E.L. VS. H.L. (FM-11-0516-11, MERCER COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE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-2439-16T4
E.L.1,
Plaintiff-Respondent,
v.
H.L.,
Defendant-Appellant.
————————————
Argued November 28, 2018 – Decided December 13, 2018
Before Judges Nugent, Reisner, and Mawla.
On appeal from Superior Court of New Jersey,
Chancery Division, Family Part, Mercer County,
Docket No. FM-11-0516-11.
H.L., appellant, argued the cause pro se.
E.L., respondent, argued the cause pro se.
PER CURIAM
1
We use the parties' initials to protect the privacy of their financial information.
Defendant appeals from a January 10, 2017 order entered following a
post-judgment plenary hearing, which granted plaintiff a downward
modification of his child support and alimony obligations. We affirm.
We take the following facts from the record. The parties were divorced
in December 2011, by way of a final judgment, which incorporated a Marital
Separation and Property Settlement Agreement (PSA), signed in September
2006, and an addendum dated the same date as the divorce. The PSA required
plaintiff to pay twenty percent of his gross income for child support, but not less
than $2500, and not more than $6000 per month. The PSA also required him to
pay defendant forty percent of his gross income as alimony, but not less than
$4000, and not more than $12,000 per month. Since the divorce, and as a result
of his earnings, plaintiff paid defendant $18,000 per month, the maximum
amount for alimony and child support, until April 2015.
Plaintiff was self-employed with a software development company known
as "Outpost." The parties were partners in the company, wherein plaintiff held
a ninety percent interest and defendant the remaining ten percent. The parties'
ownership of Outpost continued post-judgment.
In April 2015, Outpost's largest customer, responsible for approximately
ninety-five percent of Outpost's revenue, terminated its relationship with
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Outpost, and as of May 2015, Outpost had no revenue. Plaintiff immediately
contacted defendant seeking a modification of his support obligation. Plaintiff
also ceased paying defendant the maximum support amounts because of the drop
in his income.
As a result, defendant filed a post-judgment motion to compel payment at
the maximum amount and plaintiff filed a motion to modify his obligation. The
motion judge denied defendant's motion and granted plaintiff's motion, finding
he had demonstrated a prima facie showing of changed circumstances, and
scheduled a plenary hearing, in pertinent part, to address the modification of
alimony and child support. Defendant did not appeal from the order entered by
the motion judge.
The plenary hearing occurred over two days, before a second judge.
Plaintiff testified his income in 2014 was $425,688. He explained, before he
started Outpost, he was employed as a senior software engineer and project
manager. Following the demise of Outpost, he testified he searched for
employment within his area of expertise and had two offers for part-time
employment. Those positions offered salaries of $96,000 and $72,000 per year,
which he planned to accept, bringing his total earnings to $168,000. Plaintiff
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testified the combination of the salaries from these part-time jobs would be
greater than what he could earn as a full-time employee.
Utilizing plaintiff's credit card statements, defendant's cross-examination
attempted to prove that plaintiff's lifestyle did not suffer an adverse change in
circumstances. Specifically, defendant pointed to plaintiff's restaurant dining,
the purchase of jewelry, travel abroad, and the purchase of a Tesla vehicle as
evidence of his lifestyle. Defendant noted plaintiff had purchased a home in
Minsk, Belarus. She argued plaintiff's lifestyle was supported by an undisclosed
source of income.
However, plaintiff rebutted those assertions. He proved the residence in
Minsk had been purchased by A.M.2 with her pre-marital funds, explained he
had used airline points for personal travel, and the jewelry purchase was a favor
for a friend who reimbursed him. The trial judge noted the evidence also
demonstrated defendant's proofs regarding the restaurant expenditures were
mathematically incorrect and her exhibits in general were incomplete.
Defendant also challenged plaintiff's testimony regarding his employment
search. She claimed the offers he received did not "reflect his ambition" or his
skill set. Defendant argued plaintiff's circumstances and Outpost's prospects
2
Plaintiff married A.M. in September 2013.
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had not permanently changed because he was likely to meet new business
partners or receive better offers. However, defendant presented no evidence to
corroborate her hypothesis, or expert testimony to explain her claims regarding
plaintiff's earning capacity.
Conversely, plaintiff adduced objective evidence of defendant's earning
capacity. He introduced a copy of her LinkedIn profile, in which she claimed
to be a talent manager and a wardrobe stylist for a television show. Defendant's
profile also disclosed she had obtained two Associate's degrees, and could speak
English, Russian, Belarusian, intermediate French, and conversational Hebrew.
Defendant explained her work as a wardrobe stylist and talent manager
was unpaid, and the latter position was taken only to assist her daughter who
was an actress. She claimed she was seeking employment, but could not obtain
a paying position. She presented evidence of her search for employment,
namely, job applications to Hermes Paris, Burberry, Chanel, Time Warner,
HBO, and Gucci, for the period between October 27 and November 4, 2015.
Defendant testified she had ceased searching for employment, as of November
4, 2015, because she was focused on preparing for trial.
The trial judge concluded plaintiff had testified credibly regarding his
income, job search, and earning capacity, and $170,000 was a reasonable
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amount of income to impute to him based on the evidence presented. Relying
on the proofs presented regarding defendant's income, the judge concluded
"[b]ased on the wage compendium, the entry level income for a . . . wardrobe
stylist in [New York City] . . . is $43,900."
The judge found defendant's needs for herself and the children totaled
$6908 per month. The judge ordered plaintiff to pay defendant $3500 and $1105
per month in alimony and child support, respectively. Combining defendant's
imputed income with the support, the judge concluded "pre-tax, [d]efendant
should have monthly income available to her of [$7938]." The judge noted this
calculation did not include rental income defendant had been receiving by
renting the former marital residence, which she had failed to disclose on her
Case Information Statement. This appeal followed.
I.
At the outset, we note defendant raises several arguments on appeal
regarding enforcement of the January 10, 2017 order, and the parties' motion
practice subsequent to the entry of the order on appeal. Defendant also argues
plaintiff did not establish changed circumstances to warrant a modification of
support because following entry of the January 2017 order, plaintiff's business
fortunes rebounded. She asserts this information impacts the income imputation
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the trial judge made to plaintiff. She argues her September 8, 2016 bankruptcy
discharge, which occurred after the conclusion of the trial testimony in February
2016, but before the issuance of the court's order in January 2017, was not
considered by the trial judge.
We do not consider any of these arguments as they post-date the
conclusion of the trial testimony, which defendant did not seek to re-open.
"[I]ssues not raised below will ordinarily not be considered on appeal unless
they are jurisdictional in nature or substantially implicate the public interest."
N.J. Div. of Youth & Family Servs. v. M.C. III, 201 N.J. 328, 339 (2010) (citing
Cty. of Essex v. First Union Nat'l Bank, 186 N.J. 46, 51 (2006)); see also Neider
v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (absent plain error leading to
the possibility of an unjust result, the Appellate Division generally declines to
consider arguments not raised at trial). None of the aforementioned information
was presented to the trial judge, and is not part of the record before us.
Instead, we address defendant's arguments that: 1) plaintiff failed to prove
changed circumstances; 2) the trial judge erred in making an income imputation;
3) the support awarded did not meet defendant and the children's needs; and 4)
child support could not be modified because the parties contracted to apply
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Lepis3 modifications only to alimony. To the extent we do not address other
arguments raised by defendant, it is because they lack sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
II.
"The scope of appellate review of a trial court's fact-finding function is limited.
The general rule is that findings by the trial court are binding on appeal when
supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154
N.J. 394, 411–12 (1998) (citing Rova Farms Resort, Inc. v. Inv'rs Ins. Co., 65
N.J. 474, 484 (1974)). The "court must give due recognition to the wide
discretion which our law rightly affords to the trial judges," and disturb such
determinations only where the court abused its discretion. Larbig v. Larbig, 384
N.J. Super. 17, 21, 23 (App. Div. 2006) (quoting Martindell v. Martindell, 21
N.J. 341, 355 (1956)). Appellate courts reverse only if there is "'a denial of
justice' because the family court's 'conclusions are . . . "clearly mistaken" or
wide of the mark.'" Parish v. Parish, 412 N.J. Super. 39, 48 (App. Div. 2010)
(quoting N.J. Div. of Youth & Family Servs. v. E.P., 196 N.J. 88, 104 (2008)).
This standard applies equally to the trial court's decisions regarding alimony and
child support. Lombardi v. Lombardi, 447 N.J. Super. 26, 33 (App. Div. 2016).
3
Lepis v. Lepis, 83 N.J. 139 (1980).
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A.
We first address defendant's claims there were no changed circumstances
warranting a review and modification of alimony and child support. Defendant
argues plaintiff's expenditures after April 2015 have not reflected his claimed
change in circumstances. She asserts plaintiff has an undisclosed source of
income from which he meets his expenses.
In support of her claims, defendant points out plaintiff continued to fly his
private airplane, even after Outpost failed. She also claims plaintiff took a trip
to Puerto Rico in July 2015, during which he rented a private airplane. She cites
a variety of trips plaintiff took as evidence that he has undisclosed income.
These arguments are unpersuasive. A review of the record demonstrates
a portion of the flights defendant discusses in her brief took place before Outpost
failed. This had no bearing on the firm's subsequent difficulties, which caused
the motion judge to order a plenary hearing, or the trial judge's conclusion to
modify plaintiff's support obligations. Moreover, plaintiff paid the maximum
amount of child support and alimony prior to Outpost's failure.
Regarding the flights plaintiff took after Outpost failed, plaintiff testified
he had to fly the plane while he still owned it in order to prevent it from falling
into disrepair and depreciating in value before he could sell it. Plaintiff also
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explained he rented a private airplane in order to maintain "proficiency" because
he had to fly the plane at least two hours every month until he could sell it. He
explained he needed to keep the plane until its annual inspection in August 2015
because he could sell it for a greater sum with it having passed inspection.
Regarding plaintiff's travel, the record demonstrates the evidence presented a t
the hearing showed the trips were either inexpensive or were paid for by either
family members or with frequent flier miles. Defendant presented no evidence
to rebut these claims.
Defendant claims plaintiff continued to pay $11,700 per month in rent for
his apartment in Manhattan, even after he and A.M. moved to Minsk. She points
to plaintiff's testimony regarding his ownership of a Tesla automobile and argues
its $1382 monthly payment exceeded his child support obligation. Defendant
also notes the vehicle cost $700 per month to park in New York City. However,
the record demonstrates plaintiff signed a new apartment lease in August 2015
for $2500 per month and ceased residing in the more expensive apartment.
Additionally, defendant neither rebutted the fact plaintiff purchased the Tesla
before Outpost's demise, nor demonstrated how plaintiff could cease paying for
the vehicle at will. Furthermore, plaintiff testified he ceased paying to keep the
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vehicle in New York City as of July 2015, and the record reflects it is stored at
the parties' Princeton home.
Defendant also asserts plaintiff's claim the home in Minsk was funded by
A.M. is false. However, the record demonstrates plaintiff presented a deed,
which showed A.M. purchased the property in November 2011, long before he
experienced a financial downturn.
Defendant argues plaintiff founded another company in 2005, and
transferred the parties' interest in it to his parents in 2009 without defendant's
consent. She claims plaintiff operates the company and derives income from it.
At trial, defendant cross-examined plaintiff on the subject, but beyond
explaining that he founded the company and owned it until 2008, the record
reflects no testimony or evidence to support defendant's claim plaintiff owned
or derived income from the company after Outpost experienced a downturn.
Defendant's arguments on appeal do not persuade us that the judge's
decision to modify plaintiff's support obligations due to a change in
circumstances was an abuse of discretion. There is ample evidence in the record
to support the trial judge's conclusions.
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B.
We next address defendant's argument regarding the imputation of income
to her. Defendant argues the imputation to her was "unrealistically high"
because her income from earnings in addition to the modified alimony and child
support figures do not meet her needs. 4
"'Imputation of income is a discretionary matter not capable of precise or
exact determination[,] but rather requir[es] a trial judge to realistically appraise
capacity to earn and job availability.'" Elrom v. Elrom, 439 N.J. Super. 424,
434 (App. Div. 2015) (citations omitted). In Elrom, we noted the authority to
impute income
is incorporated in the New Jersey Child Support
Guidelines (Guidelines). See R. 5:6A (adopting
Guidelines set forth in Appendix IX-A to the Court
Rules). The Guidelines state:
[i]f the court finds that either parent is, without just
cause, voluntarily underemployed or unemployed, it
shall impute income to that parent according to the
following priorities:
a. impute income based on potential
employment and earning capacity using the
4
We do not address the aspect of defendant's challenge to the income imputation
wherein she relies upon her actual income from her employment beginning in
February 2017, which she claims was "significantly less" than the one imputed
to her, because it was not presented to the trial judge and is not a part of the
record before us.
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parent's work history, occupational
qualifications, educational background,
and prevailing job opportunities in the
region. The court may impute income
based on the parent's former income at that
person's usual or former occupation or the
average earnings for that occupation as
reported by the New Jersey Department of
Labor (NJDOL);
b. if potential earnings cannot be
determined, impute income based on the
parent's most recent wage or benefit
record[.]
[Elrom, 439 N.J. Super. at 435 (alteration in original)
(quoting Child Support Guidelines, Pressler &
Verniero, Current N.J. Court Rules, cmt. 12 on
Appendix IX-A to R. 5:6A at 2635 (2015)).]
"These legal precepts equally apply when establishing a party's obligation to pay
alimony." Id. at 435.
Here, pursuant to the wage compendium, the trial judge noted the entry
level income for a wardrobe stylist was $43,900 per year. The judge then
considered the parties' testimony for and against an imputation, defendant's
LinkedIn profile, and what the judge noted was defendant's "claim of having
'vast experience and knowledge of designer clothing, fabrics, and
accessories[.]'" The judge concluded "the request of [p]laintiff to impute
[d]efendant at an annual income of $40,000 is reasonable."
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We are satisfied the judge applied the evidence to the imputation rubric
we have recited. The imputation determination was supported by the competent
evidence and was not an abuse of discretion. Elrom, 439 N.J. Super. at 434.
C.
Defendant challenges the trial judge's decision on grounds the alimony
and child support awards do not meet her and children's needs. As we noted,
the judge calculated defendant and the children's monthly needs to be $6908,
and found her monthly income would be $7938. Other than to disagree with the
result, defendant has not provided us with a basis to conclude her needs and
those of the children were not met. This does not establish an abuse of
discretion.
D.
Finally, defendant argues the child support was not subject to modification
because the PSA did not explicitly permit it. The Supreme Court has long stated:
"[t]the equitable authority of a court to modify support obligations in response
to changed circumstances . . . cannot be restricted." Lepis, 83 N.J. at 149 (citing
Smith v. Smith, 72 N.J. 350, 350 (1977)); see also N.J.S.A. 2A:34-23.
Here, the PSA expressly states plaintiff's child support obligation is
"[s]ubject to the power of the court to modify these terms." Therefore, the trial
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judge could modify plaintiff's support obligations. Even where there is express
language barring a modification based on a change in circumstances, the court
is not without the ability to modify an agreement. See Morris v. Morris, 263
N.J. Super. 237, 245-46 (App. Div. 1993).
Affirmed.
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