October 15, 2012
TRACEY H. ALBINSON, F/K/A TRACEY H. MARRA, PLAINTIFF-RESPONDENT,
JOSEPH T. MARRA, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-117-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 1, 2012
Before Judges Parrillo and Fasciale.
In this post-divorce matrimonial case, defendant Joseph T. Marra
appeals from three orders*fn1 finding him in violation
of litigant's rights for failing to maintain life insurance for the parties' unemancipated son and imposing various sanctions.*fn2
We affirm the imposition of sanctions, but remand for further
proceedings regarding the parties' tax exemption status.
On May 13, 2011, the judge entered a judgment for $24,964.13 against defendant representing "additional [c]hild
[s]upport arrearages." On July 8, 2011, the judge denied defendant's motion for reconsideration of the judgment amount without prejudice. On September 26, 2011, the judge denied defendant's motion to vacate the May 13, 2011 judgment.*fn3
The judge then entered the three orders under review. The crux of the orders is that defendant was adjudged to be in violation of litigant's rights by failing to obtain life insurance in the amount of $500,000 for the parties' son, who was born in 1999. On October 7, 2011, the judge restrained defendant from "transferring title, encumbering, selling or otherwise affecting his home . . . until he shows compliance with the [o]rders of the [c]court." Then, on November 3, 2011, the judge compelled defendant to "continue to pursue reinstating [the] life insurance policy." On November 29, 2011, the judge invoked her equitable powers and imposed a sanction of $10,000, "which shall be set up in a fund for [the child]," and amended the judgment of divorce (JOD) to permit plaintiff to claim the child as a tax exemption each year until he is emancipated.
On appeal, defendant argues that the judge abused her discretion by imposing the sanctions and preventing him from declaring the child on his income taxes.
"The Family Court possesses broad equitable powers to accomplish substantial justice." Finger v. Zenn, 335 N.J. Super. 438, 446 (App. Div. 2000), certif. denied, 167 N.J. 633 (2001). The Appellate Division "accord[s] great deference to discretionary decisions of Family Part judges." Milne v. Goldenberg, ___ N.J. Super. ___, ___ (App. Div. 2012) (slip op. at 14) (citing Donnelly v. Donnelly, 405 N.J. Super. 117, 127 (App. Div. 2009)). This court, however, will not defer to a family court's decision where the court abused its discretion. See, e.g., State ex rel. J.A., 195 N.J. 324, 340 (2008). "An abuse of discretion arises when a decision is 'made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" Milne, supra, slip op. at 15 (quoting Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)) (internal quotation marks omitted).
"Generally, the special jurisdiction and expertise of the family court requires that [the appellate court] defer to factual determinations if they are supported by adequate, substantial, and credible evidence in the record." Id. at 14 (citing Cesare v. Cesare, 154 N.J. 394, 413 (1998)). The trial judge's legal decisions, however, are subject to this court's plenary review. Crespo v. Crespo, 395 N.J. Super. 190, 194 (App. Div. 2007).
We begin by addressing defendant's argument that the judge abused her discretion by restraining him from "transferring title, encumbering, selling or otherwise affecting his home . . . until he shows compliance with the [o]rders of the court."
Family Part judges may enforce litigants' rights pursuant to Rule 5:3-7(b), which provides in part:
On finding that a party has violated a . . . child support order the court may, in addition to remedies provided by R[ule] 1:10-3,*fn4 grant any of the following remedies, either singly or in combination:
(1) fixing the amount of arrearages and entering a judgment upon which interest accrues; (2) requiring payment of arrearages on a periodic basis; . . . (4) economic sanctions; . . . and (8) any other appropriate equitable remedy.
"Once the court determines the non-compliant party was able to comply with the order and unable to show the failure was excusable, it may impose appropriate sanctions." Milne, supra, slip op. at 16. Sanctions "must be fashioned in an amount sufficient to sting and force compliance, but must not be so excessive as to constitute ruinous punishment." E. Brunswick Bd. of Educ. v. E. Brunswick Educ. Ass'n, 235 N.J. Super. 417, 422 (App. Div. 1989).
Since 2004, the court permitted defendant numerous opportunities to obtain and maintain the insurance policy, to reinstate it, and to provide documentation that he was in compliance with the court orders. As of November 2011, defendant failed to produce competent evidence that he obtained the policy. Defendant maintains that he is unable to pay the insurance premium due to his employment status.*fn5 It is undisputed, however, that his home has at least "$500,000 in equity." Furthermore, defendant conceded that he "probably [has] $30,000" in his brokerage account, and he earns "[a]bout $70,000" a year when he is employed. He admitted that he had been re-employed as of late September 2011.
The judge explained that "the purpose of a life insurance [policy] . . . is to make sure that [in the event you die] there's money to pay for . . . [the] child support, to raise [the child], to send him through college, pay for his braces, his expenses, and so forth." The judge restrained defendant from "transferring title, encumbering, selling or otherwise affecting his home" to coerce defendant into compliance with prior orders. She ordered that "[d]efendant is restrained from dissipating the [assets of the] home until he shows compliance with the [o]rders of the [c]court." We see no abuse of discretion here.
Next, defendant argues that the judge misapplied an order dated February 6, 2004, imposing a penalty of $100 per day for failure to obtain life insurance.
Economic sanctions must be coercive and not punitive. E. Brunswick Bd. of Educ., supra, 235 N.J. Super. at 422; see also Innes v. Carrascosa, 391 N.J. Super. 453, 498-99 (App. Div.) (holding trial court did not err in imposing a $100 then $500 per day sanction that totaled $148,000 for repeated violations of orders pertaining to custody), certif. denied, 192 N.J. 73 (2007); Ridley v. Dennison, 298 N.J. Super. 373, 381 (App. Div. 1997) (holding sanctions improper where "the tenor of the judge's ruling and order imposing the penalties and sanctions, which included the assessment of all counsel and therapy fees, . . . constituted specific and overt punishment for what the judge concluded was defendant's improper conduct over the years").
Defendant has consistently failed to comply with court orders dating back to 2004. The judge calculated that if she imposed the $100 per day sanction from the February 6, 2004 order, defendant would owe in excess of $100,000. Instead, the judge imposed a sanction of $10,000. When considering defendant's admission that he possesses about $30,000 in a brokerage account, has at least $500,000 equity in his home, and earns roughly $70,000 per year, the sanction provides the "sting" needed to coerce defendant into compliance with prior orders. E. Brunswick Bd. of Educ., supra, 235 N.J. Super. at 422. Thus, we see no abuse of discretion here.
Finally, defendant argues that the judge abused her discretion by modifying the JOD to permit plaintiff to claim the child as a tax exemption each year, as opposed to alternating years. He maintains that the modification was unwarranted because no change in circumstances existed.
Family courts have "the power to exercise authority to effectively allocate exemptions through use of its equitable power." Gwodz v. Gwodz, 234 N.J. Super. 56, 62 (App. Div. 1989). Generally, the goal of maximizing the net income of the parties drives the allocation of tax exemptions. Heinl v. Heinl, 287 N.J. Super. 337, 353 (App. Div. 1996). The family judge must "quantify the effect of [the allocation] upon each party, and the extent to which it would require reconsideration of the child support provisions of the judgment." Gwodz, supra, 234 N.J. Super. at 62.
The judge must "consider evidence and make findings respecting the extent of child support actually provided by each parent," determine whether "a change in tax exemptions is deemed warranted," and ascertain "whether change in the existing support orders is required to reflect the benefits achieved by the change." Id. at 62-63. Family courts must bear in mind that a domestic agreement, such as a property settlement agreement, "ordinarily entails trade-offs between the parties." Ozolins v. Ozolins, 308 N.J. Super. 243, 249 (App. Div. 1998).
On November 29, 2011, the judge modified the parties' JOD to permit plaintiff to "take the tax exemption every year" and awarded "something to [plaintiff] because [plaintiff] . . . has been the victim of [defendant's] non-compliance." The judge modified the JOD to "put a few extra dollars in [plaintiff's] pocket." The judge did not make sufficient findings regarding her reasons for changing the tax exemptions. As a result, we remand and direct the judge to make the requisite findings of fact and conclusions of law.
We conclude that defendant's remaining arguments are without sufficient merit to warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed in part and remanded in part. We do not retain jurisdiction.