DIANA J. CRONIN, Plaintiff-Respondent/ Cross-Appellant,
WILLIAM J. CRONIN, Defendant-Appellant/ Cross-Respondent.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 8, 2013.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-573-10.
Bettina E. Munson argued the cause for appellant/cross-respondent (Lomurro, Davison, Eastman & Muñoz, P.A., attorneys; Ms. Munson, of counsel; Carrie A. Lumi, on the brief).
Kristin S. Pallonetti argued the cause for respondent/cross-appellant (Law Office of Steven P. Monaghan, L.L.C., attorneys; Ms. Pallonetti and Steven P. Monaghan, on the brief).
Before Judges Alvarez and Carroll.
Defendant, William J. Cronin, appeals from two orders entered by the Family Part on August 20, 2012, compelling him to pay alimony arrears of $11, 500, authorizing the issuance of a bench warrant should he miss two support payments, and denying his post-judgment application to reduce his alimony and child support obligations. Plaintiff, Diana J. Cronin, cross-appeals from that portion of the order denying her application for counsel fees. Because we conclude that the motion judge failed to make adequate findings of fact and conclusions of law, we are constrained to reverse and remand.
The parties were married in March 2003 and divorced on May 24, 2011. They have two minor children. The judgment of divorce (JOD) incorporated the parties' marital settlement agreement (MSA) bearing the same date. The MSA required defendant to pay plaintiff $12, 000 per month limited duration alimony for four years, and $2000 per month child support. The MSA specifically noted that defendant's alimony and child support obligations were based on an average gross income of $504, 000 per year, which was defendant's average annual income from 2005 through 2007, as determined by a team of forensic accountants engaged by the parties during the divorce litigation. Income was imputed to plaintiff in the amount of $35, 000 per year.
During the divorce proceedings, it was defendant's position that his income had declined since 2007. At the May 24, 2011, uncontested divorce hearing, defendant testified that his 2010 income tax return showed "substantially reduced earnings." He "expressed serious concerns about [his] ability to meet his financial obligation pursuant to [the MSA] . . . alimony [and] child support." Paragraph 4.25 of the MSA indicated that defendant had funded a $252, 000 college savings plan for the children, and the parties "acknowledge[d] that [defendant] may have to borrow against it to meet his alimony and child support obligation." Consistent therewith, defendant testified at the divorce hearing that "[he] may have to use assets to meet [his] support obligation in the event that [his] business suffers."
At the hearing, plaintiff's counsel sought to make clear that defendant "has asserted the decrease in [in]come for 2010 [and] he has considered that decrease in income in entering into this agreement, " even though the MSA utilized the period 2005-2007 as the baseline for establishing his support obligation. When defendant expressed some uncertainty, the judge suggested that defendant take a few minutes to review the terms of the MSA with his attorney. After doing so, and after defendant indicated that he understood, his attorney stated: "I'm just a little concerned, that my client has to understand that – and I want the record to reflect that he is not waiving his right to come back in pursuant to Lepis."
Barely a year after the divorce, in July 2012, plaintiff filed a motion seeking, among other things, to compel defendant to pay alimony arrears of $11, 500, and to authorize the issuance of a bench warrant should defendant miss two support payments. Plaintiff also sought an award of counsel fees, pursuant to the express terms of the MSA. In response, defendant filed a cross-motion seeking to decrease his alimony obligation to $2500 per month, to recalculate child support pursuant to the Child Support Guidelines, and to compel plaintiff to produce her bank statements and records.
Defendant owns two businesses, Shore Insulation, Inc., and Commercial Thermal Solutions, Inc. In support of his cross-motion, defendant alleged that his 2005-2007 baseline gross income was no longer an accurate depiction of his current income from those businesses. Essentially defendant argued that, over the last three years, he earned as much as $400, 000 less than the $504, 000 gross income used to calculate his support obligation. He alleged that the economy had declined over the last three years, and that his businesses had suffered due to increased costs. Specifically, defendant maintained that he "must now advertise and attend trade shows, " and that "[c]osts of materials have increased and delivery companies now charge surcharges due to fuel costs." Also, the Environmental Protection Agency had issued new regulations, requiring him to create new advertising materials, and market to new customers. Profits had decreased, as the businesses had "been forced to cut our prices by [fifteen-to-twenty percent] to keep up with our competitors." Defendant further represented that his 2009 contract with the military had ended, and consequently his 2011 military sales were reduced from $717, 000 to $50, 000. He alleged that the businesses had $515, 164 in inventory that was not being utilized, accounts receivable of $226, 935 that were uncollected, and liabilities of approximately $641, 000. He was also forced to take out a line of credit with PNC Bank to "keep Shore Insulation afloat[.]"
As a result of the businesses' decline, defendant stated that he no longer took a paycheck from Shore Insulation, and that his monthly income was now only $4623, which was inadequate to meet his $14, 000 monthly support obligation. He was also forced to withdraw approximately $200, 000 from the children's college savings plan to meet his support obligations, although he promised to "take full responsibility for ...