Posted on November 17, 2008 by Robert A. Epstein

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.

 

The husband subsequently moved again in 2007 before a different judge to reduce his child support obligation based on his current income, which had allegedly dropped by approximately $70,000 from the income figure used by the Court in deciding on the wife’s prior motion. The wife cross-moved for a support increase, again arguing that the husband’s 2004 and 2005 income should apply while the husband relied on the same successful arguments he previously made regarding his 2006 income. Notably, the husband also argued that the prior judicial finding was binding as to his reasons for leaving his former employer – involuntary termination – and also as to his 2006 salary. As such, he argued that because his 2007 salary was substantially lower than the 2006 income previously applied by the Court, he was entitled to a reduction. The motion judge decided without conducting a plenary hearing that the prior judicial determination regarding the husband’s relocation and income was binding on the parties in deciding motion before it.

 

Pursuant to the Court’s instructions, the husband then filed his motion to reduce support based on his judicially determined 2006 salary and his predicted 2007 salary. The wife, however, again reiterated her prior arguments regarding the husband’s relocation and income and, on this occasion, finally included a certification and report from an employability expert as to the husband’s earning capacity. A third judge reviewed the husband’s application and, despite the second judge’s finding, rejected the husband's argument that the first judge’s determination was binding. In so doing, the third judge concluded that the husband’s income decreased because he voluntarily left his employer, relocated to Florida and accepted a lower-paying position.

 

In reversing the third judge’s factual findings and conclusions of law regarding the husband’s relocation and income due to the binding nature of the first judge’s decision, the Appellate Division first held that the legal principle of res judicata was inapplicable because that principle prevents the re-litigation of the same controversy between the same parties, rather than a specific finding derived from a different controversy. The Appellate Division then held that the concept of collateral estoppel, which bars reconsideration of an issue of law or fact previously determined in a different action, did apply because the first judge’s decision “implicitly adopted” the husband’s arguments as to why he left his job, relocated to Florida and accepted a lower paying position. As such, the wife could not subsequently challenge these findings.

 

This case, while not approved for publication, presents interesting issues that will likely arise on a more frequent level as parties live in this difficult economic environment. In fact, in the current economic climate, the issue of whether a support payor who lost his or her job is underemployed may come up more and more. This hot topic was previously raised in another entry in this blog that can be found here.
 
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Posted on June 7, 2008 by Eric S. Solotoff

HOW TO PREPARE FOR A CUSTODY EVALUATION

Custody evaluations are very important in determining child custody and access during contested divorce proceedings. Divorce courts give considerable weight to the recommendations of the evaluator. In addition, the participates are usually extremely nervous about the process.

As such, before an evaluation, I try to meet with my clients to let them know what to expect.  I also try to give them some basic guidelines as to how to act. 

Below are some guidelines that will assist a person to prepare for your custody evaluation with the expectation of ending your custody battle.

• Arrive on time at your custody evaluation interview.
• Dress neatly and conservatively.
• Be honest. The custody evaluator will likely check out your statements with collaterals and/or other sources.
• If the custody evaluator chooses to use psychological testing, ABSOLUTELY answer honestly. The tests are designed to detect defensiveness and lies and unless you are an expert in psychometric testing, you are unlikely to fool them.
• Be sincere. The custody evaluator can usually detect over embellishment and insincerity.
• It's all right to be nervous; most people are.
• It's all right to cry and/or show emotion; many people do.
• Answer questions directly and to the point.
• Make sure you pay attention to what the evaluator is asking.
• Take your time when answering a question. If you do not understand what is being asked, feel free to ask the evaluator to explain what he/she means.
• If the custody evaluator asks that you provide additional documentation, do so as promptly as possible or communicate any concerns about getting it.
• If you provide the custody evaluator with names of collateral contacts, it is a good idea to inform them in advance that they may be contacted so that they can prepare to speak on your behalf.
• If the custody evaluator is observing you with your child(ren), be attentive to their needs and focus on their interests and not yours.
• Present yourself as being reasonable and placing the concerns of your child(ren) above all.
• Relax and let the best aspects of your personality come out (patience, humor, concern for the child(ren)’s well being, etc.)

The following is a list of things to avoid doing during a custody evaluation
• DO NOT speak badly of your spouse/partner unless the custody evaluator asks you to comment on what you perceive to be the problems between you.
• DO not make threatening comments about your spouse/partner or anyone else to the evaluator.
• DO NOT harass the custody evaluator with phone calls.
• DO NOT drop by the evaluator's office without an appointment.
• DO NOT call the custody evaluator to see if the report is completed.
• DO NOT prep your child(ren) to say negative things about their other parent. The custody evaluator has ways of telling if this has happened.
• Custody evaluators recognize the stress people are under during this process and take this into account when assessing family members.
• If you are feeling stressed and anxious, it is all right to acknowledge it and allow the custody evaluator to help allay some of your concerns.

The following is a list of things that the evaluator is looking for:
• Empathy (the ability to understand what the children are feeling and the willingness to react appropriately)
• Setting appropriate boundaries
• Proper environment and proper care providers
• A loving relationship between you and your child(ren)
• Behavior supportive of the relationship between the child(ren) and the other parent
• Behavior which demonstrates that you are striving to keep the child(ren) insulated from the conflict
• Lack of hostility toward your spouse. (Speak of past problems in a matter-of-fact way, indicating that you these things behind you)

 

Custody evaluators recognizes that there are no perfect parents and his or her recommendations should be directed at determining the best parenting arrangement to meet your child(ren)'s needs.

The following is a list of other general tips:

• Do not make derogatory remarks about the other parent in general, and especially not to or in front of the child(ren)
• Do not make derogatory remarks about the other parent’s family in general, and especially not to or in front of the child(ren)
• Do not use the child(ren) as messengers
• Do not refuse to talk to the other parent regarding the child. This does not mean that you should have to accept abusive communications.
• If you are the non-custodial parent, do not leave the child with babysitters excessively.
• Communicate with the child(ren)’s educators and health care providers.
• Do not keep the child(ren) involved in activities from dawn until bedtime.
• Do not be inflexible regarding parenting time issues.
• Do not allow a new significant other to get involved in the custody dispute.

Also, be cognizant that some evaluators ask provocative questions, apparently aligning with you, to get a response.  Do not take the bait even if you think that the evaluator agrees with you that the other spouse did something wrong.  Rather, stick to the rules set forth above to minimize being tripped up. 

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Posted on May 8, 2008 by Eric S. Solotoff

Beware of R.A.I.D.S.

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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Posted on April 28, 2008 by Sandra C. Fava

Immigration and Support: Beware of the Affidavit of Support

In a reported decision, the Appellate Division has recently decided to extend a sponsor's duty of support to a sponsored immigrant based upon the provisions set forth in Section 213A of the Immigration and Nationality Act and more specifically form I-864EZ.  When a sponsoring party signs a form I-846EZ, he or she agrees to provide the sponsored party/immigrant with "any support necessary" to maintain him or her at  an annual rate of "not less than 125 percent" of the federal poverty line until a triggering termination event occurs.  Interestingly enough, divorce is not a triggering termination event.
 
In the matter of Naik v. Naik, an Indian couple was married in India via an arranged marriage.  The husband, just a few days after the marriage, left India to return to NJ.  The wife remained in India for 15 months, then joined her husband in Englewood, NJ.  As part of the process to get his wife to NJ, the husband signed a form I-846EZ wherein he agreed to provide her with the support necessary and not less than 125% of the federal poverty line.  After arriving in NJ, the parties resided together as husband and wife, although the husband claims the marriage was never consummated.  Some three months after her arrival, they began sleeping in separate rooms and eventually the wife moved out. 
 
The husband filed for divorce.  The wife filed a motion for pendente lite support and received $200 per week .  The matter went to trial where both parties were represented by counsel. At trial, the judge denied the wife's request for alimony, equitably distributed the value of the car the parties' owned, their only asset, and denied both parties' request for counsel fees.  The wife filed a motion for reconsideration, claiming that among other things, the judge erred in failing to award her alimony because the form I-846EZ signed by the husband placed an affirmative duty of support upon him.  This argument was not raised at trial by the wife.  The court denied the motion for reconsideration and the wife appealed.
 
The Appellate Division affirmed the lower court's ruling as to equitable distribution and the denial of counsel fees, however the Court remanded the issue of support back down to the trial court to determine to what extent, if any, the wife would be entitled to immigrant support under the form I-846EZ.  Before remanding the issue to the lower court, the Appellate Division found that the form I-846EZ is enforceable in NJ courts when the obligation the form creates is against a resident of NJ or is for the benefit of a resident of NJ.  It also concluded that the sponsored immigrant's own income, assets and other sources of support can reduce the immigration support obligation of the sponsor.  Further, if the sponsor and sponsored immigrant are married, the court must include alimony, child support and the equitable distribution of income producing assets in its calculation of the sponsored immigrant's available resources.
 
Form I-846EZ is a legally enforceable contract "against the sponsor by the sponsored alien" and that an action to enforce the contract can be brought "against the sponsor in any appropriate court".  Moreover, the Court found that the sponsor is not automatically required to support the sponsored immigrant at 125 percent of the federal poverty guidelines for the appropriate family unit size.  Rather, the sponsor's obligation is to pay any deficiency needed to reach the 125 percent level once the sponsored immigrant's own income, assets and other sources of support are accounted for.
 
Sponsoring an immigrant to come to this country could also include an obligation of support based upon the sponsored immigrant's need and whether or not he or she can stay above 125 percent of the federal poverty line.  Divorce alone is not a termination of this obligation and no matter the duration of the marriage, a sponsor's financial obligation in the form of immigrant support is based upon the contractual obligations created by the signature of the form I-846EZ.
The lesson to learn from this case is that people should take care when completing forms with a specific purpose in mind because of the unintended consequences that may be lurking. 
For a full copy of the opinion, click here
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