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David P. Cannell v. Barbara J. Cannell

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


October 17, 2012

DAVID P. CANNELL, PLAINTIFF-APPELLANT,
v.
BARBARA J. CANNELL, DEFENDANT-RESPONDENT.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Hunterdon County, Docket No. FM-10-315-02.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 7, 2012 -

Before Judges Simonelli and Hayden.

In this post-judgment matrimonial matter, plaintiff David P. Cannell appeals from the February 4, 2011 Family Part order denying his motion to reduce his alimony payments to defendant Barbara J. Cannell and increasing his child support payments; the April 29, 2011 order denying his motion for reconsideration; and the May 6, 2011 order further increasing his child support payments for his younger child.*fn1 For reasons that follow, we affirm the denial of a decrease in alimony but remand for the trial judge to make clearly delineated and specific findings addressing the statutory factors in N.J.S.A. 2A:34-23 for his determination of discretionary child support.

The parties were married on December 22, 1984 and have two children. They were divorced on February 19, 2003 and the final judgment of divorce incorporated a Property Settlement Agreement (PSA). In the PSA, the parties "acknowledge[d] that during the last three years of their marriage . . . they lived on the plaintiff's average net income of $122,524 without consideration of their savings." Plaintiff agreed to pay defendant $3150 per month in alimony, and $338 per week in child support. Under the PSA, the child support for each child was to cease when the child was emancipated. Additionally, although defendant was not working, the parties imputed an annual income of $20,000 to her.

The parties also agreed that if defendant earned $40,000 per year or more, the alimony obligation would be subject to review based upon her increased income.

In 2008, defendant sought a modification of alimony and child support based upon changed circumstances, specifically that plaintiff's earnings totaled approximately $288,000 in 2007. Defendant had continued to work part-time as a massage therapist and often earned less than $2,000 per year. The motion judge increased plaintiff's alimony obligation to $4575 per month. The judge decreased child support to $191 per week, chiefly because the older child attended college and lived on campus. The judge also modified the parties' shares of contributions to college tuition and related expenses.

On January 8, 2010, the parties agreed in a consent order that the older child was emancipated effective May 15, 2009. The consent order acknowledged that the parties still disagreed about alimony, child support and emancipation of the younger child. The order stipulated that these issues were to be resolved by negotiation or adjudication and that defendant would refund child support payments made for the older child after her emancipation date.

In November 2010, plaintiff moved for downward modification of alimony and child support, alleging a material change in circumstances, because his annual income had dropped from $288,000 to $208,000 due to adverse business conditions beginning in late 2009. He submitted tax returns, a case information statement (CIS) and the certification of his accountant as proof of his decreased income. Plaintiff explained that his 2009 earned income of $299,919 was inflated because he had withdrawn $50,000 from his retirement account to pay his income tax. He also sought the modification of child support since his older child had been emancipated, and credit for overpayments he had made since the emancipation. Lastly, plaintiff requested that the imputed income for defendant be increased from $23,114 based on a 2002 report from an employability expert who had posited that in several years defendant's income should be $35,000 to $40,000.

By order of February 4, 2011, the trial judge denied plaintiff's motion to decrease alimony and child support. The judge determined that plaintiff had not presented satisfactory proof of decreased income, particularly because his 2009 tax return reflected a higher income than in 2008. The trial judge also found that, even if plaintiff's decreased income claim was accurate, he had not established that the decrease was more than temporary.

In addition, the judge modified child support based upon the emancipation of the older child, and calculated current child support based on the New Jersey Child Support Guidelines (Guidelines) using plaintiff's 2009 income of $299,919 and defendant's $23,113 imputed income. Using the Guideline maximum of $187,200, the judge found that plaintiff owed $387 in weekly child support for one child. Further, the judge ordered defendant to submit a budget for expenses for the younger son in order to address discretionary child support above the Guidelines maximum income.

On February 10, 2011, plaintiff moved for reconsideration of this order, reiterating that he had presented unrefuted evidence of a significant decrease in income. On March 8, 2011, plaintiff filed a supplemental certification and included, for the first time, a copy of a newly-prepared Schedule K-1 of his 2010 income tax return to support his contention that his income for 2010 was $191,668. On April 29, 2011, the trial judge denied the motion for reconsideration. The judge found that, although plaintiff had submitted his Schedule K-1, he had failed to submit his current CIS,*fn2 and, thus, had not demonstrated a prima facie showing of substantial and permanent changes. Additionally, the judge found that in asking for reconsideration plaintiff had failed to demonstrate that the court had overlooked any fact or made any error in denying his motion for a modification.

Meanwhile, on February 23, 2011, defendant submitted the younger son's budget, which totaled $2771 per month. Plaintiff had the opportunity to submit opposition to the budget but failed to do so. On May 6, 2011, the judge issued an order increasing defendant's weekly child support to $647.

Plaintiff appealed the February 4, April 29, and May 6, 2011 orders. He raises the following contentions for our consideration:

POINT ONE: THE TRIAL COURT ERRED IN REFUSING TO MODIFY PLAINTIFF'S SUPPORT OBLIGATIONS BASED ON THE MISTAKEN FINDING THAT PLAINTIFF HAD FAILED TO PROVIDE FINANCIAL DOCUMENTATION TO SUPPORT HIS REDUCTION IN INCOME.

POINT TWO: THE TRIAL COURT ERRONEOUSLY REFUSED TO DECREASE PLAINTIFF'S ALIMONY OBLIGATION AND INCREASED CHILD SUPPORT OBLIGATION IN THE ORDERS OF FEBRUARY 4, 2011 AND MAY 6, 2011 EVEN THOUGH HIS INCOME HAD NOT INCREASED SINCE THE PRIOR ORDER, BUT HAD DECREASED. POINT THREE: [withdrawn due to resolution of emancipation issue].

POINT FOUR: THE TRIAL COURT ERRED BY NOT ORDERING A PLENARY HEARING SINCE THERE WERE ISSUES OF MATERIAL FACT.

Having reviewed the record in light of these contentions and the applicable law, we conclude that the trial judge was correct in holding that defendant did not make a prima facie case of changed circumstances based upon his diminution of income. However, we are unable to determine from the record the basis for the trial judge's determination of the discretionary increase in child support, and we remand for the trial judge to provide an explanation of his determination of the needs of the child based upon N.J.S.A. 2A:34-23(a).

A trial judge has broad discretion in reviewing an application to modify alimony. Storey v. Storey, 373 N.J. Super. 464, 470 (App. Div. 2004) (citing N.J.S.A. 2A:34-23). "Whether an alimony obligation should be modified based upon a claim of changed circumstances rests within a Family Part judge's sound discretion." Larbig v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006) (citing Innes v. Innes, 117 N.J. 496, 504 (1990)); Rolnick v. Rolnick, 262 N.J. Super. 343, 359 (App. Div. 1993).

The moving party in an alimony modification proceeding has the burden of proving a prima facie case of changed circumstances prior to the court ordering discovery, full financial disclosure of both parties, and a plenary hearing. Lepis v. Lepis, 83 N.J. 139, 157-59 (1980). The moving party must demonstrate that "changed circumstances have substantially impaired the ability to support himself or herself." Id. at 157. However, modification of alimony is not warranted if the change in circumstances is "only temporary." Id. at 151. Moreover, in determining ability to pay alimony, other factors besides present earnings are considered, including the potential to generate income, "[r]eal property, capital assets, investment portfolio and capacity to earn by 'diligent attention to . . . business' . . . ." Miller v. Miller, 160 N.J. 408, 420-21 (1999) (quoting Innes, supra, 117 N.J. at 503)).

Here, the record shows that, even if plaintiff established a diminution in income, he failed to demonstrate that the change was permanent. Plaintiff offered mere conclusory statements about the current adverse business environment but did not provide any competent evidence as to the exact nature of his business, what was happening in his industry that caused his income to decline, and whether that decline was temporary or permanent. He also failed to establish that he could not earn up to his full income-earning potential at another company or in some other line of work. Thus, while plaintiff provided information showing that his income had been reduced, he did not provide evidence that he was making diligent efforts to work up to his full capacity in order to support himself and pay alimony and child support. Consequently, we find the judge did not abuse his discretion in holding that defendant did not present a prima facie case of changed circumstances warranting a decrease in alimony or child support.

On the other hand, the parties agreed in the consent order that that the older child's emancipation was a changed circumstance. Plaintiff argues that because he is making less money and there is one less child to support, the amount of child support should have decreased. Additionally, he submits that the judge unfairly decided the child's needs, including considering defendant's court-ordered share of the child's tuition to be included in the child's budget. However, plaintiff fails to point out any mistakes in the judge's application of the Guidelines or provide any reason why the Guidelines and N.J.S.A. 2A:34-23 should not apply. We agree with defendant that they are applicable here.

When a parent's income exceeds the maximum amount listed in the Guidelines (currently $187,200), the court must apply the Guidelines up to $187,200, and then determine whether any supplementary award is appropriate. Connell v. Connell, 313 N.J. Super. 426, 431 (App. Div. 1998); Pressler & Verniero,, Current N.J. Court Rules, comment 20 in Appendix IX-A to R. 5:6A at 2560-61 (2013). In cases where the court decides to award a supplementary amount of child support above the Guidelines, the court must consider the factors listed in N.J.S.A. 2A:34-23(a). Caplan v. Caplan, 182 N.J. 250, 271 (2005). As with any award or modification of child support, the judge must also provide "clearly delineated and specific findings addressing the statutory factors. . . ." Loro v. Colliano, 354 N.J. Super. 212, 220 (App. Div.), certif. denied, 174 N.J. 544 (2002).

When determining discretionary child support over the Guideline maximum, "'the dominant guideline for consideration is the reasonable needs of the children, which must be addressed in the context of the standard of living of the parties.'" Strahan v. Strahan, 402 N.J. Super. 298, 307 (App. Div. 2008) (quoting Isaacson v. Isaacson, 348 N.J. Super. 560, 581 (App. Div.), certif. denied, 174 N.J. 364 (2002)). In making the requisite fact-sensitive analysis, the judge must ultimately determine the best interest of the child. Pascale v. Pascale, 140 N.J. 583, 594 (1995). A judge may not simply accept the custodial parent's claims concerning the child's needs "without any determination of what was essential or non-essential or any judgment regarding the accuracy and appropriateness of those needs." Strahan, supra, 402 N.J. Super. at 310.

Here the trial judge acknowledged the statutory factors but made no explicit findings as to the application of the factors to the facts. Without a clear delineation and specific findings we are unable to understand the basis for the judge's determination of the child's needs. We note that defendant submitted a budget that attributed one half of her household expenses to the child and her entire share of the child's college expenses, which defendant was obligated to pay. The trial judge appeared to accept defendant's budget without making any determination regarding the accuracy or appropriateness of the alleged needs. Accordingly, we remand for the trial judge to determine the discretionary child support using the statutory factors in N.J.S.A. 2A:34-23(a) and to articulate the reasons for his findings on all factors.

Affirmed as to the denial of decreased alimony and child support. Reversed and remanded for a determination of the discretionary child support using the statutory factors. We do not retain jurisdiction.


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