) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)); see also Barr v. Barr, 418 N.J. Super. 18, 46 (App. Div. 2011).
Here, the trial court considered all relevant factors and made adequate findings therein, including, most significantly, that plaintiff had acted in bad faith and had been advised, prior to the plenary hearing, that if his motion proved fruitless, defendant would be awarded attorney's fees. We find no warrant for interference with the determination to award defendant counsel fees.
Defendant requested $29,880.11, representing the balance of her bill of $33,800.88 in total fees and costs. The court instead awarded her only $12,000, eliminating some of the charges on counsel's certification because they "pre-date[d] the motion that brought the matter before the court." This finding, however, was predicated on the mistaken impression that the matter was initiated later, when in fact plaintiff filed his motion for alimony reduction on May 18, 2010, and the initial hearing occurred on June 18, 2010, during which the plenary hearing was scheduled. Other than citing this fact, the record is bereft of any other reasons for fixing the amount of counsel fees at $12,000. Thus, the court concluded: "I looked at the total fee analysis. I make the point that some fees were ahead. I parsed out amounts that I thought reasonable and I think the award that I entered was reasonable."
An award of attorneys fees "unsupported by adequate findings" will be reversed. Gordon v. Rozenwald, 380 N.J. Super. 55, 79 (App. Div. 2005). Moreover, "[f]indings of this sort, without reference to the supporting evidence, are insufficient to permit review by this court and a disservice to the litigants, who are left to speculate about the basis for the discretionary decision." Gordon, supra, 380 N.J. Super. at 78 (citing Klajman v. Fair Lawn Estates, 292 N.J. Super. 54, 61 (App. Div.), certif. denied, 146 N.J. 569 (1996)). Because the court appears mistaken as to the actual date of the inception of this matter, we remand this part of the final judgment for a recalculation of attorney's fees due defendant based on the May 10, 2010 initiation date.
Affirmed on the direct appeal. On the cross-appeal, reversed and remanded for further proceedings consistent with this opinion.