July 6, 2012
SALVATORE PERILLO, JR., PLAINTIFF-APPELLANT,
VICKIE A. WHITE, N/K/A VICKIE A. WHITE-MOSKAL, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Union County, Docket No. FD-20-2149-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 31, 2012
Before Judges Fuentes, J. N. Harris and Koblitz.
Plaintiff Salvatore Perillo, Jr. appeals from the July 8, 2011 order after a plenary hearing that reduced his annual child support by $6600. Plaintiff argues that the judge erred in not further reducing his support obligation. After reviewing the record in light of the contentions advanced on appeal, we affirm.
The parties had a romantic relationship in 1998 that resulted in the birth of their son in April 2001. Their relationship ended shortly thereafter. Defendant Vickie A. White then moved from their joint home in New York City to a rented home in New Jersey, paid for by plaintiff.
Defendant expressed her desire to relocate with the child to California to be close to her family. Plaintiff commenced litigation in New Jersey to prevent the move and, after ten days of trial, the parties settled. On April 29, 2004, both parties, represented by counsel, entered into a written settlement agreement. They agreed to joint legal and physical custody of their son. Defendant agreed not to relocate with their son away from New Jersey until he graduated from high school.
Paragraph 2.1 of the settlement agreement covering child support states:
The Plaintiff shall pay child support as a combination of direct child support and his assuming the responsibility for, and the payment of, certain recurring home expenses at the home where the Defendant resides, and will reside, with the child as more particularly set forth in Paragraphs 2.4 and 2.10 of this Judgment. The Plaintiff stipulates that, absent any substantial adverse change in circumstance, his child support obligation, in the combination of the above categories, shall be equal to the maximum child support allowable under the Guidelines for one child, plus such additional amount as is necessary and reasonable to the child.*fn1
Paragraph 2.4 addresses the rental home where defendant and their son were then living. Paragraph 2.10 states:
Following closing of title, the Plaintiff's regular support obligation for the child shall be to pay the monthly mortgage, taxes, homeowner's insurance, cable television and snow removal. In addition, he shall pay as and for additional child support, the sum of $500.00 per month due and payable on the first day of each month.
The agreement further indicates that when the house is sold, plaintiff will receive the amount of the down payment and mortgage reduction, as well as reimbursement for various other payments previously made by him. After that deduction, the net proceeds will be divided equally between the parties. Defendant agreed that only her mother could reside in the home on a permanent basis with her and the boy.
Defendant married in May 2008 and had a baby girl. When she married, her husband moved into the home. Plaintiff filed an action in the Law Division seeking to eject defendant's husband from the home, which was settled with his payment of $13,500 to plaintiff. Defendant and her husband are now separated. He no longer lives with defendant, although their daughter remains with her and her son in the three-bedroom home. She receives irregular payments of $400 in support from her husband.
Due to the little girl's presence in the home, as well as plaintiff's claimed diminished income, he filed an application on June 28, 2010, to reduce his child support. Finding the only change in circumstances was the daughter's presence in the home, the hearing judge diminished child support without reference to the New Jersey Child Support Guidelines (CSG). Child Support Guidelines, Pressler & Verniero, Current N.J. Court Rules, Appendix IX-A to R. 5:6A (2012).
Plaintiff argues that the judge failed to make specific findings with respect to defendant's income and earning potential after determining that defendant's daughter's presence in the home constituted a "significant and long-term change of circumstance from the parties' original intent" expressed in their 2004 agreement. Plaintiff maintains that the judge disregarded the demonstrated diminished earnings of plaintiff, as well as the increased earnings of defendant and her underemployment, all of which he maintains are considerations required pursuant to N.J.S.A. 2A:34-23(a) and the CSG. Plaintiff further argues that the judge was required to use the CSG when calculating the appropriate reduction in child support after finding a change of circumstances.
The judge found that defendant, an American Airlines flight attendant, was working no less than she did in 2004 when the parties entered into the agreement. He accepted her testimony that she was working essentially a full-time schedule.
The judge also considered the testimony of plaintiff and his accountant, Jonathan E. Perlman, CPA, who stated that plaintiff's income from his restaurant business had decreased dramatically since the autumn of 2008 as a result of the negative business climate. Plaintiff previously owned two, then three restaurants, but now owns only one.*fn2 Plaintiff also owns income-producing real estate and "multifaceted investments." The judge looked specifically at plaintiff's adjusted gross income, determining that in 2002, the year that formed the basis for the 2004 agreement, it was $131,022. The judge further determined it to be $105,328 in 2008, $136,087 in 2009 and, on the draft return of 2010, it was $150,194.*fn3
Perlman testified that plaintiff made a business decision on December 9, 2005, to borrow $1,221,000 from the seller of the third restaurant at five percent interest. His obligation to repay this loan reduced plaintiff's disposable income. The judge found that this investment decision was made approximately two years after the 2004 agreement and, therefore, with plaintiff's full knowledge of his prior obligation to defendant. The judge rejected the accountant's suggestion, based on his analysis, that the court should focus on plaintiff's sixty percent cash flow reduction caused by the loan repayment.
"Because of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding," and the conclusions that flow logically from those findings of fact. Cesare v. Cesare, 154 N.J. 394, 413 (1998). The judge did not abuse his discretion by focusing on plaintiff's adjusted gross income rather than on his reduced cash flow resulting from a post-agreement business decision.
The judge found that plaintiff's child support is, in part, supporting defendant's second child, which was clearly not the parties' intention when they entered into the 2004 agreement. The judge relieved plaintiff of the obligation to pay the cable TV bill of approximately $50 per month, as well as the additional $500 monthly payment, due to defendant's daughter's use of the home. Plaintiff contends that this modification is arbitrary and fails to reference the CSG, which, he argues, constitutes reversible error.
In 2004, the parties agreed that plaintiff was paying in excess of the maximum amount of support for one child under the CSG, although plaintiff did not report taxable income in excess of the guidelines' parameters at that time. The hearing judge did not accept defendant's argument that this arrangement was due to plaintiff's failure to report all of his income from the restaurant business to the I.R.S. Plaintiff apparently chose to be particularly generous in supporting his son.
When a significant change of financial circumstances or parenting time occurs, the CSG should ordinarily be consulted, even if the paying parent originally chose to provide above-guidelines support. Musico v. Musico, ___ N.J. Super. ___ (Ch. Div. May 11, 2012) (slip op. at 2). Rule 5:6A indicates that the CSG may be "disregarded by the Court only where good cause is shown. . . . Good cause shall consist of . . . the presence of other relevant factors which may make the guidelines inapplicable." Note 2 to the CSG references Rule 5:6A in indicating that the CSG must be used as a rebuttable presumption to modify all child support orders. Pressler & Verniero, Current N.J. Court Rules, Appendix IX-A to R. 5:6A, Note 2. See also Pressler & Verniero, Current N.J. Court Rules, Appendix IX- A to R. 5:6A, Note 3 (indicating that "[i]f the court finds that the guidelines are inappropriate in a specific case, it may . . . disregard the guidelines").
The judge found the CSG inappropriate here. Although the CSG are referenced in the 2004 agreement, they are referenced only to indicate that the support is acknowledged to be in excess of the amount required by the CSG, without any indication of what the CSG support level would otherwise be. The modification of plaintiff's child support here is not due to a change in the financial situation of either parent, nor is it due to a change in parenting time. It is due instead to the payee parent's new child from a subsequent marriage, a factor that is not susceptible to a fair calculation via the CSG.
A new child would generally impact defendant's financial situation negatively, as she must support her new child. See Pressler & Verniero, Current N.J. Court Rules, Appendix IX-A to
R. 5:6A, Note 10a. The CSG would offer guidance as to how much the new child negatively impacts defendant's economic situation if the income of the child's father were known. See id. This adjustment would diminish defendant's share of their son's support, thereby perhaps increasing plaintiff's support obligation, which is clearly inappropriate here. The CSG offer no assistance, however, as to how plaintiff's obligation should be diminished in these unusual circumstances.
Plaintiff argues that the judge's decision to reduce support by $550 a month retroactive to plaintiff's filing of the motion in June 2010 was arbitrary, yet he offers no alternative method other than to apply the CSG to the parties' incomes, as if the 2004 agreement were not in effect. The judge's decision to reduce support by $550 a month was a reasonable diminution to account for plaintiff providing the bulk of the shelter cost of defendant's daughter.