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Lisa Iudici v. Joseph Iudici

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


October 12, 2012

LISA IUDICI, PLAINTIFF-RESPONDENT,
v.
JOSEPH IUDICI, DEFENDANT-APPELLANT.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Passaic County, FM-16-101-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 29, 2011

Before Judges Fisher, Baxter and Nugent.

Defendant Joseph Iudici appeals from parts of several Family Part orders that: required him to pay plaintiff Lisa Iudici $10,000, the balance owed for his purchase of her interest in their former marital residence; terminated the parties' obligation to arbitrate the cost of any damages allegedly caused by the plaintiff to the marital residence; denied his applications to modify alimony and child support; denied him a custody hearing; denied his motions for counsel fees and costs, and awarded plaintiff counsel fees. We affirm in part and reverse in part.

I.

The parties married on January 27, 1987, and three children were born of the marriage. The parties were divorced on January 3, 2006, and the dual final judgment of divorce incorporated their property settlement agreement (PSA). Defendant agreed in the PSA to pay plaintiff weekly child support of $300 for the younger two children, for whom plaintiff was the parent of primary residence.*fn1 Defendant also agreed to pay plaintiff alimony of $300 per week for eight years. When the parties signed the PSA, plaintiff's imputed gross income was $28,000 and she received yearly rental income of approximately $45,000-$50,000; defendant's net income was approximately $130,000.

The PSA also provided, among other terms, that defendant would receive title to the marital residence in exchange for paying plaintiff $70,000; $60,000 by January 22, 2006, and $10,000 upon plaintiff leaving the marital residence. The parties were to videotape a "walk through" of the residence in order to establish its condition before transferring title to defendant. Plaintiff was entitled to remain in the residence until June 30, 2006, provided she paid defendant $2000 per month, which he would use to pay part of the mortgage, taxes, and insurance. Plaintiff was to leave the residence in the condition depicted in the videotape. If she caused damage to the residence, then instead of paying her the $10,000 balance, defendant was to deposit the money in defense counsel's trust account until the parties resolved any dispute about the cost of restoring the home's condition. If the parties could not resolve such a dispute within ten days of plaintiff leaving the residence, they were required to participate in binding arbitration before a designated arbitrator.*fn2

The parties' post-judgment motion practice began after plaintiff moved out of the marital residence in July 2006. In September 2006, the court entered two orders disposing of more than fifteen issues raised in the parties' cross-motions, including defendant's request to "be heard on the issue of damages to the [marital] home upon his obtaining all estimates and in the interim, [to be] permitted to set off $10,000 due to plaintiff." The court denied defendant's application concerning the marital residence because the PSA required the parties to arbitrate that dispute.

In April 2007, after the parties filed more motions, the court entered two additional orders that included provisions appointing the arbitrator designated in the PSA, requiring plaintiff to pay "her one-half share of the costs for the arbitrator immediately," and denying counsel fees to both parties.

A month later, in May 2007, the parties became embroiled in a custody dispute over their two youngest children. In August, the court entered consent orders that cancelled a plenary custody hearing, appointed a parent coordinator, and provided, in the event that either party wishes to reopen the custody and parenting time issues pending before the [c]court, after engaging in all reasonable efforts through the parent coordinator to address the trial and parenting issues by and between the parties, he or she, upon the request of their counsel, may contact the [c]court to arrange for a conference to schedule such further proceedings as may have been previously scheduled by the [c]court or as may be necessary under the circumstances at that time.

Defendant subsequently filed another motion that resulted in orders being entered on December 8, 2008; the first of the orders from which defendant appeals. Defendant had filed a motion in October 2008 to enforce litigant's rights, alleging that as the result of her violation of the April 13, 2007 court order and provisions of the PSA, plaintiff owed him in excess of $12,000. In addition, defendant alleged that he had incurred in excess of $20,000 as the result of plaintiff damaging the former marital residence and failing to pay her share of the arbitrator's fee.

In a cross-motion, plaintiff acknowledged owing some of the debt, alleged that defendant had not paid her money the PSA required him to pay from an annuity fund, and disputed his allegation that she had damaged the marital residence. She pointed out that his claim concerning damage to the marital residence included payments to an investigator, a locksmith, and a home inspector; expenses for mowing and cleaning; the purchase of power washing accessories; costs for opening the pool; and a deposit for a home office. She claimed she did not have the money to make the deposit to the arbitrator, alleged that defendant was using his superior financial position in an attempt to force her to agree to his demands, and argued that it was "foolhardy" to spend money for the arbitrator for the claims asserted by defendant.

In two December 2008 orders, the court established that plaintiff owed defendant $12,879.78; ordered plaintiff to make certain payments, including her share of the arbitrator's fee; and arranged for transfer to plaintiff of the money defendant owed her from his annuity. The court required the parties to pay their own counsel fees. The court denied defendant's request to have judgment entered against plaintiff "representing the amount that [p]laintiff's conduct has cost by way of damages and/or repairs to the formal marital home in lieu of directing the parties to arbitration."*fn3

In June and July of 2009, the parties filed additional motions. Defendant sought fourteen items of relief including termination of his alimony obligation and recalculation of his child support obligation. Alternatively, defendant sought a plenary hearing. The court denied defendant's application as to those issues. In determining that defendant had not demonstrated a change in circumstances to warrant modification of his alimony and child support obligations, the court noted that defendant's income tax returns revealed that in 2008 he had earned more than he had earned in 2006 when he signed the PSA. Defendant reported adjusted gross income of more than $187,000 in 2007, and more than $174,000 in 2008. The court also denied each party's request for counsel fees.

In March 2010, plaintiff filed a motion to compel defendant to provide a Qualified Domestic Relations Order that would enable her to receive $11,000 from defendant's annuity. Plaintiff also requested that the court terminate the parties' obligation to arbitrate any issue regarding damage to the former marital residence and order the arbitrator to return his unearned retainer. Plaintiff asked the court to fix defendant's alimony and support arrears.

In his cross-motion, defendant again sought, among other relief, termination of his alimony obligation and reduction of his child support obligation. Alternatively, defendant requested a hearing as to those issues. Defendant also requested a hearing concerning issues of custody and parenting time. Lastly, defendant sought to compel plaintiff to provide a position statement to the arbitrator concerning damage to the former marital property.

In deciding the motions, the court noted defendant had never escrowed the $10,000 that he had withheld from plaintiff pending resolution of their dispute about damage to the marital residence, that several years had passed, and the marital residence had been sold. For those reasons, the court relieved the parties of their obligation to arbitrate the dispute, discharged the arbitrator, and ordered that the arbitrator return any unearned part of his retainer. The court fixed defendant's combined support arrears, awarded plaintiff $1,575 in counsel fees, and denied defendant's application to reduce his support obligation, noting, among other reasons, that defendant had not submitted required case information statements. Confirming orders were entered on May 14, 2010.

On July 23, 2010, the court denied defendant's motion for reconsideration. This appeal followed.

II.

Our role in reviewing a decision of the family court is a limited one. Cesare v. Cesare, 154 N.J. 394, 411 (1998). Because of the Family Part's special expertise, we must accord particular deference to fact-finding and to the conclusions that logically flow from those findings. Id. at 412-13. Of course, "the trial court must state clearly its factual findings and correlate them with the relevant legal conclusions." Curtis v. Finneran, 83 N.J. 563, 570 (1980). We will not disturb such findings unless they demonstrate lack of support in the record or are inconsistent with the substantial, credible evidence. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974). Although we owe no special deference to the trial courts' conclusions of law, Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995), "we do not second-guess their findings and the exercise of their sound discretion." Hand v. Hand, 391 N.J. Super. 102, 111 (App. Div. 2007).

Defendant contends the court erred when it vacated the PSA provision requiring the parties to arbitrate their dispute over damage to the former marital home. Defendant argues that the court incorrectly applied the doctrine of laches, erroneously entertained plaintiff's motion, which was invalid under Rule 4:50-1 and -2, and ultimately provided plaintiff with a better deal than the one she struck when she agreed to the terms of the PSA.

The PSA provided that if a dispute arose about the condition of the former marital home when plaintiff vacated it, two things would occur: first, defendant would deposit the $10,000 balance due plaintiff in his attorney's escrow account pending resolution of the dispute; second, "[i]f the parties cannot reach an accord as to the cost of restoring the premises to the condition it was in as of the date of the walk-through, within 10 days of the date [plaintiff] vacates the premises, then the parties shall submit to binding arbitration as to same." Plaintiff vacated the premises in July 2006. Defendant did not escrow the $10,000 and the parties did not submit to arbitration. The trial court terminated the parties' obligation to arbitrate the dispute more than three years after plaintiff vacated the premises. During the intervening years, neither party complied with the PSA arbitration clause.

Defendant disregarded the arbitration clause when he filed his first post-judgment motion and sought relief from the court. Defendant also breached the arbitration clause by withholding the $10,000 payment he owed to plaintiff, instead of depositing it in an escrow account maintained by his attorney. Moreover, the damages sought by defendant included items that had no relationship to any alleged damage caused by plaintiff.

Plaintiff violated the PSA arbitration clause by failing to pay her share of the arbitrator's retainer until January 7, 2009, after being ordered to do so on April 13, 2007, and being held to be in violation of litigant's rights on December 5, 2008.

More importantly, both parties continued to ignore their contractual agreement to arbitrate even after they had paid the arbitrator's fee. Six months after plaintiff had paid her share of the arbitrator's fee, the parties appeared before the court. During oral argument on motions, the court contemplated relieving the parties of the obligation to arbitrate. After defense counsel argued that arbitration had been delayed considerably by plaintiff's failure to pay her share of the retainer, plaintiff's counsel interjected that plaintiff had paid the retainer six months earlier. The court ordered the parties to meet with the arbitrator "without delay." Despite this explicit verbal directive and its inclusion in the confirming order, the parties had still not met with the arbitrator when they returned to court to argue additional motions on May 14, 2010.*fn4 By then, the house had been sold. During oral argument, the court commented that the issue of damages was moot because the arbitrator could not inspect the house.

The court also commented during the May 2010 oral argument that expenses submitted by defendant as damages were actually remodeling expenses. In its decision, the court explained that it did not believe defendant could prove damages, and even if he could, that too many years had passed. Consequently, the court terminated the parties' obligation to arbitrate the dispute.

The court did not abuse its discretion. The importance of promptly resolving disputes about damages to the marital home was implicit in the PSA arbitration provision, which required the parties to submit to binding arbitration if they could not resolve their dispute "within ten days of the date [plaintiff] vacates the premises." Both parties were equally at fault for disregarding and breaching the PSA arbitration provision. Both parties disregarded the court's July 31, 2009 oral directive and written order to meet with the arbitrator without delay. When the parties ignored those orders after disregarding the PSA arbitration provision for nearly four years, the court acted well within its discretion by terminating the parties' obligation to arbitrate their dispute.

Defendant argues that the court erroneously applied the doctrine of laches to bar his damage claim. Plaintiff asserts that the doctrine justifies the court's decision. Both parties are incorrect.

The record does not support defendant's argument that the court based its decision on the doctrine of laches, and contrary to the plaintiff's argument, the doctrine is inapplicable under the circumstances. To be sure, some of the elements of laches exist. "That doctrine is invoked to deny a party enforcement of a known right when the party engages in an inexcusable and unexplained delay in exercising that right to the prejudice of the other party." Knorr v. Smeal, 178 N.J. 169, 180-81 (2003). However, the doctrine applies "only . . . when the delaying party had sufficient opportunity to assert the right in the proper forum and the prejudiced party acted in good faith believing that the right had been abandoned." Id. at 181. Here, though defendant delayed submitting his claim to arbitration, there is no evidence that plaintiff acted in good faith believing that defendant had abandoned his claim. To the contrary, plaintiff continually asserted that defendant was wielding the claim in bad faith to unduly pressure her to make other concessions. The doctrine of laches does not apply to those facts, which is likely why the court did not apply it.

Defendant next contends that the court erred by terminating the parties' obligation to arbitrate, when it had previously ordered arbitration. We disagree. "It is well established that 'the trial court has the inherent power to be exercised in its sound discretion, to review, revise, reconsider and modify its interlocutory orders at any time prior to the entry of final judgment.'" Lombardi v. Masso, 207 N.J. 517, 534 (2011) (quoting Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 257 (App. Div. 1987), certif. denied, 110 N.J. 196 (1988)). The court's July order requiring the parties to meet with the arbitrator without delay was an interlocutory order enforcing the PSA. The court had the right to review and reconsider it, particularly in view of both parties' disregard of the order.

Lastly, defendant argues that by terminating the parties' obligation to arbitrate their damage dispute, the court made a better agreement for the plaintiff than the one they negotiated in the PSA. We reject this argument. The parties negotiated an agreement that required them to resolve any dispute about damage to the marital home if the dispute persisted for more than ten days after plaintiff vacated it. Both parties breached the arbitration provision, disregarded its terms, and ignored a court order that was intended to compel their compliance. The court did not modify the parties' agreement, but instead refused to enforce it based upon the parties' own conduct in ignoring the agreement and the court's order enforcing it. As we indicated previously, the court did not misapply its discretion by refusing to enforce the agreement.

III.

Defendant next contends that the court erred by declining to conduct an evidentiary hearing on his motion to terminate alimony and reduce child support.

Courts are authorized by statute to modify alimony and child support orders as circumstances may require. See N.J.S.A. 2A:34-23. First, however, "[t]he party seeking modification has the burden of showing such 'changed circumstances' as would warrant [such] relief . . . ." Lepis v. Lepis, 83 N.J. 139, 157 (1980). See also Gonzalez-Posse v. Ricciardulli, 410 N.J. Super. 340, 350 (App. Div. 2009). That showing "must be made before a court will order discovery of an ex-spouse's financial status." Lepis, supra, 83 N.J. at 157. Here, the court determined that defendant had not made a prima facie showing of changed circumstances.

In support of his motion to modify alimony and child support, defendant submitted conflicting documents to the court. The cover page of his current case information statement (CIS) was dated June 1, 2009, but the signature page contained a date of April 29, 2010. His CIS indicated that his gross income for 2008 was zero dollars, though the 2008 tax return showed adjusted gross income of $174,640. Defendant's attorney explained that the date on the cover page was a clerical error, and the CIS had actually been prepared in 2010 as indicated on the signature page; but defendant did not include his CIS from 2006. And though defendant claimed that his business had completely failed, he was earning virtually nothing, and that he had depleted his savings, plaintiff submitted e-mails and photographs depicting defendant spending a carefree vacation in Florida. The court also pointed out that despite defendant claiming to have no income, he had yearly expenses exceeding $80,000.

Defendant was required to file an accurate, current CIS as well as copies of prior case information statements. R. 5:5-4(a). In view of defendant's failure to comply with this obligation, and in view of his conflicting and inaccurate case information statement, the trial court did not misapply its discretion by denying the motion.

In his June 2010 motion for reconsideration, defendant corrected the deficiencies in his previous submissions and again moved for a modification of his support and alimony obligations. He also included personal and corporate tax returns for three years, which demonstrated a significant decrease in income. In opposition, plaintiff submitted, among other things, an e-mail sent by defendant three days after the May 14, 2010 hearing in which defendant stated, "I have a timeshare in Aruba for the week of 7/11/10 that I need to use . . . or lose it. . . ." Defendant explained that he had enough "miles saved" to purchase tickets. In a reply certification, defendant explained that the time share belonged to a friend and disputed plaintiff's claim that he had spent eighteen days in Florida following the May hearing.

The court disposed of defendant's reconsideration motion on its merits. The court denied the motion, concluding that the May 2010 order "was proper for the reasons I set forth then."

The court added that it did not believe defendant had "shown a reason to modify the alimony downward." The court cited Donnelly v. Donnelly, 405 N.J. Super. 117 (App. Div. 2009), but did not explain the proposition for which it cited this decision.

The court's decision disposing of defendant's motion for reconsideration is not entirely clear. Although the court appeared to address the decision on the merits, it denied the motion essentially for the same reasons it had denied defendant's motion two months earlier. Yet, one reason the court previously denied defendant's motion was defendant's failure to submit proper case information statements. However, defendant submitted the proper case information statements on his reconsideration motion. The court's reliance on Donnelly, supra, is also unclear because the court did not correlate factual findings with relevant legal conclusions. Finneran, supra, 83 N.J. at 570. The court could have been referring to either defendant's failure to explain adequately what he had done to improve the diminishing circumstances, see Donnelly, supra, at 131, n.5, or defendant's lifestyle and expenses being "disconnected from the type of equitable underpinnings inherent in the right to relief." Id. at 130-131. But the court did not explain its conclusion and did not explain why discovery was unnecessary as to these issues. For that reason, it is necessary to remand this matter to the trial court.

Because the circumstances of both parties may have changed since the court denied defendant's motions to modify his alimony and support obligations, the parties may supplement the record with relevant and accurate information. The court may order discovery, conduct a hearing, or take whatever action it determines, in its discretion.

IV.

Defendant contends that the court did not make adequate findings when it denied his request for a hearing concerning custody, and when it granted plaintiff counsel fees. We agree.

In August 2007, the court signed a consent order concerning custody that provided if either party wished to reopen the custody and parenting time issues . . . after engaging in all reasonable efforts through the parent coordinator . . ., he or she, upon letter request of their counsel, may contact the court to arrange for a conference to schedule such further proceedings as may have been previously scheduled by the court or as may be necessary. . . .

Defendant attempted to invoke that provision by explaining in a certification the custody issues that had arisen since the entry of the August 2007 order and requesting a custody hearing. The court denied the motion but made no findings as to whether the parties "had exhausted reasonable efforts through the parent coordinator." Instead, the court directed that the parties continue to work with the coordinator without explaining why defendant was not entitled to a hearing as contemplated by the consent order. Accordingly, we remand this matter for the trial court's determination as to whether defendant is entitled to a hearing as contemplated by the consent order.

Defendant also contends the court erred by awarding fees to plaintiff when it had repeatedly denied his applications for fees. Because we cannot conclude from the record that the court considered the factors enumerated in Rule 5:3-7(c) when it awarded fees to plaintiff, we remand that issue to the court for its further consideration.

Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion.


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