Court Opinion

ID: 3062489
Source: CourtListenerOpinion
Date Created: 2015-10-14 16:09:11.071666+00
Date Added: 2024-06-11T11:49:34.600116
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                     APPROVAL OF THE APPELLATE DIVISION

                                                SUPERIOR COURT OF NEW JERSEY
                                                APPELLATE DIVISION
                                                DOCKET NO. A-2655-14T1

DEBORAH SPANGENBERG,
                                                  APPROVED FOR PUBLICATION
       Plaintiff-Respondent,
                                                      October 14, 2015
v.
                                                      APPELLATE DIVISION
DAVID KOLAKOWSKI,

     Defendant-Appellant.
_______________________________

           Submitted September 21, 2015 - Decided October 14, 2015

           Before Judges Lihotz, Fasciale and Nugent.

           On appeal from Superior Court of New Jersey,
           Chancery   Division,  Family   Part,  Morris
           County, Docket No. FM-14-976-10.

           David Kolakowski, appellant pro se.

           Deborah Spangenberg, respondent pro se.

       The opinion of the court was delivered by

LIHOTZ, P.J.A.D.

       Defendant     David   Kolakowski        appeals   from    a    September   19,

2014   Family   Part     order    denying       his   motion     to   terminate    or

suspend   his   obligation       to     pay    alimony   to     his   former   wife,

plaintiff Deborah Spangenberg.                Defendant maintains plaintiff's

cohabitation,      combined      with    his    decreased       earnings,    require

termination     of    alimony    under        newly   enacted     subsection      (n),
amending N.J.S.A. 2A:34-23.           Defendant also moved to recalculate

child support and the parties' obligation for college costs.

Finally,   defendant      appeals     from    the       November    7,     2014     order

denying reconsideration.

       We have considered the arguments in light of the record and

applicable     law.      We    reject    defendant's         argument        to     apply

N.J.S.A.     2A:34-23(n)       as     the      statutory           provisions         are

inapplicable      to    post-judgment        orders      finalized         before     the

statute's effective date.           However, we agree a plenary hearing

is    necessary   to    determine     whether       a    substantial        change     in

economic circumstances warrants a modification of alimony and

child support.

       The essential facts are not disputed.                   The parties were

divorced in June 2012, twenty years after they married.                               All

collateral   issues     were   resolved       and   set     forth     in    a     marital

settlement agreement (MSA) incorporated into the final judgment

of divorce (FJOD).

       Specific to the issues on appeal, the MSA at paragraph 16

provided defendant's agreement to pay $2200 per month alimony,

calculated using imputed annual incomes for plaintiff of $45,000

and   defendant    of   $125,000.       The    parties       agreed      the      alimony

amount would be reviewed "on or about June 7, 2014," based on

the    "expectation     that    the     [plaintiff]'s         income        will     have

                                        2                                       A-2655-14T1
increased by that time as a result of additional training or

other factors."       Toward this objective, the parties consented to

exchange income information including "their 2013 tax returns,

W-2s,    K-1   from     [defendant's   business]      and   other    supporting

documents, and their current paystubs, no later than June 1,

2014."    Further, plaintiff agreed to inform defendant "when she

[wa]s    cohabiting     with   another,"   which     triggered   a    review    of

alimony "consistent with the Gayet1 case and evolving caselaw

[sic]."

      Regarding child support, paragraph 7 included the parties'

agreement for defendant to contribute $122 per week to support

the   parties'    two    children.     Anticipating     future      events,    the

parties' MSA set forth specific modified support amounts, using

the child support guidelines and a "blended rate" of support in

anticipation     of     college   attendance   and    emancipation.        These

included:      if one child was living at college and one was living

with plaintiff and both were unemancipated, weekly child support

would be $91; if one child was emancipated and the other was

living at home, child support would be $78; and if one child was

emancipated and the other was living at college, the weekly

child support would be $52.

1
     Gayet v. Gayet, 92 N.J. 149, 155 (1983) (addressing the
impact of cohabitation on alimony).

                                       3                                A-2655-14T1
     Paragraph 13 addressed college expenses, stating:

            The parties agree that, at the present time,
            neither party has the ability to pay for
            college for the children . . . .       In the
            event   that   the   parties'   circumstances
            change, they shall revisit the issue of
            college contribution with a view toward a
            contribution    proportionate     to    their
            respective      financial      circumstances.
            However, neither party shall be called upon
            to contribute to college if that party has
            not been consulted with regard to the cost
            of same and the selection of college.

     Defendant moved to modify his alimony obligation, alleging

plaintiff   was    cohabiting.      Also,    he   sought   to    reduce   child

support because the parties' oldest child was residing with him.

Plaintiff admitted she moved to her boyfriend's residence on

August 31, 2013.        She objected to a reduction in child support

because the older child resumed living with her and the younger

child was attending college in Washington, D.C.

     The     Family      Part      judge     considered         "the   parties

submissions[,] as well as their testimony" and the testimony of

plaintiff's boyfriend.2        As reflected in the statement of reasons

accompanying      the   December   18,     2013   order,   the    judge   found

plaintiff    received     an    economic     benefit   from      cohabitation,

warranting modification of alimony.           He found plaintiff's actual

income was higher and defendant's was lower than the amounts set

2
     The hearing transcripts are not included in the record.

                                      4                                A-2655-14T1
forth in the MSA; however, when he calculated alimony and child

support,    the    judge       used    the    MSA's    imputed     income    figures.

Defendant was ordered to pay $1350 per month alimony and $339

per week child support, until the older child                        commenced the

spring 2014 semester in mid-January 2014, at which time child

support would decrease to $150 per week.3

     Defendant's motion for reconsideration seeking to review

plaintiff's   need       for    alimony      was   denied   on    March     26,   2014.

Finding    defendant's         request    "premature,"      the    judge     concluded

"review shall take place in June of 2014."                       Reconsideration of

that order was also denied.

     On July 21, 2014, defendant moved to modify or terminate

alimony, as provided by the MSA's two-year review provision.                         He

sought    enforcement      of    prior       orders,    application    of     the   MSA

provisions, emancipation of the older child, and a concomitant

recalculation      of    child        support.        Plaintiff    cross-moved      for

enforcement       of    litigant's       rights    because       defendant    stopped

paying alimony.

     The Family Part judge did not entertain oral argument prior

to filing the September 19, 2014 order under review.                       Relying on

3
     The order included various computations resulting in
credits to the parties. As is the case with this and the other
orders under review, these computations for credits are
indirectly subject to appeal to the extent they relate to
alimony and child support calculations modified by our opinion.

                                             5                                A-2655-14T1
the reduction in alimony ordered upon a finding of plaintiff's

cohabitation       and     stating    defendant's       asserted        reduction       in

income was "surely not a permanent situation," the judge denied

further modification, despite plaintiff's "slight increase" in

earned     income.           Without        elaborating,     the        judge      found

"[d]efendant       has     'chosen'     not       to   divulge      his     financial

documentation"       and    "[p]laintiff         has   graciously       consented      to

emancipate [the older child]."                   Accordingly, using the MSA's

imputed    level    for    defendant    and      plaintiff's     "actual"       income,

child support for the younger child was reset at $99 per week

and defendant was ordered to pay 59% of the child's college

expenses.

      Defendant's subsequent motion for reconsideration of these

determinations resulted in the November 7, 2014 order, which

denied    his   requests      to     reduce      alimony,   child       support,      and

college costs.           In the accompanying statement of reasons, the

judge found "[d]efendant produced page 1 of his 2012 tax return

and pages 1 and 2 of his 2013 tax return.                    No W-2[]s, K-1[]s,

1099[]s [or] tax schedules were produced," nor did he supply the

income tax return for his sub-chapter S corporation.                        The judge

concluded: "Defendant continues to focus on the calculation of

his   income[,]     but     has    failed    and/or    refused     to    present      his

complete    financial       picture.            Self-employed    individuals          are

                                            6                                   A-2655-14T1
always     subject   to    more       scrutiny          when    it     comes    to      their

finances."     Acknowledging income averaging may be appropriate

when determining the earnings of self-employed individuals for

support    purposes,      the    judge    nonetheless,            declined      to     do   so

because     defendant     "failed        to       provide       sufficient      financial

documentation."      This appeal ensued.4

    When reviewing a trial judge's order, we defer to factual

findings     "supported          by    adequate,            substantial,         credible

evidence."     Gnall v. Gnall, __ N.J. __ (2015) (slip op. at 14)

(citing     Cesare   v.    Cesare,        154 N.J. 394,    411-12    (1998)).

Reversal is warranted only when a mistake must have been made

because the trial court's factual findings are "'so manifestly

unsupported by or inconsistent with the competent, relevant and

reasonably    credible     evidence       as       to    offend       the   interests       of

justice . . . .'"       Rova Farms Resort, Inc. v. Investors Ins. Co.

of Am., 65 N.J. 474, 484 (1974) (quoting Fagliarone v. Twp. of

N. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied,

40 N.J. 221 (1963)).            On the other hand, a "trial judge's legal

conclusions, and the application of those conclusions to the

4
     On May 12, 2015, plaintiff filed a Family Part case
information statement with accompanying financial documentation,
with her merits brief.   Certainly the facts set forth in these
documents are relevant; however, because this information was
not presented in the motions before the Family Part, we will not
consider it in our review.

                                              7                                      A-2655-14T1
facts, are subject to our plenary review."                Reese v. Weis, 430
N.J. Super. 552, 568 (App. Div. 2013).

      Defendant    maintains   the    judge     abused    his   discretion    in

ignoring the terms of the MSA when denying his request to modify

alimony   and     child     support     despite     evidence      of   changed

circumstances.     Further, he argues the judge erroneously imposed

college expense obligations using an artificially high imputed

income.   Arguing he should have been granted a plenary hearing

on these issues, defendant also asserts adopted amendments to

the   alimony     statute   addressing        cohabitation      were   ignored.

Finally, he asserts the determinations regarding the inadequacy

of his financial disclosures and plaintiff's continued need for

support were unfounded.

      The Family Part judge's authority to modify alimony and

support orders is found in N.J.S.A. 2A:34-23, which states:

          Pending any matrimonial action . . . brought
          in this State or elsewhere, or after
          judgment of divorce . . . the court may make
          such order as to the alimony or maintenance
          of the parties, and also as to the care,
          custody, education and maintenance of the
          children, . . . as the circumstances of the
          parties and the nature of the case shall
          render fit, reasonable and just . . . .
          Orders so made may be revised and altered by
          the court from time to time as circumstances
          may require.

      Our courts have interpreted this statute to require a party

who   seeks   modification     to     prove    "changed    circumstances[.]"

                                       8                               A-2655-14T1
Lepis v. Lepis, 83 N.J. 139, 157 (1980) (citation omitted).

Other circumstances considered include "whether the change in

circumstance is continuing and whether [an] agreement or decree

has   made    explicit         provision       for    the       change."       Id.    at    152.

Accordingly, each and every motion to modify support "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).                                    See also

Innes v. Innes, 117 N.J. 496, 504 (1990) ("The modification of

alimony    is     best    left     to    the    sound       discretion        of    the    trial

court.").         While an "abuse of discretion . . . defies precise

definition," we will not reverse the decision absent a finding

the   judge's       decision      "rested       on    an        impermissible        basis[,]"

considered        "irrelevant      or    inappropriate            factors[,]"        Flagg    v.

Essex Cnty. Prosecutor, 171 N.J. 561, 571-72 (2002) (citations

and   internal         quotation      marks     omitted),          "failed     to     consider

controlling legal principles or made findings inconsistent with

or unsupported by competent evidence."                           Storey v. Storey, 373
N.J. Super. 464, 479 (App. Div. 2004).

      In     Lepis,      the    Court    described          a    test    to    discern      when

financial circumstances have significantly changed from those

underpinning an order under review, in this way: "The supporting

                                               9                                       A-2655-14T1
spouse's   obligation   is   mainly     determined   by    the    quality   of

economic life during the marriage, not bare survival.               The needs

of the dependent spouse and children contemplate their continued

maintenance at the standard of living they had become accustomed

to prior to the separation."            Lepis, supra, 83 N.J. at 150

(citations and internal quotations omitted).

    For    decades   this    standard    has   guided     the    exercise   of

reasoned discretion of our Family Part judges.                  Recently, the

Legislature adopted amendments to N.J.S.A. 2A:34-23, designed to

more clearly quantify considerations examined when faced with a

request to establish or modify alimony.           L. 2014, c. 42, § 1.

Apt to this matter, the amendments include provisions regarding

modification of alimony and the effect of a dependent spouse's

cohabitation, stating:

           l.   When   a   self-employed   party   seeks
           modification   of  alimony   because  of   an
           involuntary reduction in income since the
           date of the order from which modification is
           sought, then that party's application for
           relief must include an analysis that sets
           forth the economic and non-economic benefits
           the party receives from the business, and
           which compares these economic and non-
           economic benefits to those that were in
           existence at the time of the entry of the
           order.
           m.   When assessing a temporary remedy, the
           court may temporarily suspend support, or
           reduce support on terms; direct that support
           be paid in some amount from assets pending
           further   proceedings;   direct  a   periodic
           review; or enter any other order the court

                                   10                                A-2655-14T1
              finds appropriate to assure              fairness      and
              equity to both parties.

              n.   Alimony may be suspended or terminated
              if the payee cohabits with another person.
              Cohabitation involves a mutually supportive,
              intimate personal relationship in which a
              couple has undertaken duties and privileges
              that are commonly associated with marriage
              or civil union but does not necessarily
              maintain a single common household.

              [N.J.S.A. 2A:34-23(l)-(n).]

The statute also lists factors to be examined "when assessing

whether cohabitation is occurring[.]"              N.J.S.A. 2A:34-23 (n)(1)

to (7).

      Here, plaintiff conceded she began cohabiting on August 31,

2013.     Accordingly,     our     review    is    limited      to    whether        the

statute's      cohabitation      amendments,      requiring     alimony         to   be

terminated      or   suspended,     apply.        To    examine      whether         the

Legislature intended N.J.S.A. 2A:34-23(n) to affect agreements

or   orders    adopted   prior    to   its   enactment,    we     turn     to    rules

guiding statutory review.

              The goal of all statutory interpretation "is
              to give effect to the intent of the
              Legislature." Aronberg[ v. Tolbert], 207
              N.J. [587,] 597 [2011].    We first look to
              the statutory language, which generally is
              the "best indicator" of the Legislature's
              intent. DiProspero v. Penn, 183 N.J. 477,
              492 (2005).    Only if the language of the
              statute is shrouded in ambiguity or silence,
              and   yields    more  than   one   plausible
              interpretation, do we turn to extrinsic

                                        11                                  A-2655-14T1
            sources, such as legislative history.                     Id.
            at 492-93.

            [Maeker v. Ross, 219 N.J. 565, 575 (2014).]

Courts generally will enforce newly enacted substantive statutes

prospectively,   unless    the    laws       clearly        expresses    a   contrary

intent.

    The     amendments    to   N.J.S.A.           2A:34-23     themselves     do   not

contain   language   specific      as        to     implementation,      except      to

provide the amendments are effective immediately, on September

10, 2014.     However, the bill adopting the alimony amendments

adds this provision:

            This act shall take effect immediately and
            shall not be construed either to modify the
            duration of alimony ordered or agreed upon
            or   other    specifically   bargained  for
            contractual   provisions   that  have  been
            incorporated into:

            a.   a   final       judgment           of      divorce     or
            dissolution;

            b.   a final order that has concluded post-
            judgment litigation; or

            c.   any   enforceable                written     agreement
            between the parties.

            [L. 2014, c. 42, § 2.]

This additional statement signals the legislative recognition of

the need to uphold prior agreements executed or final orders

filed before adoption of the statutory amendments.

                                        12                                   A-2655-14T1
       Here, the MSA provided for a review of defendant's alimony

obligation         upon    plaintiff's          cohabitation.              Moreover,         the

parties'         agreement        anticipated          application           of       "evolving

case[]law," recognizing their rights and obligations would be

refined in the event of cohabitation.

       In December 2013, the court conducted such a review of the

economic effect of plaintiff's admitted cohabitation.                                 In light

of the then current case law, the judge reduced alimony based on

the economic benefit received by the dependent spouse.                                   Reese,

supra,     430     N.J.   Super.     at   570-71.           He    determined          plaintiff

received      an       economic    benefit          from     cohabiting,          established

plaintiff's monthly need at $5828, and noted plaintiff's 2013

gross income increased more than 13.5% and defendant's actual

2012 income decreased 8.9% from the levels imputed in the MSA.

However, the judge concluded "the parties agreed and bargained

for    a     $125,000      imputation          to     [d]efendant       and       a    $45,000

imputation to [p]laintiff as their annual incomes," which he

used   and    reduced      alimony    from          $2200   per    month     to    $1350     per

month.       The order was not appealed, making this determination

final.

       Because      the   post-judgment         order       became     final      before     the

statutory        amendment's       effective         date,       the   new     cohabitation

provisions        do    not   apply       or    otherwise         impact       the     alimony

                                               13                                      A-2655-14T1
determination.             Accordingly,          the    order     reducing       alimony

supported by substantial evidence in the record, to which the

judge correctly applied the law, shall not be altered.

      Defendant       also     challenges       plaintiff's      adequate       need   for

alimony    and    his     ability    to    pay       support    because    of    changed

economic circumstances.             When asked to consider this in the

course of earlier motions, the judge declined because the issue

was "not ripe[,]" interpreting the MSA to prohibit modification

based on income reductions prior to June 7, 2014.                          Defendant's

subsequent motion for a plenary hearing to determine plaintiff's

needs and his ability to pay were denied.                      Each time, the judge

reiterated alimony review would not be undertaken until June 7,

2014.     Once the trigger date passed, defendant again applied for

relief, which again was denied.

      Concerning        the    rejection        of   defendant's     request       for    a

plenary hearing, he argues the trial judge ignored both the need

for   imputation      of      additional    income       to    plaintiff    and     facts

proving     significant          changes        in     the      parties'      financial

circumstances since the FJOD's entry.                   Instead, the judge found

defendant's application was "not justified," and denied relief

in the September 19, and November 17, 2014 orders.                         He reasoned

the   business's      loss     of   one    of    two    customers    was    "typically

indicative       of   a    temporary      change"       and     defendant's      alleged

                                           14                                    A-2655-14T1
decrease in income was "surely not a permanent situation."                                  The

judge also concluded defendant had "chosen" not to divulge his

financial       information,        but    did     not       describe       the    missing

financial       disclosure.         Finally,      the       judge     did   not     address

defendant's claim maintaining plaintiff failed to disclose her

income information as required by the MSA.

      We    find     the     record      does    not       support     these      findings.

Accordingly, we reverse and remand the challenged orders.

      Defendant      had     been   claiming      a    business       downturn        and   an

inability to earn $125,000 since entry of the FJOD.                            Plaintiff's

rejection       of   these      claims    based       on    her      knowledge     of       how

defendant's business worked creates a material dispute of fact,

implicating questions of credibility.                      In his motion, defendant

supplied his case information statement executed on February 10,

2014, attached pay stubs from June 2 to June 20, 2014, his 2013

federal Form K-1 recording distributions from his business; and

his   2013      individual       federal        income       tax     Form    1040,      with

schedules.           Plaintiff's          cross-motion         included         her     case

information statement executed on August 12, 2014, and attached

two pages from her 2013 individual federal income tax Form 1040,

her 2013 W-2, and pay stubs for the period June 23, 2014 to

August     3,   2014.      In    their     respective        motions,       both    parties

                                            15                                     A-2655-14T1
decried the sufficiency of the other's submission.5                    Perhaps oral

argument would have illuminated whether additional discovery was

actually    necessary.          Nevertheless,       we    determine     defendant's

submissions satisfactorily presented a prima facie showing of a

decrease   in     income.       Further       examination    of   defendant's      and

plaintiff's change in earnings should have occurred through an

evidentiary hearing.            We discern no factual support for the

trial   judge's       finding    that    defendant's        efforts    to    increase

earnings and reduce expenses following customer losses could be

assumed    to    be     "temporary"     or    otherwise     within     his   control.

Another issue raised, but never addressed, was whether plaintiff

complied with the expectations set forth in the MSA to enhance

her earning capacity.            The failure to consider these crucial

elements   of     the    parties'     financial    circumstances        require    the

order denying review of alimony to be reversed.

     The   material       factual     disputes     presented      by   the   parties'

pleadings bear directly on the legal conclusions required to be

made and these disputes can only be resolved through a plenary

hearing.        Hand v. Hand, 391 N.J. Super. 102, 105 (App. Div.

2007) (stating a plenary hearing is necessary when the parties'

5
     Plaintiff's completed case information statement                    filed with
this court may more comprehensively satisfy the MSA's                    requisites
for disclosure.   However, this was not provided to                       the trial
court and the case information statement presented to                    and relied
upon by the trial judge was incomplete.

                                             16                              A-2655-14T1
submissions       show   a   genuine    and    substantial   factual         dispute).

Importantly, "[t]he credibility of the parties' contentions may

wither, or may be fortified, by exposure to cross-examination

and through clarifying questions posed by the court[]" in a

plenary hearing.         Barblock v. Barblock, 383 N.J. Super. 114, 122

(App. Div.), certif. denied, 187 N.J. 81 (2006).

      Further, the level of the parties' respective incomes bears

directly on the amount of child support, and whether and to what

extent they are able to contribute to college costs.                      Absent an

accurate    determination       of     the    parties'   incomes,       the    ordered

child support and college payments are unfounded and also must

be reversed.6

      Accordingly, the provisions of the September 19, 2014 order

denying defendant's motion to review alimony, fix child support,

and   establish      college    contributions,       must    be   vacated.          The

matter     is    remanded     for    further     proceedings      and    a     plenary

hearing.        Provisions in the November 7, 2014 order addressed to

these same issues are also vacated.                  On remand, a different

6
     We reject defendant's challenge to the judge's disregard of
the MSA's child support step-down provisions.      The change in
alimony, as ordered in December 2013, was sufficient to
disregard the child support contingencies set forth in the MSA,
because these levels of child support were not only based on the
parties' respective imputed incomes, but also the initial level
of alimony of $2200 per month. Once the latter was changed, the
MSA support contingencies were no longer applicable.

                                         17                                   A-2655-14T1
Family Part judge must conduct the proceeding, as prior orders

incorrectly drew credibility determinations.

       We add these additional comments to arguments raised by

defendant on appeal.         First, understanding defendant is the sole

stockholder of his corporate employer, prior to conducting a

plenary hearing regarding defendant's modification request, the

court should conduct a case management conference to determine

the applicability of N.J.S.A. 2A:34-23(l).                      As necessary, the

judge     may    allow    discovery.          Second,      absent      circumstances

permitted by law, plaintiff's boyfriend's income is not subject

to     review,   except     perhaps    as     proof     of    plaintiff's          rental

payments.        Third,    in   fixing   child    support,        the    court      must

delineate the expenses determined to be covered by the support

award.     Finally, when computing college contributions, the court

must     initially       determine     the     parties'        ability        to    pay,

acknowledging      defendant's       obligation       to     satisfy    any    ordered

alimony and child support prior to determining his ability to

make college contributions.

       Affirmed in part, reversed in part, and remanded for a

plenary hearing.         We do not retain jurisdiction.

                                         18                                    A-2655-14T1