August 24, 2012
BARBARA FROST, PLAINTIFF-RESPONDENT,
MARK FROST, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Burlington County, Docket No. FM-03-1477-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 28, 2012
Before Judges Axelrad and Sapp-Peterson.
Defendant appeals from the Family Part order compelling him to provide plaintiff with monies earned in counsel fees as payment for alimony, arrears, and money owed in equitable distribution. Defendant contends he was entitled to a plenary hearing on the issues he raised because he presented sufficient evidence of changed circumstances. We disagree and affirm.
Following a thirty-six-year marriage, the parties were divorced by a Final Judgment of Divorce (FJD) entered August 25, 2006. The FJD, in addition to an award of equitable distribution, awarded plaintiff permanent alimony fixed at $9500 per month, based upon the trial court's finding that defendant's annual income at the time was $357,000. Beginning in 2008, plaintiff filed a number of motions to enforce litigant's rights to compel defendant to honor his obligations under the FJD. Each time plaintiff filed a motion, defendant cross-moved, seeking relief that included a reduction in his alimony obligation based upon changed circumstances. In orders dated August 1, 2008 and May 14, 2009, the court granted plaintiff's motions and denied defendant's motions, finding on both occasions that defendant failed to establish changed circumstances justifying the relief that defendant sought from judgment.
The May 14, 2009 order directed defendant to pay plaintiff the equitable distribution owed to her, plus interest, totaling $461,636.01, and included a provision that if defendant failed to pay plaintiff the three years past-due equitable distribution, plaintiff was permitted to "bring a motion for enforcement that includes sanctions ranging from further economic penalties to loss of driver's license to incarceration." The court also awarded plaintiff $4,597.50 in counsel fees.
On appeal, we affirmed, rejecting defendant's argument that changed circumstances warranted the relief he sought, and agreed there were no genuinely disputed issues of material fact to warrant a plenary hearing. Forman v. Frost, No. A-5334-08 (App. Div. January 21, 2011) (slip op. at 2, 8). We specifically found that other than his cancer diagnosis, which condition defendant never argued had increased his cost of living or affected his ability to work, his "arguments in support of a finding of changed circumstances [were] not materially different from those he posed in his previously denied application for a reduction of his alimony obligation in 2008." Id. at 13.
On October 26, 2010, while Forman v. Frost, supra, slip op. 1, was pending before this court, plaintiff filed an order to show cause in the trial court, seeking enforcement of defendant's outstanding equitable distribution award and alimony arrears from counsel fees he was to receive from his law practice's work on a case, Spagnola v. City of Paterson, (Spagnola). Judge Domzalski presided over the motion. Because a stay pending appeal had not been granted, the judge considered the matter. After conducting a telephonic oral argument at which only plaintiff appeared, despite notice to defendant, Judge Domzalski entered an order at its conclusion requiring defendant to escrow all of the proceeds from Spagnola defendant was slated to receive, pending the return date on the order to show cause. The court denied defendant's motion for reconsideration.
Following the court's denial of reconsideration, defendant filed an order to show cause on November 8, 2010, seeking an order permitting him to pay plaintiff $20,000 from the Spagnola settlement, with the remaining monies to be "disbursed to his clients and used to pay business and personal expenses." The trial court conducted oral argument during which defendant admitted that he paid a creditor $41,270.87 from the proceeds received in attorney's fees from Spagnola, notwithstanding the court's earlier order directing him to escrow the counsel fees awarded in connection with the that matter.
Judge Domzalski entered an order on November 9, 2010, in which it determined that for purposes of enforcing the order, the court would treat defendant and his current and past law firms as the same person/entity with respect to the Spagnola monies. Thus, any monies distributed to defendant, Mark B. Frost & Associates, or Frost & Zeff, from Spagnola, would be subject to the order. The order required defendant to provide plaintiff's attorney with proof of his payments to creditors, and to transfer the balance of the proceeds of the Spagnola settlement not paid to creditors, $208,729.13, to plaintiff's attorney, in trust, to be distributed as follows: $20,000 to plaintiff towards defendant's alimony obligation; $4,348.32 to pay for defendant's health insurance; and the balance to remain in trust until defendant provided proof of costs advanced for prosecution and money owed to clients and third-party venders in the Spagnola suit. Once defendant provided the proofs, plaintiff's attorney gave him $175,446.15 from the remainder of the first installment of the Spagnola settlement to pay his clients, third-party vendors, and creditors.
On February 18, 2011, defendant filed a certification in opposition to plaintiff's October 29, 2010 order to show cause. Defendant again certified his inability to pay his outstanding obligations under the FJD. Following oral argument, the court granted plaintiff's request to compel defendant to provide her 100% of his proceeds from Spagnola, with the exception of those funds necessary to pay the plaintiffs from the lawsuit, creditors and third-party vendors. The court also granted plaintiff's request to compel defendant to immediately bring his alimony arrears current, and granted plaintiff's request to enforce defendant's alimony obligations of $9500 per month. The court pointed out that defendant was approximately twelve to fourteen months in arrears. The judge also noted that in a 2010 Statement of Revenue and Expenses included in defendant's certification, he reported a total revenue of $343,543.55 in 2010, a net income of only $93,167.80, approximately $20,000 in auto expenses, and over $1000 in entertainment. Thus, the judge found defendant still derived benefit from his business.
Judge Domzalski spread defendant's obligations to pay plaintiff's attorney's fees, both from the present order as well as from past orders, over a period of ninety days. Defendant was also ordered to provide plaintiff with information on his current and pending cases, as well as information regarding the litigation between him and his former partner, all of which had some bearing on his cash flow. Judge Domzalski explained this information was important for plaintiff to "ascertain the validity" of defendant's proposals, and without such information, the court could not make a determination regarding any other aspects of the order, namely, defendant's ongoing alimony obligations. The present appeal followed.
On appeal, defendant raises the following points for our consideration:
APPELLANT HAS DEMONSTRATED A DRASTIC REDUCTION IN INCOME, AND THEREFORE THE COURT ERRED IN NOT HOLDING A PLENARY HEARING.
A. DEMONSTRATION OF MATERIAL FACTS AS TO CHANGED FINANCIAL CIRCUMSTANCES MANDATES A PLENARY HEARING.
B. DEFENDANT HAS DEMONSTRATED THAT ISSUES OF MATERIAL FACT EXIST AS TO HIS CHANGED FINANCIAL CIRCUMSTANCES AND ABILITY TO FULFILL HIS ALIMONY OBLIGATIONS.
C. THE COURT ERRED IN TREATING MARK FROST, THE INDIVIDUAL, AS THE SAME ENTITY AS MARK B. FROST & ASSOCIATES, THE LAW FIRM.
APPELLANT DOES NOT HAVE "UNCLEAN HANDS" AND THUS HIS APPEAL MUST NOT BE DISMISSED.
We have considered the points raised in light of the record, briefs submitted, and applicable legal principles. We first conclude this appeal is subject to dismissal as procedurally barred.
The April 15, 2011 order on appeal arises out of plaintiff's October 29, 2010 order to show cause seeking to enforce litigant's rights to 100% of defendant's proceeds from the Spagnola litigation, directing defendant to bring his arrears current, and ordering defendant to continue to pay his alimony obligations. Defendant did not file a cross-motion seeking a reduction in alimony, nor did he request a plenary hearing. He merely filed a certification opposing the order to show cause, once again arguing an inability to satisfy his obligations under the FJD. Additionally, assuming the opposition was intended as a cross-motion for modification of his alimony, defendant failed to supply the court with the required updated Case Information Statement (CIS) pursuant to Rule 5:5-4(a). Judge Domzalski noted the necessity of additional information regarding defendant's current and pending cases before the court could consider making any additional changes to the FJD. Thus, the central issue defendant has raised before this court, the trial court's error in not holding a plenary hearing, was not properly presented before that court. Consequently, defendant's appeal seeking a remand for a modification in alimony or a plenary hearing is not properly before this court and is subject to dismissal.
We nonetheless elect to consider the merits of the appeal and in that regard conclude the points raised are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We affirm substantially for the reasons expressed by Judge Kenneth Domzalski in his April 15, 2011 order. We add the following comments.
The arguments defendant raises on appeal are nearly identical to those raised in the earlier appeal before this court. Forman v. Frost, supra, slip op. 1. There, just as here, defendant argued he suffered from a permanent change in his financial circumstances because of Frost & Zeff's increased cost of doing business, the loan repayments, Frost & Zeff's dissolution, and his cancer diagnosis. Id. at 13. We rejected those allegations then, as we do now. We noted then, as Judge Domzalski noted in the current matter, that defendant failed to provide evidence of any changes in his circumstances.
Judge Domzalski correctly recognized that defendant failed to provide the court with an adequate record of his finances. He noted the information on the 2010 Statement of Revenue and Expenses was "curious" as it indicated a total revenue of approximately $343,000 but an actual net of only $93,167. He ordered defendant to provide plaintiff with information regarding his current and pending cases, as the judge understood that such information was important to evaluate defendant's cash flow. Failing to provide this information was fatal to defendant's burden to establish a prima facie case of changed circumstances.
Ultimately, there is no genuine issue of material fact regarding any change in defendant's financial circumstances. He has not demonstrated, with competent proofs, at any time since the entry of the FJD, that he has experienced a change in his financial circumstances to warrant a plenary hearing, let alone a modification in his alimony obligations.
Nor do we find any merit to defendant's contention the court erred in treating him as the same entity as his law firm. As plaintiff points out in her brief, this ruling was part of the court's November 9, 2010 order, not the April 15, 2011 order on appeal. No appeal of the November 9 order was filed. Nevertheless, the judge committed no error in treating defendant and his law firm as the same entity for purposes of his alimony obligation. Under N.J.S.A. 2A:34-23, a court may create a trust or other security device in order to require reasonable security for the observance of obligations such as alimony. Further, upon the default of an order, "the court may award and issue process for the immediate sequestration of the personal estate . . . of the party so charged . . . to be applied toward such alimony[.]" Ibid.
Alternatively, if a party fails to comply with an alimony obligation, "the court may impose a lien against the . . . personal property of the obligor . . . to secure payment of the overdue support[.]" N.J.S.A. 2A:34-24. This includes "compel[ing] the obligor to give reasonable security, post a bond, or other guarantee for such overdue support and for present and future support[.]" Ibid.
In this instance, treating defendant as the same entity as his law firm was the court's means by which to secure payment of alimony arrears owed to plaintiff from defendant's future income. The court limited the order solely to those funds earned as income from his attorney's fees in connection with the Spagnola settlement, and this did not include any money owed to creditors, the plaintiffs from the case, or litigation costs. Nor did this provision in the order "hinder the law firm's ability to make necessary payments and provide a salary to [the firm's employees,]" as the firm still retains any and all other income received from other cases apart from Spagnola. Therefore, the court did not err in treating defendant, his law firm, and his prior firm, as one entity solely with regards to the proceeds earned in counsel fees from Spagnola.
© 1992-2012 VersusLaw Inc.