July 11, 2012
WILLIAM K. BISCHOFF, PLAINTIFF-APPELLANT,
DIANE K. BISCHOFF, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. FM-02-757-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 22, 2012
Before Judges Fisher, Nugent and Carchman.
Following the denial of post-judgment relief, plaintiff William Bischoff appeals from the denial of his motion to (1) terminate alimony to his former wife, defendant Diane Bischoff; (2) retroactively modify child support to the date when the parties' two eldest children moved to plaintiff's residence; and (3) require defendant to contribute to the children's education expenses. We affirm.
The parties married in 1985 and divorced on January 24, 2006, pursuant to a dual final judgment of divorce (JOD), which incorporated a Property Settlement Agreement (PSA) of the same date. The comprehensive and fully integrated agreement resolved the issues then in dispute between the parties, including the issues raised on the post-judgment motion filed by plaintiff.
The parties had four children: Katelyn, twenty-four; Connor, twenty-one; Tyler, nineteen; and a fourteen-year-old son.
During the marriage, defendant was a full-time mother and homemaker. In January 2010, plaintiff was employed as the vice chairman in the investment banking department of First Horizon Bank National. Sometime in early 2010, during the pendency of the plenary hearing, plaintiff was laid off from his position with the bank. He indicated that his wages in 2008 were $728,993.21, and at the time of the hearing, he was "currently employed without an income."
We now set forth the facts adduced at the plenary hearing on plaintiff's various applications for relief.
Pursuant to the PSA, plaintiff provided alimony to defendant in the amount of $153,900 on the first $600,000 of his annual gross earned income, and an additional one-third of the remaining $650,000 of his income. Plaintiff's gross earned income, for purposes of determining alimony, was capped at $1,250,000 for 2008, and $2,000,000 for 2006 and 2007. The agreement defined gross earned income as "income . . . from any source including pretax income such as restricted stock and deferred income for that calendar year on an after tax basis[.]" Permanent alimony payments consistent with this formula were required "for the joint lives of the [parties], or for so long as the Wife shall not remarry, or cohabitate with an unrelated person in a relationship akin to marriage."
Plaintiff sought to terminate his alimony obligation based upon defendant's alleged cohabitation with her paramour, Thomas Walsh. Defendant sought alimony arrears in the aggregate amount of $55,490, which amount was not disputed.
During 2003, the parties agreed that Walsh, a contractor, would renovate their marital home. The work was completed in 2004, to the parties' satisfaction. Thereafter, the parties agreed to engage Walsh as the general contractor to renovate and remodel a speculation home in Allendale. According to defendant, she began dating Walsh in "August or September" 2005.
Walsh testified that he developed a "deep, personal relationship" with defendant. Walsh and defendant spent holidays together, including Christmas, Thanksgiving, and Easter, and attended their children's sporting events together.
Walsh and defendant vacationed together numerous times, sometimes with defendant's children, and sometimes including Walsh's children. For example, they stayed at defendant's parents' shore property and shared ski trips in Utah. According to Walsh, defendant typically paid for accommodations on her credit card, and he would reimburse her for some expenses. Walsh usually paid for plane tickets. They "absolutely" tried to share expenses.
Walsh and defendant shared no joint bank accounts, nor have they commingled funds for investment purposes. In 2008, Walsh supervised the installation of a pool at defendant's residence. He was not monetarily compensated. The permit request form listed him as the general contractor. Defendant paid various companies, none of which involved Walsh, a total of $73,397.93 for the pool's installation. According to defendant, Walsh advised her and may have saved her "some time and some money by recommending people" for installation of the pool.
In addition, defendant noted that, on occasion, she asked Walsh to perform various household chores such as decorating her house for Christmas, collecting the garbage cans on the weekends, and fixing the fence. Walsh denied putting the garbage cans out for disposal.
Both Walsh and defendant indicated that Walsh has maintained his own residence in an apartment located in Mahwah since August 2005, when he separated from his former wife. That address appears on his driver's license and voter's registration card. He does not receive mail at defendant's residence. According to Walsh, on the weekends, he "usually" slept overnight at defendant's residence, but "rarely" during the week. According to defendant, Walsh stayed over "[g]enerally every weekend and sometimes one night during the week." He brought his own toiletries in his gym bag, and sometimes did his laundry at defendant's home. He prepared meals for himself with his own groceries at defendant's house on occasion, but "[would not] deny" others food if asked.
At her de bene esse deposition, Katelyn observed that Walsh would "come and go," and kept "a few items of clothing" at defendant's residence and had his laundry done there.
During his de bene esse deposition, Connor indicated that Walsh lived in defendant's residence as of December 2006, when Connor moved into plaintiff's residence, and was there "most nights." Walsh was there when Connor "went to sleep," and would "very often be there in the morning." When challenged, Connor indicated that during his visits to defendant's residence once or twice per week between December 2006 and the spring of 2007, Walsh was at the residence in the morning during approximately half of his visits.
Connor took photographs of Walsh's clothing and toiletries in defendant's residence. Also, Walsh kept tools and equipment in defendant's garage.
Walsh did not have a key to defendant's home, but he did know the access code to the garage. On one occasion, he went to defendant's residence with his son to pick up one of his cars and suspected that a party was in progress. Defendant was not home. He proceeded to enter the house, and found Katelyn asleep on a bed. He stayed for "quite awhile and made sure the kids left."
Plaintiff hired detectives from Murphy & Associates to perform surveillance of defendant's residence. Between January and April 2008, out of approximately fifty weeknights of surveillance, one of Walsh's four vehicles was parked in defendant's driveway forty-four times. Walsh certified that, for approximately two months, he left one of his vehicles in the driveway because he "lost the electronic car key" and had difficulty obtaining a new, "properly program[m]ed" key. According to defendant, Walsh left one of his trucks in her driveway for extended periods of time because he completed work for several of her neighbors and "it's just easier [to] leave the one truck in [her] driveway." When Walsh stayed overnight, two of his cars were typically parked in her driveway.
Various neighbors and friends provided testimony about Walsh's presence at defendant's home with consistent testimony that he spent extensive time at the premises, parked his cars there and demonstrated an affection for defendant, reflecting an ongoing relationship between the parties.
Plaintiff also sought relief from his child support obligation as it applied to both Connor and Katelyn.
The parties shared joint custody of the children; defendant was the primary custodial parent. Under the PSA, plaintiff paid child support to defendant in the amount of $106,000 annually ($8,833.33 monthly) for the four unemancipated children. The agreement included a provision for reduction of child support based upon each child's emancipation, defined as when each child reached "the age of [eighteen] years and the earliest occurrence" of one of the following events: graduation from high school or vocational school, unless the child immediately attends college full-time; graduation from college; full-time employment; marriage; death; or military service. The PSA specifically explained that "[t]here shall be no reduction in support as a result of a child(ren) being enrolled in college and living away from Wife's residence. Only upon emancipation shall the reduction apply." The agreement does not address adjustment in child support predicated upon a child's change of residence.
Defendant certified that she agreed with Connor, in December 2006 during his Christmas break from high school, that "he would stay with his father, for what [she] had understood to be a brief period of time during which his father would straighten [Connor's behavioral problems] out somewhat." However, Connor continued to reside with plaintiff, only returning for visits with defendant. Connor had not resided in defendant's residence since January 2007. According to Connor, he gave defendant an ultimatum in December 2006: "either have [Walsh] over less or I'm going to move out." Because Walsh continued to frequent the residence, Connor moved in with plaintiff in December 2006.
Plaintiff indicated that defendant agreed that Connor would reside with him beginning in December 2006. At that time, Connor was dropped off at his apartment "with all of his possessions in torn boxes." According to plaintiff, he emailed defendant at KCTCH@aol.com on December 16, 2006, stating:
Diane, this letter is to confirm our agreement that we are prorating (reducing) Connor's child support to reflect the fact that he is now living with me. The amount is $26,500 per annum and I will contact Marge Stern to have her made [sic] the reduction. Of course we also agree if Connor ever moves back with you that support will revert to you. Please acknowledge your agreement.
KCTCH@aol.com replied on December 27, 2006, stating, "I agree but Connor will not last long with you. When he moves back you will have to pay me again." Plaintiff acknowledged that KCTCH@aol.com was not defendant's email address; rather, defendant's address was KCTCH5@aol.com. He later explained that defendant had other email addresses, and did not know whether KCTCH@aol.com was her address.
Defendant claims that she did not agree to modify plaintiff's child support obligation, nor had she ever used KCTCH@aol.com as her email address. On cross-examination, defendant insisted that KCTCH5@aol.com was her only America Online (AOL) address, while acknowledging in her deposition testimony that she did not recall whether she had other email addresses.
With respect to the purported emails, defendant certified that plaintiff did seek a reduction in support "based upon what [she] then thought to be a baseless claim that Connor was 'living' with [plaintiff] a couple of days into what [she] thought would be a visit." Defendant further elaborated that what actually had happened was that plaintiff had told me he wanted to surcharge me for the car service expense he proposed to incur when school resumed in January, for transportation of Connor back and forth from his New York apartment to Don Bosco, and I reluctantly agreed to this.
Consistent with the alleged agreement between the parties to modify child support with respect to Connor, plaintiff withheld $47,393 between January 2007 and October 2008. Defendant did not object to the proposed payment schedule until she filed her cross-motion in August 2008.
While Connor resided with plaintiff, he attended a private high school and transferred to a public school after his sophomore year was completed. Plaintiff indicated that he paid all of Connor's expenses while he resided with him.
Katelyn moved in with plaintiff at the end of her spring semester at college in May or June 2007, and resides with him when she is not attending school. At that time, plaintiff requested a twenty-five percent reduction in child support, to which defendant did not agree. Plaintiff noted that he paid all of Katelyn's expenses while she lived with him when she was not at school except for her tuition for one semester, approximately $2900.
By order dated October 10, 2008, the court reduced plaintiff's child support obligation to $72,000 per year based on Connor and Katelyn's change of residence and in accordance with the emancipation schedule in the PSA since the "the transfer in custody [wa]s akin to an emancipation." At the plenary hearing, plaintiff sought retroactive application of the reduction to when each child vacated defendant's residence.
Also during the hearing, plaintiff was laid off. The court refused to allow testimony and evidence regarding the effect of that event on plaintiff's income and corresponding alimony obligation because the PSA provided that a loss in employment must last at least six months to affect alimony and that time had not yet run.
Plaintiff next sought contribution from defendant for school expenses for the children.
The PSA provided that the parties were required to contribute to the children's private school and college education expenses in accord with their respective earned income:
It is specifically understood and agreed by the parties that each shall contribute . . . to any and all costs, fees and related expenses for the child(ren) of the parties to attend private school(s) upon which the parties may agree to send the child(ren). It is acknowledged that as of the date of this Agreement the parties' son Connor attends Don Bosco Prep High School in Ramsey, New Jersey and the other children Katelyn, Tyler and [the minor son] attend public school. Husband shall continue to pay for Connor's Don Bosco attendance without contribution from the Wife. If the three other children attend private school before college, the parties shall contribute toward private school tuition based in proportion to their respective earned income.
With respect to college expenses, it is specifically understood and agreed by the parties that they both have an obligation to provide for the college education of their children, taking into consideration, at the time each child reaches the appropriate age, the Husband's and Wife's respective earned incomes and assets of the children . . . .
Plaintiff sought from defendant thirty-eight-percent contribution to the children's education expenses, including: thirty-eight percent of $56,466.31 for Katelyn's college education expenses and $31,788.90 total for the youngest child's private school expenses at The Gow School for Dyslexia and Learning Disabilities.
Defendant paid $62,023 for Tyler's education expenses between 2006 and 2009 because her husband told her she was obligated to do so. She stopped contributions in January 2009 after being advised by her attorney that she had no such obligation. Defendant paid $2964 towards Katelyn's college expenses in 2009. According to plaintiff, defendant had no source of income other than from Build It Big, LLC, a company formed by the parties in March 2005 for development of the Brookside Avenue property, and distributed to defendant in the PSA. Defendant bought the speculation home in 2005 for $505,812. Without any written contract with defendant, Walsh constructed a new home on the property between 2005 and most of 2006. It was their mutual understanding that they would share in the profits, if any, from the sale of the home.
Walsh provided defendant with a running invoice and, in accordance with that invoice, defendant periodically paid him for his work, with Walsh receiving $697,000 from defendant notwithstanding that his running invoice only totaled $362,606.46. Walsh admitted that half of his invoices were missing. Defendant claimed that she spent a total of $1,368,929.35 on the speculation home, of which $707,843.39 was paid to Walsh Builders & Remodelers, Inc. In April 2007, the home sold for $1,425,000. Defendant noted she lost $14,539.15 on the venture, but at her deposition, she stated that she lost approximately $100,000.
Walsh Builders & Remodelers, Inc.'s 2007 1120S tax return listed its income as zero. Walsh's individual tax return indicated a loss of $25,350 for 2007, while defendant's 2007 income tax return indicated a gain of $694 from Build It Big, LLC. According to defendant, she has realized no earned income since the divorce.
In a written opinion incorporated in the court's May 7, 2010 order,*fn1 the court denied plaintiff's motion to terminate alimony, to retroactively modify child support, and for defendant's contribution toward the children's education expenses. With respect to defendant's cross-motion, the court awarded her child support and alimony arrears, and Tyler's unreimbursed medical expenses.
This appeal followed.*fn2
On appeal, plaintiff asserts that the court erred by denying his motion to terminate alimony based on defendant's cohabitation with Walsh. He also challenges the denial of his application to terminate child support retroactively as of the dates that both Connor and Katelyn moved to his residence; claims the judge failed to consider the child support guidelines as well as the statutory factors set forth in N.J.S.A. 2A:34-23a in computing child support; and asserts that the judge erred by refusing to order defendant to contribute to the children's education and college expenses.
Plaintiff asserts that the court erred by not terminating his alimony obligation based upon defendant's alleged cohabitation with Walsh.
The PSA provided for termination of alimony contingent upon defendant's cohabitation "with an unrelated person in a relationship akin to marriage." The court found that the stable romantic relationship between defendant and Walsh did not constitute cohabitation, explaining:
There is stability in the relationship, but there is no indication of its permanency, and there has been no evidence to support a mutual interdependence. Neither has there been evidence offered that would indicate that Mr. Walsh is responsible for, or contributes to the support of the defendant, or that defendant is responsible for, or contributes to the support of Mr. Walsh. It is clear though, that a good number of the Konzelman [v. Konzelman, 158 N.J. 185 (1999)] factors are present. There is a relationship that consists of vacations, holidays, most weekends are overnights, observation of children's athletic activities, and access to the residence. Like Konzelman, some of his belongings remain at the premises, he was seen maintaining the yard, walking the dog and running errands.
The facts do not bear out that Mr.
Walsh was responsible for the costs of installation of the pool, but merely acted as an adviser. As to the joint venture, "Build It Big," checks were provided showing monies from defendant to Mr. Walsh but were based upon a joint venture that existed prior to the dissolution of the marriage and continued thereafter. There is no indication that a profit was realized from this joint venture.
Further, Mr. Walsh testified he lived in a one-bedroom apartment, and I find his testimony to be creditable [sic] and don't find it to be maintained as a separate address for appearances only; his license indicates that address, he goes back and forth regularly. There is no established sharing of a common residence, a sharing of assets or common bank accounts, a joint contribution to household expenses, or recognition of the relationship by the community beyond that of a dating relationship. There is an intimate or romantic involvement, but that is only one of the Konzelman criteria clearly present.
Critical to our resolution of this issue on appeal is our standard of review.
"[F]indings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). Additionally, "[b]ecause of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding." Id. at 413. "Trial court findings are ordinarily not disturbed unless 'they are so wholly unsupportable as to result in a denial of justice[.]'" Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 475 (1988) (quoting Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974)). Likewise, the lower court's credibility determinations are entitled to deference because "it has a better perspective than a reviewing court in evaluating the veracity of witnesses." Pascale v. Pascale, 113 N.J. 20, 33 (1988).
"A mere romantic, casual or social relationship is not sufficient to justify the enforcement of a settlement agreement provision terminating alimony. Such an agreement must be predicated on a relationship of cohabitation that can be shown to have stability, permanency, and mutual interdependence." Konzelman v. Konzelman, 158 N.J. 185, 202 (1999). "[T]he relationship must be shown to be serious and lasting." Id. at 203. To determine the "true nature of the relationship," whether the couple "bears the generic character of a family unit as a relatively permanent household" should be evaluated. Gayet v. Gayet, 92 N.J. 149, 155 (1983) (internal quotation marks omitted). Such evaluation includes those factors that make the relationship close and enduring and requires more than a common residence, although that is an important factor. Cohabitation involves an intimate relationship in which the couple has undertaken duties and privileges that are commonly associated with marriage.
These can include, but are 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. [Konzelman, supra, 158 N.J. at 202.]
Our review of the record leads us to conclude that all of the trial court's findings were amply supported by credible record evidence and are entitled to deference. Rova Farms Resort, Inc., supra, 65 N.J. at 484. The majority of facts cited by plaintiff which, according to him, warranted a finding of cohabitation, are in accord with the trial court's findings.
Plaintiff contends that contrary to the court's findings, the record evidence showed that "defendant paid for all the vacations," Walsh "had unfettered access" to defendant's residence, Walsh "maintains a 'separate address' for appearances only," and defendant and Walsh "engaged in a joint business venture, intertwining their finances." However, plaintiff's assertions are contrary to the judge's findings and not supported by the record. Regarding vacations, defendant and Walsh typically shared expenses. Regarding Walsh's alleged unfettered access to defendant's residence, Walsh testified and defendant corroborated that he did not have a key, and defendant acknowledged that he knew the garage access code. Regarding Walsh's purported apartment residence "for appearances only," the trial court's credibility finding that he resided there is entitled to deference. See Pascale, supra, 113 N.J. at 33. And regarding defendant and Walsh's joint business venture of building the speculation home, defendant paid Walsh's company for his contracting services on the project, which began prior to the dissolution of her marriage. Moreover, there is no evidence that a profit was realized.
Contrary to plaintiff's assertion, the Court did not hold that financial contributions between a dependent spouse and cohabitant are irrelevant in determining whether cohabitation has been established. Rather, Konzelman, supra, 158 N.J. at 202, held that intertwined finances are a relevant factor to consider in the cohabitation analysis. The trial judge here correctly analyzed the Konzelman factors.
Our commitment to our standard of review is significant. Even though
we may have decided this issue differently, the trial judge's
findings, here supported by what he saw and heard on the record, will
be deferred to in the absence of an error as to the law.*fn3
No such error occurred here, and we perceive no basis for our
As to child support, plaintiff raises two issues. First, plaintiff claims the court should have retroactively reduced his child support obligation effective to the dates when Connor and Katelyn moved into his residence (December 2006 and June 2007, respectively), rather than the filing date of his modification motion (July 8, 2008). Second, plaintiff claims the court erred by failing to consider the child support guidelines and applicable statutory factors in reducing his child support obligation based upon Connor and Katelyn's change of residence. We first set forth a bedrock principle that governs all awards of child support. "An award of [child] support is within the discretion of the trial court." Raynor v. Raynor, 319 N.J. Super. 591, 605 (App. Div. 1999). "It will not be disturbed unless it is manifestly unreasonable, arbitrary or clearly contrary to reason or to the evidence, or the result of whim or caprice." DeVita v. DeVita, 145 N.J. Super. 120, 123 (App. Div. 1976).
The PSA does not address adjustment in child support predicated upon a child's change of residence. Rather, it provides that "[t]here shall be no reduction in support as a result of a child(ren) being enrolled in college and living away from Wife's residence. Only upon emancipation shall the reduction apply." The court found that the record did not establish when Connor and Katelyn moved into plaintiff's residence on a permanent basis "until such time as the order was entered in October of 2008." The court terminated plaintiff's child support obligation for Connor and Katelyn as of the filing date of plaintiff's modification motion in July 2008.
N.J.S.A. 2A:17-56.23a states, in relevant part: "No payment or installment of an order for child support . . . shall be retroactively modified by the court except with respect to the period during which there is a pending application for modification." The statute bars modification of child support to a date earlier than the filing of a motion to modify. Mallamo v. Mallamo, 280 N.J. Super. 8, 13 (App. Div. 1995); Pressler and Verniero, Current N.J. Court Rules, comment 3.1 on R. 5:6A (2012).
In Ohlhoff v. Ohlhoff, 246 N.J. Super. 1, 7 (App. Div. 1991), we held that "a child support obligation is not automatically abrogated when a child for whom support is owed moves into the home of the supporting parent." In many circumstances, "some time must elapse before the child can decide whether the new living arrangement really will be more to his or her liking and before the custodial parent can decide whether to accept the change on a permanent basis." Ibid.
Nevertheless, in Ohlhoff, we recognized that "[w]hen the residence of a supported child changes, the parties may often expressly agree upon a modification of support arrangements[,] . . . [a]nd even without an express agreement the parties' course of conduct subsequent to the change may reflect an implied agreement to modify support which a court may enforce." Id. at 9. Agreements to modify child support may be enforced even though the supporting spouse's obligation may be reduced or eliminated to a date earlier than the filing of the modification motion. Ibid.
We find no basis to disturb the court's retroactive termination of child support for Katelyn effective on July 8, 2008. There is no record evidence indicating an express or implied agreement to reduce child support when she moved into plaintiff's residence in June 2007. Rather, plaintiff acknowledges that defendant refused his proposal to reduce support.
Whether termination of child support for Connor should have occurred prior to July 2008 involved a specific factual question. The only evidence suggesting an express agreement to reduce support was an alleged email response from KCTCH@aol.com to plaintiff. Plaintiff admitted that the email address he sent his reduction proposal to, and the purported response email address, were not defendant's. Rather, her email address was KCTCH5@aol.com. Even though it did not make a specific credibility finding as to the authenticity of the emails, the judge viewed both emails as suspect.
Plaintiff contends an implied agreement to terminate child support was established by the following circumstances: the change in residential custody; his own unilateral $26,500 reduction in child support; and defendant's failure to object to the reduction until she opposed plaintiff's motion and filed her own motion, nearly a year and eight months after Connor purportedly moved to plaintiff's home. Although not explicitly stating as such, the court credited defendant's testimony that there was no intended change of residence at the time Connor initially relocated to plaintiff's residence. As we previously observed, we will grant deference to those findings. Rova Farms Resort, Inc., supra, 65 N.J. at 484.
In sum, we find no basis for revisiting the judge's determination. There was no suggestion of immediate permanency or a meeting of the minds on that issue. In fact, defendant's alleged email response theorizes that Connor would not "last long" at plaintiff's residence. We agree with the trial court that the record establishes that the appropriate date for retroactive application of child support is July 8, 2008, and affirm the trial judge's utilization of that date.
We reach a similar result regarding the use of the PSA's emancipation provision and standard in determining the quantum of reduction in child support.
At the time of the PSA, plaintiff's child support obligation of $106,000 annually was based upon his annual income in excess of $1,000,000. The PSA does not address whether the children's change of residence warrants a reduction in support and, if so, the quantum of such reduction. The PSA permits a reduction in support based upon each child's emancipation (i.e., to $90,000 for the first child; to $72,000 for the second child; to $43,500 for the third child; and to $0 for the fourth child).
In recalculating plaintiff's child support obligation based upon Connor and Katelyn's change of residence, without a specific finding of emancipation, the court adopted the emancipation schedule because defendant "has no income that has been established, and there was no request to impute income to her, and therefore, the transfer in custody is akin to an emancipation." Accordingly, the court reduced plaintiff's child support obligation to $72,000 per year. Since the PSA did not provide for a reduction upon a child's time away at school, the court ordered no reduction for Tyler "until such time as [his] custody is changed to the plaintiff's."
In determining the reduction in child support, the court looked first to the PSA and adopted the formula the parties had agreed to for a reduction in the event of emancipation.
We conclude that the judge adopted a reasonable consideration of the agreement of the parties and the unique facts presented here demonstrate a sufficient basis for adopting the standards agreed to by the parties.
Plaintiff focuses his argument on the Court's mandate in Caplan v. Caplan, 182 N.J. 250, 271 (2005), regarding the necessity to apply the Child Support Guidelines. Particularly noteworthy, however, Caplan did not involve a PSA or modification of an agreement as to child support but addressed the issue of child support in its initial calculation.*fn4
Plaintiff next contends that the court erred by failing to order defendant to contribute to the children's education and college expenses.
The PSA provides that the parties are each obligated to contribute towards their children's education and college expenses in proportion to their respective earned income.
"Earned income" is not defined in the education and college expenses section of the PSA.
The court found the term "earned income" unambiguous, explaining:
The agreement specifically does not say "income" for either party, but yet says "earned" income for both parties. Alimony is not earned, it is not received with regard to performance of work or tasks, it is paid for purposes of maintaining a marital lifestyle based upon a choice made by a husband and wife, that one of the spouses shall stay at home and be the caregiver, and therefore, the alimony alone shall not be considered as "earned" income.
The court further found "no proofs of any earned income that can be attributed to the defendant in this matter," and concluded that defendant was not responsible for contribution towards the children's education expenses.
Our standard of review recognizes that interpretation of a contract "is a matter of law for the court subject to de novo review." Fastenberg v. Prudential Ins. Co., 309 N.J. Super. 415, 420 (App. Div. 1998).
Matrimonial agreements are contractual in nature. Petersen v. Petersen, 85 N.J. 638, 642 (1981); Harrington v. Harrington, 281 N.J. Super. 39, 46 (App. Div.), certif. denied, 142 N.J. 455 (1995). "The law grants particular leniency to agreements made in the domestic arena, and likewise allows judges greater discretion when interpreting such agreements. Such discretion lies in the principle that although marital agreements are contractual in nature, 'contract principles have little place in the law of domestic relations.'" Guglielmo v. Guglielmo, 253 N.J. Super. 531, 542 (App. Div. 1992) (quoting Lepis v. Lepis, 83 N.J. 139, 148 (1980)) (internal citation omitted). "Marital agreements, however, are enforceable only if they are fair and equitable." Massar v. Massar, 279 N.J. Super. 89, 93 (App. Div. 1995).
"'[F]undamental canons of contract construction require that we examine the plain language of the contract and the parties' intent, as evidenced by the contract's purpose and surrounding circumstances.'" Highland Lakes Country Club & Cmty. Ass'n v. Franzino, 186 N.J. 99, 115 (2006) (quoting State Troopers Fraternal Ass'n v. New Jersey, 149 N.J. 38, 47 (1997)).
In the quest for the common intention of the parties to a contract the court must consider the relations of the parties, the attendant circumstances, and the objects they were trying to attain. An agreement must be construed in the context of the circumstances under which it was entered into and it must be accorded a rational meaning in keeping with the express general purpose.
Even where the intention is doubtful or obscure, the most fair and reasonable construction, imputing the least hardship on either of the contracting parties, should be adopted so that neither will have an unfair or unreasonable advantage over the other. [Tessmar v. Grosner, 23 N.J. 193, 201 (1957) (citations omitted).]
"Generally, once the parties have reached an agreement, no court may create a 'new or better' contract for them." Aarvig v. Aarvig, 248 N.J. Super. 181, 185 (Ch. Div. 1991) (quoting Commc'n Workers of Am., Local 1087 v. Monmouth Cnty. Bd., 96 N.J. 442, 452 (1984)). A court may not adopt "an interpretation contrary to the . . . plain meaning" of the contract's wording because "[a] party that uses unambiguous terms in a contract cannot be relieved from the language simply because it had a secret, unexpressed intent" to a different effect. Schor v. FMS Fin. Corp., 357 N.J. Super. 185, 191 (App. Div. 2002).
However, where a particular contract term is ambiguous, the court will assess "'what was written in the context of the circumstances under which it was written, and accord to language a rational meaning in keeping with the express general purpose.'" GNOC Corp. v. Dir., Div. of Taxation, 328 N.J. Super. 467, 476-77 (App. Div. 2000) (quoting Acme Mkts., Inc. v. Wharton Hardware & Supply Corp., 890 F. Supp. 1230, 1243 (D.N.J. 1995)), aff'd as modified by 167 N.J. 62 (2001).
The term "earned income" is unambiguous. Dictionaries typically supply a word's plain meaning. See, e.g., Danco, Inc. v. Commerce Bank/Shore, N.A., 290 N.J. Super. 211, 217 (App. Div. 1996). Webster's Third New International Dictionary 714 (1993) defines "earned income" as "income (as wages, salary, professional fees, or commissions) that results from the personal labor or services of an individual." Likewise, Black's Law Dictionary 831 (9th ed. 2009) defines "earned income" as "[m]oney derived from one's own labor or active participation; earnings from services."
"Earned income" is paid commensurate with the performance of labor or service. Alimony, however, is paid to maintain the marital lifestyle. See, e.g., Aronson v. Aronson, 245 N.J. Super. 354, 364 (App. Div. 1991) (Alimony "is a right arising out of the marriage relationship to continue to live according to the economic standard established during the marriage as far as economic circumstances will allow"). See also Cox v. Cox, 335 N.J. Super. 465, 473 (App. Div. 2000). Alimony is not earned income, and was properly excluded from determining defendant's share of the children's education expenses.
We agree with the trial judge's finding that defendant earned no income on the speculation house project. That finding is supported by credible record evidence, and is binding on appeal. Rova Farms Resort, Inc., supra, 65 N.J. at 484.