Court Opinion

ID: 4657793
Source: CourtListenerOpinion
Date Created: 2021-02-05 15:08:42.318544+00
Date Added: 2024-06-11T08:01:23.689961
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NOT FOR PUBLICATION WITHOUT THE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-0496-19T2

MARIA D. NEWMAN,

          Plaintiff-Respondent/
          Cross-Appellant,

v.

MARK T. NEWMAN,

     Defendant-Appellant/
     Cross-Respondent.
_______________________

                   Submitted January 6, 2021 – Decided February 5, 2021

                   Before Judges Whipple, Rose, and Firko.

                   On appeal from the Superior Court of New Jersey,
                   Chancery Division, Family Part, Bergen County,
                   Docket No. FM-02-2265-11.

                   LaRocca Hornik Rosen Greenberg, attorneys for
                   appellant/cross-respondent (Frank J. LaRocca and
                   Rotem Peretz, on the briefs).

                   Price Meese Shulman & D'Arminio, PC, attorneys for
                   respondent/cross-appellant (Cathy J. Pollak, of counsel
                   and on the briefs; Aaron Cohen, on the briefs).
PER CURIAM

      In this post-judgment matrimonial matter, defendant Mark T. Newman

appeals from paragraphs one and two of an August 26, 2019 order entered by

the Family Part judge denying his request for a recalculation of child support

based upon a substantial change in circumstances and denying his request for a

reallocation of responsibility between the parties for expenses not included in

child support under the Child Support Guidelines in proportion to the parties'

net incomes. Plaintiff Maria D. Newman cross-appeals paragraph seventeen of

the order denying her request for counsel fees. We affirm.

                                         I.

      We derive the following pertinent facts from the record. The parties were

divorced in November 2013, after eighteen years of marriage. They have a son,

J.N.,1 born in January 2008, age thirteen. The parties entered into a prenuptial

agreement prior to their marriage. Following a lengthy trial, a judgment of

divorce (JOD) was entered. The parties were granted equal parenting time with

J.N., and neither party was designated as the parent of primary residence.

1
  We use initials to identify the child to protect and preserve his confidentiality.
R. 1:38-3(d)(13).
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                                         2
      As per the amended judgment of divorce (AJOD), defendant was ordered

to pay child support directly to plaintiff of $3000 per month. He was also

obligated to pay 95% of J.N.'s summer camp, extracurricular activities,

unreimbursed medical expenses, with the exception of the first $250 incurred

per year in accordance with Rule 5:6A, equipment for sports and hobbies, cost

of enrichment at school, and any extraordinary expenses as defined by law.

Plaintiff has two children from a prior marriage and pays $562.50 per month in

child support to the father of those children.

      In July 2009, defendant became employed at Morgan Stanley and signed

a promissory note for $2,259,000 in forgivable loans, with a 3% per annum rate

of interest, "to recruit individuals from competitors." Defendant entered into

two more such arrangements after meeting incentive goals:           $627,500 in

November 2009 and $288,960.71 in August 2011. These funds were deposited

by defendant into an account in his sole name. Defendant claimed these assets

were exempt from equitable distribution under the terms of the parties'

prenuptial agreement.     The AJOD, filed on December 11, 2013, which

incorporated the trial judge's findings of fact and conclusions of law from the

trial, stated "[p]laintiff works on a base salary plus commissions. The defendant

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works based on commissions and has an advance which he must pay back to his

employer over a period of time."

      The AJOD provided it was "appropriate to base child support on the last

three years' gross earned income for the parties." Plaintiff's gross earned income

for the most recent three years preceding the divorce was: $59,930 in 2010;

$67,732 in 2011; and $65,302 in 2012. Her average income was $64,141.

Defendant's gross earned income for the three years preceding the divorce was:

$989,851 in 2010; $1,076,553 in 2011; and $1,112,939 in 2012. His average

gross earned income for those years was $1,059,780, which was the amount

utilized by the trial court in establishing child support.

      Defendant alleges he disagreed with the trial court's conclusions relative

to his income set forth in the AJOD but chose to forgo appealing the issue. He

now contends his income at the time of divorce was $650,000 to $700,000 and

only exceeded $1,000,000 because of the forgivable loans from Morgan Stanley.

According to defendant, each year during the loan term, a portion of the

principal and interest associated with the loans was "forgiven" and attributed to

him as income in the form of a bonus, thereby artificially inflating his income

because he never actually received these amounts. In addition, defendant claims

the promissory notes for the forgivable loans have been satisfied, and he is no

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longer eligible to receive such bonuses in the future. The final sums were

forgiven in 2018. Defendant contends he has been paying an excessive amount

of child support.

      On January 28, 2019, plaintiff filed an ex parte order to show cause

seeking injunctive relief before the Family Part judge regarding the parties' son

J.N. Pursuant to a January 30, 2019 consent order, defendant's parenting ti me

with J.N. was temporarily suspended and contact was limited to telephonic

conversations on plaintiff's landline subject to recording. By consent, defendant

agreed to commence anger management therapy and a parenting coordinator was

appointed.

      On July 22, 2019, defendant filed a motion seeking recalculation of his

child support obligation arguing a substantial change in his financial

circumstances.      Plaintiff filed opposition to the motion and a cross-motion

seeking counsel fees and costs incurred in connection with this matter. In his

moving certification, defendant asserted that in 2018, his obligations under the

promissory notes were fully satisfied, and he was no longer eligible to receive

any similar bonuses going forward. By way of explanation, defendant submitted

a letter dated May 9, 2019, from Joseph Vaccaro, Senior Vice President and

Branch Manager of Morgan Stanley, explaining defendant's forgivable loans,

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compensation package, and annual income throughout his career at Morgan

Stanley.   Mr. Vaccaro stated in pertinent part:     "These bonuses averaged

$401,675 per year over the last nine years. During this same period, [defendant]

averages $634,565 per year in salary and commissions . . . ."

      Defendant also argued his income was found to be $1,059,781 when child

support was initially calculated at the time of divorce, and his annual average

income had decreased to $634,565 between 2010 through 2018, a forty-percent

difference. For 2019, defendant projected his income would be $632,519 , based

upon a base salary of $24,000, anticipated commissions, and other remuneration.

      In her opposition and cross-motion, plaintiff argued defendant's motion

was "premature conjecture" as to his contemplated 2019 income. She also

contended her gross income declined to a three-year average of $58,766.84, her

salary being $61,659 at the time the motions were considered. Plaintiff also

contended defendant's net worth increased from $4,564,085 in 2013 to

$5,683,000 in May 2019, while plaintiff's net worth was negative $191,070.

Plaintiff further argued defendant's Schedule A and C expenses, exclusive of

child support, were higher in 2019 than in 2012, confirming his ability to pay

the $3000 child support obligation and 95% of J.N.'s supplemental and

extraordinary expenses. In her cross-motion, plaintiff sought counsel fees for

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having to defend defendant's motion, which she claimed lacked merit and was

motivated by his "reprehensible bad faith conduct."

      The Family Part judge considered the motions on August 26, 2019. After

hearing oral arguments, the judge denied both motions and entered a

memorializing order that day.      In her oral decision, the judge rejected

defendant's argument that his 2019 income should be extrapolated and projected

for 2019 based on year-to-date paystubs he submitted with his moving papers.

The judge found "there's nothing to say . . . what he's going to earn. There may

be incentives and information or commissions that come later in the year in

addition . . . ." Consequently, the judge found defendant failed to demonstrate

a prima facie showing of changed circumstances warranting modification of his

child support obligation. The judge also noted that defendant failed to show

J.N.'s needs have lessened and maintained defendant's obligation to pay 95% of

the child's supplemental and extraordinary expenses.

      In denying plaintiff's cross-motion, the judge found plaintiff had the

ability to pay her own counsel fees and defendant's motion was not filed in bad

faith. This appeal and cross-appeal followed.

      On appeal, defendant argues the judge erred in denying his motion for

modification of child support and child-related expenses not included in child

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support because he established a prima facie case of a substantial change of

circumstances based upon a diminution in his income. In her cross-appeal,

plaintiff argues the judge correctly denied defendant's motion but erred in not

granting her request for counsel fees.

                                         II.

      Our review of the Family Part's determinations involving child support is

limited. Avelino-Catabran v. Catabran, 445 N.J. Super. 574, 587 (App. Div.

2016). "'The general rule is that findings by the trial court are binding on appeal

when supported by adequate, substantial, credible evidence.'" Crespo v. Crespo,

395 N.J. Super. 190, 193 (App. Div. 2007) (quoting Cesare v. Cesare, 154 N.J.
394, 411-12 (1998)). The reviewing court should "'not disturb the factual

findings and legal conclusions of the [motion] judge unless [it is] convinced that

they are so manifestly unsupported by or inconsistent with the competent,

relevant and reasonably credible evidence as to offend the interests of justice.'"

Catabran, 445 N.J. Super. at 587 (first alteration in original) (quoting Rova

Farms Resort, Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474, 484 (1974)).

      "'When reviewing decisions granting or denying applications to modify

child support, we examine whether, given the facts, the trial judge abused his or

her discretion.'" Ibid. (quoting Jacoby v. Jacoby, 427 N.J. Super. 109, 116 (App.

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                                         8
Div. 2012)).     Reversal is appropriate only if the award is "manifestly

unreasonable, arbitrary, or clearly contrary to reason or to other evidence, or the

result of whim or caprice." Ibid. (quoting Jacoby, 427 N.J. Super. at 116).

      However, our review of purely legal issues is de novo, "because the trial

court is in no better position than [the Appellate Division] when interpreting a

statute or divining the meaning of the law." D.W. v. R.W., 212 N.J. 232, 245-

46 (2012); see also Catabran, 445 N.J. Super. at 587. Child support orders are

always subject to review and modification upon a showing of "changed

circumstances." Lepis v. Lepis, 83 N.J. 139, 146 (1980). Upon a motion to

modify an order, "the moving party has the burden to make a prima facie

showing of [the] changed circumstances warranting relief."            Isaacson v.

Isaacson, 348 N.J. Super. 560, 579 (App. Div. 2002).

      When a modification application is made, the court should examine

evidence of the paying spouse's financial status in order "to make an informed

determination as to 'what, in light of all of the [circumstances] is equitable and

fair.'" Lepis, 83 N.J. at 158 (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)

(alteration in original)). The party seeking modification of a prior orde r bears

the burden of making a prima facie showing of changed circumstances. Id. at

157. Changed circumstances may "include 'an increase in the cost of living, an

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increase or decrease in the income of the supporting or supported spouse,

cohabitation of the dependent spouse, illness or disability arising after the entry

of the judgment, and changes in federal tax law.'" Quinn v. Quinn, 225 N.J. 34,

49 (2016) (quoting J.B. v. W.B., 215 N.J. 305, 327 (2013)).

      In assessing changed circumstances the court must typically find more

than just a downward turn in economic circumstances, especially where, as here,

the payor's reduced income is still relatively high. This court has previously

noted that "[u]nderpinning the basis of every support order is the proposition

that the payor has the 'ability to pay' the amount set, or agreed to." Dorfman v.

Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998). Support orders may be

modified upon a showing of changed circumstances, but a mere reduction in

income is not dispositive on its own. Generally, a payor must show that there

has been a "substantial, non-temporary change[] in [their] ability to support

[themselves] or pay support." Gordon v. Rozenwald, 380 N.J. Super. 55, 67-68

(App. Div. 2005).

      This court has emphasized that where a payor continues to live lavishly, a

showing of substantial change in circumstances is unlikely.           Donnelly v.

Donnelly, 405 N.J. Super. 117, 130-31 (App. Div. 2009).            We have also

previously noted that where a payor has had a reduction in their income they

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generally must also "demonstrate how he or she has attempted to improve the

diminishing circumstances." Id. at 130 n.5; see also Aronson v. Aronson, 245
N.J. Super. 354, 361 (App. Div. 1991).

      Additionally, this court recognizes that as with all child support decisions

"[a]ny decision must be made in accordance with the best interests of the

children." Jacoby, 427 N.J. Super. at 116. The court must therefore also weigh

whether a modification is equitable and fair.      Lepis, 83 N.J. at 158. This

necessarily includes examining the situation of each party, including their assets,

property, and capital assets. Heller-Loren v. Apuzzio, 371 N.J. Super. 518, 531

(App. Div. 2004); see also Mowery v. Mowery, 38 N.J. Super. 92, 105 (App.

Div. 1955).

      In addition, Rule 5:5-4(a)(2) provides: "When a motion or cross-motion

is filed to establish alimony or child support, the pleadings filed in support of,

or in opposition to the motion, shall include a copy of a current case information

statement." Rule 5:5-4(a)(4) requires a "movant's case information statement

previously executed or filed in connection with the order, judgment or

agreement sought to be modified" to also be appended.

      The reason given by the Family Part judge for denying defendant's request

for modification was his 2019 income was uncertain at the time the motion was

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decided. The judge noted defendant's dividend income and capital gains listed

on his tax return did not show that "his financial circumstances have changed

for the . . . worst . . . ." Further, the judge emphasized when child support was

set at $36,000 per year, that equated to 3.4% of defendant's income. Assuming

defendant was on track to earn $760,000 in 2019, the child support obligation

would be 4.7% of his income, less than a 1.5 percentage-point change. And,

since the parties' combined income exceeded $187, 200, under N.J.S.A. 2A:34-

23(a), the parties' assets had to be considered in the child support calculation.

            [I]f the combined net income of the parents is more than
            $187,200 per year, the [c]ourt shall apply the guidelines
            up to $187,200 and supplement the guidelines-based
            award with a discretionary amount based on the
            remaining family income (i.e., income in excess of
            $187,000) and the factors specified in N.J.S.A. 2A:34-
            23. Thus, the maximum guidelines award in Appendix
            IX-F represents the minimum award for families with
            net incomes of more than $187,200 per year.

            [Child Support Guidelines, Pressler & Verniero,
            Current N.J. Court Rules, Appendix IX-A to R. 5:6A,
            www.gannlaw.com (2021) (emphasis added).]

We reiterate, the factors specified in N.J.S.A. 2A:34-23, which the court must

consider in determining the child support award in addition to the base guideline

child support award, are as follows:

            1) Needs of the child; 2) Standard of living and
            economic circumstances of each parent; 3) All sources

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              of income and assets of each parent; 4) Earning ability
              of each parent, including educational background,
              training, employment skills, work experience, custodial
              responsibility for children including the cost of
              providing child care and the length of time and cost of
              providing child care and the length of time and cost of
              each parent to obtain training or experience for
              appropriate employment; 5) Need and capacity of the
              child for education, including higher education; 6) Age
              and health of the child and each parent; 7) Income,
              assets and earning ability of the child; 8) Responsibility
              of the parents for the court-ordered support of others;
              9) Reasonable debts and liabilities of each child and
              parents; and 10) Any other factors the [c]ourt may deem
              relevant.

      Moreover, we have previously addressed the delicate balance the Family

Part judge must strike in establishing child support obligations in high -income

situations.

              Even with high income parents, the court still must
              'determin[e] needs of a child in a sensible manner
              consistent with the best interests of the child.' Isaacson,
348 N.J. Super. at 584. '[T]he law is not offended if
              there is some incidental benefit to the custodial parent
              from increased child support payments.' Ibid. While
              'some incidental benefit' is not offensive, 'overreaching
              in the name of benefiting a child is.' Id. at 585. '[A]
              custodial parent cannot[,] through the guise of the
              incidental benefits of child support[,] gain a benefit
              beyond that which is merely incidental to a benefit
              being conferred on the child.' Loro v. Del Colliano, 354
N.J. Super. 212, 225-26 (App. Div. 2002).

              [Strahan v. Strahan, 402 N.J. Super. 298, 308 (App.
              Div. 2008) (alterations in original).]

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      Here, the judge also scrutinized defendant's assets to ascertain if a prima

facie change of circumstances was met. The judge found, based on defendant's

2012 and 2019 case information statements, his net worth increased by

$1,100,000 since the time of the divorce to $5,683,000. Moreover, the judge

aptly highlighted that defendant's monthly Schedule A expenses were $11,495

in 2012 and $16,097 in 2019, an increase of approximately $3500. Defendant's

monthly Schedule C expenses increased from $5105 in 2012 to $6498 in 2019,

a difference of $1400. J.N.'s older age was properly not deemed a relevant

change of circumstances either by the judge.

      Moreover, the record demonstrated that defendant's alleged change of

circumstances was not permanent. Miller v. Miller, 160 N.J. 408, 420 (1999)

(citing Lepis, 83 N.J. at 157). Accordingly, we discern no abuse of discretion

on the part of the Family Part judge, and her decision was not based on a

palpably incorrect basis. The judge reviewed defendant's financial situation and

found his income had not substantially changed since the time the AJOD was

entered.

      We are also unpersuaded by defendant's argument that J.N.'s needs have

also decreased because he failed to provide any evidence to support his

contention. The moving party for a downward modification of support has the

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burden of proving the child's needs have lessened. Jacoby, 427 N.J. Super. 120-

21. Here, defendant has not met that burden, and the judge correctly declined

to recalculate the child support obligation.

      We are likewise unpersuaded by defendant's argument that because

plaintiff now resides in a "five-bedroom, four-bathroom [3300] [square] [foot]

home," the benefit she gains is more than merely incidental. The payee sp ouse,

namely plaintiff here, does not have to account for her expenditure of child

support monies as defendant implies. Child Support Guidelines, Pressler &

Verniero,   Current   N.J.   Court   Rules,    Appendix   IX-A    to   R.     5:6A,

www.gannlaw.com (2021). Saliently, defendant's parenting time with J.N. was

suspended in early 2019 by the judge, and plaintiff did not receive an increase

in child support notwithstanding the fact that child support was calculated based

on an equally shared, alternating week basis. Therefore, defendant's argument

is unavailing.

      We also disagree with defendant's argument that the judge erred by not

recalculating the percentage share of each party's responsibility to pay J.N.'s

supplemental and extraordinary child support expenses.       Defendant has not

proven that his earned and unearned income now represents only 91% of the

gross combined income of the parties. The judge was correct in pointing out

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                                       15
that "attendant to [child support] is the reallocation for the responsibility of

expenses. And, . . . in my mind, I view those two things as inextricably

intertwined."   The judge's decision was based upon substantial, credible

evidence in the record. Therefore, defendant's motion was properly denied.

      The judge also properly rejected plaintiff's request that defendant start

paying his child support obligation through the Department of Probation. In her

ruling, the judge explained:

                   I understand that, in the history of this family,
            that at one point there—payment was made through the
            Department of Probation. And, ultimately there was a
            consent order removing it from probation's
            enforcement and rather calling for direct pay.

                  And that—the order itself sets forth the
            circumstances where—wherein the case would be
            payable again through probation, which required—or—
            the instance that would give rise to that would be if
            [defendant] missed two child support payments—and I
            believe it was in a row. Give me one minute. Two
            missed child support payments.

                   And, that order was June 27th, 2014. And, I do
            not find that that condition precedent to the consent
            order has . . . occurred here. So, I am . . . denying
            plaintiff's application to do that.

      We add the following brief remarks.            Rule 5:7-4(b) provides:

"Enforcement of child support orders shall presumptively be in the county in

which the child support order is first established (county of venue) . . . ."

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N.J.S.A. 2A:17-56.13 provides, "in every award for alimony, maintenance or

child support payment, the judgment or order shall provide that payments be

made through the Probation Division of the county in which the obligor resides,

unless the court, for good cause shown, otherwise orders." (Emphasis added).

      The judge was correct in concluding that plaintiff has not shown that

defendant missed two consecutive child support payments. Hence, the condition

precedent set forth in the consent order was not satisfied, and there was no basis

upon which the judge should have ordered child support payments to be made

through the Probation Division.

                                       III.

      We next address plaintiff's argument that the Family Part judge erred and

abused her discretion in denying plaintiff's request for counsel fees and costs

because she misapplied the factors enumerated under Rule 5:3-5(c).

Specifically, plaintiff claims defendant filed his motion in bad faith, and the

judge's finding that plaintiff had sufficient income to pay her attorney's fees was

inconsistent with the record.

      Counsel fee determinations rest within the trial judge's sound discretion.

Williams v. Williams, 59 N.J. 229, 233 (1971). We will disturb a trial court's

determination on counsel fees "only on the 'rarest occasion,' and then only

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because of clear abuse of discretion." Strahan, 402 N.J. Super. at 317 (quoting

Rendine v. Pantzer, 141 N.J. 292, 317 (1995)). An "abuse of discretion only

arises on demonstration of 'manifest error or injustice,'" Hisenaj v. Kuehner, 194
N.J. 6, 20 (2008) (quoting State v. Torres, 183 N.J. 554, 572 (2005)), and occurs

when the trial judge's decision is "'made without a rational explanation,

inexplicably departed from established policies, or rested on an impermissible

basis.'" Milne v. Goldenberg, 428 N.J. Super. 184, 197 (App. Div. 2012)

(quoting Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)).

      "A lawyer's fee must be reasonable." Giarusso v. Giarusso, 455 N.J.

Super. 42, 50 (App. Div. 2018) (quoting Rosenberg v. Rosenberg, 286 N.J.

Super. 58, 69 (App. Div. 1995)). Determining the reasonableness of the fee

involves "determining the number of hours reasonably expended multiplied by

a reasonable hourly rate." Id. at 51 (citing Rendine, 141 N.J. at 334-35).

      In determining whether to award counsel fees the trial court must consider

the factors enumerated in Rule 5:3-5(c):

            (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

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             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.

      Here, plaintiff's attorney certified that the estimated fees and costs

incurred by plaintiff in connection with this matter were $10,538.50. The judge

evaluated the reasonableness of the fees requested by each party, as required

under Rule 1.5, and determined the fees requested by each party were

reasonable: "Both the attorneys who are representing the parties in this matter

are seasoned attorneys, both of whom have rates that are reasonable in light of

their years of experience and years of—in light of the vicinage in which they

practice."

      In evaluating the Rule 5:3-5(c) factors the judge noted in her analysis that

each party had the ability to pay their own fees. Plaintiff does not contend she

is unable to pay her counsel fees; rather she stresses given the disparity in the

parties' incomes, defendant should pay her fees. The judge specifically noted

that defendant did not litigate this matter in bad faith or unreasonably. We

discern no abuse of discretion in the judge's fee analysis. Gotlib v. Gotlib, 399
N.J. Super. 295, 314-15 (App. Div. 2008) (noting that counsel fee awards are

committed to the Family Part's "sound discretion"); see also Loro v. Colliano,

354 N.J. Super. 212 (App. Div. 2002).

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     We have fully considered the balance of the arguments raised by both

parties on appeal and conclude that they lack sufficient merit to require

comment. R. 2:11-3(e)(1)(E).

     Affirmed.

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