August 30, 2013
DONNA R. BURNS, Plaintiff-Respondent,
JOHN G. BURNS, Defendant-Appellant.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued telephonically November 9, 2012
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-1127-06B.
G. John Germann argued the cause for appellant (DeNoia & Tambasco, L.L.C., attorneys (Mr. Germann, on the briefs).
Noel S. Tonneman argued the cause for respondent (Tonneman, Vuotto, Enis & White, L.L.C., attorneys; Ms. Tonneman, of counsel, and on the brief; Lisa Steirman Harvey, on the brief).
Before Judges Axelrad, Nugent and Haas.
Defendant John G. Burns, a fugitive, appeals from the post-judgment Family Part Order that denied his motion for a hearing concerning recalculation of his spousal and child support obligations. He contends the court erred by denying his motion on the grounds he had withheld financial information and filed a misleading case information statement. He also contends that the court abused its discretion by issuing a bench warrant for his arrest after he defied three court orders, which he asserts were issued without due process. Lastly, he challenges both the judgment the court entered against him for support arrearages and the counsel fees the court awarded to plaintiff. Having considered the parties' arguments in view of the record and controlling law, we affirm.
Married in 1992 and divorced in 2008, the parties have five children ranging in age from ten years old to eighteen years old. Incorporated into the parties' February 25, 2009 Amended Dual Judgment of Divorce (DJOD) is their sixty-seven page Matrimonial Settlement Agreement (MSA). Article II of the MSA sets forth their agreement concerning custody and provides a comprehensive parenting plan. Plaintiff, Donna R. Burns, is "designated the primary caretaker and primary residential parent." Articles III and IV of the MSA, concerning child support and alimony, require defendant to pay alimony and child support to plaintiff so that she receives "$11, 000 per month in net support." Article III also addresses other expenses for the children, including health care, pre-school, and extracurricular expenses, as well as college expenses.
Notwithstanding the MSA provisions concerning spousal and child support, paragraph 85 of the MSA states:
The parties agree to settle their pending matrimonial matter notwithstanding the fact that they are in disagreement over this issue. The parties acknowledge that a significant component of this Agreement is the mandatory review provisions of Husband's support obligation, which review shall be conducted notwithstanding the fact that without such an Agreement, the case law suggests that Husband would not be entitled to such a review at the times to which the parties have agreed. The parties recognize that one issue that may need to be determined during the review process is the marital standard of living, and that by agreeing to not agree on the standard of living at this time, the parties may simply be delaying that ultimate resolution. The parties acknowledge that they have been advised by their attorneys of their right to have a hearing at this time with regard to the issue of determining the marital lifestyle, and have elected to voluntarily waive that right in furtherance of their desire to resolve this matter expeditiously and without incurring additional counsel fees and costs.
Paragraph 86 of the MSA further explains:
The parties acknowledge that they have not agreed upon the proper method for determining and defining the marital standard of living. In particular, the parties have not agreed whether a determination as to marital lifestyles should include an examination of the budget for any particular year during the marriage, as opposed to an examination of a compilation of years or some other methodology. The parties agree to forego resolution of this issue, and expressly reserve same for a future plenary hearing, should that become necessary.
In addition to the terms concerning review of defendant's support obligations, paragraphs 110 through 116, under the heading, "Review of Support, " state that if defendant does not lose his job, "a review of the support arrangement shall be undertaken in April 2009." The MSA requires that the review "be conducted by the parties and counsel with an agreed upon mediator, " and provides for judicial review if mediation is unsuccessful.
When the parties signed the MSA, defendant was a stock broker with UBS Financial Services, Inc. The MSA was based in part on defendant's representation that he currently earned $10, 000 net per month. Because defendant's net monthly income was $1, 000 less than his support obligations, the MSA permitted him to pay $4, 000 per month, up to a total of $25, 000, from a home equity line of credit (LOC) secured by a property in Branch Beach. The amounts defendant paid from the LOC were not to be considered support arrearages, but he was required to repay them.
In October 2009, defendant initiated the review process provided for in the MSA. Following motion practice, the court entered a consent order appointing a mediator, requiring the parties to exchange financial discovery, and continuing defendant's support obligations but suspending enforcement of those obligations, "by way of bench warrant, suspension of license, or otherwise . . . pending the conclusion of the mediation and/or further Order of the Court."
During the next one-and-one-half years, the parties were unable to settle their dispute through mediation. In June 2011, defendant filed a motion seeking a judicial hearing and recalculation of his support obligations as well as other relief. Plaintiff filed a cross-motion seeking a judgment against defendant for support arrearages in excess of $300, 000, vacating the provision in the previous order suspending enforcement of defendant's support obligations, compelling defendant to pay off the LOC, and other relief.
Following oral argument the court entered an order that, with certain exceptions, denied relief to all parties, but reserved a final ruling on such relief until defendant submitted financial information. Because defendant apparently no longer worked at UBS, the court granted plaintiff leave to subpoena defendant's employment records concerning defendant's compensation, severance packages, and other financial information from UBS. The court further ordered defendant to submit within ten days:
a. An updated, accurate and complete Case Information Statement [(CIS)], including, but not limited to, accurate year to date information on any and all income from UBS and any other source for 2011;
b. Information on the real property that defendant has owned since 1995 and was sold at a $115, 315.00 profit on December 9, 2010;
c. Copies of any and all paystubs from Merrill Lynch [plaintiff's current employer] for 2011;
d. The last three (3) paystubs from UBS [and] the disposition of defendant's UBS stock, valued at the time of the divorce at $196, 075.00, which stock was awarded to him in or about December 2005;
e. The status or disposition of the Liberator Medical Device stock, and if sold, a copy of the IRS tax return reporting the sale of this stock;
f. Evidence of IRS debt in the amount of $55, 000.00;
g. Evidence of the $225, 000.00 defendant owes UBS, the source of the $800, 000.00 used to purchase his new home at lot 68 Medalist Club plot 2 on or about July 28, 2011, and a copy of defendant's monthly mortgage statement, if any;
h. Copy of his current employment agreement, bonus and benefit package from Merrill Lynch; and
i. Evidence of the $22, 000.00 debt owed to Sovereign Bank.
Defendant did not comply with the order. His attorney requested an extension because he was scheduled to take a vacation beginning August 20, 2011. The court denied counsel's request for an extension of time. On August 24, 2011, defense counsel forwarded certain financial information to the court, but not all of the information the court had ordered. The information submitted to the court by defendant included two Merrill Lynch paystubs, one UBS paystub, and an incomplete case information statement (CIS), which was not current.
The court conducted a conference call with counsel on September 22, 2011, following which it entered an order. By then, defendant had accumulated considerable support arrears. In the order, the court required "defendant to transfer $550, 000 of the approximate remaining $700, 000 in loan proceeds from defendant's new employer, Merrill Lynch, . . . to the trust account of defendant's counsel's law firm . . . within five (5) days[.]" The court further directed that within seven days of receipt of those funds, defendant's counsel was to issue a check for $100, 000 to plaintiff's counsel, payable to plaintiff, constituting "a partial payment of plaintiff's claim against defendant for child and spousal support arrears." The court further ordered that the parties attend economic mediation and the court scheduled a conference call for September 29, 2011.
Defendant neither complied with the court's order nor sought relief from it. For that reason, following the September 29, 2011 conference call, the court issued a written order requiring defendant to transfer the remaining proceeds from the Merrill Lynch loan to his attorney's trust account by 4:00 p.m. the next day. The court's order further provided that if defendant failed to transfer the funds, the court would issue on October 3, 2011, a bench warrant "for defendant's arrest and/or reduce his outstanding child support and alimony arrears of $208, 184.92 to a judgment." The court restrained defendant from dissipating the remaining loan proceeds; directed defendant's counsel, upon receipt of the funds, to issue a $100, 000 check to plaintiff as partial payment against defendant's support arrears; and ordered economic mediation to proceed if defendant transferred the funds. The court scheduled a follow-up conference call for October 6, 2011. Defendant did not comply with the order and did not seek relief from it.
On October 3, 2011, the court issued a bench warrant for defendant's arrest, defendant having failed to comply with the September 22 and 29 orders. The bench warrant provided that defendant "shall only be released upon his transferring the Merrill Lynch Loan Proceeds to his attorney's trust account, as referenced and ordered in the . . . September 22 and 29, 2011 Orders."
On October 21, 2011, the court decided the issues it had reserved decision on in its August 5, 2011 order. The court entered judgment against defendant for support arrears in the amount of $208, 184.92; vacated the provision in the January 19, 2010 order which had suspended enforcement of defendant's support obligations; and awarded plaintiff $11, 404.94 in counsel fees. The court wrote on the order: "This Court finds it appropriate to award to plaintiff the entire costs of attorney's fees given that defendant has failed to follow through on his own motion and has decided to disobey this Court's orders dated Sept. 14, 22, and 29 and October 3, 2011."
The court explained its decision on the record, though counsel were not present. The court explained that it had taken the cross-motions under advisement because defendant "had not completed his [CIS] accurately or sufficiently[.]" Noting that from the motion papers it appeared defendant had left his employment with UBS and commenced employment with Merrill Lynch in Florida, where he had purchased a home for approximately $800, 000, the court explained:
[S]everal days before the oral argument apparently [defendant] had left his employment at UBS and went to Merrill Lynch. And he got a signing bonus or signing loan of 1.6 million dollars which he has to pay back in installments on a yearly basis. And he used part of the proceeds to pay for his house in cash. And then we did [not] know what happened to the approximately $800, 000.
The court further explained that it was for those reasons it issued the September 14 order "freezing those assets until I could have a conference call with Counsel." The court believed defendant would be able to pay some of his support arrearages, which exceeded $200, 000, from the loan proceeds, and the parties could "try to settle this case since there was money[.]" The court explained that on September 29, "we found out that no transfers were going to be made to [defendant's counsel]." After explaining that background, the court disposed of the cross-motions. The court entered judgment against defendant for child support arrears for less than the $310, 000 requested by plaintiff, because "the plaintiff has not really justified or given me sufficient proof to prove the entire $310, 000." The court further explained that "defendant can have an opportunity, once he decides to comply with this Court's order, to come back and try to prove that he [does not] owe this entire amount, or the plaintiff can prove that he does owe this entire amount."
The court entered a memorializing order. Defendant filed his notice of appeal on December 5, 2011. On January 4, 2012, the trial court filed an amplified opinion pursuant to Rule 2:5-1(b). In the amplified opinion, the court explained the deficiencies in the CIS defendant had filed with his motion to compel the review of his support obligations as provided in the MSA. The court pointed out that defendant obtained a forgivable loan from Merrill Lynch in excess of $1, 591, 934, but did not mention the loan in the certification he filed with the court on July 27, 2011, replying to plaintiff's cross-motion. After recounting defendant's disregard of its orders, the court suggested in its amplified opinion that the "fugitive disentitlement doctrine" should bar defendant's appeal.
Defendant presents the following arguments for our consideration:
THE COURT'S ORDERS OF SEPTEMBER 22, 2011, SEPTEMBER 29, 2011, OCTOBER 3, 2011 AND OCTOBER 21, 2011 DIRECTING THE DEFENDANT TO DEPOSIT MONIES INTO TRUST REPRESENTS TAKING OF PROPERTY WITHOUT DUE PROCESS IN VIOLATION OF THE FOURTEENTH AMENDMENT OF THE UNITED STATES CONSTITUTION AND AS SUCH MUST BE VACATED.
THE COURT'S ISSUANCE OF A BENCH WARRANT FOR THE DEFENDANT'S ARREST FOR FAILING TO COMPLY WITH THE ORDERS OF SEPTEMBER 21, 2011, SEPTEMBER 29, 2011 AND OCTOBER 3, 2011 REPRESENTS AN ABUSE OF DISCRETION AND MUST BE VACATED AS THE UNDERLYING ORD[E]RS WERE ENTERED IN VIOLATION OF THE FOURTEENTH AMENDMENT OF THE UNITED STATES CONSTITUTION.
THE COURT'S ORDER OF OCTOBER 21, 2011 FIXING SUPPORT ARREARAGES AND REDUCING SAME TO A JUDGMENT WITHOUT A HEARING REPRESENTS AN ABUSE OF DISCRETION AND MUST BE VACATED.
THE PARTIES' PROPERTY SETTLEMENT AGREEMENT CLEARLY AND UNAMBIGUOUSLY MANDATES A REVIEW OF THE SUPPORT OBLIGATION IN ITS ENTIRETY, REGARDLESS OF CHANGED CIRCUMSTANCES, AND THE COURT'S FAILURE TO ENFORCE THAT AGREEMENT AND CONDUCT AN APPROPRIATE HEARING REPRESENTS AN ABUSE OF DISCRETION.
A. CHANGED CIRCUMSTANCES ARE NOT REQUIRED FOR THE REVIEW OF SUPPORT AND THE DEFENDANT IS ENTITLED TO A REVIEW OF THE SUPPORT OBLIGATIONS AS OF RIGHT PURSUANT TO THE EXPRESS TERMS OF THE PARTIES PROPERTY SETTLEMENT AGREEMENT.
THE COURT ERRED IN FINDING THAT THE DEFENDANT FAILED TO FILE A CASE INFORMATION STATEMENT AND TO THE EXTENT THE COURT'S DECISION TO DECLINE THE MANDATORY REVIEW OF SUPPORT BASED UPON THAT FINDING REPRESENTS REVERSIBLE ERROR.
A. A CASE INFORMATION STATEMENT IS ONLY REQUIRED IN ACCORDANCE WITH R.5:5-4(a) WHERE A MOTION TO MODIFY SUPPORT IS BASED UPON A CHANGE OF CIRCUMSTANCES AND AS SUCH DEFENDANT WAS NOT REQUIRED TO FILE A CASE INFORMATION STATEMENT WITH HIS APPLICATION.
B. THE ALLEGED DEFICIENCIES IN CONNECTION WITH THE DEFENDANT'S CASE INFORMATION STATEMENT ARE NOT RELEVANT TO THE DETERMINATION OF THE DEFENDANT'S MOTION AND DO NOT FORM A BASIS FOR THE DENIAL THEREOF.
THE TRIAL COURT'S AWARD OF ATTORNEY'S FEES REPRESENTS AN ABUSE OF DISCRETION AND IS NOT SUPPORTED BY THE FACTS OR LAW IN THIS CASE AND MUST BE VACATED.
THE FUGITIVE DISENTITLEMENT DOCTRINE CANNOT BE IMPOSED IN THIS CASE AND THE COURT'S ORDERS COMPELLING PAYMENT OF PROCEEDS INTO TRUST REPRESENTED A TAKING OF PROPERTY WITHOUT DUE PROCESS AND ANY BENCH WARRANT RESULTING FROM A VIOLATION OF THOSE ORDERS MUST THEREFORE BE VACATED.
THE AMPLIFIED OPINION SUBMITTED BY THE TRIAL COURT IS IMPROPER AND EXCEEDS THE BOUNDS OF R. 2:5-1(b) AND FURTHER CREATES AN IMPRESSION THAT THE COURT IS BIASED AGAINST THE DEFENDANT REQUIRING THAT THE MATTER BE REMANDED TO A SEPARATE JUDGE.
At the outset, we reject plaintiff's argument that defendant's appeal is barred by the fugitive disentitlement doctrine. That doctrine "springs out of the inherent power of courts to enforce their judgments and protect their dignity." Matsumoto v. Matsumoto, 171 N.J. 110, 119 (2002). The doctrine essentially "provides that 'a fugitive from justice may not seek relief from the judicial system whose authority he or she evades.'" Ibid. (quoting Martha B. Stolley, Sword or Shield: Due Process and the Fugitive Entitlement Doctrine, 87 J. Crim. L & Criminology, 751, 752 (1997)).
For purposes of the fugitive entitlement doctrine, a fugitive includes not only a person who has fled the jurisdiction in which he or she has committed a crime, but also a person who, "while legally outside the jurisdiction, 'constructively flee[s] by deciding not to return.'" Id. at 121 (quoting United States v. Barnette, 121 F.3d. 1179, 1184 (11th Cir. 1997)). Here, the evidence suggests that defendant moved to Florida for a better job, not to escape the Family Part's jurisdiction. More significantly, nothing in the record suggests that defendant decided not to return to avoid the court's jurisdiction. To the contrary, there were no hearings scheduled when the court entered its order.
Moreover, our Supreme Court has cautioned that the fugitive entitlement doctrine, "should be sparingly invoked, because remedies that bar consideration of claims on the merits are, in the main, contrary to our notions of justice." Matsumoto, supra, 171 N.J. at 110. We decline to invoke the doctrine under the circumstances presented by this case.
We next address defendant's argument that he was not required to provide a current CIS because his motion was not based on changed circumstances, but rather on the terms of the MSA; and that the court's decision to decline for that reason to review his support obligations was reversible error.
Rule 5:5-2(a) requires each party to file and serve a CIS "in all contested family actions, except summary actions, in which there is any issue as to custody, support, alimony or equitable distribution." The Family Part "has the express authority to order a CIS in any other family action." Pressler & Verniero, Current N.J. Court Rules, comment 2 on Rule 5:5-2 (2013). Post-judgment motions involving disputes concerning support obligations must be accompanied by a current CIS as well as the prior CIS. R. 5:5-4(a). The requirement that parties file current financial disclosure statements is "a way for the trial judge to get a complete picture of the finances of the movants in a modification case." Gulya v. Gulya, 251 N.J.Super. 250, 253 (App. Div. 1991). The trial court here acted well within its discretion when it ordered defendant to submit "an updated, accurate and complete [CIS.]"
When defendant disregarded the order requiring him to provide a current CIS, he in turn provided the court with "an [in]adequate factual basis for the court to assess essential facts necessary to a determination of the issues presented [by his motion]." Palombi v. Palombi, 414 N.J.Super. 274, 288 (App. Div. 2010). For that reason, the court properly exercised its discretion in denying defendant's motion. A litigant who files a motion and asks a court for a downward adjustment in spousal and child support obligations, and then disregards the court's order requiring the information necessary to decide the motion, should expect to have the motion dismissed.
Defendant also argues that the alleged deficiencies in his CIS were not relevant to the determination of his motion. That argument is so lacking in merit that it warrants no discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only that the relevance of information in a CIS is a matter to be determined by the court, not unilaterally by litigants.
Having concluded that the trial court properly denied defendant's motion for a plenary review of his support obligations, we turn to defendant's argument that the court erred by granting plaintiff's cross-motion and entering judgment on defendant's support arrearages. The court committed no error.
We begin by recognizing "that the enforcement, collection, modification and extinguishment of unpaid arrearages in alimony and child support payments are matters addressed to the sound discretion of the court." Mastropole v. Mastropole, 181 N.J.Super. 130, 141 (App. Div. 1981). Plenary hearings to determine support issues are not always necessary. Only where there are "disputed factual issues as to the amount of the arrearages, [a litigant's] ability to pay the accumulated arrearages, or the amount of credits to which [a litigant] is entitled, " is a hearing required. Id. at 140.
Plaintiff supported her cross-motion with an itemization of defendant's arrears totaling $310, 183.09. There was no dispute about the MSA requiring defendant to pay combined spousal and child support in the amount of $11, 000 per month. In the June 27, 2011 certification defendant filed, he admitted "[t]he arrearages are currently $182, 000." In his appellate brief, he further concedes that when "the [m]otion was ultimately heard and decided, the arrearages on the [p]robation account had exceeded $200, 000." Although defendant claims that the balance reflected in the probation account improperly included amounts he had paid out of the LOC, he did not dispute that he failed to repay those amounts. Nor did he contend that, with an adjustment for the LOC, his arrearages were less than $200, 000.
Defendant did dispute his ability to pay. But when the court entered judgment for his arrearages, the court had information that he had received in excess of $1, 000, 000 from his new employer, a fact he did not dispute; and he had refused to provide an updated CIS. Under those circumstances, the court did not abuse its discretion by implicitly determining there was no factual dispute that defendant owed $200, 000 in support arrearages.
Defendant next contends that the court's orders requiring him to deposit money into his attorney's trust account, and the court's issuance of a bench warrant when he disregarded the order, violated his right to due process. The family part is authorized by statute to
"make such order as to the alimony or maintenance of the parties, and also as to the . . . maintenance of the children, . . . as the circumstances of the parties and the nature of the case shall render fit, reasonable and just, including, but not limited to, the creation of trusts or other security devices . . . ."
[N.J.S.A. 2A:34-23; see also Jacobitti v. Jacobitti, 135 N.J. 571, 580 (1994).]
The statutory authorization "permits the trial court to require security for the payment of marital obligations." McCarthy v. McCarthy, 319 N.J.Super. 138, 147 (App. Div. 1999). However, "where the obligations are reducible to judgment and where there are no continuing obligations to be secured, the trust device is entirely unnecessary since execution will fully serve the purpose." Ibid.
Here, defendant's support obligations were ongoing, a proposition defendant does not dispute. Defendant had failed to fulfill his support obligations, as evidenced by the significant amount of arrearages. Moreover, defendant had disregarded the court's order to provide current financial information so that the court could make an informed decision about his support obligations. And, as the court explained in its oral opinion, it intended to provide an opportunity for defendant to present evidence concerning his support obligations once he decided to comply with the court's orders.
Defendant also had the opportunity to address the prospect of the bench warrant. He was given notice that the bench warrant would issue, he was represented by counsel, and he could have either appeared or filed papers explaining why a bench warrant should not issue. Instead, he simply ignored the court's orders.
Considering the foregoing circumstances, we discern no abuse of discretion on the part of the trial court in attempting to secure defendant's support obligations and to force him to comply with its orders.
Defendant next challenges the court's award of counsel fees to plaintiff. An award of counsel fees in family actions is permitted by Rule 5:3-5(c) and Rule 4:42-9(a)(1). See Berkowitz v. Berkowitz, 55 N.J. 564, 570 (1970). Although the award is discretionary, the court is required to consider the following factors:
(1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties both during and prior to trial; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.
[R. 5:3-5(c); see also Mani v. Mani, 183 N.J. 70, 94 (2005).]
Although the court did not explicitly refer to all of the factors in Rule 5:3-5(c), its reasons for the award of counsel fees are clear from the record. The court determined defendant had the ability to pay counsel fees; had not complied with its order; and had not taken a reasonable position during the lengthy litigation Under those circumstances we perceive no basis to disturb the fee award.