SUSAN STEUBER VS. JOHN DESMELYK (FM-18-0320-19, SOMERSET COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE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-0600-19T2
SUSAN STEUBER,
Plaintiff-Respondent,
v.
JOHN DESMELYK,
Defendant-Appellant.
___________________________
Argued November 12, 2020 – Decided December 28, 2020
Before Judges Fuentes, Rose and Firko.
On appeal from the Superior Court of New Jersey,
Chancery Division, Family Part, Somerset County,
Docket No. FM-18-0320-19.
Jenny Berse argued the cause for appellant (Berse Law,
LLC, attorneys; David Cecil Bendush, on the briefs).
Eric James Warner argued the cause for respondent
(Law Office of Eric J. Warner, LLC, attorneys; Susan
Steuber, on the pro se brief).
PER CURIAM
In this post-judgment matrimonial case, defendant John Desmelyk appeals
from the Family Part's August 27, 2019 order denying his cross-motion to
modify or vacate the parties' marital settlement agreement (MSA) negotiated
and signed by the parties on August 14, 2018, and terminating his alimony
obligation based on changed circumstances. We affirm.
I.
We derive the following facts from the motion record. Married in October
2011, the parties divorced in December 2018. The judgment of divorce, entered
by default, incorporated the MSA. The parties had no children together. In
pertinent part, paragraph 4(A) of the MSA required that defendant pay plaintiff
Susan Steuber $58341 per month in limited duration alimony for a period of sixty
months. The MSA provided that defendant's alimony obligation "shall terminate
upon [plaintiff's death], [plaintiff's] remarriage, [defendant's] death or after
[defendant] has paid [sixty] monthly payments, whichever occurs first. Alimony
shall be tax deductible to [defendant] and taxable income to [plaintiff]."
Prior to the divorce, defendant was the sole owner of his interest in a
business known as KMD Excavating, LLC (KMD) that the parties agreed would
1
The MSA lists the value as $5834, but the Family Part judge used $5824 in
her opinion. This minor difference is not germane to our analysis.
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remain defendant's asset free of any equitable distribution claim by plaintiff, and
defendant agreed to be solely responsible for all business debts and liabilities.
Paragraph ten of the MSA states that the parties were "advised to have
[defendant's] business valued by a forensic expert and they have declined to do
so at this time." The MSA also notes: "The parties acknowledge that
[defendant's] business account has approximately $100,000 contained therein
and that the business owns significant equipment and vehicles all with unknown
values." The MSA noted there was no marital debt aside from the mortgage on
the former marital home.
Since the entry of the JOD, defendant has not made one alimony payment. 2
No prior case information statements (CIS) were served with the motion papers.
The MSA indicates the marital lifestyle was $10,500 per month.
On June 28, 2019, plaintiff moved before the Family Part seeking to
enforce litigant's rights since she had not yet received any alimony payments
from defendant. In response, on August 14, 2019, defendant cross-moved to
modify or vacate the MSA under Rule 4:50-1 and terminate his alimony support
obligation. He argued that he was entitled to relief or alternatively, had met his
2
At the time of oral argument, defendant's counsel represented that this is
incorrect, and a $5000 payment was made to plaintiff, which is not part of the
record.
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burden of showing a prima facie case of changed circumstances, warranting a
plenary hearing.
Defendant founded KMD in 2007. In 2015, he was awarded a lucrative
contract for the installation of water meter pits for Middlesex Water Company
that spanned July 2015 through June 2018, which led to a "substantial increase
in income[.]" In June 2018, following a New Jersey Department of Labor (DOL)
investigation concluding that defendant failed to pay prevailing wages, certify
his payroll, and committed other regulatory violations, defendant lost the
Middlesex Water Company contract. He sold inventory to satisfy bills.
The DOL investigation also resulted in an $11,176 lien assessment against
KMD, which defendant was unable to pay. Allegedly unbeknownst to
defendant, the DOL lien disqualified his company from bidding on other public
works contracts. According to defendant, his business struggled after losing this
contract, leading to termination of four KMD employees and the sale of four
pieces of equipment. In his certification, defendant stated he was unaware KMD
lost the contract until 2019.
After selling business vehicles he was unable to make payments on,
defendant was audited by the Internal Revenue Service (IRS) for failing to
declare the depreciation KMD had recaptured. Ultimately, the IRS fined
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defendant's business $59,602 for this omission. Defendant did not provide any
supporting documentation relative to the sale of equipment or confirming the
IRS penalty amount with his cross-moving papers. Defendant's 2018 tax returns
showed he or his business owned twenty-nine pieces of equipment, but he only
sold four or five pieces of equipment. Schedule C of defendant's 2018 tax return
indicated a total net gain of $283,216 from the sale of assets, and a $55,695 net
gain in profits from the business. Later, defendant asserted neither he nor his
company owned any of the equipment.
The MSA states that the agreement is based on "[defendant] having earned
income in the amount of $280,000 (including in kind income for expenses paid
on behalf of [defendant] by business and including additional imputed income)
per year and [plaintiff] having earned income in the amount of $52,000 per
year." Defendant certified his current monthly income is averaging less than
$2500 or $30,000 annually. In his August 12, 2019 CIS submitted in connection
with his cross-motion, defendant indicated his monthly A, B and C expenses are
$7500, including a $945 monthly child support obligation for a child born from
a prior marriage. Defendant certified his personal income from the business
averaged $55,997 annually from 2015 through 2018.
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In response, plaintiff noted defendant knowingly waived his right to
counsel in the negotiation and execution of the MSA; he was aware of his credit
card and other debt when he signed the MSA; knew of the loss of the Middlesex
Water Company contract prior to entering the MSA, and never paid alimony
"prior to the onset of such calamities." Plaintiff emphasized defendant's request
for relief under Rule 4:50-1 seeking to invalidate the MSA is extraordinary in
nature and defendant should not benefit from his own "self-impoverishment."
Based on this record, the Family Part judge granted plaintiff's motion and
denied defendant's cross-motion. The motion judge noted:
So I have to say to really sum it up, I think the only
issue is if there's possibly a change of circumstance and
whether it's [voluntarily] or [involuntarily] caused at
the hands of basically the [d]efendant. With regard to
the [d]efendant's request to vacate the judgment and
amend the terms, and I read his certification and I read
the brief and, you know, that he didn't have the
assistance of counsel, et cetera. There's [sic] so many
problems with that argument. Namely, the [MSA] that
was executed by the [d]efendant and notarized, which
has numerous provisions addressing the concerns that
he raises. Specifically, and I just want to go through
the [MSA] with regard to, paragraph [nineteen], page
[nine], independent counsel provision.
The judge highlighted that the notice defendant received from the DOL is
dated July 9, 2019, and that he lost the Middlesex Public Water contract in June
2018, "which was prior [to] him signing the August 14, 2018 MSA. Thus,
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[d]efendant signed the MSA provided that he would pay alimony with full
knowledge that he did not have the contract." In addition, the judge noted
defendant had three years of experience doing public sector work for the
Middlesex Water Company, and of the three DOL violations, unpaid wages,
inaccurately certified payroll, and failure to pay prevailing wage on utility work,
only one violation was attributable to public utility work and prevailing wages.
In this light, the judge found defendant failed to establish changed
circumstances under Lepis v. Lepis, 83 N.J. 139 (1980), Beck v. Beck, 239 N.J.
Super. 183, 190 (App. Div. 1990), and Smith v. Smith, 72 N.J. 350 (1977), to
warrant a modification or suspension of his alimony payments. The judge found
defendant was incredulous based upon misrepresentations made in his moving
certification and proofs and declined to vacate the JOD and MSA under Rule
4:50-1. This appeal followed.
II.
On appeal, defendant contends that the judge erred in denying his motion
pursuant to Rule 4:50-1 seeking to modify the MSA based upon changed
circumstances. Our standard of review of the Family Part's decision here
compels that we affirm. As we noted in Larbig v. Larbig,
[t]here is, of course, no brightline rule by which to
measure when a changed circumstance has endured
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long enough to warrant a modification of a support
obligation. Instead such matters turn on the
discretionary determinations of Family Part judges,
based upon their experience as applied to all the
relevant circumstances presented, which we do not
disturb absent an abuse of discretion . . . . Neither
compulsory discovery nor a plenary hearing is required
until a movant provides sufficient evidence of a
material changed circumstance.
[384 N.J. Super. 17, 23 (App. Div. 2006) (citing Lepis,
83 N.J. at 157).]
"[A]ppellate 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." Crespo v. Crespo, 395
N.J. Super. 190, 193 (App. Div. 2007) (quoting Cesare v. Cesare, 154 N.J. 394,
411-12 (1998)). Especially when considering "the family courts' special
jurisdiction and expertise in family matters, appellate courts should accord
deference to family court factfinding." Ibid. (quoting Cesare, 154 N.J. at 413).
"Whether an alimony obligation should be modified based upon a claim
of changed circumstances rests within a Family Part judge's sound discretion."
Larbig, 384 N.J. Super. at 21 (citing Innes v. Innes, 117 N.J. 496, 504 (1990)).
Each individual motion for modification is particularized to the facts of that
case, 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."
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Ibid. (quoting Martindell v. Martindell, 21 N.J. 341, 355 (1956)). We will not
disturb the trial court's decision on alimony unless we conclude:
. . . the trial court clearly abused its discretion, failed to
consider all of the controlling legal principles, or [are]
otherwise . . . satisfied that the findings were mistaken
or that the determination could not reasonably have
been reached on sufficient credible evidence present in
the record after considering the proofs as a whole.
[Heinl v. Heinl, 287 N.J. Super. 337, 345 (App. Div.
1996).]
Therefore, the judge's findings are binding so long as his or her
determinations are "supported by adequate, substantial, credible evidence." Id.
at 412. A "'[motion] judge's legal conclusions, and the application of those
conclusions to the facts, are subject to our plenary review.'" Spangenberg v.
Kolakowski, 442 N.J. Super. 529, 535 (App. Div. 2015) (quoting Reese v. Weis,
430 N.J. Super. 552, 568 (App. Div. 2013)).
Defendant argues the judge abused her discretion by not awarding him
relief under Rule 4:50-1. Our Supreme Court has stated that, "[r]elief [under
Rule 4:50-1] is granted sparingly." F.B. v. A.L.G., 176 N.J. 201, 207 (2003).
Obtaining relief under "Rule 4:50-1 'requires proof of exceptional and
compelling circumstances' as it is '[d]esigned to balance the interests of finality
of judgments and judicial efficiency against the interest of equity and fairness.'"
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Eaton v. Grau, 368 N.J. Super. 215, 222 (App. Div. 2004) (quoting Harrington
v. Harrington, 281 N.J. Super. 39, 48 (App. Div. 1955)) (alteration in original).
"Whether exceptional circumstances exist is determined on a case-by-case basis
according to the specific facts presented." In re Guardianship of J.N.H., 172
N.J. 440, 474 (2002).
In matrimonial matters, our Supreme Court has acknowledged that spousal
agreements "are essentially consensual and voluntary in character and therefore
entitled to considerable weight with respect to their validity and enforceability
notwithstanding the fact that such an agreement has been incorporated in a
judgment of divorce." Petersen v. Petersen, 85 N.J. 638, 642 (1981). Moreover,
courts generally disfavor providing relief from bargained-for contracts, and
alimony agreements are no exception. "For these reasons, 'fair and definitive
arrangements arrived at by mutual consent should not be unnecessarily or lightly
disturbed.'" Konzelman v. Konzelman, 158 N.J. 185, 193-94 (1999) (quoting
Smith, 72 N.J. at 358).
Specifically, defendant contends credit card debt was not properly
allocated between the parties, he was not represented by counsel, and the IRS
penalty and DOL lien were not contemplated at the time of drafting. As the
judge correctly noted, many of defendant's arguments directly dispute clearly
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labelled provisions of the MSA. Moreover, defendant's economic downturn,
even if true, does not rise to the level of exceptional circumstances warranting
the extraordinary relief provided by Rule 4:50-1 as astutely pointed out by the
judge. The judge's decision to deny defendant's cross-motion under Rule 4:50-
1 was based upon substantial, credible evidence in the record. Thus, we discern
no abuse of discretion.
Defendant's claim that he presented a prima facie case of changed
circumstances is likewise without merit. We note alimony awards "define only
the present obligations of the former spouses" and are generally subject to
"review and modification". Lepis, 83 N.J. at 146. Courts can generally modify
alimony "as circumstances may require." Crews v. Crews, 164 N.J. 11, 24
(2000) (citing Lepis, 83 N.J. at 145). Importantly, the existence of an agreement
regarding alimony, such as an MSA, does not prevent a former spouse from
seeking judicial review or modification based upon a showing of changed
circumstances. Glass v. Glass, 366 N.J. Super. 357, 370 (App. Div. 2004) (citing
Miller v. Miller, 160 N.J. 408, 419 (1999)).
In Lepis, our Supreme Court noted that as a threshold matter, a movant
has the burden of demonstrating a prima facie case of changed circumstances
before the court orders discovery, full financial disclosure, or a plenary hearing.
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83 N.J. at 157-59. Similarly, "[w]hen [a] movant is seeking modification of an
alimony award, that party must demonstrate that changed circumstances have
substantially impaired the ability to support himself or herself." Lepis, 83 N.J.
at 157.
There are a number of changed circumstances that may warrant a
modification of an alimony order. In evaluating an application for alteration of
an alimony order the court may "justly consider all relevant circumstances[.]"
Martindell, 21 N.J. at 355. Relevant circumstances generally include the
supporting party's increased or decreased financial resources, or the dependent
spouse's increased or decreased financial needs. Ibid. A substantial decrease in
the supporting spouse's financial resources can alone serve as grounds for a
reduction in alimony. Ibid.However, courts acknowledge that income earned through employment
"is not the only measure of the supporting spouse's ability to pay that should be
considered by a court." Miller, 160 N.J. at 420. Courts should also consider
other factors, including "[a] supporting spouse's potential to generate income[.]"
Ibid. (citing Mahoney v. Mahoney, 91 N.J. 488, 505 (1982)). Also, a supporting
spouse's "capacity to earn by 'diligent attention to . . . business' [is an] important
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factor[] for a court to consider in the determination of alimony modification."
Ibid. (quoting Innes, 117 N.J. at 503).
Here, defendant alleges his annual income has declined from
approximately $280,000 when he signed the MSA, to a current level of merely
$30,000. He also contends that this substantial decrease in financial resources
is sufficient to justify modification of his alimony obligations under the MSA.
However, the record shows defendant has not attempted to solicit new clients,
bid on other contracts, or pay any amount of the DOL lien. With a "diligent
attention to business" defendant might regain earlier levels of success. Miller,
160 N.J. at 420-21. Defendant has undisputed past success, demonstrating he
has "potential to generate income" which the judge properly took into
consideration. Id. at 420.
Courts are more circumspect in situations dealing with a self-employed
movant's representations regarding financial status. In Donnelly, the movant,
an attorney, argued that since his law practice was struggling, he should be
entitled to a downward modification of his alimony obligation. Donnelly v.
Donnelly, 405 N.J. Super. 117, 128-29 (App. Div. 2009). We noted, "'what
constitutes a temporary change in income should be viewed more expansively
when urged by a self-employed obligor,'" because they generally are "'in a better
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position to present an unrealistic picture of his or her actual income than a W-2
earner.'" Ibid. (quoting Larbig, 384 N.J. Super. at 23). And, "the focus must
also be on the length of time that had elapsed since the last milepost in these
post-judgment proceedings." Id. at 127-28.
In Larbig, the movant filed for modification "a mere twenty months after
the parties' execution of the [Property Settlement Agreement] and the entry of
the [JOD]," and we cautioned the alleged change in circumstance could not have
become permanent in such a short time. 384 N.J. Super. at 22. Here, only eight
months passed between the entry of the JOD and the filing of defendant's cross-
motion. We discern no basis to disturb the judge's conclusion that defendant
was not entitled to a modification of his alimony obligation.
Defendant next argues the judge erred by failing to hold a plenary hearing
before denying his cross-motion. We are not persuaded. "A hearing is not
required or warranted in every contested proceeding for the modification of a
judgment or order relating to alimony." Murphy v. Murphy, 313 N.J. Super.
575, 580 (App. Div. 1998); see also Lepis, 83 N.J. at 159 (holding "a party must
clearly demonstrate the existence of a genuine issue as to a material fact before
a hearing is necessary," and explaining that "[w]ithout such a standard, courts
would be obligated to hold hearings on every modification application"). A
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plenary hearing should be ordered "only where the affidavits show that there is
a genuine issue as to a material fact, and that the trial judge determines that a
plenary hearing would be helpful." Murphy, 313 N.J. Super. at 580 (quoting
Shaw v. Shaw, 138 N.J. Super. 436, 440 (App. Div. 1976)). A material factual
dispute is one that "bear[s] directly on the legal conclusions required to be made
and [such] disputes can only be resolved through a plenary hearing."
Spangenberg, 442 N.J. Super. at 540-41.
The court has the power "to hear and decide motions . . . exclusively upon
affidavits." Shaw, 138 N.J. Super. at 440. However, "[i]t is only where the
affidavits show that there is a genuine issue as to a material fact, and that the
trial judge determines that a plenary hearing would be helpful in deciding such
factual issues, that a plenary hearing is required." Ibid. "[W]here the need for
a plenary hearing is not so obvious, the threshold issue is whether the movant
has made a prima facie showing that a plenary hearing is necessary." Hand v.
Hand, 391 N.J. Super. 102, 106 (App. Div. 2007). We review a court's decision
whether a plenary hearing is required for an abuse of discretion. Costa v. Costa,
440 N.J. Super. 1, 4 (App. Div. 2015).
We discern no abuse of discretion in the judge's decision not to conduct a
plenary hearing. Based on the judge's review of the certifications of the parties
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and after hearing oral argument, she concluded there were no disputed facts
requiring a plenary hearing. Contrary to defendant's contention, the judge
properly determined that a plenary hearing would not have assisted in gathering
information about his business and income essential to the disposition of the
cross-motion. We therefore see no basis to reverse the judge's determination.
Affirmed.
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