August 2, 2013
HARVEY N. KAREN, Plaintiff-Respondent,
LINDA KAREN, Defendant-Appellant.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted April 22, 2013
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-0605-97.
Jacobowitz & Defino, P.C., attorneys for appellant (Benjamin M. Hoffman, on the briefs).
Jeanette Russell, attorney for respondent.
Before Judges Sabatino and Maven.
Defendant Linda Karen (Linda) appeals from a post-judgment order of the Family Part terminating plaintiff Harvey Karen's (Harvey) alimony obligation on the basis of her cohabitation. Karen asserts error in not ordering a period of discovery and a plenary hearing. We agree and remand for further proceedings.
We discern the following facts and procedural history from the record on appeal. Harvey and Linda were married in October 1974. They have two sons, both of whom are emancipated. A dual final judgment of divorce was filed on February 10, 1998, which incorporated a property settlement agreement (PSA), dated December 16, 1997.
Pursuant to the PSA, Harvey was required to pay alimony of $2500 per month. The PSA also provided in Article V, Paragraph 5.3 that: "The husband's alimony obligation to the wife shall cease upon her remarriage, the wife[']s death or [the] husband[']s death." Harvey was also required to maintain life insurance in the amount of $125, 000 naming Linda as beneficiary, even after alimony has terminated.
In September 2011, Harvey filed a motion for retroactive termination or modification of his alimony obligation effective from the commencement of cohabitation between Linda and her paramour; financial discovery from Linda; and payment of Harvey's counsel fees and costs.
Harvey alleged that Linda had been cohabiting with the paramour since 2001 in a home in Florida that they jointly own. He proffered that they have a joint bank account, share club memberships, take "family" vacations with the parties' children, and hold themselves out as an established couple. He argues that the evidence supports the conclusion that Linda and her paramour reside together in a relationship akin to marriage necessitating the immediate termination of his alimony obligation.
Alternatively, he argues that Linda's cohabitation with the paramour constitutes a prima facie showing of changed circumstances that warrants a modification or termination of his alimony obligation. He requested a period of discovery to permit him to ascertain the degree of financial interdependence between Linda and the paramour, and the degree to which any such financial interdependence obviates the need for all or part of his alimony payment. He maintained that having established the existence of the cohabitation, the burden shifts to Linda to establish the financial impact of the relationship. Harvey also asserted that he has suffered from herniated disks since 2000. This medical condition has created such chronic pain that it interferes with his ability work, resulting the termination of his commercial real estate business. He has also been diagnosed with prostate cancer.
In November 2011, Linda filed a cross-motion seeking an order denying Harvey's motion; requiring Harvey to comply with his obligation to provide life insurance required by the PSA; and awarding her counsel fees. In her certification, Linda noted that the PSA does not indicate that alimony would be terminated or reduced based on cohabitation. She further asserted that she and the paramour are not in a relationship "akin to marriage." While they reside together in the same home as friends and roommates, they have separate bedrooms at different ends of the home. She maintains that there is no relationship between her and the paramour, and that they live together out of financial necessity. Linda provided her Case Information Statement (CIS) and averred that she is struggling financially and needs someone to share the expenses. She stated that she and the paramour split the monthly mortgage and she uses the alimony to pay her monthly bills. She denied taking exotic vacations but acknowledged that she owned a used 2007 Mercedes, which she purchased in 2011. Conversely, Linda maintained that Harvey continues to live a very high lifestyle, including owning luxury vehicles, taking multiple trips and owning numerous properties.
In response to the cross-motion, Harvey asserted that Linda was not being truthful about her relationship with the paramour and provided what he believed to be indicia of their relationship, including photographs of Linda and the paramour together at her son's wedding with Linda "wearing an engagement ring" and a page from the paramour's Facebook account stating that he is "in a relationship with Linda." Harvey challenged Linda's ability to maintain her CIS monthly budget solely on his alimony payment. Harvey provided his CIS and a medical report for the court's review.
On January 24, 2012, the motion judge decided the matter on the papers submitted without oral argument. The judge entered an order terminating Harvey's alimony obligation based on Linda's cohabitation, effective September 16, 2011, the date of the filing of the motion. Furthermore, the trial court ordered Linda to pay Harvey's counsel fees in the amount of $2655. The order was accompanied by a very brief written statement of reasons. In her statement of reasons, the judge noted that Article V, Paragraph 5.3 of the PSA provided that "alimony shall terminate upon the death of either party or remarriage of the [p]laintiff" yet found on the basis of the parties' certifications that:
[T]he [c]ourt is satisfied that [Linda's] cohabitation is sufficient to warrant termination of [Harvey's] alimony obligation. . . . Although [Linda] has not legally remarried, the [c]ourt finds that she is benefiting from her cohabitation and relationship with . . .[the paramour], and no longer qualifies for the financial support of [Harvey].
The judge granted Harvey's request for counsel fees reasoning that these "legal fees were incurred as a result of Linda's violation of litigant's rights, " namely continuing "to accept alimony payments from [Harvey] while cohabitating with another man." As to the ability to pay, the court found that "[Harvey] has been diagnosed with cancer and his ability to work and earn a living has been significantly decreased." The judge determined from the parties' certifications that Harvey had depleted nearly all of his assets in order to comply with his alimony obligations, and that "[Linda] was in a much better financial position than [Harvey], particularly in light of her relationship with . . . [the paramour], who possesse[d] significant assets." Consequently, the court granted Harvey's counsel fee request. This appeal followed.
Linda contends that the trial court erred in terminating alimony based on her cohabitation without a determination of whether the relationship had reduced her financial needs, and if so, to what extent. She further contends that the court erred in not ordering a period of discovery and a plenary hearing. Given the nature of the issues raised in the conflicting certifications, we agree that discovery and a plenary hearing are necessary to resolve the parties' conflicting motions.
We ordinarily accord great deference to the discretionary decisions of Family Part judges. See Larbig v. Larbig, 384 N.J.Super. 17, 21 (App. Div. 2006) ("Whether an alimony obligation should be modified based upon a claim of changed circumstances rests within a Family Part judge's sound discretion."); see also Donnelly v. Donnelly, 405 N.J.Super. 117, 127 (App. Div. 2009). Our review of the record in this case, however, convinces us that the matter must be remanded to the Family Part for further proceedings. First, the motion judge's written statement of reasons is too cursory for us to ascertain whether she appropriately exercised her discretion. Second, and more significantly, most of the issues raised in the cross-motions are fact-sensitive and should not be decided on the papers given the conflicting factual assertions made by the parties.
"Trial judges are under a duty to make findings of fact and to state reasons in support of their conclusions." Heinl v. Heinl, 287 N.J.Super. 337, 347 (App. Div. 1996) (citing R. 1:7-4). "'Meaningful appellate review is inhibited unless the judge sets forth the reasons for his or her opinion.'" Strahan v. Strahan, 402 N.J.Super. 298, 310 (App. Div. 2008) (quoting Salch v. Salch, 240 N.J.Super. 441, 443 (App. Div. 1990)). Rather, 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) (citations omitted). The judge's findings and conclusions in this case do not satisfy this standard.
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; Innes v. Innes, 117 N.J. 496, 504 (1990)). "As a result of this judicial authority, alimony and support orders define only the present obligations of the former spouses. Those duties are always subject to review and modification on a showing of 'changed circumstances.'" Lepis v. Lepis, 83 N.J. 139, 146 (1980) (citations omitted).
The party seeking to modify an alimony obligation has the burden of showing "changed circumstances." Id. at 157 (citing Martindell v. Martindell, 21 N.J. 341, 353 (1956)). In addition, the "party must demonstrate that changed circumstances have substantially impaired [his or her] ability to support himself or herself." Ibid. "Courts have consistently rejected requests for modification based on circumstances which are only temporary or which are expected but have not yet occurred." Id. at 151 (citations omitted).
The Supreme Court has examined the legal principles that must be contemplated when considering whether a relationship constitutes cohabitation. Cohabitation involves an "intimate, " "close and enduring" relationship, requiring "more than a common residence" or mere sexual liaison. Konzelman v. Konzelman, 158 N.J. 185, 202 (1999). Cohabitation involves conduct whereby "the couple has undertaken duties and privileges that are commonly associated with marriage." Ibid. In addition to long-term intimate or romantic involvement, indicia of cohabitation may "include, but are not limited to, living together, intertwined finances such as joint bank accounts, sharing living expenses and household chores, and recognition of the relationship in the couple's social and family circle." Ibid. The couple's relationship "bears the generic character of a family unit as a relatively permanent household, " Gayet v. Gayet, 92 N.J. 149, 155 (1983) (internal quotation marks and citation omitted), is "serious and lasting, " and reflects the "stability, permanency and mutual interdependence" of a single household, Konzelman, supra, 158 N.J. at 202-03.
The cohabitation of a dependent spouse constitutes an event of changed circumstances, which requires further review of the economic consequences of the new relationship and its impact on the previously imposed support obligation. Gayet, supra, 92 N.J. at 155; Lepis, supra, 83 N.J. at 151 (citation omitted); see also Boardman v. Boardman, 314 N.J.Super. 340, 347 (App. Div. 1998) (explaining that "cohabitation constitute[s] changed circumstances . . . justifying discovery and a hearing for modification of alimony").
In Ozolins v. Ozolins, 308 N.J.Super. 243, 244 (App. Div. 1998), we held "that a showing of cohabitation creates a rebuttable presumption of changed circumstances shifting the burden to the dependent spouse to show that there is no actual economic benefit to the spouse or the cohabitant." See also Conlon v. Conlon, 335 N.J.Super. 638, 650 (Ch. Div. 2000) (holding the dependent spouse has the burden of proof "to address the economic consequence of the [new] relationship in order for the [c]ourt to make an appropriate assessment regarding a modification or termination of alimony"). Consequently, when faced with the circumstance of cohabitation of a dependent spouse, the court must focus on the economic relationship of the cohabitants to discern whether one cohabitant "subsidizes the other." Boardman, supra, 314 N.J.Super. at 347 (citations omitted) (internal quotation marks omitted).
Modification of alimony is warranted when either the cohabitant contributes to the dependent spouse's support or lives with the dependent spouse without contributing. Gayet, supra, 92 N.J. at 153 (citing Garlinger v. Garlinger, 137 N.J.Super. 56, 64 (App. Div. 1975)). When a dependent spouse economically benefits from cohabitation, his or her support payments may be reduced or terminated. See Melletz v. Melletz, 271 N.J.Super. 359, 363 (App. Div.) (stating "the test for determining whether cohabitation by the dependent spouse should reduce an alimony award has always been based on a theory of economic contribution"), certif. denied, 137 N.J. 307 (1994). "The extent of actual economic dependency, not one's conduct as a cohabitant, must determine the duration of support as well as its amount." Gayet, supra, 92 N.J. at 154.
In order to rebut the presumption that the living arrangement is tantamount to marriage and has reduced or ended the need for alimony, a dependent spouse must prove he or she remains dependent on the former spouse's support. Id. at 154-55.
We are aware that "not every factual dispute that arises in the context of matrimonial proceedings triggers the need for a plenary hearing." Harrington v. Harrington, 281 N.J.Super. 39, 47 (App. Div.) (citing Adler v. Adler, 229 N.J.Super. 496, 500 (App. Div. 1988)), certif. denied, 142 N.J. 455 (1995).
Applying these legal principles to the case at hand, we are convinced that the question of Linda's cohabitation has not been sufficiently developed in light of the Konzelman standard. Our review of the record compels our conclusion that the critical issues in these motions, and the necessary findings of fact and conclusions of law that must be considered cannot be resolved upon the review of conflicting certifications alone. Rather, such determinations necessarily depend upon the examination and credibility of witnesses, reliability of evidence and critical examination of the financial documentation presented. Although the trial judge's conclusion with respect to cohabitation appears to have some basis in the facts contained in the motion papers, the issue should be included in the plenary hearing because it is also highly fact-sensitive.
If cohabitation is established, the question whether there are any economic consequences resulting from Linda's cohabitation must be developed. A fair reading of Konzelman requires the completion of discovery and a plenary hearing to resolve whether Linda's cohabitation results in economic consequences which warrant an adjustment to Harvey's alimony obligation. See Konzelman, supra, 158 N.J. at 202. See also Conlon, supra, 335 N.J.Super. at 649-50. The burden would be upon Linda to rebut the presumption of changed circumstances arising from Harvey's prima facie showing. Ozolins, supra, 308 N.J.Super. at 248-49. "When a genuine issue of material fact exists, a plenary hearing is required." Palmieri v. Palmieri, 338 N.J.Super. 562, 564 (App. Div. 2006) (citing Shaw v. Shaw, 138 N.J.Super. 436, 440 (App. Div. 1976)).
We have recently established that in considering the economic impact of cohabitation the court must determine if any such benefit warrants termination or a modification of alimony. Reese v. Weis, 430 N.J.Super. 552, 576 (App. Div. 2013). In Reese, we established that whether an award of alimony continues to be "fit, reasonable and just, " N.J.S.A. 2A:34-25, the court must
consider the characteristics of the new relationship of the dependent spouse and the cohabitant. Considerations that may be weighed when making such a determination include the length of cohabitation; the duration of receipt of the economic benefits, particularly in light of the length of the prior marriage; and whether the committed cohabiting relationship exhibits the indicia of marriage.
[Id. at 582.]
Based on the record before us, we conclude that the trial judge did not undertake the qualitative assessment necessary to support the finding of cohabitation and termination of alimony. We therefore conclude that in order for the court to render a legally sufficient and equitable assessment of the economic consequences resulting from Linda's relationship, a period of discovery and a plenary hearing must be conducted.
We do not suggest the final outcome. We merely conclude that if Harvey proves that Linda's relationship with the paramour is more like a marriage than a casual social connection, then the parties are entitled to discovery and a hearing. Accordingly, we remand all issues to the Family Part for reconsideration, based upon additional discovery as needed, and a plenary hearing consistent with Konzelman and the newly espoused criteria for consideration set forth in Reese. The judge shall comply with the requirements of Rule 1:7-4 in explaining her resolution of the issues. The order on appeal shall remain in effect as an interim order, but it is subject to such modification pending the plenary hearing as the judge deems appropriate, including the stay of any orders requiring defendant to reimburse alimony based on the retroactive change in Harvey's obligation, pending the final decision on the remand.
Under the circumstances of this case, we vacate the award of counsel fees to Harvey and on remand, direct the judge to address anew the fee applications after the completion of the plenary hearing, in accordance with Rule 5:3-5(c). An award of counsel fees in a matrimonial action is discretionary. See Eaton v. Grau, 368 N.J.Super. 215, 225 (App. Div. 2004) (citation omitted); see also R. 4:42-9(a)(1).
Remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.