Submitted: November 3, 2014.
Approved for Publication February 23, 2015.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-2214-11.
Townsend, Tomaio & Newmark, LLC, attorneys for appellant ( John E. Clancy, on the briefs).
Jordana Elrom, respondent, Pro se.
Before Judges LIHOTZ, ST. JOHN and ROTHSTADT. The opinion of the court was delivered by LIHOTZ, P.J.A.D.
[439 N.J.Super. 427] OPINION
Defendant, Elad Elrom, appeals from provisions set forth in a November 19, 2012 final judgment of divorce (FJOD), entered following trial. He challenges the imputation of income to the parties for the purpose of calculating child support and limited [439 N.J.Super. 428] duration alimony payable to plaintiff Jordana Elrom. Defendant also challenges supplemental child support added for child care and extracurricular activities, the allocation of assets equitably distributed, and appeals from a February 21, 2013 order denying reconsideration of the FJOD's terms.
Following our review of the issues raised on appeal, in light of the record and the applicable law, we agree the judge erred in increasing child support by work-related child-care costs during a period of plaintiff's unemployment and the cost of the children's everyday extracurricular activity expenses, which generally are included in the amount of child support. In all other respects, including the imputation of income, we affirm.
The facts pertinent to our review are taken from the five-day trial record. The parties appeared self-represented and presented testimony regarding their incomes, along with fact testimony from plaintiff's father and expert testimony. Numerous documents were introduced into evidence regarding the parties' respective incomes, expenses, and assets.
The parties, who are now thirty-eight, were married in February 2005 and separated in September 2010. They have two young children, who were born in 2008 and 2010. Prior Family Division proceedings between the parties were consolidated into
this matter (FD-02-435-11) or dismissed. Although the parties litigated custody and parenting time at trial, they successfully mediated an agreement, largely resolving custody issues.
Plaintiff is an attorney, licensed to practice in New York and New Jersey. When she married defendant, she worked in Newark earning an annual salary of $102,000. Thereafter, she took a position with a New York firm, earning $175,000 per year. In early 2008, just prior to the birth of the parties' first child, plaintiff was laid off. She testified the parties agreed she would stay home to raise the children, possibly working part-time. In 2009, plaintiff commenced part-time employment, working ten to fifteen hours per week. When the parties separated, she earned $67.50 [439 N.J.Super. 429] per hour, working approximately twenty-six hours per week. Plaintiff next secured an associate's position earning $80,640, but lost her job prior to trial. Asserting child-care obligations required she " focus her job search on New Jersey firms," plaintiff intended to seek a New Jersey position and asked " the [c]ourt impute [to] her a salary of $80,640.00."
Defendant is a software engineer, technical writer, web developer, and entrepreneur. In the past, he held positions with Sigma, HBO, Weight Watchers, and MTV. During an earlier non-dissolution matter, he earned $193,375 per year as a consultant for HBO. Before trial, he changed jobs, and was employed as the chief technical officer for ChatAnd Inc. (ChatAnd), earning a base salary of $120,000, with potential to earn as much as $295,000. Defendant also owned Elrom LLC, which performed consulting services, sponsored an annual technology trade show, and participated in several start-up companies.
At trial, plaintiff produced documents evincing defendant's income, and explained he was not compliant with her discovery demands. Plaintiff asserted during the marriage, defendant received income from " clients on the side" and royalties from three books he authored. Plaintiff also discovered defendant started a company in Las Vegas on February 2, 2012, called Effective Idea, LLC, and withdrew funds from Elrom LLC's account, which he transferred to an account at Banca Privada d'Andorra. Defendant stipulated the Andorra account held $67,978.
As to the marital standard of living, plaintiff explained the parties lived an " upper middle class, at times, lavish lifestyle" before the children were born. They owned a New York City apartment. When they moved to Englewood in anticipation of the birth of their second child, they rented their apartment. After separating, defendant moved to New York City, while plaintiff and the children moved into her parents' home in Montville. Plaintiff [439 N.J.Super. 430] had residential custody of the children. She sought alimony and listed her actual expenses " to the penny" in an amended case information statement (CIS).
Larry Frankel, CPA, CFF, plaintiff's expert forensic accountant, examined monies deposited into the parties' various bank accounts to calculate defendant's annual income. Frankel concluded deposits into Elrom LLC's account from January 2009 to February 2012, totaled $903,241. Reducing the sums by an estimated twenty to thirty percent for overhead, he asserted profit, exclusive of taxes, amounted to seventy to eighty percent.
Defendant countered with testimony from his forensic employability expert
Gary Young, whose vocational evaluations addressed the likely earnings of the parties. Young's reports were not provided in the appellate record.
Young concluded defendant was likely to earn $120,000 annually as a software engineer and technical writer. He based this opinion on his review of defendant's resume and a telephone interview, but acknowledged he was not provided with defendant's ChatAnd contract, and did not consider defendant's earning capacity as a consultant.
Young also offered testimony regarding plaintiff's employability, although he did not interview her. After considering her degrees and bar admissions, he conducted research using Internet sources and suggested her earning possibilities, primarily in New York City, ranged from " $108,740 to $177,850." Young did not factor parenting responsibilities, the children's special needs, or day care availability into this calculus.
Defendant next offered Jonathan Klopchin, a credentialed IT recruiter. His report is not included in the record. Evaluating defendant's experience with " Flash, Flex, Front and implementation" technologies, which Klopchin explained were declining in demand, he asserted a full-time Flex engineer could make $100,000 to $150,000, although some Flex developers could garner more than $200,000, which was " more the exception than the rule." [439 N.J.Super. 431] He stated a Flex consultant would be " fortunate to get [$]90 an hour" and " a lead developer" could earn $165,000.
During defendant's direct testimony, he asserted the actual gross receipts of Elrom LLC for 2010 were merely $145,000. He argued Frankel's use of deposits inflated estimated income because it included rental receipts from the New York City apartment and funds withdrawn but re-deposited. However, defendant later admitted he received receipts of $19,000 in royalties and $88,000 from consulting, and spent $11,000 in payroll expenses. The sums, along with his salary, make his total 2010 income $252,000. Defendant discussed his reported receipts in 2011, as captured on Schedule C of his federal tax return, which totaled $250,000. He mentioned $206,000 in consulting fees from HBO, a position he lost. Defendant also asserted ChatAnd just terminated his services, and his last paycheck was July 27, 2012. Defendant suggested $120,000 per year should be imputed to him, as opined by Young.
Following trial, the judge issued a written opinion granting plaintiff's request for divorce. Addressing the collateral issues arising upon the dissolution of the marriage, the judgment awarded plaintiff limited duration alimony for three years in the amount of $1,000 per week " based upon the differential in their earnings, [p]laintiff's needs and [d]efendant's ability to pay." The judgment further ordered defendant to pay child support in the amount of $697 per week, which included insurance premiums and work-related child care, plus fifty percent of the children's uncovered medical costs, exceeding $250 per child, and fifty percent of the children's extracurricular and sporting activity fees, provided defendant consents to their participation in advance. Defendant received an $8,702 credit for overpayment of work-related child-care expenses.
[439 N.J.Super. 432] In calculating support, the judge found plaintiff's income was represented by her last full-time job, as an ...