January 18, 2013
PAMELA HEARD, PLAINTIFF-RESPONDENT,
DEAN DUNBAR, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-0735-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 9, 2013 Before Judges Nugent and Haas.
In this post-judgment matrimonial matter, defendant appeals from the November 30, 2011 order of the Family Part denying his motion to modify his child support, college contribution and life insurance obligations. We reverse and remand for further proceedings.
The parties were married in July 1992, separated in August 2000, and divorced in March 2004. They have one child, who is now fifteen years old.
Defendant worked at Goldman Sachs from 1988 until October 1997 and he earned as much as $800,000 per year during this period. He resigned his position in 1997 after he was accused of unauthorized discretionary trading. While no disciplinary action was ever taken, defendant asserted that this allegation prevented him from obtaining similar employment in the financial management field.
After leaving Goldman Sachs, defendant began managing the funds in the parties' investment account on a full-time basis and, by the time the parties separated in 2000, their portfolio had grown from $800,000 to over $8 million. After the separation, however, defendant's investments faltered and, by 2002, their account balance had fallen to $304.
At the time the parties entered into their Property Settlement Agreement (PSA) in August 2003, defendant was employed as the managing director of a "start-up hedge fund." He earned $15,011 in 2003. During the marriage, plaintiff was employed as a psychologist at a university. In 2003, she earned $52,000.
In the PSA, defendant agreed to pay plaintiff $1,885 per month in child support.*fn1 Neither the parties' incomes nor a specific explanation of how this support obligation was calculated was set forth in the PSA. The PSA merely stated that the $1,885 monthly payment was "to cover [defendant's] share of providing the parties' child with a standard of living comparable to that during the marriage." This "standard of living," however, was not defined in the agreement. Defendant also agreed to pay for the child's college expenses, up to a $250,000 cap, by regularly contributing to a college fund and to maintain a $2 million life insurance policy to secure his support and equitable distribution obligations.
In October 2011, plaintiff filed a motion to enforce the support and equitable distribution requirements of the PSA. She alleged that defendant was $57,660 in arrears on child support and that he had also failed to abide by other terms of the PSA, including the requirement that he start a college fund for the parties' child and that he maintain a $2 million life insurance policy.
Defendant filed a cross-motion. His primary contention was that the PSA should be set aside because he had not entered into it voluntarily. In the alternative, he argued his child support obligations should be reduced based on a claimed change of circumstances, namely that the parties' incomes had changed after their divorce.
In his certification in support of his cross-motion, defendant asserted his child support obligation was based upon the assumption that he would be able to again earn the high salaries he received prior to his 1997 resignation from Goldman Sachs. However, he has never returned to that income range. Following the divorce, he began working in real estate and he expected to earn $119,000 in 2011. Plaintiff was still employed at the university and certified she was now the Director of Counseling, with an annual salary of $101,900. Plaintiff also earned between $2,500 and $3,000 per year from her private counseling practice.
The trial judge heard oral argument and then rendered a decision from the bench, granting plaintiff's enforcement motion and denying defendant's motion in its entirety. The judge found defendant had failed to meet his support obligations and he granted plaintiff "a money judgment against [d]efendant in the sum of $81,957.40 representing [d]efendant's child support arrears, equitable distribution arrears, and life insurance premium arrears." The judge further found that defendant had failed to establish that the PSA "was anything other than a voluntary knowing agreement," and had "provide[d] no proof to substantiate his claims of incompetence" when the PSA was executed by the parties.
The judge denied defendant's motion to modify his child support obligation. The judge stated:
He hasn't met his burden of proof. There were no permanent changed circumstances to the - - worsening for this defendant, in fact, he acknowledged an ability to earn more income . . . He is making more money now then he did in the past. Not as much as before back in the late . . . 1900s, early 2000s, but certainly he said he was unemployed in 2004, and now he's employed making money - - making more money.
The judge concluded by finding "[t]here's no real . . . Lepis argument, [be]cause there's no substantial permanent change in circumstances from 2003 [until] now." The judge did not consider or mention plaintiff's increased income since the divorce and he made no specific findings concerning defendant's college contribution and insurance obligations. He also did not make findings concerning the basis for the child support obligation established in the PSA.
On appeal, defendant argues the judge erred in denying his motion to reduce child support and to modify his college contribution and life insurance obligations based on the parties' changed income. We agree.
Child support orders are "generally subject to judicial review." Kiken v. Kiken, 149 N.J. 441, 455 (1997). Despite the presence of a PSA, a court should re-examine existing support orders if the movant can establish that there has been a substantial change of circumstances. Lepis v. Lepis, 83 N.J. 139, 146 (1980). Whether a party has experienced changed circumstances derives from a comparison of the parties' economic life during the marriage with the present economic conditions. Id. at 151.
A change in circumstances warranting modification of support may result from an alteration in the fortunes of either party. Aronson v. Aronson, 245 N.J. Super. 354, 364 (App. Div. 1991). We have recognized that the failure "to address [a supporting spouse's] claims of changed circumstances based on an enhancement in his former wife's income" is error warranting reversal of the denial of relief and a remand for further proceedings. Stamberg v. Stamberg, 302 N.J. Super. 35, 42 (App. Div. 1997).
Here, the judge focused solely upon defendant's income in his review of the support modification motion. He found that, because defendant was earning more than he had in 2003, defendant's financial circumstances had improved and a reduction was therefore not necessary. However, the judge did not consider plaintiff's increased income in this analysis. She earned $52,000 in 2003, but her income had doubled by 2011.
Under Lepis, a supporting spouse is as much entitled to a reconsideration of child support where there has been a significant change for the better in the circumstances of the dependent spouse, as where there has been a significant change for the worse in the supporting spouse's own circumstances. Stamberg, supra, 302 N.J. Super. at 42. We are therefore constrained to conclude the judge erred in failing to consider plaintiff's increase in income in determining whether a support modification was warranted due to a change of circumstances.
We are also satisfied that the judge did not make adequate findings with respect to the parties' competing allegations concerning the basis for the child support obligation set forth in the PSA. Defendant asserted this support was based upon the assumption that he would return to his former earning levels, while plaintiff contended the obligation was based solely upon the "child's needs," rather than the parties' incomes. The judge did not squarely resolve this dispute in the order under review and, therefore, the full extent of any change of circumstances cannot be determined from the existing record.
Finally, the judge failed to make any findings concerning his denial of defendant's motion to modify his college contribution and life insurance obligations. Absent such findings, we are unable to review this portion of the order. Grayer v. Grayer, 147 N.J. Super. 513, 516 (App. Div. 1977); R. 1:7-4. In addition, the judge did not consider both parties' incomes in determining whether any modification in college contribution was warranted under Lepis, supra.
We therefore reverse the November 30, 2011 order denying defendant's motion to modify his child support, college contribution and insurance obligations and remand for further proceedings. The judge should determine the nature and extent of any further discovery that may be necessary and whether a plenary hearing is required to resolve any genuinely disputed factual issues.
Reversed and remanded for further proceedings. We do not retain jurisdiction.