NJ Family Legal Blog : New Jersey Divorce and Family Lawyer & Attorney : Fox Rothschild Law Firm : Domestic Violence, Prenuptial Agreements, Child Custody

I have heard on more than one occasion from a client that their spouse or ex-spouse isn't earning nearly as much income as he/she may be capable of earning.  This statement is often made in the face of an alimony or child support calculation.  What happens if this is in fact true?

During the divorce process one of the more common ways to determine how much income a spouse can earn is to have them evaluated by an employability expert.  Now if you look up "employability expert" as a qualified profession or a course of study available in a college course book, I doubt that you would find it in there.  Like many other things, employability experts arose out of a need in the legal profession to have an individual with the proper experience, knowledge and background meet with an individual and assess their skill set to determine what kind of employment they may be eligible to obtain. Viola- a new niche profession is born!

So what about after a divorce is finalized and an ex-spouse is either unemployed (because of the economy, the job market or they simply refuse to work) or is underemployed (earning less than they had previously earned either by choice or no fault of their own) and a support obligation exists?  What does the court then rely upon when addressing the recalculation of a support award?

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We've all read the salacious gossip at the local food store news stand when popular celebrities bear children out of wedlock or famous couples battle it out in a nasty divorce and heartless allegations fly.  Even in those widely publicized cases, it can be an uncomfortable and awkward situation for any parent to question the paternity of a child.  I will admit that in my experience it is not a common occurrence for a parent to question the paternity of a child.  That's not to say it doesn't happen.  What happens when that question arises?

In NJ and many other states there's a presumption that the name listed on a birth certificate is the father of a child.  There is also a presumption that a father who assumes paternity by allowing their name to be listed as the father on a birth certificate along with participating in the upbringing of the child, making financial contributions for the child and representing himself to the public as the child's father is that child's father, whether DNA says so or not.  These cases are factually sensitive and depend upon a number of factors for consideration, such as:

-When paternity is questioned?

-Who is questioning paternity?

-Is there another man submitting himself as the biological father of the child?

-Does the mother know who the biological father is?

These are just a few factors to consider.  Recently, the Appellate Division, in the unpublished decision of Qian v. Wang, A-1873-08T1, decided October 14, 2009 addressed this issue.

In Qian, the parties had been married for 13 years before the father questioned paternity of the parties' only child in the midst of their divorce.  After DNA testing, there was no dispute that the child was not the biological child of the father.  The mother testified at trial that she believed the father was the biological parent of the child until the DNA tests revealed otherwise.  The trial judge found this testimony to be credible.  Also at trial, the father testified that at the child's birth, he had suspicions about paternity but did nothing to pursue those suspicions.

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Last Friday, I was sitting in a courtroom, early for my case, when the judge called the two attorneys on the case before mine into his chambers.   As the time passed, what interested me was the reaction of both of the clients that were left behind. Both clients were disturbed that they were left alone in the courtroom while their lawyers and the judge were “in the back.” Oftentimes, judges will ask the attorneys to come back to his or her chambers, or office, for a multitude of reasons.  And I realized, that in an already stressful situation, not knowing what was going on was just another worry for the litigants.  

On many occasions, the reason can be something as simple as the judge wanting to schedule something in the case and needs to look at the court calendar. For that matter, most attorneys will have more than one case in front of the same judge and they may wind up speaking about another case entirely for a brief period ( for example, “ by the way, have you been able to settle the Doe v. Doe case you were here on last week?” “ Not yet, judge, but I think we are close to a resolution.”).  I was in a judge’s chambers several weeks ago, and it was nothing more than a scheduling conference as my adversary and I were trying to schedule a next day of trial. Between the two lawyers, we had five cases in front of the judge.  It took quite a while to find a common day that both lawyers and the court was available!

The court may want to get a sense of what discovery it still outstanding and what a realistic time frame is for getting a case ready for trial.  Other times, the judge wants to speak about an aspect of the case and ask the lawyers for their position on a legal issue, and may explore whether the issues should be the topic of further research. Priority of issues in a case may be a topic of conversation as well. Which issues are ones which will take a longer time at trial and which are not. Are there any issues in a case which may reasonably settle prior to trial? And speaking of settlement, the court may want to know how far apart the parties are to a settlement.

Some judges will become more involved than others when settlement is being discussed.  Most issues have come in front of a judge before, and he or she knows that “range” a decision will be in. If one side is being completely unreasonable, the judge may be able to help the parties move towards a settlement. The judge may have some creative ideas for compromise that it wants to share with the attorneys.  The court may want to give the attorneys his or her initial reaction in order to focus an argument.

My point is, there are many reasons why the judge may call the lawyers to chambers. Whatever the reason, it is not unusual for the lawyers to get into chambers, and the court’s staff has a pressing matter to speak to the court about, and the attorneys have to wait.  In any event, the lawyer, should, upon coming back to the client be forthright about the topic of conversation, however mundane it may have been.  It is just one of the ways an attorney should effectively communicate with the client.

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It is not uncommon for divorcing parties or parties who may have never married but share a child in common to face the issue of the costs of childcare.  In a time and economic climate where more often than not, both parents must work to support a household, payment of child care costs is an issue that must be addressed.

When calculating the Child Support Guidelines, which is the method NJ courts use when determining how much child support one party will pay to another for a child or children, part of the consideration allowed is a credit for child care costs paid.  It is not necessary that the cost of child care be included in the Guidelines calculation, as sometimes there are situations where parties will negotiate payment of this expense outside of the Guidelines calculation.

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Today I came across a blog entry by a divorce mediator which was nothing short of an attack on "best lawyers."  It appeared as though the ills of the divorce world were placed at the feet of the best divorce lawyers. Lawyers were castigated for such sins as discovery (obtaining financial documents) and seeking court assistance when you want temporary support or time with the children. He said that any lawyer can get the same result and that hiring a good lawyer sets the client up for a racket that is in the lawyer's best interests, but not the client's.

Unfortunately, this is not the first time that I have seen attacks on lawyers from the mediation community.  There appears to be a turf war.  Either you are mediation friendly, or you are not.    Rather than recognizing that some cases are more amenable to mediation than others, the followers would rather attack the "non believers."  

While I agree that most cases will settle, many cases take a fair amount of discovery and litigation to get there. To believe otherwise is simply naive. 

Further, while mediation is not for everyone, it is a useful tool in many cases, Then again, just as not all attorneys are alike, neither are all mediators.  In fact, I suspect that the author of the blog that I read would agree that not every mediator can get the same result - though he says that any lawyer can. 

In a prior blog from May 2009, I wondered whether the mediator's goal was a fair settlement or just a settlement.  To see another blog post on mediation that I authored, click here.  Are parties, often the woman being protected from the imbalance of power that permeated the marriage?  Are people being told of their rights when they appear at mediation without lawyers?  What efforts are made to ensure full and accurate disclosure?  Are the appropriate appraisals being done at all, and when done, are they being challenged and scrutinized to make sure that they are fair and accurate? 

There is no doubt that mediation and other methods of alternate dispute resolution can be a good thing. That said, I have often seen mediations result in a "settlement", but one where the disadvantaged spouse got a "deal" that was neither fair nor reasonable, if not unconscionable. The problem in these cases is that often, once there is an "agreement", the person that got the great deal refuses to concede anything. Thus, a method meant to avoid litigation can often create litigation.  Many of these deals came from the "best mediators." 

That said, rather than attacking lawyers, mediators should recognize that there is a place for the best attorneys and the best mediators.  I posit that the best and most fair mediated settlements will result from the attorneys and mediators working together rather than attacking each other.  I am sure that we can all agree that a fully informed settlement, where both parties interests are fully protected, is optimum. 

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Driving around town this weekend, I saw many lawn signs, like those you would see for a political candidate, advertising a "Free Divorce Seminar." The old adage, "you get what you paid for" comes to mind. 

While I am aware of the phenomena of these "seminars" over the last several years, putting aside potential conflict of interest issues that could perhaps be created, is this the type of thing that one contemplating a divorce should be attending?  Or rather, should a person schedule an honest to goodness divorce consultation with an attorney to which they have been referred or otherwise have researched? 

There is no privacy or anonymity at the seminar - you may see neighbors, parents of your children's classmates, etc.  There is no confidentiality or privilege at a seminar.  You have these things at an initial consultation. 

You cannot ask confidential questions at a seminar; maybe you cannot ask questions at all (and the smart attorney probably would not take questions for risk of prematurely creating an attorney client relationship.)  You cannot show the attorney any pertinent document for the same reason.  And how can you develop a rapport with a speaker at a seminar?  The seminar can never be tailored to your special circumstances because one size never fits all. At a seminar, you cannot really probe the presenter's experience, depth of staff and other resources of the firm, ability to commit to your case, etc. 

At the end of the day, a one-on-one consultation, even if you have to pay for it, will be far more worthwhile to protect your dignity and get the attention and information you deserve.

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We have blogged several times as to a former spouse's attempt to obtain an alimony or child support reduction based on the existence of substantial and continuing changed circumstances impacting the spouse's ability to pay, as set forth by the New Jersey Supreme Court in Lepis v. Lepis, 83 N.J. 139 (1980).  One of the so-called recognized changed circumstances set forth in Lepis is "illness, disability or infirmity" arising after a support Order was first entered. 

An interesting question might arise as to whether a payor spouse claiming an illness or disability as the basis for changed circumstances is really trying to engage in a bad faith form of early, voluntary retirement in order to avoid paying support.  Generally, a retirement when the spouse hits age 65 may justify a support reduction so long as it was made in good faith.  Where the retirement occurs before age 65, however, a Court will look even more closely at the facts to see to what degree the retiring spouse benefits from his retirement compared to the disadvantage suffered by the dependent spouse.

Further, while a temporary change in circumstances, such as through the loss of employment, is generally not enough to obtain a support reduction, what about the reduction of support for a specific, limited period of time?  For instance, New Jersey courts have granted this type of reduction where the payor spouse has been imprisoned or cohabitated with another for a specific period of time. 

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For parties whose combined net after tax income is less than approximately $185,000, there are  Child Support Guidelines that control what the support should be.  Generally, people cannot agree to pay less child support than is mandated and, in fact, it is well settled that a custodial parent cannot bargain away their right to child support because in theory, the support belongs to the child, not the parent.  On the other hand, if you agree to pay more child support than the Guidelines call for, you may be stuck with that deviation in perpetuity.

This fact was highlighted in the recent unreported case of Foster v.McGee.  In this case, the husband had researched the child support when the parties settled and proposed a number that he believed was in accordance with the Guidelines.  In fact, the parties' Agreement reflects that the sum was determined after considering the Guidelines.  The wife was represented by counsel in the divorce, the husband was not.  Turns out, the husband figured the support out incorrectly, and support which should have been $198 per week under the Guidelines, was agreed to at $289 per week

Because this was determined not to be "mutual mistake" and that the increased support was in the children's best interests, the husband did not get relief.

That said, the parties later had a verbal agreement to modify the support to $240 per week.  Even though the parties' agreement said that changes had to be in writing, since there was no dispute as to the modification, it too was confirmed.  From a practical perspective, it is better to get any modifications confirmed in a writing.

However, as to the original point, was a fair result achieved?  If the Agreement suggests that the Guidelines were considered, then if there was not "mutual mistake", then were there sharp dealings?  Did the wife, who was represented by counsel. know that the Guidelines called for lower support by remained silent?  Moreover, when you submit your Judgment of Divorce, a Child Support Guideline Worksheet is supposed to be attached?  One think that if this happened, the mistake would be obvious?  If not, then why not"  Also, as noted in the opinion, there are supposed to be findings made by a trial judge if there is going to be a deviation from the Guidelines.  it does not appear to have happened here. 

While extra support will almost inevitably be in a child's "best interest".  That said, one wonders whether a fair result occur ed in this case.

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A common misconception in New Jersey is that both spouses can use the same attorney for their divorce.  My local paper recently had an article about divorces in the current economy.  One attorney was quoted as intimating that this was true; the attorney was speaking of uncontested divorces in which the parties agree on issues and the seek the dissolution of their marriage. While I am certain that the attorney’s comments were taken out of context, as one of the points in the article was a concern about legal fees, this is a question that comes to me often.  A client will ask me if I can represent both spouses, even if they have an agreement.  The answer is a resounding, no.

The ethics rules in our state are very clear that one attorney cannot represent both spouses in a divorce.   Simply, it is a conflict of interest.  The New Jersey Supreme Court has said on many occasions, that “one of the most basic responsibilities incumbent on a lawyer is the duty of loyalty to his or her clients. From that duty issues the prohibition against representing clients with conflicting interests."( In re Opinion No. 653 of the Advisory Comm. on Prof'l Ethics, 132 N.J. 124, 129 (1993)).  Our state has a very strong policy in which there should not be even an “appearance” of a possible conflict of interest.  This is to protect the clients.

Imagine a scenario in which one spouse has been home raising children, and the other has been working throughout a twenty year marriage.  This is a situation in which alimony will be an issue.  Certainly, the non working spouse and the working spouse may have differing positions about the amount and term of alimony. Most people agree that in these circumstances, the parties will want to have their own attorneys.  But what about the situations where both parties are working, and they have a house and a couple of retirement accounts.  Many people believe that in this situation, they do not need two attorneys and both use the same lawyer.  Well, they can’t. 

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It has recently come to light that the court may have been calculating child support incorrectly.  This revelation comes to light from a Mercer County case where an attorney recalculated child support using the software in his office and came up with the different result than the Court.  As a result, the attorney wrote to the Court and the Court directed the matter to the Administrative Office of the Courts (AOC) for review.  Sure enough, the attorney was correct and a corrected Order was entered. 

Since the support as calculated by the Court's child support software was about 10% too high, this has raised concern among the bar whether all support orders calculated by the Court in the recent past have been too high. 

When the new Child Support Guidelines came out about a dozen years ago, there were essentially two main software packages that calculated support and the Court had one of the two.  While they usually were close, it was not uncommon for their to be a slight deviation in the calculations.  If there was a real discrepancy, the Court would usually accept the guidelines calculated using the same software that the Court had.

Several years ago, the Court went to a web based program to calculate child support.  This program was not available to the public or attorneys.  It now appears that there could be a problem with this program. 

If this is so, who knows how long it has been going on.  Perhaps there was user error in the matter described above - but that does not seem to be the case. Further, as both the taxes considered and other aspects of the Guidelines are essentially updated yearly, perhaps there was a programing error in the most recent update.  Worse yet would be if there has been a "glitch" in the Court's program since it's inception.

In the mean time, if your child support was calculated by the Court, you may want to have the calculations checked. 

Either way, stay tuned for updates on this story.

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The financial impact upon children of a divorce or a separation among unmarried parents is almost certain. It is common sense to assume that it is more expensive to sustain two households than one household. In some circumstances however, one of the parties has family, usually parents, who are capable and willing to aid a grown child and the grandchildren being impacted by the divorce or separation, whether by providing non-monetary support such as shelter or by providing some monetary aid. The question is does such aid impact child support? Is the aid being provided considered an “available source of income”? 

There have been no New Jersey decisions squarely on point. However, in a 2000 Appellate Division decision, the Court plainly stated that “generally, a grandparent has no legal obligation to support a grandchild.” A.N. ex rel. S.N. v. S.M., 333 N.J. Super. 566 (App. Div. 2000), cert. denied, A.N. ex rel. S.N. v. S.M., Sr. ex rel. S.M., Jr., 166 N.J. 606 (N.J. 2000). In that case, the parents were unemancipated teenagers who had a child. The maternal grandmother filed a child support obligation against the unemancipated father and against the paternal grandfather who was providing financial support to the father. 

The A.N. decision notes two exceptions to the general rule that a grandparent has no legal duty to support the grandchild (1) when the grandparent obtains legal custody or guardianship or (2) where the grandparent otherwise acts in loco parentis. (Notably, prior to 1975, in certain circumstances a grandfather could be compelled to support a grandchild by statute. N.J.S.A. 44:1-140. That obligation, however, was eliminated by L.1975, c. 1, § 1, effective January 14, 1975. The statute now only requires a mother and/or father to support their child. In short, "…third parties are not legally responsible to pay support for children who are not theirs." 2 Skoloff & Cutler, New Jersey Family Law Practice § 5.1B(2)(a) at 5:21 (13th ed. 2008).  

While the A.N. ex rel. S.N. v. S.M. decision is clear that third-parties are not legally responsible for the support of a family member’s child, the true question in circumstances were aid is being provided by a family member is whether or not the Court should (or would) impute the aid being provided as income to the parent receiving such aid. There are arguments on both ends. 

The party receiving such aid can assert that such aid is not guaranteed-- it could end-- and to impute such aid as income in the calculation of child support would be to inappropriately inflate income for aid that is uncertain and would be inappropriately indirectly forcing third-parties to pay support where they do not otherwise have a legal obligation to do so. On the other hand, the other party could argue that such aid is an “available source of income” and that New Jersey statutes and decisions allow for calculation of child support based upon all available sources of income. 

The issue is difficult to address and it is likely to be determined on a fact by fact basis. The inquiry will center upon, among other things, the form of aid, how much aid is being provided, how often is the aid being given, how significant the aid is, the purpose of the aid, and the certainty of continuous receipt of aid. For example, in a case where the aid being provided is in the form of shelter, it is unlikely that this will have much impact on child support. However, in the case in which the aid being provided is a monetary cash stipend, the inquiry is much more complex. For example, how much is being provided, how long has it been provided and what is the certainty that it will continue to be provided. (This post does not consider monies being received by way of Trust funds as such funds would be considered an available source of income for purposes of calculating child support and comments upon actual cash that is being given.)

In short, whether or not a child support calculation will be affected by aid being providing to the supporting or dependent parent, is a difficult and complex issue to raise and undertake in Court proceedings especially. However, depending upon the circumstances, the argument may be raised.

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Summer is over.  Kids are either back to school by now or will start by Tuesday.  The regular routine for most families will soon be back in full swing.

Another phenomena occurs this time of year.  A surge of people call for divorce consultations.  At first I thought it odd or coincidental.  Over the last several years, it has become commonplace.  There is a similar phenomena after New Year's Day. 

New Year's seems logical - New Year's resolutions.  Seemingly decisions are made to not be unhappy anymore and improve what one perceives to be a problem in their lives.  Back to school, however, does not have the same immediate "of course" as to why things occur this time of year.

I suspect that for most people, theirs kids are the most important thing. Since the kids are off and around during the summer, I suspect that many people do not want to start the process while their children are off, where long planned family vacations are scheduled, etc.  Once the routine is back it place, there are more distractions.

This is not to say that people do not start divorces at other times of the year.  Just that there are noticeable surges at these two times of years.

Though this is not to suggest that anyone should rush out to get a divorce, for those with questions about the process, our firm can answer any of your questions.  With our three offices in New Jersey, we cover the entire state.

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A basic question that people often ask at the outset of a divorce is, does the Court have the ability, or jurisdiction, to hear their case, especially when one spouse lives in a state other than New Jersey?

New Jersey statutory law seems clear, but the outcomes of a jurisdictional question over whether the Court can hear the cause of action for divorce are often based on highly fact-specific scenarios. N.J.S.A. 2A:34-10 states, in relevant part to this blog entry, that a New Jersey Court may have jurisdiction over a divorce when either party to the marriage has “become, and for at least 1 year next preceding the commencement of the action has continued to be, a bona fide resident” of New Jersey. As noted by the Appellate Division in the recently decided Boghosian v. Boghosian, an intricate and interesting unreported (not precedential) opinion decided on August 17, 2009, New Jersey Courts interpreting the language of this law have concluded that “bona fide resident” is the equivalent of “domiciliary” and that either party must actually be domiciled in this State. 

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Previously I have blogged on both the issue of sanctions assessed by a court against one party in a divorce or post divorce matter and also the obligation to contribute to the costs of a college education for a child and to what extent.

These issues are often addressed to the Appellate Court of New Jersey as in many family law matters they are topics hot for debate.  Most recently, the Appellate Division in the unpublished decision of Hikes v. Hikes, Decided August 13, 2009, Docket No. A-6642-06T2 addressed both the issue of sanctions and the payment of college for a child.

Sanctions may be requested by a party or  granted by a court on its own in a situation where one party acts in extreme bad faith or is non-compliant.  Sanctions can be viewed as a sort of punishment for that extreme bad faith or non-compliance.  This is especially so when the other party acts in good faith and is complaint. 

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In a reported (precedential) trial court decision, Martin v. Martin, released on July 31, 2009, Judge Haas, in Burlington County ruled that there no longer is an automatic review of child support every three years.  Rather, for child support to be reviewed, the mere passage of time is not enough, and there has to be a showing of a change of circumstances.

The Court went on to point out that the three year review relates back to a prior version of a particular statute and has essentially been replaced by a Cost of Living Increase (COLA) every two years. 

While this is an interesting opinion and makes logical sense, since it is a trial court opinion, other trial court judges are not required to follow it.  Moreover, there is precedential decisional law that states that passage of time can be a change of circumstances as to child support because it is well known that as children get older, certain expenses increase.

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At the time of divorce proceedings, many of my clients ask if they can “lock” the other party to whatever support amount is rendered. If the person asking is going to be paying support, they are asking because they do not want to have to pay more in the future. If the person asking is going to be receiving the support, they are asking because they intend to rely upon the amount indefinitely. My response in most circumstances is that it can be done but it should only be done with great caution and only done by way of agreement. For example, while a litigant’s intent may be to “lock” the support amount because they are anticipating earning more in the future and do not wish to pay more in the future, once locked and the litigant is faced with unanticipated detrimental financial circumstances, they may be unable to obtain a decrease of their support obligation. In other words, it goes both ways - being bound to a specific number regardless of changed circumstances can be very beneficial in some circumstances and in other circumstances very disastrous.

N.J.S.A. 2A:34-23 recognizes the equitable power of the Courts of the State of New Jersey to modify alimony and support orders at any time. Specifically, N.J.S.A. 2A:34-23 states:

Pending any matrimonial action brought in this State or elsewhere, or after judgment of divorce or maintenance, whether obtained in this State or elsewhere, the Court may make such order as to the alimony or maintenance of the parties . . . as the circumstances of the parties and the nature of the case shall render fit, reasonable and just, and require reasonable security for the due observance of such orders. . . . Orders so made may be revised and altered by the court from time to time as circumstances may require. 

Based upon the mandates of the statute, “alimony and support orders define only the present obligations of the former spouses.” Lepis v. Lepis, 83 N.J. 139, 146 (1980). Alimony and support obligations are always subject to judicial review and modification upon a showing of a change in circumstances. Id.    A type of “‘changed circumstance” that warrants modification of a support order is an increase or decrease in the supporting spouse’s income.” Innes v. Innes, 117 N.J. 496, 504 (1990). However, what happens when the parties agree at the time of the divorce that the support provisions cannot be modified?

The Appellate Division decision discussed whether or not a non-modifiable clause (also called an “anti-Lepis” clause) is enforceable in the decision of Morris v. Morris, 263 N.J. Super. 237 (App.Div. 1993). The Morris Court did find that an anti-Lepis clause could be found unenforceable in some circumstances, although the particular anti-Lepis clause in Morriswas upheld. In Morris, the defendant husband sought a reduction in alimony payments despite an anti-Lepis clause in the alimony agreement stating that the agreement was not modifiable for any reason except for the husband's physical disability. The husband based his request for reduction on a claim that the his annual income was $49,000 while his annual alimony payment was $35,000. The wife argued that husband kept all of the assets pursuant to the parties agreement and in exchanged for non-modifiable alimony, she agreed to a support amount of much less than the amount needed to sustain the marital standard of living. In holding that the husband was not entitled to a reduction in alimony payments, the court addressed a conflict between two chancery court decisions. In Smith v. Smith, 261 N.J. Super. 198, 199-200 (Ch. Div. 1992), the court determined that “an ‘anti- Lepis’ clause, which seeks to preclude the exercise of [the] Court's equitable responsibility to review and, if warranted, to modify support obligations in response to changed circumstances, is contrary to the public policy of this State as reflected in its Legislative Acts and its judicial decisions.” In Finckin v. Finckin, 240 N.J. Super. 204, 206 (Ch. Div. 1990), the court concluded that public policy did not prohibit the use of an anti- Lepis clause.
 

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Trials are often won or lost based upon credibility determinations.  More often than not, cases are replete with he said/she said situations, or real differences of opinion as to almost every issue.  In an interesting unreported Appellate Decision released on July 15, 2009, credibility was critical.  As the author of this post was the successful trial and appellate attorney in this matter, I am fully familiar with the facts. 

Aside from being important at trial, credibility determinations cannot be overturned on appeal.  On top of that, as long as the Appellate Division finds that there was sufficient credible evidence in the record, the trial court opinion will be upheld.

In this case, the issues were more than he said she said. In the six months between when the wife said that she wanted to get divorced and the filing of the divorce complaint, the husband's law practice which had been growing and flourishing each year, suddenly became less profitable, if he was to be believed.  He was not believed.  Both the wife's testimony as well as her forensic accounting expert's testimony were deemed more credible. 

It was not just the wife's word that was so compelling.  Rather, at trial we produced thousands of pages of exhibits that supported the issues we presented.  It was not surprising, on appeal, that defendant argued that there was no evidence in the record - but to do so, he had to fail to comply with the rules and submit the trial evidence.  The wife was forced to remedy this. 

On almost every issue at trial, the husband was deemed not credible. This included findings of discrepancies in his Case Information Statement, violation of Court Orders, lack of credibility regarding the marital standard of living and his income, etc.  The Appellate Division's assessment of the husband was perhaps even more severe:

Finally, in an amended notice of appeal, defendant seeks review of an order entered on September 24, 2007 denying his motion for recusal of the trial judge. Defendant claims that "the trial [judge] made several inappropriate credibility determinations about defendant and his experts to justify rejecting the testimony and objective evidence presented at trial." After reviewing the record, we find no evidence of bias
against defendant. The court made credibility determinations based upon the evidence presented and defendant's demeanor and testimony. We give great deference to the trial court's credibility findings and will not upset them unless they are patently contrary to the credible evidence in the record. State v. Locurto, 157 N.J. 463, 470-71 (1999).

Moreover, if this had been a jury trial, the court could have given the "False in One, False in All" charge, instructing the jury that if it found that defendant had testified untruthfully in one instance, it could find his entire testimony to be untruthful. Since numerous discrepancies in defendant's financial information were brought to light during trial, the "False in One, False in All" principle applies.

The ramifications of not being truthful are rarely so clear.  We are obviously proud of the result obtained for our client in this case.

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During tax season this past Spring, we posted blog entry entitled "Who Gets The Tax Exemption".  This past month in a Chief Counsel Advice (CCA), the IRS has clarified the provisions in the IRS Code relating to exemptions which were discussed in our blog.  CCA 200925041 cautions that a Final Judgment of Divorce awarding one party a dependency exemption may not be upheld by the IRS if the Judgment awarding the dependency exemption contains contingencies.  

In our prior blog, we discussed the recently amended IRS code, Section 152(e) relating to tax exemptions.  Section 152(e) directs, for exemption purposes, that the custodial parent is the one with whom the child resides the greater number of nights during the year regardless of the terms of a divorce decree.  However, Section 152(e) does not preclude the non-custodial parent from claiming the exemption so long a the custodial parent executes IRS Form 8332 releasing the exemption.  Sandra Fava, the scrivener of the blog, noted that it is important to make sure that there is a procedure in place to have the custodial parent file IRS Form 8332 so that the non-custodial parent will be able to claim the exemption.  CCA 200925041 clarifies the procedure in effectuating the exemption through execution of Form 8332 and further recommends additional procedures in order for the non-custodial parent to exercise his or her right to claim the exemption..

CCA 200925041 clarifies that (1) for pre-July 3, 2008 divorce decrees or separation agreements allowing a non-custodial parent to claim an exemption for a child, a non-custodial parent may attach pages of a divorce decree or separation instrument executed on or before July 2, 2008 if the pages constitute a statement substantially similar to the requirements of Form 8332 in effect at the time of the entry of the decree or separation agreement; and (2) for post-July 3, 2008 divorce decrees or separation agreements, a custodial parent's release of a claim to an exemption for a child must be separate from the decree or separation agreement.  The release of the exemption my be pursuant to a signed Form 8332 or a document that conforms to the substance of Form 8332 but the document's only purpose must be to release a claim to the exemption. 

Also very important is that CCA 200925041 specifically noted that for pre-July 3, 2008 divorce decrees or separation agreements, while in order to obtain the exemption the non-custodial parent may attach pages of a divorce decree or separation instrument executed on or before July 2, 2008, the provisions to the divorce decree or separation agreement must not contain any conditions on claiming the exemption.  For example, parties often agree that one party may claim an exemption so long as his or her child support obligation is current.  If this type of provision is contained in the divorce decree or the separation agreement, regardless of whether the condition is satisfied, a non-custodial parent will be unable to claim the exemption simply by attaching copies of the decree or separation agreement as has been the practice in the past.

Accordingly, it is important to do the following:  (1) If you have a pre-July 3, 2008 divorce decree or settlement agreement that contains conditional requirements and you are the non-custodial parent, discuss with an attorney how to best protect your exemption right and any necessary modifications to your Judgment or your settlement agreement to effectuate your right;  and  (2) if you are currently separated or about to be separated and are heading to divorce, make sure that you address these issues with an attorney so that you can insure that there are no problems in the future with respect to the IRS and exemptions. 

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Despite what people often think are iron-clad agreements, foolproof from any misinterpretation, despite best efforts, that may not always be the case.  One area that has been given significant recognition for interpretation by our courts is the area of what constitutes emancipation of a child.

This issue was recently addressed in the unpublished Appellate Court opinion, Zingone v. Zingone, decided June 1, 2009, A-0078-08T1.   Generally, a parent has no obligation to support an emancipated child.  So what constitutes emancipation?

The Supreme Court of New Jersey has held that emancipation can be found when a child marries, joins the military, reaching of an appropriate age, and when a court orders him/her so based upon the child's best interests.  Just because a child turns 18 years old only establishes prima facie, not conclusive proof.  Whether a child is emancipated at 18 years old depends on the facts of the case.

So what does the court look at? The most important inquiry is whether the child has moved beyond his or her parents' sphere of influence and responsibility and has obtained independent status.  To make this determination, one must look at the child's needs, interests and independent resources as well as the family's expectations and the parents' financial ability.

However, if an agreement remains vague as to a triggering emancipation event, as the plaintiff argued in Zingone above, courts will often refer to public policy, which in modern times, encourages a college education, especially where a child shows scholastic aptitude and the parents are able to afford it.

In New Jersey, our highest Court has recognized that generally, financially capable parents should contribute to the higher education of children who are qualified.  Even in cases where a child may take a brief break from college, during which time he or she is working full-time, our courts have held that that child is not emancipated because he or she has not yet moved beyond their parents' sphere of influence.

These cases are often extremely fact specific and require examination of several factors before an individual can determine whether or not their child may be emancipated under the laws of this state such that relief from financial obligations would be successful.

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An opinion issued by Judge McGann in Monmouth County in December 2008 was released for publication in June 8, 2009.   In the case of Centanni v. Centanni, the Court held again that child support could be modified retroactively in limited circumstances.

In this tragic case, one of the parties' children died in a car accident in October 2007.  The father did not file a motion to modify his child support per the parties' 2004 Property Settlement Agreement until January 2008. 

While typically the law is that child support cannot be retroactively modified, there are limited circumstances where it is possible.  However, prior to this case, there were no reported decisions dealing with the death of a child.  Judge McGann held that:

Upon the tragic death of the parties’ daughter, the duty to pay support for her ceased. Nothing within the four corners of the statute evinces an intent on the part of the legislature to bar retroactive modification upon such an occurrence. Moreover, there are other equities at work here. To bar retroactive modification would be to punish financially an obligor who has thoughtfully, and in good faith, allowed an appropriate period of grieving and healing to take place before seeking redress in court. Consequently, a bar on retroactive modifications would encourage an inopportunely-timed filing while families are still in the midst of coping with the tragedy.

Given the previous reported decisions allowing retroactive modification in certain circumstances, for instance, upon emancipation, one has to wonder why the mother fought the retroactive termination of support. Certainly, the legal fees that she expended were going to substantially cut into if not exceed the support at issue. 

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Previously I blogged on the issue of mediation and my skepticism of the process under certain circumstances.  This week there was a spirited discussion regarding the issue of mediation on the New Jersey State Bar Association Family Law Section listserve.  As a result, I thought it would be wise to highlight some of the issues again.

To frame the issue, the bigger debate surrounded the practice where a couple goes directly to a divorce mediator or some other trained mediator, without attorneys.  Some of the things that raised concern were as follows:

1. Some mediators are concerned not whether the mediation is fair, but rather, simply that the parties reached a settlement
2. Number 1 would be less troubling, except that many mediators are not telling the party receiving an unfair deal that it is unfair
3. Rather, apparently, for many mediator's, the phrase, "I think you should discuss this issue with a lawyer" is code for the resolution of this issue or this case is unfair.  However, people go to mediators to avoid lawyers and/or there is an undercurrent among mediators that divorce lawyers really are not looking out for the parties' interests.  Moreover, some parties think that if a mediator is not putting a stop to the mediation when something is unfair, that it must be fair.

There was also a concern that the imbalance of power in the marriage that naturally is creeping into the mediation is being ignored.  A perfect example is in a case where alimony, perhaps permanent alimony is a no brainer, yet the wife is willing to waive it in mediation.  Is anyone asking why?  Did the husband vow to never pay alimony?  Was there a threat to "go after custody" if a spouse sought alimony?  Did one spouse say "I spoke to a lawyer who said you weren't entitled to alimony" as a means to deter the other spouse from seeking it?  Was the other spouse given access to money to consult their own attorney?  I once represented a woman in a post-judgment matter whose husband would not give her money for the attorneys she wanted to see, only for mediation and then an attorney he hand selected for her to draft the Agreement.  It was not shocking that the "mediated agreement" included a waiver of alimony and the child going to school where the husband lives, when the child was of school age, despite the fact that the wife was the primary caregiver. 

I have also seen many a  complex matter where one party is pushing for mediation and there hasn't even been the most basic exchange of information at that time, much less formal discovery. I have even seen cases where the party with the documents will not provide them in advance of mediation and will only bring them to mediation and take them with him at the end. The better practice, and the better mediators require, parties to have attorneys involved from the start of the mediation so that both parties are fully informed about the law and the process and so that any imbalance of power can be rectified with an attorney protecting the weaker party.

There is no doubt that mediation and other methods of alternate dispute resolution can be a good thing.  That said, I have often seen mediations result in a "settlement", but one where the disadvantaged spouse got a "deal" that was neither fair nor reasonable, if not unconscionable. The problem in these cases is that often, once there is an "agreement", the person that got the great deal refuses to concede anything. Thus, a method meant to avoid litigation can often create litigation.

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A question faced by all parents is, when is a child emancipated in the eyes of the law?  As set forth by the New Jersey Supreme Court,  "emancipation is the act by which a parent relinquishes the right to custody and is relieved of the duty to support a child."  Newburgh v. Arrigo, 88 N.J. 529 (1982).  The question and answer therefore have far reaching financial implications.  However, emancipation does not occur at a fixed age.  Rather, the inquiry is fact-specific. 

This issue was recently taken on by the Appellate Division in the matter of Brandes v. Rigney, an unpublished opinion finding that the trial court applied improper legal principles in concluding that a child was emancipated.  The parties at issue had three children before they were divorced in 1997.  In 2004, the father, Brandes, sought to have the parties' sons emancipated.  The parties' oldest son, Raymond, was born in 1982, while the other son, Eric, was born in 1985.  The trial court denied Brandes' motion at that time.

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The issue of relationships between parents and children when determining allocation of college expenses is often a complicated one. I have had many post divorce clients, usually non-custodial clients, discuss their frustration with the lack of involvement that they have had in the selection of college for their sons or daughters but are expected to pay a significant portion thereof. They feel as if the are simply “a wallet.” The recent unreported Appellate Division decision of Miller v. Tafaro brought this to mind.

In Miller, the father had been estranged from his children for many years following the parties’ divorce. When the mother asked the court to enforce the Property Settlement Agreement as to the payment of college expenses, the father said that he should not have an obligation to pay as he did not have a relationship with the children. The Court noted that as this was but one factor for consideration by the court, and, given that the lack of relationship over the years with the children was a result of the father’s actions, the trial court’s decision that the father was obligated to pay a portion of college expenses was affirmed.

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We have previously posted many blog entries regarding modifying alimony and child support based upon job loss and/or reductions in income in light of the historic, current economic down turn.  To see some of my prior posts, click here, here, here, here, and here.

In our practice we have seen many clients coming in to address these issues and have heard anecdotally from judges that the increase in these kind of motions has hit the courts.

That said, there is still little consensus on how these cases are being handled.  There is no consensus amount the courts regarding how long you have to wait to come to Court.  There is no consensus amount the court's regarding how much of your assets you have to go through, or whether you have to incur debt before you can file.

There seems to be a focus on the lifestyle of the support payor, i.e. has he or she reduced their lifestyle.  While that is an appropriate consideration, it may be too simplistic.  Looking at the house someone lives on or the car that they drive likely does not tell the whole story.  Can the person reasonably sell their home in this market without facing a deficit?  How long would it take to sell the house anyway?  Maybe the car is leased or if financed, there is negative equity and they cant rid of it to reduce their expenses. 

The bigger question is whether despite a clear loss or reduction of income, whether the payor has to strip their lifestyle to bare bones, or whether the undisputed reduction of income should be enough. 

Court's also have to beware the opportunist who is using the bad economy in general to try to reduce or limit their support obligation when there is no real credible evidence that they have or will be affected. Scrutiny in this regard is particularly difficult when the payor is a business owner and has the ability to control their income in various ways.  The skepticism and scrutiny in these cases is heightened.  I have two cases now represented service providers - one of whom has lost many long term clients because they have simply gone out of business - and the other, who has received less than half of the orders and deposits then have historically been received by this time of year (and it is a seasonal business). 

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New Jersey has upheld the long standing principle that permanent alimony awards are subject to review, modification and possibly termination based upon changed circumstances.  (Lepis v. Lepis, 83 N.J. 139 (1980).  However, it is not enough to paint a bleak picture of a payor's financial circumstances in order to succeed in a downward modification or termination of alimony.  The applicant must also show the Court that the financial difficulties being encountered are not temporary and/or subject to contingent circumstances.  Innes v. Innes, 117 N.J. 496 (1990).

In the recent unreported Appellate Division decision of Norych v. Norych (A-2633-07T1 decided April 16, 2009), while the payor applicant provided the court with very grim descriptions of his personal financial situation and the financial affairs of his law firm, the applicant miserably failed to substantiate his professed circumstances.

In the Norych matter, the parties were divorced in 1992 and at the time of the divorce, the ex-wife received a permanent alimony award of $1,000 per month partly based on ex-husband's law firm income of $70,000 per year and ex-wife's income as a teacher of $25,000 per year.  Ten years later, the alimony increased to $1,100 per month.  In October 2007, ex-husband filed a Motion seeking to terminate his alimony obligation based upon  what he characterized as two devastating and shocking events. 

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The end of the Court year in  New Jersey in June 30th.  With that will come pressure, perhaps unnatural pressure, but pressure nontheless to resolve cases. 

While the fact that there are judicial shortages in many counties may provide relief, I suspect that it will do little to quell this rite of Spring.

As the legal system is very statistically driven, a court's performance is often measured in how many cases they clear, and more particularly, whether there is backlog (i.e. is the case too old for the case type that it is).  My undertanding is that a divorce case in in back log when it is over 1 year old. 

One tool that Court's use to clear more cases this time of year is to hold "blitz weeks."  During a blitz week, the oldest cases in a county are scheduled for trial and all of the family part judges clear their calendars to allegedly try cases during these weeks.  Whether or not cases actually get tried during blitz week is another story.  However, the threat of trial, along with the court's active assistance in trying to settle cases often clears many cases from the docket.

Also, in the cases that are naturally scheduled for trial during this time of year, adjournments become more difficult.  Regularly, multiple trials are scheduled for a judge for the same day.  The reason for this is that most cases settle or get adjourned so if only one case were scheduled, a judge could have open court time.  Often you will learn where you are on the list in terms of which is the oldest case and can get a sense as to whether the trial date is a real one.  In fact, usually the first and second trial date are not "real" dates, but rather dates when a court will try to get you to settle. 

That said, at this time of year, if you want to try to adjourn these dates, it becomes more difficult, with the hope that you will settle.  There is an old joke that goes, what is the easiest way to get an adjournment, tell the court you are ready for trial.  In reality, it works in the reverse.  That is, when you seek an adjourment of a trial date, courts often deny this expecting that it will help force a settlement. 

In my practice, if I appear for a trial date, I am prepared for trial.  I learned early on that the best way to be prepared to settle a case it to be prepared to try a case.  That way you are negotiating from a position of strength and very often, the other side really isn't prepared for trial  - making favorable settlement terms more likely.

In any event, if your case is getting close to a year old, expect pressure from the Court to get it done before June 30th.

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On April 13, 2009, the Appellate Division issued a decision in the case of Cadavid v. Nieto which dealt in large part with the issue of child support in high income cases. To view the full text of the case, click here. 

We have previously blogged on this topic.  To view links to those prior posts, click here , here, and here.

In the Cadivad matter, the father appealed an Order requiring him to pay almost $9000 per month in child support.  Both parties were  immigrants from Colombia. The father is the successful founder and president of eight schools that teach English as a second language located in New Jersey, New York, Florida, and Canada. He also owns interests in several commercial properties in New Jersey and Florida as well as 4 homes.  In a June 2007 loan application, the father valued his various business interests at $8 million and the fair market value of his real estate holdings at $5.2 million. The trial judge calculated the father's annual income for purposes of child support at approximately $2 million annually.

On the other hand, the mother was a full time homemaker but had an associates degree from Bergen County Community College.

The parties had 3 children under age 10 at the time of the proceedings.

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 A long standing problem for matrimonial attorneys has been the calculation of child support in situations in which two parents have equal physical custody of children. The Court Rules tell us that when the combined net income of the two parents is $187,200 or below, the Guidelines must be utilized as a rebuttable presumption for child support. Practice tells us that the Guidelines are rarely deviated from in this income category. 

 The Child Support Guidelines are predicated on the supposition that there are three types of expenditures that parents make for or on behalf of their children.. The first is fixed expenses (representing 38% of the child support amount) are those expenses incurred even when the child is not residing with the parent. Examples of this include housing-related expenses, such as mortgage or rent, utilities, household furnishings and household care items. The second is variable expenses (representing 37% of the child support amount). Variable expenses are incurred only when the child is with the parent. This category includes items such as transportation and food. Finally, controlled expenses (representing 25% of the child support amount) are those expenses which include items like clothing, personal care, entertainment and other miscellaneous items.

The Guidelines presume that each parent has fixed and variable expenses on behalf of the child. On the other hand, the Guidelines also presume that controlled expenses are ONLY incurred by the parent who is designated the “Parent of Primary Residence.”  However, in a true joint custody scenario, neither parent is the Parent Primary Residence and both have controlled expenses. The calculation of child support in these cases has been problematic for many years and there has been little consistency as to the child support awards in these cases. On April 13, 2009, a published trial court decision was handed down in which there is a specific formula to determine child support.

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Mark Ashton, a partner in our Exton, Pennsylvania office, and the editor of the firm's Pennsylvania Family Law blog, wrote an excellent post on that blog entitled "Stock Option Developments."  To read the post, click here.

Stock options have become a large part of executive compensation over the last few decades.  Moreover, they have become common additional/incentive compensation even for non executives who work for large public companies.  We have had to deal with the issue of options both in terms of the division of them in equitable distribution and as a component of income for determining alimony and child support.

Mark's post raises interesting food for thought regarding the issue of the re-casting and/or re-pricing of options, post-complaint. 

Stay tuned for updates as the law develops regarding this topic.

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As April 15h quickly approaches and the pressure to get those tax returns completed and filed grows, the issue of which parent can claim a child or children as a dependency deduction for tax purposes becomes more and more relevant.

All Property Settlement Agreements ("PSA") or Final Judgments of Divorce should address this issue to avoid future complications.  What about when the issue is appropriately addressed but one parent seeks to modify the terms so as to receive a benefit  perhaps previously given up in lieu of some other benefit?

Recently, the Appellate Division heard the matter of Mitchell v. Mitchell, A-4856-07T1, decided March 11, 2009 (unpublished decision).  In this case, the parties have been divorced since 2002 resolving their issues by entering into a negotiated Property Settlement Agreement.  At the time of the divorce, husband was earning over $100,000 and wife was imputed income of $17,000.  The two children were given as tax exemptions to the husband but resided primarily with the wife.

Both parties remarried.  In 2008, wife filed a motion seeking, among other things, to amend the terms of the parties' PSA to allow each party to claim one child as a dependency deduction on their tax returns.  Her argument was based on the fact that husband now had twins with his current spouse and would receive that tax benefit.  The trial court granted this request stating that there had been "numerous changes in circumstances" since the parties entered into the agreement and that such a request was "fair".

The Appellate Division vacated and remanded this aspect of the trial court's Order.  In doing so, it noted that husband didn't argue that the trial court was powerless to change or modify the terms of the PSA but rather that the judge's conclusory determination of what was "fair" was insufficient to support the Order.  The Appellate Division agreed stating that the "record does not disclose the tax effect if one of the child tax exemptions was taken from" the husband.  Id. at pg. 6.  The court must ascertain whether its fair and equitable to take from husband a right for which he had previously bargained and which  may need to be determined with an evidentiary hearing.

In 2008, the IRS amended Section 152(e), which deals with dependency exemptions.  The changes to the tax code can be summarized as follows:

The custodial parent, for 2009 and forward, is the one with whom the child resides the greater number of nights during the year, regardless of the terms of the divorce decree. 

 The custodial parent can unilaterally revoke the release of a child exemption for calendar years 2009 and forward, even if the release was made prior to 2009.  As a result, it is important to make sure that there is a procedure in place to have the custodial parent file IRS form 8332 in a timely manner so that the non-custodial parent can claim the exemption that they are entitled to claim by reason of the parties' agreement or a Court Order. Put another way, the change in the IRS section does not preclude a non-custodial parent from claiming the exemption, it just requires more care to make sure that this is accomplished.

As a further note, the individual claiming a dependency exemption is entitled to benefit from a Child Tax Credit and any allowable Hope and/or Lifetime Learning Educational Tax Credits.

For more information on the tax benefits/ramifications of these issues, you should consult a tax professional.

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Given the current economy, a major issue being discussed by family law attorneys and judges is how to handle the issue of support modification where due to the current economy, someones income is eliminated or greatly decreased.  The standard for modification of support is that there has to be a showing of a substantial and continuing change of circumstances.  One of the major issues being discussed is how long does one have to be out of work before making an application to the Court. 

The second issue is even if the change is temporary - whatever that now means - should there still not be some temporary relief because if the existing Order or Agreement is not fair.  A general proposition of law is that Agreements can only be enforced to the extent that they are fair.

Earlier this week, the Appellate Division decided the case of Baker v. Baker which leads me to believe that help may be on the way. To view the case, click here.

In Baker, the parties were divorced in 1998.  At the time, the husband worked was a Managing Director at Pershing Trading Company and earning nearly $800,000 per year, the great
bulk of which came in the form of an annual bonus.  The parties agreed that he would pay alimony in the amount of $10,000 per month.

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This was a good and bad week for Martin Brodeur, the goalie for the New Jersey Devils.  On a good note, he passed Patrick Roy as the all time winningest goalie in NHL history.  On a bad note, he lost his appeal of an alimony award in the Appellate Division.  To see the opinion, click here. This is the second appeal in this case.  To see the opinion in the first appeal, click here.

This was a 7 1/2 year marriage from the date of marriage until the date of separation.  It was clear that it is was the parties' intention that the wife would be a full time, stay at home caretaker of the children.

In the first appeal of this case, the Appellate Division affirmed the award of alimony to Melanie Brodeur in the amount of $500,000 per year but reversed the award of permanent alimony.  In this case, the Appellate Division affirmed the award of limited duration alimony until the youngest child graduated from high school.

In the first appeal, the Appellate Division held that:

limited duration alimony is particularly suitable for a situation such as here when the marriage was of short to intermediate duration and the woman is young and has young children. The judge is able to fashion an award that provides financial support to the former wife while she cares for the children.

The Court then addressed the factors that should  be considered in the decision of the length of the term, as follows:

The term should be informed not only by the age of the children, but also by the parties' decision that plaintiff should be the primary and full-time caretaker of the children.

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Imagine that you and your spouse recently finalized your divorce.  There were children born of the marriage who go to summer camp, participate in extracurricular activities, etc.  The question arises, which parent pays for these activities?  How about if you and your ex-spouse entered into a Property Settlement Agreement that specifically addresses the issue of payment, but you are unaware that the kids have already been enrolled in camp or activities and now you are just stuck with a bill to pay.  Are you still obligated to pay if you had no notice before the children were signed up and the expenses incurred?

These issues formed the basis of a new and interesting unreported opinion from the Appellate Division entitled Zenn v. Zenn, found here.  In the case, the father expressed a specific concern to the trial court that he wanted to have input into expenses incurred on behalf of the parties' child before being compelled to contribute payment.  Specifically at issue was the child's attendance at summer camp and enrollment in extracurricular activities (ultimately, violin lessons).  Heeding the father's concern, the Court directed that both parties would be consulted prior to any expenses being incurred on behalf of the child.  Language to that effect regarding camp and extracurricular activities was thereafter drafted into the parties' Property Settlement Agreement.  Notably, the father had agreed to pay for summer camp in 2004, but that there would be no such obligation unless the parties discussed future summer camp attendance. 

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Jane Lessner, a partner in our Philadelphia office, wrote an interesting post entitled "How Many are Too Many" on the firm's Pennsylvania Family Law blog.  The addresses legal issues raised by "Octomom" type situations. To see the full post, click here.

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 We all hear that in bad economies, divorce filings traditionally decrease.   There are many reasons for this, many of which are a subject for another day. Yet a prevalent concern that many of my potential clients express is the fear of the next step financially. Starting over is difficult and indeed overwhelming in the most amicable divorce where the parties both have substantial income. When the money is tight, is adds an additional layer of stress.  Some people mistakenly believe that they simply cannot afford to divorce their spouse.

One of my first questions to a new client is to find out if they have an accountant and financial planner of their own that they trust. If they do not, having them find one is near the top of my “to do” list for that client.   This is because, in most cases, there will be an equitable distribution of assets that have to be invested, whether it be a new home, a new IRA, or a new investment account. My client has to plan for his or her future early on and this may mean very different planning that occurred during the marriage. Even when there is a distribution of debt, there must be consideration of how to best pay that debT. Is a home equity loan appropriate? Should the debt be paid from assets that may not have as much capital gains given the current economic state? What are the tax consequences? These are all issues that need to be discussed with the client and financial specialists.

Another concern for many clients is purchasing a new home. For some, it may be the first time they are purchasing a home. Clients are concerned about obtaining a mortgage in these difficult economic times. It seems as if forces are colliding against some clients. For instance, we have all heard that banks are only lending to people with excellent credit scores. Yet during a divorce, many people experience financial stress and their credit rating suffers, often because of the other spouse. So what to do? First, many people do not realize that there are banks that are lending and there are mortgage brokers who cater to people who find themselves in a divorce. Also, rates are down and there are incentives for first time homebuyers. Clients already have most of their financial information ready as a result of the divorce. There are people and banks out there. It is just a bit tougher to find them in these times.

At the end of the day, my client has to make the decision that is best for his or her situation.  But I have to make sure that the client has to tools to make the right decision. 

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For many, litigation after a final judgment of divorce is a well known reality.  Oftentimes, especially when children are involved, issues arise regarding child support, other expenses for the children, enforcing terms of a judgment or agreement. 

In the matter of Warmke v. Warmke, Appellate Division, decided January 26, 2009, the Court faced such issues as noted above in what stemmed from post judgment motion practice.  Ms. Warmke filed an application with the trial court seeking to fix the amount of childcare arrears owed by Mr. Warmke, modify and enforce child support payments, modify parenting time, modify the amount of life insurance required by their agreement and for counsel fees.  Mr. Warmke filed a cross application requesting that Ms. Warmke contribute to summer camp expenses, a hearing aid for the older child, medical expenses, requiring her to share the transportation reimbursement from the public school and for counsel fees.

The Warmke's had been divorced since 1996 and had entered into an Agreement resolving the outstanding issues in their marriage.  They had two children, the eldest of which suffers from Down Syndrome, Pervasive Developmental Disorder, anxiety disorder, seizures, and hearing and vision impairments.

The parties' agreement provides for joint legal custody. Ms. Warmke has primary physical custody and Mr. Warmke receives liberal parenting time.  At some point after the agreement was entered into, the parties modified their parenting time arrangement, allowing Mr. Warmke primary physical custody during the school summer holiday.

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On February 13, 2009, the Appellate Division issued an interesting unreported decision in the case of Chopoorian v. Chopoorian dealing with a topic that we have blogged about frequently as of late - modification of support obligations. To review the full text of the opinion, click here.

The parties were divorced in 2005.  During the marriage, the husband operated a highly  successful advertising business which provided him with an annual income of over $900,000 in 2003. The parties also owned several valuable pieces of real estate.  The divorce agreement required the husband to pay $187,500 per year in permanent alimony and $50,000 per year in child support.  Of note, the Agreement stated:

Husband’s earned income as defined herein may increase to $650,000 gross per year (before taxes) before Wife is entitled to file a Motion to modify/increase alimony
based on an increase in Husband’s earned income. Husband’s earned income must decline to $400,000 gross per year (before taxes) or below before he is entitled to file a Motion to modify/decrease alimony based on a decrease in earned income.

The husband was also supposed to pay the wife $1.3 million over time for her share of the business interests.

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Last week, I published a blog post entitled "No Hearing Required for Serial Modification Motions." To view that post, click here.  However, released on February 9th was the unreported decision in the case of Cordero v. Mora with a different result. To view the full text of the case, click here.

This case involves the former Major League baseball player, Will Cordero, who was seeking, once again, to reduce his child support obligation for the child of his first marriage.  He played with the Boston Red Sox, Cleveland Indians, Pittsburgh Pirates, Montreal Expos, Florida Marlins and Washington Nationals in the major league for fourteen years. He made a substantial amount
of money during his career. In some seasons he made as much as $6,000,000.  He now claims to be out of baseball, having last played in the Major Leagues in 2005.  He participated in spring training in 2007 with the Mets in their minor league camp but was cut.

Over the years, Mr. Cordero has filed many application to reduce his support. In 2005 resulted in a reduction of child support from $1300 to $800 weekly. The  following year, he sought and obtained another reduction based on a substantial salary reduction.  from $800 to $500 weekly. On appeal,
he argued he should have received a greater reduction.  In June 2007, that argument was rejected by the Appellate DIvision.  However, just prior thereto, the ex-wife filed an enforcement motion and Mr. Cordero filed another motion seeking a reduction.  The judge granted the motion to enforce the existing order. In addition, the judge ordered him to pay $11,999 in arrears within thirty days and denied his motion for a further reduction. The judge noted that plaintiff provided limited and spotty financial information. Based on the information before the court, the judge concluded that plaintiff had the ability to pay the arrears. He also found that plaintiff produced extremely limited information about his efforts to obtain employment and incomplete information about assets that may generate unearned income or can be liquidated to meet his on-going child support obligation. The judge was particularly concerned that plaintiff had not provided an accounting of the millions of dollars he had earned during his professional baseball career.

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Usually, the "you snooze, you lose" defense is not often a successful legal tactic.  However, in the recent unreported Appellate Division decision in Adler v. Adler the former wife's application seeking unpaid child support, alimony and other obligations brought some 30 years later was denied essentially because she waited to long to collect.  To read the full text of the decision, click here. 

Pursuant to the Judgment of Divorce entered in 1973, the ex husband was required to pay $235 per week as undifferentiated child support and alimony until the oldest child was emancipated, at
which time the weekly support was to be reduced by $50 per week.  That same $50 reduction was to occur when each of the two younger children became emancipated. The JOD also obligated
defendant to pay: the mortgage, taxes, insurance and utilities on the marital home; all reasonable and necessary medical expenses for the children; health insurance premiums for ex-wife and the children; $3,500 to the ex-wife on or before August 15, 1973; $6,231.85 for various unpaid bills arising during the marriage; college tuition for the parties' three children; and orthodontic treatment for the parties' two sons.  Other than an enforcement Order from November 1973, there were no other Orders in the case.  In addition, in 1975, the Probation Department closed their account, though arrears existed at that time, due to direct payments being made.

Between 1975 and 1978, the ex-husband stopped making payments.  There was an enforcement motion filed in Maine in April 1978 and another Order entered later that year in Delaware County, New York that held the husband in contempt. Another enforcement motion was filed in late 1979 but their appears to be no further enforcement efforts taken thereafter.

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Litigants who get caught lying about their income in their filed submissions to the Court subject themselves not only to denial of their request for relief from the Family Part Judge but they also open the door for problems with the IRS, the State of New Jersey Division of Taxation, the Prosecutor’s office and the Social Security Administration. 

In the recent unpublished Appellate Division decision of Lucci v. Lucci, Defendant ex-husband filed an application in 2008 to permanently terminate his alimony obligation on the basis that his income significantly decreased. Notably, between the time of the divorce in 2000 and the time of the application, Ex-Husband had been successful in reducing his alimony obligation on two separate occasions. First, by consent in 2004, he was able to reduce alimony from $300 to $150 per week. Then, by consent in 2005, he was able to suspend his alimony because he was “unemployed”.  In 2008, he was seeking to permanently terminate his alimony obligation.

Ex-husband stated in sworn Certifications filed with the Court in the 2005 and the 2008 proceedings that he was laid-off of work, went through periods of unemployment and was finally able to obtain employment with much lower compensation. The Ex-Husband also certified that during his periods of unemployment, he received unemployment benefits. 

In opposition to the application, Ex-Wife presented the Court with a sworn Certification from a Company that was never disclosed by Ex-Husband.  The Company stated that it had employed Ex-Husband including the period during which Ex-Husband received unemployment benefits, that Ex-Husband misrepresented his employment status to the Court, and that he had earned income in an amount comparable to that which he earned when the Order of support subject to the Motion was filed. The Company further advised the Court that Ex-Husband provided two conflicting Social Security numbers to the Company. Finally, the Company advised that the income reported on Ex-Husband’s tax returns did not include his income from the Company.

Ex-Husband’s attorney did not know about Ex-Husband’s employment with the Company.

Not only did the Court deny Ex-Husband’s request to terminate alimony but the Court also wrote a letter to the IRS, State Division of Taxation, the Sussex County Prosecutor and the Social Security Administration.   Moreover, the Court granted Ex-Wife’s request to reinstate alimony at $300 per week effective in 2004 and granted her counsel fees. Despite the fact that Ex-husband was reported to the authorities for what the Court perceived to be intentionally wrongful conduct, the Ex-Husband had the gall to appeal the decision to the Appellate Division.

The Appellate Division affirmed the trial Court’s decision with the exception of the effective date of the reinstatement of alimony. The Appellate Division noted that while it was clear from Ex-Husband’s filed submissions to the Court in 2005 that he had provided misleading information, it was unclear whether he provided misleading information in 2004. If Ex-Husband did not provide misleading information in 2004, the Appellate Division noted that the effective date of the reinstatement should be in 2005 when Ex-Husband was required to pay $150 per week in alimony. The Appellate Division directed the trial court to determine the issue after further Court proceedings.

The moral of the story is if you get caught lying in submissions to the Court for which you certified under oath that your statements were true, be prepared to not only pay the consequences to the other litigant but you may also have to pay a hefty price to authorities. 

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Early on in a case, the lawyer and client will have to determine what experts will be necesary to resolve a case either for settlement or trial.  In fact, at the first Case Management Conference, the uniform Case Management Order requires that you identify the types of experts you need and how they are going to be paid for. 

What is an expert and why do we need them?  Per the Rules of Evidence, "If scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise."  Simply put, an expert is a tool to help determine a fact.  Experts provide information that the parties cannot generally provide themselves.

What kind of experts are used in these cases?  The following are some examples:

• Forensic accountants to value busineses, determine actual income, trace income and assets (including tracing premarital assets), to provide lifestyle analysis, to provide cash flow reports based upon proposed alimony and child support scenarios and a variety of other financial related issues,
• Business valuation experts (sometimes they are not accountants)
• Experts to value stock options or other exployee benefits - often but not always accountants
• custody evaluators - usually forensic psychologists, but occasionally forsensic psychiatrists and social workers, who will give an opinion of custody and parenting time
• educational experts - to determine which school or school district is better, what program is better, public vs. private school issues, educations issues regarding children with special needs
• employability experts  - to determine what someone can and/or should be earning.
• pension appraisers - usually actuaries, to determine the value of a pension, parse out premarital shares of 401ks, and draft Qualified Domestic Relations Orders
• Real estate appraisers
• personal property appraisers
• jewelry appraisers
• art, coin, antique appraisers
• medical doctors - to assess disabilities or sometimes personal injuries
• handwriting experts
• computer forensics
• Interpreting services (for documents in foreign languages)
• experts to value intellectual property

There are probably many other types of experts.  This list does not even include other professionals that may help the parties, but probably not testify, like financial planners, stock brokers, insurance agents, parent coordinators, reunification therapists or for that matter any treating therapists.

Over the years, we have worked with most or all of these types of experts as the need has arisen.  Should an issue requiring an expert come up in one of our client's cases, we are well equipped to handle it.

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Mark Ashton, a partner in our Exton (Chester County), Pennsylvania office and the editor of our Pennsylvania Family Law Blog, wrote an interesting post entitled "Property Settlement Agreements: Be Careful What You Sign Up For", on that blog. 

To read the full post, click here.

The post discusses how the Bankruptcy laws impact on divorce matters.  The bottom line is that while a debtor may be able to avoid all kinds of debts in a bankruptcy proceeding,  if your obligation is to a spouse or your kids, the rules are different and those obligations are going to survive your bankruptcy. The bottom line is that you should make an agreement that is realistic and reasonable, that you can actually pay and not one that you hope you will be able to pay.

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My clients often ask “will I get the same thing that my neighbor received in his divorce” or “why can’t my ex share in transportation-- my cousin has to share with her ex” or “my friend earns so much more than me and his support is much lower than mine”. I always tell my clients that as a rule, don’t compare your situation with the situation of someone else. 

While the same laws concerning family law actions are applied to each case, each case is different and therefore, the outcomes are different. It is true that many cases have similar factual patterns but most of the time they are not exactly the same. Using one of the examples above, while someone may be earning more but paying less in support than another litigant, it could be that the ex-spouse of the litigant had other available resources generating income like an inheritance or the ex-spouse could have received more of the family assets as a trade-off for less support. While it is very tempting to compare your situation with that of another person, keep in mind that more likely than not, you are not getting the full story from that person. Also, sometimes misery loves company and it could be that the only part of the story you are getting is what the other person painfully remembers the most.

Also important to note is that in New Jersey, the statutory factors for an award of support or for a custody determination are numerous. The Courts apply each factor to the given situation and then completes a balancing of all of the factors prior to rendering a determination. It is in this application of the facts that results in different determinations among cases. Moreover, litigants should also recognize that Judges are vested with a certain level of discretion in weighing the factors which is yet another reason why the outcome of cases differ. 

Notably, if one was to review a significant amount of family law decisions published by the Court concerning the same exact issue (child support, alimony, custody, etc.), it is very unlikely that a person would find a decision with the same exact fact pattern as their given situation. 

In short, save yourself some frustration and make it a rule not to compare your family situation with that of someone else during a litigation and focus on your facts with your attorney.   After all, as I tell my clients, it is your facts that we will be presenting to the Court and not the facts of your neighbor, cousin or friend.

EDITOR'S NOTE:  i once had a client who used to say that no one could believe how much temporary support he was paying and that it was the most anyone ever heard of.  My answer was, "Do they make a million dollars a year like you? No.  Do they make a half a million a year?  No  Do they make $250,000 per year?  No.  The moral is that he was talking to people whose finances had no similarity to his and reacting to their shock.   That goes exactly to Apple's point - while friends and relatives are good for support and a shoulder to lean/cry on, they are not usually a good source of legal advice or information.           ERIC S. SOLOTOFF

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I am currently preparing for trial in a case in which there is a special needs child. These cases bring another layer of topics to the already crowded plate. No divorce is easy, and when children and custody issues are involved it is more difficult. However, when a special needs child is involved, there are complex issues which arise and which must rise above the parent’s anger, emotions, and anxiety, of the process.  

 First, one primary issue is that of the expenses associated with the child. If the child is receiving governmental assistance, it is imperative that a divorcing parent consult with counsel that is familiar with special needs trusts as well as special education. What is it they say about “the best laid plans???” Parents trying to plan for the future with the best of intentions may create now, a situation which will later impede the child’s ability to qualify for and receive benefits. That having been said, it is critical to anticipate, to the extent possible, the current and short to mid term custodial and financial needs of the child so that an appropriate parenting schedule and amount of support can be set in order to avoid an expensive trip back to the courthouse later in order to make modifications or to obtain an increase in support.

Another issue which needs to be addressed is the bona fide day time needs of the child. I was involved in a case several years ago in which the father thankfully realized that due to the severity of his son’s problems, the mother, who was otherwise employable and capable of supporting herself, needed to be available to take care of the child during the day. I have had other cases in which a parent has essentially tried to “exploit” a child’s otherwise minimal disability in order convince a judge that employment outside of the home was impossible. In the vast majority of cases that are filed in New Jersey, both parents have, or will presumably have to work outside the home. In a case when there is a special needs it is imperative to accurately assess the true needs of the child. This may often involve the retention of an expert who is familiar with the particular disability of the child in question.

Divorce is stressful under the most “ideal: situation. However, when the parties have a special needs child, it is critical to make sure the parents are considering all aspects which carefully consider the present and future needs of the child.

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In many divorce matters, attorneys, clients and judges alike must determine how to deal with the issue of support for children, oftentimes which includes the divvying up responsibility for payment of college expenses.

There is a large body of case law in New Jersey that deals with this very issue and provides guidance as to how a court should decide the issue of payment of towards college, if parties cannot come to an agreement on their own.  However, each case is fact sensitive and must be considered on its own merits.

In a recent unpublished Appellate Division decision entitled Novy v. Novy, A-4207-07T2, decided January 12, 2009, the Court remanded the issue of whether a child was in fact emancipated and not entitled to financial support from her parents towards the cost of her college education.

Mother and father were divorced in 2001.  Incorporated in their Property Settlement Agreement was the requirement for father to pay child support to mother until the children were emancipated.  The Agreement went on to state what would be deemed an emancipation event such that same would trigger the termination of father's support obligation for that child.

The parties' daughter has experienced mental health and personal adjustment problems for many years. She didn't graduate high school but later earned her GED. She has been attending Ocean County Community College since fall 2006.  At the same time she began college, she moved out of her mother's home and into the home of a friend's family.

In July 2007, father filed a motion with the court seeking to have daughter emancipated based on her residence away from her mother and her failure to attend college as is delineated in the Agreement reached by the parties.  That application was denied, however the court did rule that if daughter failed to make continuous progress toward the completion of her college education, including registering and completing not less than 12 credits/semester, father's obligation to support her would terminate.

Some 6 months later, father and mother entered into a Consent Order, which declared that both parties agreed daughter was emancipated and father's support obligation was terminated.  Shortly after this agreement was reached, daughter filed her own motion with the court seeking to intervene and vacate the Order declaring her emancipated.

Father was the only one who opposed this application and in his Certification he set forth several allegations upon which he determined daughter to be emancipated.  Daughter, in her responding Certification denied these allegations.  The trial court granted daughter's motion to intervene and vacated the Consent Order into which her parents entered and agreed that she was emancipated.

Father appealed that Order.  On appeal, the Appellate Division noted that the determination of whether a child was emancipated depended on the facts of each case.  Furthermore,it has already been determined by the Appellate Division that "merely because both parents are united in their determination to declare the child emancipated" may not defeat the child's right to support.  Johnson v. Bradbury, 233 N.J. Super. 129, 136 (App. Div. 1989).  The Court noted that the essential question to be answered is whether the child has "moved beyond the sphere of influence and responsibility exercised by a parent and obtains an independent status of his or her own."  Fillipone v. Lee, 304 N.J. Super. 301, 308 (App. Div. 1997).

Because the trial court heard no testimony about the disputed facts relevant to daughter, the Appellate Division held that the trial court erred in failing to conduct an evidentiary hearing to resolve those contested facts and remanded to the trial court to conduct such a hearing. 

Despite the agreement reached by and between mother and father that daughter is now emancipated, father may still have a duty to provide financial support for daughter, to be determined by the outcome of the plenary hearing.  While daughter had no say in the original agreement reached by her parents and in the Consent Order they later entered into, she did have the right to file an application with the court on her own behalf seeking relief from the obligation that arises out of the parent-child relationship.  A child's right to support cannot simply be contracted away by that child's parents.  Parents have an obligation to support their children and in NJ this duty of support may include payment for college.

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As previously reported in this Blog here and here, New Jersey has taken the initiative on penalizing individuals who fail to pay their court-ordered child support or who have failed to show up for court hearings.  In just one week in December 2008, nearly 1,000 delinquent individuals were rounded up as part of the state Sheriff's Association biannual child support warrant sweep.  Nearly $300,000 was collected statewide, with the most warrants served in Monmouth County and by far the most monies collected in Bergen County.

EDITOR'S NOTE:  As noted in prior posts, on wonders whether there will more more support arrears caused by the current economy, whether there will be more motions for modification and/or more motions for enforcement.  The longer the economy suffers, it will be interesting to see whether the law of imputation of income, changes of circumstances and enforcement changes.      Eric S. Solotoff

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While state courts in matrimonial actions are often asked by an ex-spouse to modify an existing child support obligation under Lepis v. Lepis, 83 N.J. 139 (1980), based on the existence of "changed circumstances" and an inability to pay the ordered support, it is not often that a decision so thoroughly recaps situations in which courts have previously found such changed circumstances.  The Appellate Division recently accomplished detailed same in Ferraro v. Ferraro, wherein the facts of the case themselves are noteworthy unto themselves and detailed below.

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On December 31, 2008, the Appellate Division released the opinion in the case of Cardell v. Kirby.  In this case, child support over the guidelines was limited to a nominal amount by the trial court and the Appellate Division affirmed.  To see the full opinion, click here.

In this case, the defendant-father lived in NY with his wife and two children.  As some point, he became estranged from his wife and had a relationship with the plaintiff-mother  that resulted in a child born in November 2006.  Subsequent to that time, he resumed living with his wife.  The defendant seemingly earned or had the ability to earn more than $500,000 per year.  In fact, in 2006, he earned  just under $700,000 and the plaintiff earned just under $87,000

The plaintiff filed a complaint and motion seeking, among other things, $4,000 per week. The defendant began paying support of $2,600 per month and filed a cross motion seeking to limit his support to that amount.

The judge determined that the top child support due from the defendant to the plaintiff, inclusive of his share of child care, was $632.00 per week.  Noting that he had to add some amount over that, he added $17.50 per week to pay a portion of plaintiff's loan that was required to renovate her
apartment to accommodate the parties' daughter.  The plaintiff appealed.

The Appellate Division noted the established principle that the needs of an infant are less than those of teenagers.  The Court also noted that "a balance must be struck between reasonable
needs, which reflect lifestyle opportunities, while at the same time precluding an inappropriate windfall to the child or to the custodial parent."  The Court disagreed with plaintiff's contention that the court erred by not considering the lifestyle that her daughter is entitled to, based on defendant's significant earnings.

The Court also rejected plaintiff's assertion that the court erred by failing to recognize that the amount of expenses declared in her December 2006 Case Information Statement only represented what she could then afford, "at a time when defendant was not paying support."  The Court noted that the trial judge correctly determined the child support based upon the information that it had before it at the time.

Read together, it seems as though plaintiff may have made a mistake by failing to include a CIS with not only her actual budget, but one that included a proposal of what her expenses would be if she was receiving the support that she sought.  Specifically, the quote from the reported Walton v. Visgil case, restated in the Isaacson case, probably should have been heeded.  The quote is as follows:

where as here, the children are entitled to share in a parent's good fortune, the custodial parent's budget should be broken down into two parts: the reality-based component dictated by his or her income and the added projections which will, in fact, allow the children to share in the other parent's financial gain. This could include, by way of example, private school tuition, private tutoring, summer camps, music or art lessons, sports clinics, vacations, study abroad, and the provision of transportation for a child who drives, to mention only a few possibilities. It could also include help to make the family home more presentable, assistance with the cost of a family car, or a larger amount of money for a teenager's clothing and incidentals. As we have said, these are only examples. What is important is that sufficient thought, effort and information is put into the two-part budget to give the trial judge a basis on which to act under Dunne and Zazzo.

Of course, in a case of a 9 months old, it is probably hard to come up with these types of extras.

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The U.S. Department of Labor recently issued a new set of guidelines for compliance for what are known as qualified child support orders ("QMSCO"). 

Many employers offer what is known as an employee based group benefit plan.  Simply stated, this is usually health insurance offered at a reduced rate to employees of companies.  Most of these programs are governed by both federal and state law.  The federal law, known as the Employee Retirement Income Security Act (ERISA) is especially pertinent to these employer sponsored group health plans.

A 1993 amendment to ERISA requires employer-sponsored group health plans to extend health care coverage to the children of a parent/employee who is divorced, separated, or never married when ordered to do so by state authorities.  Many states refer to such a court ordered obligation as a "qualified medical child support order".  The group health plan must determine whether the medical child support order is “qualified". 

The recently issued Compliance Assistance Guide released by the U.S. Department of Labor provides general questions and answers about Qualified Medical Child Support Orders, answers questions about National Medical Support Notices and the role of State child support enforcement agencies in obtaining health care coverage on behalf of children, and also lists additional resources that may provide useful information about ERISA and obtaining health care coverage and medical care for children.

To learn more about these guidelines click here.

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 In an interesting opinion from the Appellate Division, Faro v. Randel R. Vonder Heyden, III, found here, the Appellate Division reversed a trial court's denial of a plaintiff ex-wife's post-judgment Order denying her motion to enforce litigant's rights due to the ex-husband's failure to pay child support over a period of several years.  The Appellate Division found that the wife's delay of several years in seeking payment did not warrant application of the equitable doctrine of laches and that the wife could not waive the claim to the monies, as that right belonged to the children of the marriage.

Two children were born of the marriage and the parties were ultimately divorced in 1992.  The final judgment of divorce granted the wife primary residential custody of the children and the husband was required to pay $90 in weekly child support; $20 in weekly health insurance; 50% of the unreimbursed medical expenses incurred on the children's behalf; and to provide $100,000 in life insurance for the children's benefit.  The husband, however, failed to pay the weekly medical and dental insurance, failed to pay his 50% share of one child's orthodontic expenses, and never provided proof that he obtained life insurance.  The wife a motion to compel payment that was denied without prejudice.

The wife did not thereafter seek enforcement of litigant's rights until 2007 in response to the husband's motion to emancipate one of the party's children.  She sought more than $19,000 in accumulated health insurance contributions, as well as proof of life insurance for the benefit of the party's other child.  Neither party contested the other party's application.

Without a hearing, the trial court found the child emancipated and ordered the husband to provide proofs regarding the life insurance.  However, the wife's request for $19,000 was denied due to her delay in seeking same and the Court seemingly left the husband with a slap on the wrist for his delinquencies.  The wife's subsequent motion for reconsideration was also denied under the doctrine of laches. 

Disagreeing with the Court application of the laches doctrine to bar the wife's claim, the Appellate Division noted that the husband did not deny the amounts that the wife claimed he owed, his position never changed, and he was not prejudiced by the delay in the wife's application, as he continued in his failures to pay.  The Appellate Division found neither doctrine applicable even if properly raised as the husband continued in his failures to pay and the claim to the monies owed was not waived due to the wife's delay, as the right to receive the payments actually belonged to the children, rather than her.  Finally, the Appellate Division applied an "unclean hands" concept, noting that the inequity caused by the husband's own failure to pay over time did not entitle him to benefit from the equitable laches concept.

The Appellate Division was protecting the rights of the children despite the wife's delays, not allowing the husband to get away with his complete failure to pay for their medical insurance and then seeking the emancipation of one of the children in the process. 

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Can a prior judicial determination regarding an ex-spouse’s employment situation preclude the other party from subsequently making an issue out of it when faced with a motion to modify child support? That was the unique issue taken on by the Appellate Division in Simon v. Simon, where the Appellate Division gave preclusive effect to a prior judicial holding regarding the reason why the ex-spouse husband left his job and his resulting subsequent income in deciding a motion to reduce child support.

The parties entered into a Property Settlement Agreement in 2001, wherein the husband agreed to pay child support for their three children at a set amount through the end of 2005, at which point his support obligation would be reevaluated pursuant to the Child Support Guidelines. In 2006, the husband left his employer and obtained a job in Florida because he was allegedly unable to find suitable work in the Princeton, New Jersey area where he lived. As his new job was in Florida, the husband initially lived there with his father, thereby substantially reducing his parenting time with his biological children. 

In spring 2006, the wife moved for a child support increase, alleging that the husband provided no justification for his relocation to Florida, that her parenting time and related expenses increased due to the husband’s reduced parenting time attributable to the move, and because such expenses would only increase as her alimony was ending. The husband cross-moved to modify his support obligation, arguing that he involuntarily left his employer and was forced to take a substantial salary reduction in Florida because he was unable to obtain a position in New Jersey at a salary higher than that he received from his Florida employer. Responding to the husband’s claims, the wife asserted that he left his employment voluntarily so that he could commence his retirement in Florida and, as a result, the Court should use his 2004 and 2005 income to determine support. She submitted no evidence, however, of the husband’s ability to earn a higher salary in the metropolitan area. Ultimately, the Court found that the husband’s 2006 income should apply.

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In some cases, either parties will agree or a court will Order the payment for a nanny.  In fact, this is typically in the nature of work related child care which is something that parents are typically required to share the costs of in accordance to their incomes under the Child Support Guidelines. 

A question that is more interesting is for how long must we pay for a nanny.  In hign income cases, perhaps this is less of an issue because it becomes more of a lifestyle issue than work related child care.  In fact, in many cases like that, there is a nanny or nannies even when one parent does not work outside of the home.  That is why I say it is more of a lifestyle issue.

What happens when there is a nanny in a garden variety case where the resources are more limited?   In an unreported Appellate Division case released on November 7, 2008 entitled Herega v. Figueroa that issue was addressed to a certain extent. To see the full text of the case, click here.

In this case, it appears as though the father had custody of the children.  At time of the divorce, both children were not in school full time.  As such, recgonizing a need for assistance, the wife agreed to pay for half of the nanny.

However, the current litigation stems from her motion to cease contributing to the nanny among other things.  There were two major rationales given.  First, she alleged that the father and the nanny were now a romantic couple - indeed sharing the same bedroom.  Second, since the kids were now 6 and 9 and in school full time, she asserted that there was no need for a full time nanny.  In fact, their school offered low cost before and after care.  The husband denied that there was a relationship and otherwise opposed the motion.  The trial court denied the motion.

The Appellate Division reversed and remanded the matter for a plenary hearing (trial) on the issue of whether there was a relationship between the nanny and the husband.  Further, the hearing was to address whether the nanny was still needed given the maturation of the children and the availablity of after care at school.

While not reported, this case remains interesting for the above reasons.  In addition, it is another example of the Appellate Division reminding trial judges that plenary hearings are required when there are important factual issues in dispute.

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One need only pick up any newspaper, turn on any radio or television or even have water cooler conversation, even with those who never used to speak about the economy, to know of the serious economic crisis that this country and the world appear to be facing.  Even today, we read that the stock markets took yet another tumble based upon the news of increased jobless rates.

These realities will no doubt start hitting the family court system if they have not already begun to hit. Specifically, there will be motions by people paying alimony and child support to reduce their support because they have lost their job or have suffered a significant decrease in income.

In the seminal NJ Supreme Court case of Lepis v. Lepis, the historical standard for a modification of support is the showing of a substantial and continuing change of circumstances.  We also know that temporary changes do not form the basis for a modification. 

In fact, in order to get relief, a litigant usually had to show that they have made a significant, diligent job search and despite their best efforts, they could not obtain comparable employment.  How long this had to be depended on the circumstances, but it was probably more than 90 days, or even more than 6 months. 

The question during these times is have we entered a brave new world.  Will someone who worked on Wall Street earning $500,000 per year who has lost their job be expected to get comparable employment?  Should they?  What about the financial professional whose income is based in large part on either commissions or a large yearly bonus that they always used to carry them for the entire year who wont be getting a bonus this year or their commissions are 50% less than last year? 

In the past, when someones income was sporadic, the case law and Child Support Guidelines require that you take an average of 3 or maybe 5 years.  Is that fair now when doom and gloom about the economy is being predicted?  Put another way, is the 3 or 5 year average indicative of what the payor can really earn in this economy? Will the earn at historical levels during the foreseeable future? 

If we use an average now, or impute the last income earned, is that fair?  Is only the payor being forced to sacrifice in that case (assuming for the moment that they even have the ability to pay the prior support which may be unlikely)? If they are forced to pay support based upon passed income, will they ever get the money back when then show in a year or two or three that their income has not and may never be the same> The answer is that this is doubtful. Is this fair?

While representing the recipient, what choice will attorneys have to argue that the laws of imputation and averaging, as the case may be, must be followed by the Courts?  I do not think that we can argue a deviation from the law, to the detriment of our clients.

On the other hand, attorneys for the payor's have to be bold in their arguments that the existing law is distinguishable based upon the current circumstances.  I also think that Judge's must be courageous in their decisions so that the reflect the economic realities.

If the current economic circumstances are ignored, then I foresee a lot more enforcement proceedings, if not a lot more arrest warrants issue for failure to pay support.  In the end, if things continue as they are economically, attorneys and judges should try to work together, creatively, to strive for fairness for all of the parties based upon the economic realities of today.

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Retiring from the workforce does not necessarily mean retiring from your child support obligations.  Rather, the circumstances of each case will dictate whether a person retiring in good faith can successfully obtain a child support modification.  

The Appellate Division recently addressed this issue in Kassin v. Kassin, affirming a trial court’s decision denying a defendant father’s motion to modify his child support obligation after he was terminated from his job at age 65 due to a heart-related condition. The parties were married for 25 years and 6 children were born of the marriage prior to the parties’ divorce in 1998. At the time of the divorce, the father was employed and earning approximately $23,000 annually. At the time of his motion for a support modification, 1 of the 6 children, age 15, was still unemancipated. In March 2007, at age 65, the father was terminated from his job. He claimed in his motion that the termination was caused by his inability to perform his job duties due to a heart-related medical condition and that he was unable to secure other employment for the same reasons. He also asserted that, as a result, his only income came in the form of social security benefits and charitable assistance from private agencies, thus providing him with an annual income of approximately $20,000. It was upon these facts that the father claimed the existence of changed circumstances justifying a modification pursuant to Lepis v. Lepis, 83 N.J. 139 (1980).

Citing to Silvan v. Sylvan, 267 N.J. Super. 578 (App. Div. 1993), the Appellate Division based its decision on the following non-exhaustive list of factors to consider when a party retires at age 65 and subsists on social security benefits: 

• the age gap between the parties;
• whether at the time of the initial alimony award any attention was given by the parties to the possibility of future retirement;
• whether the particular retirement was mandatory or voluntary;
• whether the particular retirement occurred earlier than might have been anticipated at the time alimony was awarded;
• the financial impact of that retirement upon the respective financial positions of the parties; and
• the motivation which led to the decision to retire, i.e., was it reasonable under all the circumstances or motivated primarily by a desire to reduce the alimony of a former spouse. 

In denying the father’s motion, the Court concluded that the father failed to submit evidence sufficiently linking his medical condition to his inability to work and of his search for other employment, as well as the fact that the income differential pre- and post-job termination was too insubstantial to constitute a changed circumstance. Notably, the Court reminded the father that, as a so-called "late in life" parent who, at age 65, still had an unemancipated child, he was responsible for working and saving for this child beyond an otherwise expected age.

Also of note was that, despite denying the father’s motion, the Court nevertheless remanded the case for a credit to be calculated on the father’s child support obligation pursuant to New Jersey’s Child Support Guidelines because the mother was receiving social security benefits for the unemancipated child.

This case highlights how simply wanting to retire early in good faith (rather than retiring to simply avoid a support obligation) is not as easy as it seems when the potential retiree has existing child support (similar issues arise in the context of alimony) obligations. 

EDITOR'S NOTE:  It seems unlikely as a matter of public policy that someone will ever be allowed to "retire" under any circumstances to avoid a child support obligation.  If there is a bona fide disability, that is another story however as that is usually beyond the obligor's control.  Absent disability, late in life parents will more likely than not be required to keep working and/or otherwise be required to pay support until all of their children are emancipated. - Eric S. Solotoff

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Mark Ashton, a partner in our Exton (Chester County), Pennsylvania office and the editor of our Pennsylvania Family Law Blog, wrote an interesting post entitled "The Owner Know Thy Business" on that blog.

To read the complete post, click here.
 

EDITORS NOTE:  Mark's post leads to a discussion of several interesting issues that are frequently encountered in matrimonial cases.  It is not unusual in cases where one or both parties are self employed that there is either unreported income and/or personal expenses being paid through he business.  In those cases, the tax returns are obviously unreliable for support purposes and you have to get the business books and records, credit card records and other documents to determine the business owner's actual income/cash flow.  I say cash flow because that person is not paying taxes on the expenses being paid through he business and the expenses are not added to that person's income.  In some cases, though there are some personal expenses that are paid through the business, that is neither unusual nor problematic from an income tax perspective.  A perfect example is the deduction of automobile expenses.  While this is acceptable, within limits, per the IRS, those expenses have to be added back to income per the Child Support Guidelines.  In fact, all personal expenses are supposed to be added back.  I have been involved in other cases where the husband was declaring just enough income to pay the mortgage, taxes and utilities on the parties' $2 million dollar house and there was no other declared income apparent to pay their other expenses which amounted to a few hundred thousand per year.  In that case, we had to use a forensic accountant to reconstruct the income through the parties' budget because, there were, surprise, sparse records. 

An interesting question, and unanswered question,  is how these non-taxed expenses should be treated for support purposes.  If some declares $100,000 in taxable income and has another $100,000 in non-taxable perks, what is the income number for support purposes.  $200,000 doesn't seem right because only half is taxed.  A normal, taxpaying citizen may have to earn $240,000 or more to have the same net after tax spending power.

A bigger issue to address which deserves its own separate blog entry is what to do when the case has these issues because of a NJ case called Sheridan v. Sheridan.  The rule as per Sheridan is that when a judge hears evidence of unreported income, they are duty bound to refer the matter to the IRS.  As Mark suggests, filing amended tax returns makes the most sense when confronted with this issue - as long as it doesn't happen too late - as was the case in the example in Mark's post.                        -Eric Solotoff

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In order to determine alimony and child support, the court must know what both parties earn.  In fact, the child support and alimony statute requires the court to look at the parents "earning ability" (in the child support statute) and "earning capacities" (in the alimony statute).  Don't ask me why the terminology is different but the concept is the same.  That is, if someone is not earning up to their capacity, the Court needs to know what they can/should be earning.

This often comes up when one parent, by agreement or otherwise, was a stay at home parent or worked part-time in order to care for the children.  The other instance where this comes up is one someone is a malingerer or otherwise unmotivated to work.  In fact, in a trial court opinion, when discussing imputation of income in one of these situations, there is an amusing reference to a dictionary definition of a parasite.

Notwithstanding, if someone is not working or is only working part-time, the court can and usually should impute income to that party.  Of course, if child care will be needed to replace the care that that parent gave, the court must also assess and offset what appropriate child care would be. 

The New Jersey Department of Labor publishes statistics on wages for numerous occupations, providing statewide statistics and statistics broken down by groups of counties.  In addition, the charts provide the mean, median 25th percentile and 75 percentile of income for the particular job.  To go the the Department of Labor website regarding this information, click here. 

Courts have the ability to take judicial notice of these statistics.  Some judges will - some wont.  In addition, these are merely cold statistics and may are may not provide definitive income regarding what someone can earn. 

Another method of providing evidence of what someone can earn is to employ an employability expert to assess the underemployed party.  Note however, there are some judges who do not allow employability experts, at all.  Of course, in a case where that same judge said that a wife's part time income should be doubled to get to a full time wage for support purposes, the Appellate Division reversed that finding because it lacked evidence in the record to support it.

I have heard other judges say that they do not put much weight to the reports/testimony of any of these experts, though they will permit them.  Just recently, an adversary during a trial objected to the scientific basis of employability experts, seemingly in general (though the expert was permitted to testify and the report was received in evidence).

While I suppose there can be a debate about the science, I for one am a proponent of employability experts, where appropriate.  A good expert will meet with the party, get a detailed history, perhaps do some testing, if appropriate, then do research.  Part of this research typically includes resources looking at job availability in the industry.  They also look at wage statistics such as those set forth above and other sources.  More and more, the experts will do a labor market survey in where they contact employers in the target field to determine whether the candidate would be considered for the job and what the range of pay is.  The good thing about the labor market survey is that it can buttress the statistics.  The bad thing, at least at trial, is that it is a ripe area for damaging cross examination.

That said, employability experts are an effective tool to help the court determine what an unemployed or underemployed person can earn.

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Previously I blogged about child support in cases where the combined net income exceeds the upper levels of the Child Support Guidelines.  To see that post, click here.

That issue was prominent in the Appellate Division's decision in the Strahan case which was released on August 26, 2008 as a reported decision (meaning that the case has precedential effect). To see the full text of the case, click here.

This case involved the divorce of Michael Strahan, formerly of the New York Giants and his former wife, Jean.  At issue as to child support was support for their three year old twin daughters.

The trial court found that the basic child support amount under the guidelines was $35,984 a year but then found that the children had a supplemental need of $200,000 a year, for a total
of $235,984 a year.  Mr. Strahan was ordered to pay 91% of this.

The Appellate Division found several errors in the amount and allocation of child support. First, the trial court took as both accurate and reasonable Jean's budget, which included $27,000 per year in clothes, $30,000 per year in landscaping, gifts of diamonds for grandparents, a vacation for the nanny, etc.  The Appellate Division found that there was duplication between the children's needs and Jean's needs, that certain items should have been eliminated and that others were not reasonable. Further, the court held that while Mr. Strahan expressed  at trial his desire not "to spoil" the children and to teach them the value of money, the trial court  failed to address
plaintiff's "legitimate right . . . to determine the appropriate lifestyle of [his] child[ren]."

The Appellate Division also found that it was error not to impute income to Jean, who had earned $70,000 per year previously.  Interestingly, they commented that "employment opportunities were, in all likelihood, enhanced by her celebrity marriage. There is no question that as a healthy, educated, 41-year-old, (she) is capable of earning her own income."

The Appellate Division also reversed the requirement that Mr. Strahan maintain $7.5 million in disability insurance, in part because he had retired, and in part because it exceeded the life insurance that he was required to maintain.  The Court noted that if he became disabled, he would be entitled to file the same change of circumstances motion as any other litigant. 

However, Mr. Strahan's request to have the matter remanded to a new judge was denied.  The Appellate Division noted, once again, that an adverse ruling does not equate to bias. 

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The Appellate Division recently issued an opinion addressing the imputation of income to a parent who is not a resident of the United States.  In Ibrahim v. Aziz the parties first came to the US on visitor visas and shortly thereafter returned to Egypt.  A year later, they returned with their child, at which time Ms. Ibrahim got a job as a waitress and the family moved into an apartment.  She alleges that Mr. Aziz opened a retail store at that time, however he denied doing so.  While the parties lived in Egypt, where the cost of living is significantly lower than that of the US, Mr. Aziz worked with his family in their jewelry store and the family maintained a middle class lifestyle.

During their stay in the US, an act of domestic violence occurred and Ms. Ibrahim obtained a Final Restraining Order.  At the hearing, child support was determined.  Shortly after that hearing, Mr. Aziz returned to Egypt and Ms. Ibrahim eventually obtained a divorce, including child support.  Mr. Aziz made an application to the court to reconsider the judgment of divorce for the purpose of reviewing his child support obligation.  He claimed that the court erred in imputing income to him based upon New Jersey wages because he was now living in Egypt, where wages were significantly lower.  The trial court found that Mr. Aziz's income should be that of what a retail store manager in NJ could earn.  He appealed from that decision.

The basis for his appeal was that not only could he not earn similar or even comparable salary in Egypt as compared to NJ, but also that he was unable to return to NJ to work as he had been denied a visa on several occasions.  Ms. Ibrahim claimed that the parties lived a middle class lifestyle while in Egypt but failed to provide any proof of their lifestyle or provide any proof that Mr. Aziz could return to NJ to work.  Ultimately, the Appellate Division found that the trial court had erred in imputing a NJ salary to Mr. Aziz as he was unable to work in NJ and the income he earned in Egypt was significantly less than that which had been imputed.

When calculating child support payments, the court may impute income to a parent whose income cannot be determined.  The court may also impute income to a parent who has voluntarily become underemployed or unemployed without good cause.  There are four considerations for a court when determining whether to impute income: 1) the employment status and earning capacity of the parent  if the family had remained intact, 2) the reason and intent for the voluntary underemployment or employment, 3) the availability of other assets that may be used to pay support, 4) the ages of any children in the parent's household and child-care alternatives.

This issue arises quite frequently during divorce when one parent engages in divorce planning and intentionally reduces his/her income so as to avoid a higher support obligation.  Imputation of income for support purposes is also applicable to unmarried individuals who have a child or children in common and support must be determined.

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Previously, I blogged about the trial in the McGreevey divorce.  In that entry, I wondered whether it was the desire for retribution that was driving the case and whether the legal and expert fees exceeded the matters at issue.  To see my prior post, click here.

The decision of the Court was released yesterday and unfortunately I was right.  As for the one party playing the victim throughout and until the end, that was evidenced by Ms. Matos McGreevey's statement released even before the decision was released. 

As to the decision, it was decidedly in favor of Mr. McGreevey on the major issues raised by his wife.  Whether the issues raised were ever real and bona fide issues, that is another story.  In any event, the trial judge was clearly frustrated with the parties and it showed in her decision.  To read the decision click here.

Some of the highlights of the decision and Judgment of Divorce are as follows:

-There is no obligation to pay alimony.  In fact, the Judge found that to the extent that there was a need for alimony, it was caused by the legal fee debt associated with the case.

-Mr. McGreevey's income for support purposes was $175,000 - approximately $25,000 more than his employability expert opined and significantly more than he claimed he could earn as a seminary student. Child support was based upon that income and his wife's former income (she was laid off just prior to the end of the trial.) The Child Support Guidelines were used and then enhanced slightly due in large part to the fact that Mr. McGreevey was being supported by his partner.  He did not get a credit for the support for his other child because he was not currently paying it.

-The wife's claim for celebrity goodwill did not fly nor did her claim that marital lifestyle should be fixed based upon the lifestyle provided by the State of New Jersey to the Governor and First Lady.

-Each side had to pay their own legal fees. 

-The wife's fees total fees were more than $525,000   after receiving a courtesy discount of approximately $125,000.  Only $50,500 had been paid to date.  Mr. McGreevey's fees totaled $498,000 and he had paid only approximately $170,000. 

Given the costs and the results, could it have possibly been all worth it?  Based upon the Court's decision, it seems unlikely.  That is, unless there was a desire to drag the other through the mud and exact vengeance in a public arena.  If that was the victory sought and received by either or both of the parties, then the system failed.

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Some parents may be wondering why they have not yet received an economic stimulus check from the federal government.  An article in the June 25, 2008 edition of USA Today entitled, Rebate Checks Diverted to Pay $2B in Child Support, Loans, Other Debts, sheds some light on the situation, informing readers how economic stimulus rebate checks are being confiscated to pay for, among other outstanding obligations, child support.

The article explains how 1.8 million rebate checks were intercepted by a Treasury Department debt-collection system based on lists of delinquent Americans provided by state and federal agencies. Of the nearly $1 billion collected as of the date of the article, 55% went directly to the family or government agency owed child support, which is an astounding number when considering that the remainder went towards more commonly seen debts such as unpaid loans and taxes.

This USA Today article raises an opportunity to address some of the tactics that the State of New Jersey may employ in order to obtain child support owed when payments are made through New Jersey’s Probation Division. For instance, the Probation Division may intercept federal and state income tax refunds or homestead rebates.  Further, while you may be lucky enough to win the lottery or winnings at a casino or racetrack, the State is not going to let you enjoy those winnings free and clear if you owe child support. The State legislature recently passed a law allowing the Probation Division to intercept and deduct support owed from a delinquent parent’s lottery winnings if the winnings are $600 or more. The key here is to be responsible, own up to your obligations, and then enjoy your winnings.

A related tip can be garnered from property purchases, especially in a down economy. Be aware that when you buy or sell property, a judgment search must be conducted in order to uncover any existing child support arrears. Your credit rating may also be negatively impacted depending on how much you owe and your driver's license suspended or revoked.

Readers of this blog may recall our recent entry discussing New Jersey's law enforcement crackdown on parent's behind in child support payments.  The USA Today article reveals that this is not merely a problem in New Jersey, but one that stretches from coast to coast.  However, the overall song for delinquent parents remains the same – make your child support payments in a timely manner or be prepared to face potentially severe legal consequences.

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A recent article published in the June 17, 2008 edition of the New Jersey Star-Ledger entitled State roundup results in 1,600 arrests, detailed State efforts to capture not only violent fugitives, sexual predators, and alleged gangsters and crooked businessmen, but also parents who are months behind on their child support obligations. 

Considering how violent fugitives, gangsters and sexual predators generally consist of the worst of the worst when it comes to the criminal population, the inclusion of parents delinquent in their child support not so subtlety underscores the importance to which the State attaches to a parent’s obligations to their children. While one arrest detailed in the article involved a real estate investor accused of defrauding 43 buyers and 15 banks out of $4.6 million, another arrest discussed involved a man arrested for falling two months behind on his child support payments – a total of $3,000.

The article informs readers that, on a statewide level, $12.6 million is owed in child support and that the State will make a concerted effort twice per year to round up delinquent parents behind on their payments. The penalty for such delinquency can even include jail time until outstanding payments are made.

Parents behind on their child support payments can generally be placed into two groups: those who do not pay because they do not want to or do not care; and (2) those who simply cannot afford to do so for a variety of reasons. While it is easy to say that those parents who fall into the former category get what they deserve, the same cannot be said about the latter. 

With the economy spiraling towards a downturn, many parents are losing their jobs and finding it difficult to not only pay for child support, but also to make their own ends meet. That does not mean, however, that a parent can avoid their obligation.  

One option for the delinquent parent is to try to amicably work out a revised payment plan or support level with his ex-spouse. While this method is no guarantee that the ex-spouse will simply agree to a reduction or revised payment plan, it is an option that could potentially avoid legal expenses and costs associated with filing a court motion for a support reduction.  Of course, any resolution should be in writing and preferably reduced to a Consent Order.

A parent who cannot afford their support obligation can also file a motion in court for a reduction in support based on a substantial and continuing change in circumstances. This, however, is not easy to establish.  While evidence of recent involuntary unemployment could aid in seeking a support reduction, courts will not grant a reduction where the unemployment was voluntarily incurred or the delinquent parent relies on a prediction that his income will decline due to market forces. In addition, the parent that lost his job must show a good faith effort to seek new employment.  A person in this predicament should keep excellent records of their job search as evidence of their good faith. 

Recently, this office was able to preclude a support reduction sought by an ex-spouse who, while not delinquent in his payments, had habitually sought to reduce his payment obligations. While he was able to show that his income had slightly decreased, he was still earning annually in excess of $1 million. Recognizing this defect in his motion papers, the parent also tried to assert that market volatility would further cause his income to decline. Having previously been rebuked for attempting to employ such a strategy, this spouse was not only denied a support reduction, but was also ordered to pay our client’s legal fees and costs. 

The lesson to learn here is simple – your child’s well-being is at stake, so make your child support payments in a timely manner. If you fail to do so, it will not only be your ex-spouse who comes after you, but possibly law enforcement as well. The penalty may even include jail time until the outstanding payments are made. If it simply becomes infeasible for you to make your payments, talk to your ex-spouse about a reduction or revised payment plan. If that does not work, file a motion for a support reduction. Be aware, however, that you will need to establish a substantial and continuous change in circumstances.

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I have eagerly awaited the news accounts each day of the ongoing saga of the former first family of the State of New Jersey. 

While by all accounts, there is some exceptional lawyering going on, one cannot help to think that this is a case that should have been settled or that one or more of the parties is using the trial to settle personal vendettas. 

Thankfully for the parties' child, they settled custody and parenting issues.  However, as the judge admonished at points in the case, their daughter is going to be able to read all about her parents' divorce by just typing hers and their names into Google.  And for what?

 While their marital lifestyle was perhaps unusual from the common folk, in both financial and other ways, at the end of the day, this was a short marriage. The testimony from both as reported suggests that there was no savings and few assets.  The disputes as to alimony seem absurd because even if there was a viable claim, how much could it have been for.  The legal and experts fees had to have exceeded the claim. 

Again, I don't know all of the facts and only know what I read.  However, I always tell my clients that you don't want to spend $10 in legal fees to get $5 back.  I wonder at the end of the day whether the battling McGreeveys will have done just that.  If so, that is good for no one - even the lawyers.  Moreover, I hope that the trial was not a vehicle for either to get the last of their 15 minutes of fame while at the same time, preventing parties with real issues from getting their day in court.

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There is a not too uncommon phenomenon that is frequently seen in divorce cases.  Specifically, as soon as the notion of a divorce action become a reality, many supporting spouse's incomes suddenly, and usually without valid explanation, drop substantially.  It may come as no surprise that someone may want to manipulate their income when an alimony or child support obligation is about to be set.  This affliction is sometimes known as "R.A.I.D.S." or Rapidly Acquired Income Deficiency Syndrome (sometimes also known as "SIDS"  Sudden Income Deficiency Syndrome.) 

That is not to say that there are not valid, legitimate and explainable deviations in someones income.  Some people are in commission sales and one year is legitimately better than another.  Perhaps someones income is tied to real estate.  That person may have a legitimate reason why 2007 and 2008 are down years.  Mortgage bankers are probably having trouble now as are realtors.  I recently had a case where if you looked at my client's tax returns and W-2s, one would think that support should have been based upon a seven figure income as opposed to a mid-six figure income.  In this case, there were some discrete one time payments from exercises of stock options and change of control of companies that he worked for.  These are not the situations I am talking about.  In fact, when there is non-recurring income, it may be legitimate to back it out for purposes of computing support or else the support would not be fair to the payor.  When income legitimately fluctuates from year to year, the Child Support Guidelines and decisional law suggest taking an average (3 or 5 years is common). 

The cases that I am talking about are those where there is no explanation for the sudden drop in income.  Very often, this occurs when the supporting spouse is self employed.  There are many ways income is hidden.  Sometimes, it is just not collected - as possibly evidenced by a large rise in accounts receivable.  Sometimes, there may be several capital expenditures or large equipment purchases, which reduce the profits and thus the income.  Other times, perquisites or personal expenses paid by the business increase dramatically.  Check the business credit cards - they are often illuminating in this regard.  Cash is also a possibility as are other manipulations with payments received.

In these cases, discovery is critical to smoke out the true income and real reason for the alleged reduction in income.  The use of a forensic accountant is often essential to get to the correct income number.  

RAIDS is certainly an illness that can be diagnosed and with the proper team of lawyers and experts, cured so that the supported spouse is treated fairly. 

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One of my pet peeves is litigants and lawyers that use custody and parenting time issues as a bargaining chip to get better a better financial settlement.  I have several matters ongoing now where that is occurring.

In a recent case, both in negotiations between the parties directly, and in negotiations with opposing counsel, we were told that the proposed resolution of a hotly contested parenting time issue for far less than had been demanded was fine but only as part of a global settlement including the finances.  Put another way, they were only going to resolve visitation if my client made financial concessions.  The bad faith of the tactic was evident.

In fact,  in New Jersey, there is really little interplay between the parenting time and the finances other than some child support adjustments made for the number of overnight visits.  This does not even really come into play in high income cases that exceed the Child Support Guidelines.  That said, since parenting time and custody issues are based upon the best interests of the children, most would agree that you should not negotiate these issues based upon money.  However, it comes up all to frequently, often to the detriment of the children and at a great financial and emotional cost to the parties. 

The system in New Jersey is set up to try to smoke out and resolve these bogus parenting and custody issues early in the case.  At the outset of a case, the parties are required to attend a Parent Education program given by each county.  After that, the parties are required to go to mandatory custody and parenting time mediation, usually with Court staff, unless there is a domestic violence restraining order in effect.  Only then, do you get into custody and parenting evaluations with experts, etc.  Also, this is all completed at the outset of the process, long before discovery is over, and often before it is even started in earnest.

A familiar scenario of the bad faith custody dispute that I have seen a fair amount as of late is as follows:  one parent is the traditional stay at home parent - the other is the Type A executive type that leaves the home at 6 a.m. and doesn't return home until 7 p.m.  Sometimes, that person travels substantially for business as well.  The stay at home parent has been responsible for all medical and dental visits, haircuts, play dates, teacher conferences, etc. The divorce starts and the  parent that works out of the home demands either custody or a 50-50 parenting arrangement. 

In these cases, absent mental health issues or other extraneous circumstances, the demand is one that is typically made either because there are control issues or as a bargaining chip.  That is not to say that there are not times where this parent should not get custody, because there are and I have gotten custody for these types of parents. 

That said, when these issues are made for bargaining, if the matter does not settle in mediation, the next step is custody evaluations by a forensic psychologist. If the parties cannot agree on a joint expert or the Court does not appoint one expert, there can be two experts.  The children are now made part of the process and have to meet with the expert several times.  Their teachers may be contacted.  Their doctors and therapists may be contacted.  The parties' therapists may be contacted.  Other collateral sources may be contacted (neighbors, coaches, family members, etc.)  The price to pay on the family, aside from the legal and expert fees, is high - especially when the issue is for bargaining only.

Don't get me wrong.  I understand that there are good faith custody and parenting disputes that require this process.  While the toll is still the same, that may be unavoidable.  However, if the issue is not a "real" one, I would hope that people would not use it improperly as a bargaining chip.  The collateral damage may be great.

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Previously I blogged about the fact that cases have a life of their own and will only settle when both parties are ready.  As I was trying to settle a case today that is scheduled to start trial in Morris County next week, I was reminded of a related issue.

In this case, we have had a hard time getting the other side to negotiate.  They have taken a position that we don't think is reasonable nor supported by the facts or the law.  That said, we have made proposals to try to resolve the case.  In fact, at each time we have been required to negotiate (at the Early Settlement Panel, mandatory economic mediation (several sessions) and at an Intensive Settlement Conference), we have made proposals.  In some ways, it was against my normal practice to not bid against myself, but the client wanted to at least try to stir some movement. 

At each point, rather than provide a counter proposal, the other side has tried to wow us with, to put it nicely, "fuzzy math" in order to justify why they are right and we are wrong.  They have never, however, moved off of their proposal on support in any significant way. 

I finally had to tell the opposing counsel to just give me a number without the explanation or argument because I wasn't going to buy their theory, ever, and the theory didn't make a difference if the number was acceptable.

In fact, this is not unusual when trying to settle matters.  That is, sometimes the theories and explanations will bog things down.  The bottom line is that if  the parties agree on the number or a certain resolution of a non-financial issue, in many instances, it matters not at all how or why you got to that number.  In fact, the explanation may just start the argument again. 

Sometimes, it is more important to just give a number than explain how you got there.  If the number is fair and within the realm of reason, and the parties can live with it, it is sometimes better to be settled then win the debate which may only prove more costly.

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It’s that time of year. High School seniors all over the country are making that agonizing decision, “Which college should I go to?”  While the kids are choosing schools, parents are thinking, “how will I pay for it?” Financing college is a challenge in the best of circumstances, but for families in which parents are divorced or separated, the issues become particularly difficult. 

New Jersey courts will, in appropriate circumstances, compel both parents to contribute towards the college or vocational educational expenses of their child. This is in recognition of the fact that in today’s day and age, a college or vocational education is becoming a necessity. In the absence of an existing agreement, New Jersey Courts will conduct an analysis considering several factors. The New Jersey Supreme Court, in the case of Newburgh v. Arrigo, 88 N.J. 529 (1982) set forth the basis upon which parents can be ordered to contribute towards college expenses.

When a child has suitable scholastic aptitude for the pursuit of a college education and continues to exhibit that aptitude throughout his college career, the court will examine:

1. Whether the parent if still living with the child would have voluntarily contributed to the cost of the requested higher education;
2. The effect of the background, values, and goals of the parent and the reasonableness of the expectation of the child for higher education;
3. The amount of the contribution sought by the child for the cost of the higher education;
4. The ability of the parent to pay the cost;
5. The relationship of the requested contribution to the choice of the school and course of study sought by the child;
6. The financial resources of both parents;
7. The commitment to and aptitude of the child for the requested education;
8. The financial resources of the child, including assets owned individually or held in custodianship or trust;
9. The ability of the child to earn income during the school year or on vacation;
10. The availability of financial aid in the form of college grants and loans;
11. The child’s relationship to the paying parent, including mutual affection and shared goals, as well as the child’s responsiveness to parental advice and guidance; and
12. The relationship of the education requested to any prior training and the overall long-range goals of the child.

After reviewing these factors, if a court finds that contribution for college is appropriate, it may impose some or all of the following conditions:

1. All savings accounts earmarked for the child’s education shall have been exhausted;
2. Scholarships, loans, grants, and any other financial assistance shall have been applied for in reasonable fashion. The parties and the applying student shall cooperate in this regard;
3. Reasonable contribution shall be made by the child towards the education costs from summer employment;
4. Each of the parties shall have an equal say in the choice of higher educational schooling;
5. There shall continue to exist the customary parent-child relationship as currently exists;

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      In high-income cases, determining the appropriate level of child support is a difficult - and critical task for the courts.  Part science, part art, most judges rely on both detailed financial disclosures adn a qualitative assessment of what is truly in the child's best interests. In the vast majority of low- and middle-income cases, judges follow the advice of the New Jersey Child Support Guidelines, which define child support based on the family’s net income. In 2006, the Guidelines were revised include more high-income situations. Many feel this formulaic approach was more hindrance than help because discretionary spending patterns can vary widely. 

       The New Jersey Supreme Court’s revised the Child Support Guidelines effective September 1, 2007 – specify only a minimum support level (with no guidance on an upper limit) for families with net incomes exceeding $187,000. Previously, the Guidelines defined both the support level for families with net incomes exceeding $229,840. When the new Guidelines are in effect, a large number of cases will no longer be subject to guidelines on the maximum level of support, which should result in awards that are more in keeping with the parties’ lifestyles.            

        Approximately 10 years ago, the New Jersey Child Support Guidelines were overhauled to include more families. Prior to those changes, only cases in which the combined net income (i.e., the net after-tax income of both parents) was under $52,000 per year fell within the Guidelines. The changes significantly raised the upper limit of the Guidelines to include families whose combined net income was as much as $150,800 per year ($2,900 per week). The Guidelines were not changed again until 2006, when the upper limit was raised to cover families up to $229,840 ($4,420 per week). The goal was to make the Guidelines more inclusive.

            However, the changes had unintended consequences. While there were some modest increases in child support awards at lower-income levels, support actually decreased at the upper levels – which prompted an immediate outcry from the Family Law Section of the New Jersey Bar Association. Others argued that strict Guideline calculations did not make sense in higher-income situations where discretionary spending patterns would not necessarily be captured in the economic data on which the Guidelines were based. 

          The Supreme Court took note and accepted the recommendation of its Family Practice Committee to set the top of the guidelines at $187,000 per year ($3,600 per week) in combined net income. The Court expects that the new limits will cover 90 percent of the state's child-support cases.

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On March 27, 2008, the Appellate Division released the decision in Gotlib v. Gotlib.  This is a reported decision which means that it is precedential and must be followed by courts in the future. 

In this case, the plaintiff/ex-wife filed a motion seeking enforcement as to unreimbursed medical expenses and the payment of college expenses. She also sought to invalidate defendant/ex-husband's transfer to a third part for his share of the marital residence.

As to the issue of medical expenses, the parties were required per their Judgment of Divorce to equally share in these costs.  The plaintiff sought more than $23,000 in medical expense arrears, going back to 1996.  These expenses included those that were already awarded to her in 1997 when she was required to file an enforcement motion.  Though she was successful in the motion, the defendant never paid.  The defendant argued that plaintiff waived her right to enforce the Judgment's clear provisions requiring each party to pay one-half of the children's un-reimbursed medical expenses because she did not consult with him before the children visited certain physicians, and did not bill him on a monthly basis, as required by the Judgment.

The Appellate Division disagreed holding that a parent's obligation to pay un-reimbursed medical expenses should be deemed by a court reviewing a motion to enforce litigant's rights as an essential benefit to the parties' children. In this light, the right to receive these payments belong to the children, and is therefore is not subject to waiver by a custodial parent. That said, the non-custodial parent retains the right to question the reasonableness of any individual medical expense.

The Appellate Division made some interesting comments as to how parents should ideally act after a divorce:

"A parent from whom financial contribution is sought nevertheless retains the right to challenge the reasonableness of the medical expenses. Cooperation, discussion and consultation should be the guiding principles in any decision involving the welfare of the parties' children. In deciding what type of medical treatment is required, the need for the parties to behave and act like parents is paramount. This may require them to subordinate their adversarial interests as litigants in favor of their children's welfare."

They also set forth factors that should be considered when assessing medical expenses, as follows:

"Some of the relevant questions to be addressed when considering the reasonableness of a reimbursement request are: (1) was the treatment medically necessary; (2) was the medical treatment in response to an unforeseen emergency requiring immediate action; (3) did the treatment involve elective or cosmetic medical services, and if so, was it in the best interest of the child involved to undergo such treatment; and (4) in cases of elective or cosmetic medical treatment, was the decision economically sound, given the parties' financial resources. This list is by no means an exhaustive recitation of the issues to be considered in every case. These cases are, by necessity, factually sensitive. A proper resolution requires careful attention to the salient facts."

As to the college issue, the Appellate Division reversed the finding that the parties should equally share the costs remanded the matter to the trial court  to make factual findings, after conducting a plenary hearing, guided by the factors outlined in Gac v. Gac and Newburgh v. Arrigo. The reason for this was that the Judgment was silent as to how the parties would divide higher education expenses, however, in arriving at his decision, "the motion judge did not address the Newburgh and statutory factors reflected in N.J.S.A. 2A:34-23(a) ,,, The court simply appears to have divided the expenses equally."  In addition, the Court was concerned because the plaintiff also did not seek contribution from defendant until long after the expenses had been incurred, "thereby excluding him from the decision making process of whether his son should attend Curry College or whether his daughter should attend Ba'er Miriam Yeshiva, both private schools. (citations omitted).  Participation by both parents is an essential factor under Gac, expressly required by the JOD, and should have "weigh[ed] heavily against the grant of a future application. (citations omitted)."   

In Gac, a father was not required to pay for college because of similar reasons as in the case above.  This seemingly creates a contradiction in how medical expenses and college expenses are treated.  Seemingly, reimbursement for medical expenses cannot be waived for lack of prosecution of the arrears.  On the other hand, contribution for college costs can seemingly be waived if a parent waits until after college is completed to seek reimbursement.  The distinction, at least in this case, is that apparently, at least as to the medical expenses, the defendant was given the explanation of the medical expenses and the proofs near the time they were incurred and/or the defendant had knowledge of them - even if exact compliance with the Judgment was not made by the plaintiff. 

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Tasara Masaya v. Peter Griffin and Deirdre Newman

This case is an appeal from a final order of the Family Part. Peter Griffin was married to Deirdre Newman in 1985. They had two children. In 2000 Griffin and Newman divorced. The parties’ Property Settlement Agreement required that the two children remain the beneficiaries of Griffin’s $150,000 policy and his employer life insurance policy until their emancipation.  In 2004, Griffin had another child with Tasara Masaya. In 2005, Masaya filed a complaint for custody and child support.  The Court entered a Consent Order that provided Masaya with child support, arrears, child costs, and required Griffin to obtain life insurance of $200,000 to secure his child support obligation. In 2006, Masaya sought to enforce the Order regarding the arrears and the life insurance. Although Griffin was in the hospital at the time, the judge without knowledge of the PSA, awarded Masaya’s child 85% of the life insurance. 

Following Griffin’s death, an order to show cause was filed regarding the life insurance. The order to show cause informed the Court of the PSA, and the judge modified her previous Order. Masaya appealed. The appellate division cited Della Terza v. Estate of Della Terza, 276 N.J. Super. 46 (App. Div. 1994), when rendering its decision that “[w]hen incorporated in an agreement or court order, the parent’s obligation to provide such insurance for the benefit of his or her child gives the child an equitable interest in the proceeds of a policy of insurance on that parent’s life, regardless of the beneficiary designation in effect at the time or his or her death”.    

When a child of a deceased parent has an equitable interest in the proceeds of a life insurance policy, i.e. they are the beneficiary, because the deceased parent has an obligation to provide such insurance, that interest is enforceable as an equitable assignment. Taking it one step further, when a parent has other children born after the order establishing the obligation to maintain life insurance for the child of the marriage, the prior obligation is enforceable regardless of a subsequent redesignation of beneficiaries. In essence, the first in time still has an enforceable right under the terms of the Property Settlement Agreement and a subsequent child and subsequent obligation, does not nullify that obligation. 

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