Court Opinion

ID: 4675489
Source: CourtListenerOpinion
Date Created: 2021-04-08 14:08:10.956103+00
Date Added: 2024-06-11T08:03:26.346027
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-1878-19

MEGAN LEPORE,

          Plaintiff-Respondent/
          Cross-Appellant,

v.

GERARD LEPORE,

     Defendant-Appellant/
     Cross-Respondent.
_______________________

                   Submitted February 22, 2021 – Decided April 8, 2021

                   Before Judges Sabatino and DeAlmeida.

                   On appeal from the Superior Court of New Jersey,
                   Chancery Division, Family Part, Morris County,
                   Docket No. FM-14-0759-09.

                   Horn Law Group, LLC, attorneys for appellant/cross-
                   respondent (Jeff J. Horn, of counsel and on the brief;
                   Jessica R. Carosiello, on the briefs).

                   Kozyra & Hartz, LLC, attorneys for respondent/cross-
                   appellant (Judith A. Hartz, of counsel and on the brief;
                   Ronald J. Herman, on the briefs).
PER CURIAM

      This appeal and cross-appeal mainly concern the Family Part's disposition

of a father's post-divorce motion to reduce his child support obligations for the

parties' three unemancipated children. For the reasons that follow, we remand

for a plenary hearing, predominantly to enable the court to reconsider its

determination that it lacked authority to recalibrate the imputed annual earnings

level for the father, which was set forth in the divorcing parties' Property

Settlement Agreement ("PSA") more than eleven years ago.

      Because we are remanding the matter for further development of the

record, we need not discuss the facts comprehensively. The following details

will suffice for our purposes.

      Plaintiff Megan LePore ("the mother") and defendant Gerard LePore ("the

father") were married in June 1998. Three children were born of the marriage:

twin boys born in October 2000, and another son born in December 2002.

      While the parties were married, the father was a business executive in the

pharmaceutical industry, netting annual income between $300,000 to $1.38

million between 2000-2007, with his highest-earning years in 2006 and 2007. 1

1
  We discuss the parties' finances and the terms of the PSA in this opinion by
necessity, as they are at the heart of the issues on appeal. Likewise, the father's
medical condition that has impacted his career decisions also must be
mentioned.
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The father was the primary wage earner while the mother stayed home to raise

the three children.

      In 2005, while the parties were still married, the father was diagnosed with

leukemia. Since his initial diagnosis, the father has had four recurrences, each

time having to undergo chemotherapy treatment. The father contends the cancer

diagnosis, along with "extensive business travel, tremendous stress caused by

the business, and forced time away from family led [him] to sell his shares in

the pharmaceutical marketing business." The father sold his shares in th at

business in 2008, a year before the parties divorced, and a substantial portion of

the profit from the sale was distributed to the mother.

      After leaving the pharmaceutical industry in 2008, the father started a

yoga studio business, Powerflow Yoga.         As a result, his annual income

drastically declined to $82,159 in 2008 and $12,844 in 2009, the year the parties

divorced.

      As of the time of the post-judgment motion filed by the father, Powerflow

had ten locations in New Jersey and two franchise locations in South Carolina.

According to the father's motion certification, Powerflow "operates at a small

loss," and he "recently started to take home a salary of approximately $140,000

per year."

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      The parties divorced in November 2009 and, as we have noted, executed

a PSA with the assistance of their respective counsel.          For purposes of

determining child support and alimony, the parties agreed in the PSA to impute

annual income of $500,000 to the father and $35,000 per year to the mother.

Based on these imputed incomes, the father agreed to pay the mother limited

duration alimony of $14,000 per month for a term of seven years and $4,000 per

month in child support for the three children. The parties divided about $2

million from the sale of the pharmaceutical business, and each have used those

assets to pay the ongoing needs of themselves and the children. According to

the father, he has depleted approximately $3 million in assets since the time of

the divorce. He has paid all of the limited-duration alimony.

      The twins enrolled as first-year undergraduates at a private university in

Pennsylvania in the fall of 2019, and they were residing at college pre-pandemic.

Their college costs are being funded through a combination of 529 savings

accounts and financial aid. Meanwhile, as of the time of the motion practice,

the youngest child was a high school junior living with his mother.

      The father engaged in self-help after the twins started college and

unilaterally reduced his monthly child support payments. He then filed a motion

to modify child support, which the mother opposed in a cross-motion. Both

sides sought counsel fees.

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      After an oral argument at which the father was sworn and answered only

one question (confirming to the judge his present health and his ability to work),

the judge issued an order on December 5, 2019, accompanied by a Statement of

Reasons. The order, in relevant part: (1) adjusted the father's child support

obligation for the youngest child to $465 per week (approximately $2,000 per

month), retroactive to September 17, 2019, the filing date of the father's motion;

(2) reduced the father's child support obligation for the twins combined to

$1,000 per month, retroactive to September 17, 2019; (3) directed the father to

pay child support arrears; and (4) denied both parties' requests for counsel fees.

The order contained other miscellaneous provisions that are not germane to this

appeal.

      On appeal, the father argues the trial court: (1) erred in calculating child

support for one child at home by misapplying the Child Support Guidelines in

excess of $187,200 yearly income pursuant to Rule 5:6A, Appendix IX-

A(20)(b); (2) erred in utilizing the Child Support Guidelines without factoring

in health insurance premiums paid by the father for the benefit of the minor child

pursuant to Rule 5:6A, Appendix IX-A(26); (3) made no finding that the father

is voluntarily underemployed, thereby erring in continuing to impute to the

father an annual income of $500,000; and (4) erred by essentially requiring the

father to work and maintain the level of income imputed to him at the time of

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the divorce indefinitely. The father only appeals the amount of his child support

obligation for the youngest son, and he does not appeal the $1,000 monthly child

support the court directed for the twins.

        In her cross-appeal, the mother argues the trial court erred in calculating

the child support for the youngest child living at home by failing to supplement

the Child Support Guidelines award through the application of the statutory

factors in N.J.S.A. 2A:34-23(a) as allegedly mandated by Rule 5:6A, Appendix

IX-A(20)(b). Additionally, the mother cross-appeals the denial of her counsel

fees.

        In analyzing these contentions, we are guided by familiar principles of

family law and appellate review. In general, a party's motion to modify a support

obligation "rests upon its own particular footing and the appellate court must

give due recognition to the wide discretion which our law rightly affords to the

trial judges who deal with these matters." Martindell v. Martindell, 21 N.J. 341,

355 (1956) (citations omitted). Ordinarily, we will not disturb the trial court's

findings unless they are demonstrated to lack support in the record with

substantial, credible evidence. Rova Farms Resort, Inc. v. Investors Ins. Co., 65

N.J. 474, 483-84 (1974); see also Pascale v. Pascale, 113 N.J. 20, 33 (1988).

Given the Family Part's special expertise, appellate courts must accord particular

                                         6
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deference to fact-finding in family cases, and to the conclusions that logically

flow from those findings. Cesare v. Cesare, 154 N.J. 394, 412-13 (1998).

      That said, we apply de novo review to legal issues raised on appeal in

family cases. Jacoby v. Jacoby, 427 N.J. Super. 109, 116-17 (App. Div. 2012).

In addition, we are empowered to set aside Family Part decisions that are shown

to be arbitrary and capricious. Ibid. At times, we must remand a matter for a

plenary hearing where contested material factual matters must be evaluated with

the benefit of testimony. Conforti v. Guliadis, 128 N.J. 318, 322-23 (1992)

(requiring plenary hearings to resolve material factual disputes); Tretola v.

Tretola, 389 N.J. Super. 15, 20 (App. Div. 2006) (in which a plenary hearing

was required in a child support modification case).

      On the subject of child support, our courts are authorized under N.J.S.A.

2A:34-23 to issue orders providing for the "care, custody, education and

maintenance of the [divorcing parties'] children, or any of them, as the

circumstances of the parties and the nature of the case shall render fit, reasonable

and just. " The statute recites ten factors a court is to consider in calibrating

such child support, including, as is especially pertinent here, the "sources of

income and assets of each parent" (factor three), the "[e]arning ability of each

parent, including educational background, training, employment skills, work

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experience [and other considerations]" (factor four), and the "[a]ge and health

of the child and each parent." N.J.S.A. 2A:34-23(a)(3), (4), and (6).

      Subject to exceptions, the determination of a parent's child support

obligation is generally to be guided by application of the Judiciary's child

support guidelines ("the Guidelines"). Pressler & Verniero, Current N.J. Court

Rules, Appendix IX-A to R. 5:6A (2020). If the parties' combined net annual

income is not above $187,200, then the Guidelines presumptively supply the

appropriate child support amounts for non-impoverished parents. Pressler &

Verniero, Appendix IX-A(20) to R. 5:6A. If, however, the parties' combined

income exceeds $187,200, then our courts utilize the maximum Guidelines

support levels up to that threshold, and then augment that support level with a

discretionary supplement. Pressler & Verniero, Appendix IX-A(20)(b) to R.

5:6A; see, e.g., Isaacson v. Isaacson, 348 N.J. Super. 560, 581 (App. Div. 2002).

Here, the question of whether the parties' combined incomes exceed the

$187,200 Guidelines threshold depends on whether the father's annual income

should continue to be imputed at $500,000, or whether some lower income

should be utilized.

      Also, as a general proposition, child support amounts are subject to

modification by the court if there has been a material change in circumstances

affecting the parties' resources or the child's needs and living situation. Lepis

                                       8
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v. Lepis, 83 N.J. 139, 157 (1980); Jacoby, 427 N.J. Super. at 116, 118-19. In

this case, such a change in circumstances occurred when the two older children

began full-time residency away at college. The father contends that his ongoing

substantially reduced earnings since the time of the PSA also reflect a material

change of circumstances. We need not adopt or reject that argument, since the

departure of the two older sons for college suffices as a material change

requiring the court to conduct a fresh assessment of the unallocated $4,000

monthly support amount for all three sons.

      The critical question posed here—which drives the remaining issues—is

the propriety of the trial court's determination that the PSA's $500,000 imputed

annual income level for the father should remain unaltered. This, in turn, raises

the question of whether the father, whose financial statement reflects that he

earns only $140,000 annually, is "underemployed."

      If a trial court determines that a parent is, "without just cause, voluntarily

underemployed or unemployed," it must impute income to that parent. Pressler

& Verniero, Appendix IX-A(12) to R. 5:6A. Such a finding must be made before

any income is imputed. Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App.

Div. 1998).    A parent is voluntarily underemployed where he or she is

"intentionally failing to earn that which he or she is capable of earning." Ibid.

                                         9
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      When imputing income, trial courts consider the parent's "potential

employment and earning capacity using the parent's work history, occupational

qualifications, educational background, and prevailing job opportunities in the

region." Pressler & Verniero, Appendix IX-A(12)(a) to R. 5:6A. The court also

should consider such additional factors as "the reason for and intent behind

voluntary underemployment or unemployment; the extent other assets are

available to pay support; and the ages of any children in the parent's household

as well as child-care alternatives." Caplan v. Caplan, 182 N.J. 250, 268 (2005).

      An obligor who has "selected a new, less lucrative career must establish

that the benefits he or she derives from the career change substantially outweigh

the disadvantage to the supported spouse [or children]." Storey v. Storey, 373

N.J. Super. 464, 468 (App. Div. 2004). "The burden of persuasion is on the

obligor." Id. at 469.

      The father argues the trial court erred by continuing to impute $500,000

in annual income to him for purposes of determining his child support

obligation. As we have noted, shortly before the divorce in 2009 he earned

approximately $1.2 million annually for two years. However, also before the

divorce, he was diagnosed with leukemia, sold his interest in his pharmaceutical

business, and started a new enterprise operating yoga studios.            In his

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certification, he asserts that the change was occasioned by the physical and

emotional toll of his prior position.

      Although the record presently lacks testimony and credibility findings on

the subject, the annual income of $500,000 imputed to the father in the PSA

appears to have been a compromise figure—one that took into account his prior

earnings, an expected reduction in earnings from the change in his business, and

a prediction that his new enterprise would be profitable. Since that time, the

father has pursued the yoga studio business but, according to his financial

statement and certification, has not generated earnings for him at or near the

$500,000 annual level. In the meantime, the father has suffered four recurrences

of his leukemia, and his children have grown to a point that two of them were

residing away at college, with their sibling in his last two years of high school.

      In assessing the situation, the trial court appears to have been under the

mistaken premise that the $500,000 income imputation within the PSA is a

virtually ironclad contractual commitment. In this regard, the court stated:

            Here, the parties will be imputed income of $35,000
            ([the mother]) and $500,000 ([the father]) because, as a
            matter of contract interpretation, the Court finds that
            the parties intended their imputed incomes to remain
            constant. Further, [the father] testified at oral argument
            that he is physically able to work in the pharmaceutical
            industry.

            [(Emphasis added).]

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The court then compared the modification language in the college-expense

portion of the PSA, Paragraph 20, with the modification language in the child

support provision, Paragraph 12, which states that child support "shall be

adjusted upon a termination of the [father's] alimony obligation or such other

changed circumstances as permitted by law." The court wrote:

            The Court finds it significant that this provision
            [Paragraph 12] does not mention the parties['] changed
            incomes, whereas, another provision contemplated
            such changed financial circumstances. With respect to
            the children's college costs, the parties agreed [in
            Paragraph 20 of the PSA] that: "The parties will discuss
            the children's choice of school in each child's junior
            year of high school. Each party's obligation will be
            based on their respective financial circumstances
            existing at the time."

            Under [the father's] theory, he could have successfully
            moved for a reduction in child support at any time based
            on a substantial reduction in income—a well-
            established changed circumstance under Lepis—
            because he has not earned close to $500,000 after the
            divorce. See Lepis v. Lepis, 83 N.J. 139, 151 (1980)
            (An "increase or decrease in the supporting spouse's
            income" qualifies as a changed circumstance).
            However, that would have undermined the parties'
            compromise to impute income of $500,000 per year—
            which was substantially more than [the father] earned
            at the time of the divorce ($12,844 in 2009) but
            significantly less than he earned in the two years before
            he left the pharmaceutical industry to start a yoga studio
            ($1,129,416 in 2006 and $1,378,153 in 2007).

                                       12
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              For these reasons, the Court finds that [the mother]
              should be imputed income of $35,000 per year and [the
              father] should be imputed income of $500,000 per year.
              The Court will thus use these imputed incomes for
              purposes of calculating [the father's] child support
              obligations for the college students and the youngest
              son.

      With all due deference to the trial court, this analysis treats the $500,000

income imputation within the 2009 PSA with undue rigidity.              To be sure,

provisions negotiated by divorcing couples within their marital settlement

agreements have characteristics of contractual obligations, and should not be

lightly set aside or altered. Quinn v. Quinn, 225 N.J. 34, 45 (2016). Even so,

"Family Part judges possess a broad supervisory role in determining the fairness

of agreements between spouses." Fattore v. Fattore, 458 N.J. Super. 75, 87

(App. Div. 2019). "In each case the court must determine what, in the light of

all the facts presented to it, is equitable and fair, giving due weight to the strong

public policy favoring stability of arrangements." Smith v. Smith, 72 N.J. 350,

360 (1977).

      "[T]he law grants particular leniency to agreements made in the domestic

arena" and vests "judges greater discretion when interpreting such agreements."

Quinn, 225 N.J. at 45-46 (citations omitted). "This leniency is derived from the

terms of the marital agreement and the nature of some post-judgment issues,

such as . . . financial support for the family, that may require modification of the

                                         13
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marital agreement over the years as events occur that were never contemplated

by the parties." Id. at 46 (emphasis added).

      We are unpersuaded that the mention of the termination of alimony in

Paragraph 12 of the PSA as a triggering event for adjusting child support

signifies that no other subsequent event or circumstance could enable the court

to modify that support. To the contrary, Paragraph 12 also states modification

may be warranted by "such other changed circumstances as permitted by law."

Nor are we persuaded that the mention of the parties' "respective financial

circumstances existing at the time" in Paragraph 20 of the PSA concerning future

college expenses rules out the court's fair consideration of the parties' actual

income history on a motion to modify child support. In effect, the trial court

treated the $500,000 income imputation as impervious, even though the PSA

contains no "anti-Lepis" provision. This inflexible approach was erroneous.

Indeed, the trial court never made a finding the father is or has been

underemployed, an omission which implies his actual post-divorce annual

earnings deserve fair consideration.

      Because the record is not well developed on these issues, we remand for

a plenary hearing. At such a hearing, the court can elicit fulsome testimony on

the relevant subjects, including, but not limited to, the father's earnings history

and business management, his health factors, his ability to resume working in

                                        14
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the pharmaceutical or comparable industry after more than a decade of absence,

the mother's own circumstances, the original intent of the parties in the PSA, the

children's present needs, and other matters bearing on support. As part of that

hearing, the court may consider the impact of the COVID-19 pandemic on the

twins' college residency and on the father's yoga business, and whether the third

son is about to begin college.

      Because of the interdependency of the income-imputation issue with the

other issues raised on appeal, we decline to adjudicate them here, including the

denial of counsel fees to both parties. Those issues can be further addressed at

the plenary hearing on remand. In the meantime, the trial court's December 2019

order will provisionally remain in place, subject to adjustment by that court.

      Remanded for a plenary hearing. We do not retain jurisdiction.

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