June 27, 2012
MARIA SIMONETTI, PLAINTIFF-RESPONDENT,
SALVATORE SIMONETTI, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, Docket No. FM-03-1091-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued February 1, 2012
Before Judges Cuff and St. John.
Defendant Salvatore Simonetti appeals from the January 7, 2011 order of the Family Part denying his motion for modification of his support obligations, as well as other relief.
Having considered the limited record before us, and in light of the applicable legal principles, we conclude that the motion judge should have conducted a plenary hearing. Consequently, we reverse and remand for such a hearing.
The parties were married in 1987, and had two children born in 1988 and 1991. On January 3, 2006, plaintiff Maria Simonetti filed a complaint for divorce. The parties subsequently entered into a property settlement agreement (PSA), which resolved all issues between them, including defendant's support obligations to plaintiff. On May 17, 2007, a Family Part judge entered a Final Judgment of Divorce.
In 2008, defendant filed a motion for a reduction of his support obligations. On October 31, the motion judge denied defendant's application for modification, determining defendant had not demonstrated a prima facie showing of changed circumstances. Defendant appealed the order in December. In July 2009, the parties entered into a consent order, agreeing to certain payments, including a reduction of defendant's unallocated support payments, and a dismissal of the appeal.
In May 2010, defendant filed a second motion for reduction of support, and for other relief. Plaintiff sought to enforce the 2009 consent order. Attached to defendant's certification was his case information statement (CIS). The court set defendant's income "based upon [d]efendant's average income from 2006 through 2009" in the amount of $129,000 per year. On August 27, the motion judge denied defendant's application for modification, again determining defendant had not demonstrated a prima facie showing of changed circumstances.
In October 2010, defendant filed a third motion for reduction of support, and for other relief. Defendant asserted he was laid off in 2008 due to a downturn in the home building industry, and that he had aggressively sought employment but had only obtained employment in a family restaurant business, earning $45,000 per year. He claimed the exhaustion of all assets, including having no equity in his home. Defendant also sought emancipation of his daughter, contending she was not actually pursuing her education.
The motion judge, without a plenary hearing, found defendant had not adequately shown changed circumstances under Lepis v. Lepis, 83 N.J. 139 (1980), which was required to obtain relief. In denying defendant's application, the court found "that [d]efendant has not demonstrated a substantial change in circumstances warranting a modification of his child support and spousal support obligations." Because this conclusion is contrary to the recent employment and income history asserted by defendant as well as the produced evidence suggesting defendant has other sources of income, his motion could not be resolved without a plenary hearing.
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.
Although the matter is not free from doubt, we are persuaded that defendant has advanced a prima facie showing of changed circumstances to trigger a plenary hearing. His certification asserts that after eighteen years of employment, he was "laid off on August 1[,] 2008 after being in the residential home building industry[,]" which has since been devastated by the recent economic recession. He also claims, "since being laid off, the only employment I have been able to obtain was working with family in their restaurant business with a salary of $45,000 per year in 2009." Defendant was only able to work a partial year in 2009, and earned $25,000 that year.
He asserts his income has declined "by 75% and has since stopped all together, while plaintiff's income [had] gone up over 40%." Defendant's certification does not appear to evince bad faith, and sets forth the continuing decline in his income during 2010.
However, satisfying this threshold does not automatically result in a downward modification of defendant's support obligations. 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.
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 three 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.
We cannot conclusively determine from the record whether defendant is voluntarily underemployed by virtue of his diminution in income from his residential home building career. 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 covered by her increased income.
Defendant also asserts his daughter should be emancipated and evinces, as a basis for the relief sought, her Burlington County College registration statement showing limited academic advancement.
Given the nature of this record, any dispute as to defendant's changed circumstances and emancipation of his daughter would be best determined in a plenary hearing. The issue of whether defendant's daughter is emancipated, with the correlative termination of the right to parental support, is fact-sensitive. See Dolce v. Dolce, 383 N.J. Super. 11, 17 (App. Div. 2006). 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 support payments, 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, including tax returns, and any necessary discovery counsel wish to pursue. The Family Part also retains the discretion, if any support reduction is ordered, to preserve defendant's original filing date of the October 2010 motion, concerning the computation of arrears, and potential credits or refunds.
Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
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