July 12, 2013
DEBRA MALANGA, Plaintiff-Respondent,
MICHAEL MALANGA, Defendant-Appellant.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 19, 2012
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-80-98.
Dunne & Associates, LLC, attorneys for appellant (F.R. "Chip" Dunne, III, on the brief).
Damiano Law Offices, attorneys for respondent (Toni Belford Damiano, of counsel; Nancy B. Murray, on the brief).
Before Judges Sapp-Peterson and Haas.
Defendant Michael Malanga (husband) appeals from the August 31, 2011 Family Part order denying his post-judgment cross-motion seeking a reduction in child support, an accounting of the custodial accounts of the two children of the marriage, and credit for previous medical payments made. On appeal, husband contends the court abused its discretion by failing to order a plenary hearing, was incorrect in its assessment of payments he made for unreimbursed medical expenses, and improperly denied his request for an accounting of wife's use of the $37, 000 in funds held in trust for each of the parties' children. We reject these contentions and affirm substantially for the reasons expressed in Judge Siobhan A. Teare's comprehensive August 31, 2011 written opinion.
The parties were divorced in 1999 following a thirteen-day trial. The final judgment of divorce (FJOD) granted custody of the two children born of the marriage to plaintiff Debra Malanga (wife). Husband was ordered to provide full health care insurance coverage for the children and pay 67.5% of unreimbursed medical expenses. The court additionally ordered that he pay $273 in weekly child support and execute the necessary documents "to change the designation of the trustee/guardian on any and all of the children's custodial accounts, which exceed $37, 000 each, to [wife's] name[.]"
In 2011, wife initiated an enforcement action because husband had defaulted on his obligation to pay his share of the unreimbursed medical and health expenses for several years and also for having allowed the health insurance to lapse for one month between December 2010 and January 2011. The court granted wife's motion and also granted husband's cross-motion for reimbursement of child support for the time their son lived with him and for reimbursement of medical expenses for son's psychiatric visits. The court denied husband's application to modify child support based upon changed circumstances, concluding that husband had failed to establish a prima facie case of changed circumstances under Lepis v. Lepis, 83 N.J. 139 (1980). In its June 14, 2011 order, the court expressly noted that husband failed to supply the court with his business tax returns or any medical evidence that he was in need of surgery.
Husband moved for reconsideration. The court conducted oral argument, during which it took sworn testimony from wife and husband. It also took testimony from husband's treating orthopedic surgeon, Dr. Peter Dipaolo.
Husband testified he put money into a 12% certificate of deposit account when the children were born, valued at $37, 000 at the time of the divorce. He estimated the value of the account would have accrued to $284, 528.73, if wife had maintained the account. He testified that he made direct payments for his children's activities. Husband also produced cancelled checks for the court's review. Many of the checks had nothing written in the memo portion. Those for which there were entries in the memo section bore the description, "[f]ull payment for un-reimbursed medical[, ]" "un-reimbursed medical 03" and "unreimbursed medical."
Dr. Dipaolo testified he is a friend of husband in addition to being his treating physician. He diagnosed husband as suffering from post-traumatic arthritis in his shoulders stemming from injuries husband sustained during high school. While husband had undergone shoulder surgery in early 1998 to remove calcium deposits, he found that the arthritis in his shoulders inhibited husband's range of motion, directly affecting husband's activities as an auto body mechanic. He had been recommending total joint replacement for both shoulders since 1998, noting that each shoulder would have to be done separately and recovery time would be three to four months.
Dr. Dipaolo also treated husband for post-traumatic arthritis in his right knee. He testified that husband had undergone surgery in 1999 to repair a patella tendon and a second surgery in 1999 to reconstruct his ACL. He also recommended total joint replacement, with the recovery time for this surgery requiring another three to four months. He did not recommend that this surgery be performed at the same time as the recommended shoulder surgery. He testified he had been recommending the joint replacement surgery for quite some time but that husband told him he did not have the time, nor did he want to take off from work to have the surgeries completed.
Finally, the doctor testified that he treated husband for an elbow nerve problem that affects the nerves in husband's hands. He recommended staggered surgery to both elbows to correct this condition and the surgeries would require eight to ten weeks of recovery.
Under cross-examination, he acknowledged that he had been a lien holder on a building owned by husband. Under questioning from the court, the doctor testified he simply lent husband the money, which husband repaid.
Wife presented a spreadsheet accounting for unreimbursed medical expenses. The spreadsheet omitted two of husband's checks for which there had been a designation "unreimbursed medical" written in the memo section. She testified that she paid unreimbursed medical expenses directly to the provider. Regarding the children's bank accounts, she testified the money had been deposited in a regular savings account, which she used to raise her children. She stated that she used the funds to purchase furniture, put a portion in 529 college funds, as well as a portion in Janis funds, where she took a very big loss.
In her written decision, Judge Teare granted reconsideration of the "[c]ourt's order to reimburse Plaintiff a sum of $4, 583.51[, ] and credited husband with $2400 in unreimbursed medical expenses but disallowed the additional credits sought because husband failed to produce "any further evidence as to what these checks were made payable to the Plaintiff for[.]" The judge denied reconsideration of its ruling denying a downward modification of child support or an accounting of the children's trust accounts, making the following findings:
[A]lthough the Defendant's motion for reconsideration contained a case information statement and his personal and business tax returns for the 2010 tax year and three pay stubs, dated April 22, 2011, May 6, 2011 and May 20, 2011, the Defendant did not present to the [c]ourt any information regarding the financial situation of his sole proprietorship, Malanga Auto Body, at the time [of] the original motion filing and argument. Moreover, the [c]ourt finds that the personal and business tax returns submitted lack credibility and do not reconcile when looked at in conjunction with one another and in reference to the pay stubs submitted by the Defendant. For instance, the Defendant lists that he received $2, 800.00 as his total wages, salaries and tips in his 2010 individual and corporate tax returns, yet the Defendant's pay stubs submitted with his original motion show his salary to be $543.69 biweekly, which would extrapolate to $1, 087.38 monthly and a total yearly salary of $13, 048.56 for 2011. This figure contradicts his proposition that his income is declining and rather, his proofs actually establish a slight increase in his yearly salary that he pays himself from his sole proprietorship. Nonetheless, Defendant has failed to demonstrate that the change is of a permanent nature.
Further, the Defendant is the self[-] employed owner of Malanga Auto Body . . . and owns the property with an outstanding mortgage and rents it to himself, paying himself $24, 500.00 annually in rental income therefrom. However, the Defendant did not supply or explain in his proofs submitted to the [c]ourt, nor at oral argument, from where he attains the money he pays himself in rental income. . . . [I]t is significant to note that the Defendant's current case information statement shows three mortgages on that property totaling $370, 000.00, with monthly payments totaling $4, 585.00 on said mortgages. It seems impossible for the Defendant to maintain the properties that he currently owns, none of which seem to be under the threat of default at this time, homeowners insurance of $3, 200.00 per month, gas and commuting expenses totaling $1, 440.00 per month, lease payments and car insurance totaling $873.00 per month, eating out at restaurants at $560.00 per month, and all the other expenses that the Defendant has listed in his case information statement, at the current earnings he has submitted. [footnote omitted].
Turning to husband's medical condition, Judge Teare found Dr. Dipaolo's testimony "vague and ambiguous" but concluded his credibility as to the seriousness of husband's medical condition was not relevant to the court's determination:
The [c]ourt's judgment on the issue of the Defendant's medical conditions and his subsequent inability to work at his previous pace because of these conditions, is based on the eleven (11) year span of time since the parties' 1999 final judgment of divorce, that the Defendant has been dealing with these medical conditions and, candidly, his sheer lack of action to alleviate the symptoms thereof or to undergo the surgeries of which he is apparently in desperate need. It should be noted that Dr. Dipaolo testified, when questioned by the Plaintiff, that "I have been trying to talk him into surgery for a long time, but he never had time or wanted to take off work." [footnote omitted]. . . .
Moreover, even if Defendant had been actively trying to exhaust all other forms of rehabilitation and/or therapy before undergoing surgery, that there would be evidence thereof and if those efforts had been unsuccessful, these same surgeries would have been scheduled. However, the last surgery that the [D]efendant underwent was in 1999 from a knee injury from high school football and Dr. Dipaolo testified that the Defendant will come in "from time to time" for a cortisone shot.
Based upon the finding that husband had not met the Lepis standard of changed circumstances, Judge Teare denied husband's reconsideration motion seeking a downward modification of child support.
Finally, addressing husband's request for an accounting of the children's custodial accounts, Judge Teare noted that husband did not seek this relief in his original cross-motion. Rather, the issue was raised during oral argument on the reconsideration motion. The judge nonetheless addressed the issue:
At the time of oral argument on the original motion, the Plaintiff testified that at the time of the divorce[, ] she "left with only the clothes on their backs" and supplied the [c]ourt with invoices for children's furniture that she had purchased for the parties['] two children shortly after the divorce that totaled $8, 704.04. Additionally, during oral argument on the original motion[, ] the Plaintiff testified that she put the remainder in a 529 account for the children and produced the balances in the two custodial accounts, . . . which the Defendant was supplied with at the time. . . . Plaintiff testified at oral argument on the original motion that over the eleven (11) years since the parties' divorce, she used funds from the custodial accounts as necessary for the care and maintenance of the children for normal expenses incurred in raising children through elementary school, high school, and now college and all of the extra expenses that occur during those years for clothes, food, trips, camps, school sports and extracurricular activities. . . . The [c]ourt found Plaintiff to be a credible witness and accepted her explanation as to the use of the accounts. . . .
The present appeal followed.
Our review of a trial judge's findings is a limited one. Fagliarone v. Twp. of N. Bergen, 78 N.J.Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963). We will not "'engage in an independent assessment of the evidence as if [we] were the court of first instance[, ]'" N.J. Div. of Youth & Family Servs. v. Z.P.R., 351 N.J.Super. 427, 433 (App. Div. 2002) (quoting State v. Locurto, 157 N.J. 463, 471 (1999)), and will reverse only if we are convinced the trial judge's factual findings and legal conclusions "are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Fagliarone, supra, 78 N.J.Super. at 155. We must defer to the trial judge's findings of fact if supported by clear and convincing evidence in the record. N.J. Div. of Youth & Family Servs. v. P.P., 180 N.J. 494, 511 (2004); In re Guardianship of J.T., 269 N.J.Super. 172, 188 (App. Div. 1993).
Moreover, given the special jurisdiction and expertise of a family court judge, we accord deference to that judge's fact finding and conclusions which flow logically from those findings of fact. Cesare v. Cesare, 154 N.J. 394, 413 (1998); N.J. Div. of Youth & Family Servs. v. M.M., 382 N.J.Super. 264, 271–72 (App. Div. 2006) (citing Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483–84 (1974)), rev'd o.g., 180 N.J. 261 (2007). We also afford deferential respect to a family judge's credibility determinations. N.J. Div. of Youth & Family Servs. v. H.B., 375 N.J.Super. 148, 172 (App. Div. 2005) (citing Rova Farms, supra, 65 N.J. at 483–84); Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
Additionally, we do not second-guess the exercise of sound discretion by a trial judge because we recognize "[j]udicial discretion connotes conscientious judgment, not arbitrary action; it takes into account the law and the particular circumstances of the case before the court." Higgins v. Polk, 14 N.J. 490, 493 (1954); see also DeVito v. Sheeran, 165 N.J. 167, 198 (2000) (appellate review requires substantial deference to a trial court's evidentiary rulings).
A party moving for modification must make "a prima facie showing of changed circumstances[.]" Miller v. Miller, 160 N.J. 408, 420 (1999) (citing Lepis v. Lepis, 83 N.J. 139, 157). Changed circumstances may be shown by an increase or decrease in the resources of the supporting spouse, an increase in cost of living, illness or disability arising after the original judgment or changes in the dependent spouse's lifestyle, among other things. Lepis, supra, 83 N.J. at 151. It is only after a movant makes such a showing to the court's satisfaction that "a court may order discovery and hold a hearing to determine the supporting spouse's ability to pay." Miller, supra, 160 N.J. at 420 (citing Lepis, supra, 83 N.J. at 152).
"Although equity demands that spouses be afforded an opportunity to seek modification, the opportunity need not include a hearing when the material facts are not in genuine dispute." Lepis, supra, 83 N.J. at 159. "[A] party must clearly demonstrate the existence of a genuine issue as to a material fact before a hearing is necessary." Ibid. This standard is intended to alleviate a court's obligation from holding a hearing in every modification application. Ibid.
Here, Judge Teare granted husband's request to permit his treating physician to testify at the oral argument hearing on his reconsideration motion and also permitted the parties to testify. The judge also took sworn testimony during oral argument on the original motion. Consequently, although not designated as a plenary hearing, the reconsideration motion, in essence, became a plenary hearing.
In her written opinion, Judge Teare made detailed findings reflecting the judge's assessment of the weight of the evidence proffered to support husband's reconsideration motion. Her decision was reached after hearing and observing the witnesses under both direct and cross-examination, as well as considering the documents submitted in support of and in opposition to husband's reconsideration motion. Judge Teare observed that husband's claimed earnings did not cover his claimed expenses, nor did husband produce any evidence demonstrating his attempts to improve his purportedly diminishing circumstances, as required of an obligor. Donnelly v. Donnely, 405 N.J.Super. 117, 131 (App. Div. 2009) (holding that "it is not enough that an obligor demonstrate a reduction in income; the obligor must also demonstrate how he or she has attempted to improve the diminishing circumstances") The judge additionally reasoned that the logical conclusion for someone in husband's purported medical condition would not be to wait eleven years to have the necessary surgeries especially given the substantial reduction of income claimed Finally the judge noted that wife supplied invoices to the court for the purchase of the children's furniture produced the balance of the two accounts for the court's review and testified in the original motion that she used funds from the accounts "as necessary for the care and maintenance of the children for normal expenses incurred in raising children " The judge credited this testimony
Judge Teare's findings which she detailed at length in her written opinion are entitled to deference as they were not "so wide of the mark" that the interests of justice require appellate intervention N.J. Div of Youth & Family Servs v MM 189 N.J. 261 279 (2007) Based upon our standard of review we discern no basis to disturb the judge's determination