INTERESTING NEW ALIMONY REDUCTION CASE

We have blogged many times about cases dealing with motions for reductions of child support and alimony.  Obviously, that has been a hot topic given the economic downturn that our country has experienced over the last year or so.  Another interesting unreported (non-precedential) case was released on November 2, 2009.

That case was Miele v. Miele.  In this case, the parties divorced in 2005.  In their Agreement, the husband's support was based upon anticipated gross income of $165,000 per year.  The reason for this was because he involuntarily changed employment in 2005.   In 2004 he earned more than $331,000.  Because of these circumstances, the parties agreement required them to exchange W-2 and 1099 forms for 2006, 2007 2008.

The husband's post divorce income did not approach even the $165,000 level.  As a result, he made a motion to reduce his alimony in 2007 which was denied.   He filed another motion in 2008 which also was denied.  This time, he appealed. 

The Appellate Division reversed.  The Appellate Court found that the parties agreement recognized that there was an involuntary reduction in income and that the $165,000 number was a projection of future income that did not come to fruition.  Given that the husband had shown two, if not three straight years of income that was substantially below the anticipated gross income, he was entitled to, at the very least, entitled to a hearing. 

This case is instructive because I would anticipate that many current divorces will be faced with a similar situation of someone who lost their job and their new income is speculative.  The parties should attempt to include protections in the agreement that take into account that the income could go back to historical levels, as well as what should happen if it does not. 

COURT FINDS THAT THREE YEAR REVIEW OF CHILD SUPPORT NO LONGER VALID

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on to point out that the three year review relates back to a prior version of a particular statute and has essentially been replaced by a Cost of Living Increase (COLA) every two years.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

The Good, the Bad and the Ugly: Locking in Support Obligations

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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APPELLATE DIVISION AFFIRMS WHAT IT DEEMED WAS TRIAL COURT MODIFICATION OF A PARTIES' CUSTODY AGREEMENT AS TO DECISION MAKING

Last week we blogged about a recent unreported Appellate Division case where I was the attorney for the winning party at trial and on appeal.  To view the prior post, click here - to view the Appellate Division opinion, click here.  In last week's post, I blogged about the importance of credibility.  There were other interesting parts of the decision.

In this case, the parties agreed that they would have joint legal custody but that the wife would have the children about 60% of the overnights.  The husband, however, in what we deemed a game of semantics, would not agree that the wife was the Parent of Primary Residence (PPR), though by definition, since she had the children more than 50% of the time, she was the PPR.  There is case law that says that the PPR has final say if parents deadlock on major decisions for the children.  Despite this being the law, this was an unresolved issue at trial.  The trial court essentially acknowledged the law.  The husband appealed claiming that the custody agreement was modified.

The Appellate Division held:

Defendant initially argues that the trial court erred in "setting aside material portions of the Consent Judgment to elevate plaintiff's decision-making authority" respecting the parties' two children. We disagree.
This was a bitterly contested divorce as evidenced by the extent of the record and the expense of the litigation. The court recognized that the parties "dispute[d] how to make decisions related to their children" and "recognized the parent of primary residence to be the parent in the better position to make those decisions." The court held that as "primary caretaker," plaintiff "shall decide in the best interest of the children their medical needs and treatment, schooling, expenses, and even religious instruction" because it was not in the children's interest to "be in the middle of parental conflict" when decisions concerning their welfare needed to be made. The court left intact the parties' agreement to "confer on all important matters concerning the children's health, education and general well being" and to use a mediator to resolve disputes that might arise concerning the children. The court concluded that "[t]he parties shall be bound by the terms of their consent judgment fixing custody and parenting time subject to the plaintiff's authority as parent of primary residence." With respect to extraordinary medical treatment, the parties were to consult each other in advance, except in cases of emergency, and "[n]either party shall unreasonably withhold consent."

We agree that the trial court's modification of the parties' consent judgment is in the children's best interest, considering the hostility between the parties. Kinsella v. Kinsella, 150 N.J. 276, 317 (1997). Should the parties come to a resolution of their hostilities and be able to deal reasonably with each other regarding the children, they may seek to amend the judgment in respect of the custody provisions pursuant to N.J.S.A. 2A:34-23. In the meantime, irrespective of the parties' agreement, the court properly exercised its "supervisory jurisdiction as parens patriae," in the children's best interests. Sheehan v. Sheehan, 38 N.J. Super. 120, 125 (App. Div. 1955).

 

To the extent that parenting agreements are unclear, or there is a dispute as to what joint legal custody means, this case provides some guidance.

RETROACTIVE MODIFICATION OF CHILD SUPPORT ALLOWED IN LIMITED CIRCUMSTANCES

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. 

LOSS OF JOB - ANOTHER DAY ANOTHER DECISION

In an interesting unreported Appellate Division decision released on May 20, 2009, in the case of Williams v. Williams the appellate court affirmed a finding by the trial court that the former husband had not shown a change of circumstances and therefore was not entitled to eliminate his alimony obligation.  The case is also a primer of what not to do when seeking a reduction.

In this case, the husband was a long time employee at JP Morgan Chase making $185,000 per year.  His alimony obligation was $1,000 per month.  When he lost his job in August 2006, he immediately stopped paying alimony despite receiving one year of severance pay.

The husband asserted that he had tried but failed to find comparable work.  The opinion was not clear but given the final outcome, one can surmise that overwhelming proof of an unsuccessful job search was not supplied to the Court.  The husband further alleged that he had attempted unsuccessfully to establish a consultant business focusing on information technology. He claimed, however, that the only employment he could obtain was a position in a florist shop. It was not disputed that the florist shop was operated by his girlfriend.  Though the issue was ultimately decided for other reasons, these facts could also lead to a conclusion the he had not made an initial showing of a change of circumstances.

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MODIFICATION OF ALIMONY AND CHILD SUPPORT BASED UPON INCOME REDUCTION CAUSED BY THE ECONOMIC DOWNTURN - THE GROUNDSWELL CONTINUES

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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PAINTING A GRIM FINANCIAL PICTURE...IS IT ENOUGH TO OBTAIN A DECREASE OR TERMINATION OF SUPPORT?

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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WHO GETS THE TAX EXEMPTIONS?

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.

MODIFICATION BASED ON THE ECONOMY - IS HELP ON THE WAY?

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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Are They Living Together or Not?

On February 3, 2009, my colleague, Katherine R. Sookhoo, an associate in or Philadelphia office,  wrote a very interesting article on cohabitation in our Pennsylvania Family Blog entitled For Love or Money.  I found the blog interesting for two reasons.  First, the rule of law between Pennsylvania and New Jersey are significantly different.  Second, although different, the difficulty litigants have in either jurisdiction in proving that their ex-spouses are cohabiting is the same. 

Pursuant to the Pennsylvania Divorce Code, divorce litigants are not entitled to alimony if they cohabit after they have been divorced.   However, in Pennsylvania, in cases resolved by way of Property Settlement Agreement, the Pennsylvania Divorce Code provision applies only if the agreement specifically states that cohabitation terminates alimony.

Unlike Pennsylvania, New Jersey statutory law does not prohibit receipt of alimony payments based upon cohabitation.  In New Jersey, while cohabitation may be considered a change in financial circumstances that permits a review and/or a modification of alimony, the fact that an ex-spouse cohabits does not necessarily mean that alimony will be terminated.  Konzelman v. Konzelman, 158 N.J. 185 (1999). 

While Pennsylvania and New Jersey have differing laws regarding cohabitation, both jurisdictions are plagued with the uncertainty of how the Court's define "cohabitation".  In Pennsylvania, there has to be a showing of a financial, social and sexual link, by sharing the same residences.  Miller v. Miller, 508 A.2d 550 (1986).  In New Jersey, the New Jersey Supreme Court  noted that “to constitute cohabitation, the relationship must be shown to be serious and lasting” and that  “a mere romantic, casual or social relationship is not sufficient to justify enforcement of settlement agreement provision terminating alimony upon dependent spouse's cohabitation; such a provision must be predicated on a relationship of cohabitation that can be shown to have stability, permanency, and mutual interdependence” Id.  

Therefore, does cohabitation exist if your ex-spouse and her paramour switch back and forth in sleeping in their respective residences?  If they stay together only on weekends?  If they have resided together for a month?  How about a year?  What if their finances are totally separate? In either Pennsylvania or New Jersey, the answers to those questions are not entirely clear and Courts determine the issues on a case-by-case basis.

Because there is no exact definition of "cohabitation", proving that cohabitation exists may be tricky and requires a thorough analysis of the circumstances before raising the issue in Court.  If a litigant is going to allege cohabitation, before doing so, they should make sure that factually and legally, they have enough to get beyond the "grey" area because (1) if you are going to proceed in Court, you want to prevail; and (2) you don't want to go to Court, lose, and give your ex-spouse the ability to further avoid termination of alimony now that they know your on to the cohabitation.   

 EDITOR'S NOTE:  Apple is absolutely correct regarding the grey areas. That said, there have been a number of unreported Appellate Division decisions over the last year or so that have been more permissive in what amounts to cohabitation.  Specifically, many of the cases suggest that staying together every single night may not be required, and that the location is not entirely important (ie. some nights at her house and some nights at his house.) 

However, once some semblance of cohabitation is shown, unless the divorce Agreement specifically calls for the termination of alimony, and most don't, the next issue to address is the financial interdependence between the former spouse and cohabitant.  Put another way, cohabitation is not enough to terminate alimony in the typical case.  You have to look at the financial impact of the cohabitation.  Eric S. Solotoff

ARREARS, ENFORCEMENT AND MODIFICATION- A TRIPLE THREAT?

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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SUPPORT MODIFICATION - ANOTHER DAY ANOTHER DECISION

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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HEARING FOR SERIAL FILER OF SUPPORT MODIFICATION MOTIONS - ANOTHER RESULT

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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Hello, IRS this is a Superior Court Judge and....

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. 

NO HEARING REQUIRED FOR SERIAL MODIFICATION MOTIONS

On February 2, 2009, the Appellate Division released a reported (precedential) decision that affirmed a decision of the trial court denying the former husband's motion for a downward modification of his alimony and child support obligations.  The Appellate Division found that the trial judge properly exercised his discretion particularly when viewed against his findings from a multi-day plenary hearing (trial) that occurred less than one year prior. To see the full text of this case, click here.

The parties were divorced in 2003 and entered a Property Settlement Agreement (PSA) where he agreed to pay $1,000 per week in alimony and $350 per week in child support for the parties' 3 children.  In addition, based upon the joint accountant's finding of the five year average of the husband's income, he agreed that support was based upon $185,000 for him. 

In 2005, the husband moved for a reduction in his support obligation claiming a downturn in his law practice.  The plenary hearing on this motion was held over several days in December 2006.  After the hearing, the judge denied the husband's motion finding that during the time that the husband's income had supposedly decreased, he obtained a new $58,000 Lexus and bought a home for $785,000 with a $600,000 mortgage.  The judge also found that based upon the evidence at trial and his CIS, that the husband's income was more in the $140,000 range and not $100,000.  The judge also rejected the husband's claim that he was indebted to the Internal Revenue Service in the amount of $55,000 because Gregory failed to provide any documentation to
support that assertion.

 

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Don't do it!! The Comparison Pitfall

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

EMANCIPATED OR NOT?

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.

 

 

SCARY APPELLATE DECISION REGARDING PERMANENT ALIMONY/RETIREMENT

I was reading an unreported Appellate Division case released today and gasped when I read the following sentence, " ...Moreover, the permanent alimony figure was negotiated and presumably contemplated defendant's retirement since he was fifty-three years old when he appeared before Judge Piscal on September 19, 2000."  To read the full case, click here.

While the facts in this case may have justified the denial of the former husband's motion to modify alimony, that statement struck a chord.  In this case, the parties were married for 32 years, a long term marriage by any standards.  However, by current standards, we often start talking about long term marriages being 15 years or more and if alimony is appropriate, the discussion is about permanent alimony begins.  Moreover, although there is a well known Appellate Division case authored by Judge (now Supreme Court Justice) Long suggesting that it is better practice to negotiate the issue of retirement, the reality in practice is that it is rare that the party receiving alimony will concede the issue of retirement in the agreement.  Often it is just too speculative.  At best, you may get a recognition that there can be an application for a review upon retirement.

Given that you typically cannot get any concession about retirement and there is no doubt that this was a permanent alimony case, is the above quoted statement a fair or a realistic view?  I don't think so. 

Assume a long term marriage where all assets, including retirement assets are equally divided.  The law is clear that you cannot look to assets divided in equitable distribution for support.  Post-divorce assets can be considered.  If in the 8 or 10 or 12 years after the divorce, after paying alimony and perhaps child support, the payor does not accumulate substantial assets, then what.  What if he bought a new house with his equitable distribution and did contribute the max to his 401k during the post divorce years.  In this economy , the value of the home and the 401k could be down substantially.

More importantly, one would think by this sentence that someone who agrees to permanent alimony can never retire.  This, however, is wrong as a matter of law.  Thus, for a court to determine that a retirement by a person who was age 53 when he agreed to permanent alimony was contemplated in the agreement, is both practically unrealistic and legally incorrect in my opinion. 

That said, as noted above, the denial of the motion to modify under the specific facts in that case made perfect sense.

However, I think it is essential, if possible, to at least get recognition in a Marital Settlement Agreement, that, if nothing else, the issue of retirement was discussed but unresolved to best preserve the issue for another day.

Appellate Division Provides Primer on "Changed Circumstances" in Denying Motion to Reduce Support Based on Spouse's Ability to Pay

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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Applying Res Judicata and Collateral Estoppel to Child Support Modifications

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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CHANGING THE TERM OF A LIMITED DURATION ALIMONY OBLIGATION

Pursuant to the statute, the general rule is that the tern of limited duration alimony cannot be extended without unusual circumstances.  A recent Appellate Division decision shed some light on what those circumstances could be.

Jane and Samuel had been married for less than seven years when they got divorced.  They had two children, ages 6 and 4 at the time of the divorce.  Both parties were attorneys although Jane stopped practicing law after the birth of their first child, within the first year of the marriage.  The parties negotiated and entered into an agreement designating Jane with residential custody of the minor children subject to Samuel's visitation and limited duration alimony in the amount of $500 per week for a period of four (4) years.  In addition, Samuel paid $500 per week in child support and child care related expenses to be paid 80% by Samuel, 20% by Jane.

At the time the parties negotiated their agreement, it was assumed that Jane would be able to obtain per diem employment in the law field.  Also, at that time, the oldest child was having difficulties with school and may have had ADD.  Since the time of the divorce, he has been diagnosed with ADD, Asperger's, Obsessive Compulsive disorder and Bi-Polar disorder.  As a result of these diagnosis, Jane argued that she was unable to obtain significant employment such that was contemplated at the time of the divorce.  Jane filed a motion seeking a continuation of her limited duration alimony, an increase in the amount of alimony, the production of financial information or in the alternative an increase in child support, and to establish a fund for their son's medical care.

The trial court denied Jane's application in its entirety.  She appealed and the Appellate Division reversed and remanded. the matter back to the trial court.  The Appellate Court held that an award of limited duration alimony may be modified based either upon changed circumstances or upon the non-occurrence of circumstances that the court found would occur at the time of the award.  A court may modify the amount of such an award but shall not modify the length of the terms except in unusual circumstances.  N.J.S.A. 2A:34-23(c).

In this case, the Court found that Jane had established a change of circumstance for an increase in the amount of the limited duration alimony as well as an increase in the term based upon unusual circumstances, i.e. the health of the parties' eldest child.

The court was careful to explain in it's unpublished opinion that a modification to the time for payment of limited duration alimony as well as the amount would only be based upon an ability to prove changed circumstances or upon the non-occurrence of circumstances that the court found would occur at the time of the award.  Thus, the burden is upon the party making the application (i.e. the recipient spouse) that circumstances have changed such that a modification is necessary and just.  Here, the child's condition was far worse than anyone anticipated at the time of the divorce and Jane simply could not work as contemplated when the matter was settled. 

To read the entire case, click here.

EDITOR'S NOTE:  This case in interesting because there is little law on extending limited duration alimony.  What  is also interesting is that the Appellate Division applied a similar analysis that is used when someone seeks to either extend rehabilitative alimony or convert it to permanent alimony.  Rehabilitative alimony is meant to provide a person with the opportunity to improve their earning ability in order to become self-sufficient, without the need for alimony.                                       Eric S. Solotoff

IT'S THE ECONOMY - WHERE THE LAW AND REALITY MAY COLLIDE IN FUTURE POST-JUDGMENT MOTIONS CAUSED BY JOB LOSS

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.

New Jersey Focus Turns to Parents Behind on Their Child Support Obligations

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.

Custody and Parenting Time Can NOT be Subject to Binding Arbitrated

This week in an opinion published by the Appellate Division, the Court  held that parties in a matrimonial action cannot agree to binding, non-appealable arbitration of child custody and parenting time issues.  Any such agreement would violate the Court's parens patriae obligation to protect the best interests of the children.

In the matter of Fawzy v. Fawzy,  the parties were scheduled for a trial date in early 2007.  When they appeared in Court on this date, after several hours of discussion, they agreed to submit all issues in contest to an arbitrator for binding, final, non-appealable arbitration pursuant to this state's statute governing arbitration (N.J.S.A. 2A:23B1 to 32).  They went before the judge that same day and placed this agreement on the record.  The judge advised them that the arbitrator's decision would be final and could not be changed.  The parties agreed and went forward.

The parties selected an arbitrator and began the process.  After several days into the proceeding, Mr. Fawzy sensed things were not going well for him and filed an emergent application with the Court to restrain the arbitrator from making a custody and parenting time award.  His argument was that these issues could not be arbitrated as a matter of law.  The trial judge denied his application.

Shortly thereafter the arbitrator issued a custody and parenting time award in Ms. Fawzy's favor.  Mr. Fawzy retained new counsel and filed a second emergent application seeking to vacate the arbitration award, disqualify the arbitrator, restrain the arbitrator from any further participation, require a de novo review of the reward and stay the award pending appeal.  The trial judge once again denied his application and entered an amended judgment of divorce confirming the arbitrator's award.  Mr. Fawzy then filed his appeal.

On appeal, Mr. Fawzy argued that as a matter of law, parties cannot bargain away the Court's obligation to review the best interests of the children by agreeing to binding arbitration of custody issues.  The Court noted that it was troubled by the fact that Mr. Fawzy did not make any claims that the award would cause harm to his children or in any way endanger their health, safety or welfare.  Despite that concern, the Court agrees that parties to a matrimonial matter cannot enter into an agreement to submit custody issues to final, binding, non-appealable arbitration.

While our courts have endorsed arbitration as a favored remedy and have encouraged the use of various alternative dispute resolution devices, the question of whether child custody could be submitted to final, binding arbitration has not before been addressed by the Court.  The Court has favored the use of final, binding arbitration for alimony disputes as seen in the 1984 opinion of Faherty v. Faherty, however they did not address the issue of custody directly at that time.

In conclusion, the opinion notes that while the development of a more workable custody arbitration process may be more beneficial to both the parties and the children involved in a matrimonial action, the Court ultimately must defer to their traditional parens patriae role.  That role requires the trial court to determine the best interests of the children regardless of any agreement for arbitration as to custody and parenting time.

While binding arbitration is a viable and useful alternative to litigation for the purpose of resolving financial issues related to equitable distribution and alimony, issues concerning and relating to the best interests of a child cannot be submitted to binding, final arbitration.  When considering arbitration as an alternative to traditional litigation, make mental note of its restrictions.

 

EX-WIFE'S INCOME DOUBLES YET ALIMONY REMAINS UNCHANGED

In an interesting unpublished Appellate Division decision dated May 23, 2008 in the matter of Pechinka v. Pechinka, A-6089-06T3, the court affirmed a trial court decision that denied an ex-husband's motion to terminate his limited duration alimony. 

At the time of the divorce in 2002, the wife was earning $46,000.  The husband earned $116,000 per year.  They stipulated that there marital lifestyle was $7,000 to $7,500 per month for a family of four  "... in an average month on living expenses." 

In 2006, the wife earned almost $91,000 and with her alimony, she had $6,100 per month in net after tax funds.  This amounts to about 81% to 87% of the joint family net income/lifestyle before the divorce. 

 

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