Posted on October 6, 2009 by Sandra C. Fava

CHILD CARE EXPENSES AS CHILD SUPPORT?

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.

However, when it is included in the Guidelines calculation, it is reflected in its own line item on the calculation sheet and will increase the amount of the support calculation.

With that said, the Appellate Division in a recent unpublished decision addressed the issue of whether the expense for child care costs is considered child support and thus not subject to retroactive modification pursuant to NJSA 2A:17-56.23a.  To read the entire decision, click here.

NJSA 2A:17-56.23a states in part: "No payment or installment of an order for child support, or those portions of an order which are allocated for child support....shall be retroactively modified by the court except with respect to the period during which there is a pending application for modification, but only from the date the notice of motion was mailed either directly or through the appropriate agent.

In English, the statute basically tells litigants that if you file an application to reduce child support for whatever reason, the court can only grant the reduction for the time period as far back as when the application was served on the other party.  The retroactivity will only go as far back as the notice was given of the application.

In the recent unpublished decision referenced above, the father filed an application to reduce his child support payments, which included a credit for child care, based upon the fact that the child was no longer in day care.  As of September 1, 2007, the child had started a regular school program.  Father, however, did not file his application for reduction until June 2008 and requested that the modification be retroactive to September 2007, when the child began school and not when he filed his application.  On appeal, father argued that the day care expenses are not governed under NJSA 2A:1756.23a because they are not "child support".

Both the trial court and the Appellate Division rejected this argument.  The court held that day care expenses are comparable to college expenses but are even more clearly part of the child support obligation.  "Their payment is necessary to allow the parent with primary residential custody to earn income that will determine her financial obligation to support the child."  Cushman v. Losasso, A-0692-08T3, Decided September 24, 2009. 

If you are considering filing an application to reduce or terminate a child support award, be wary that you will only be allowed retroactive relief from the time your application is filed.
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Posted on February 9, 2009 by Eric S. Solotoff

SHE SNOOZED, SHE LOST

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.

That is, until April 2007 when the ex wife filed an application under the Uniform Interstate Family Support Act in Massachusetts.  Massachusetts determined it had no jurisdiction over the ex-husband.  Thereafter, the motion that is the subject of the current appeal was filed in NJ.  In her motion, the ex-wife requested the entry of a judgment against defendant in the amount of
$971,280, which she alleged consisted of: $466,962 in support arrears, interest of $18,768 at four percent per annum, and a doubling of that amount as a penalty.

The trial court denied the motion based upon a legal doctrine called laches which essentially is that for no good reason, the ex-wife failed to act in time.  The trial court was willing to entertain enforcement of the arrears in existence when the  Probation Account was closed if it was reduced to Judgment.

The Appellate Division affirmed.  The Appellate Division also noted that even if arrears were reduced to judgment, the statute requires a judgment to be enforced within 20 years.  In addition, the Court held:

At the time plaintiff filed her enforcement action before the Family Part, he was seventy-three years old and in poor health, suffering from heart problems and
diabetes. Moreover, except for a brief three-year period when defendant was suspended from the practice of law, plaintiff had the ability to ascertain defendant's address from the applicable authority in New York that licenses attorneys. The record is devoid of evidence demonstrating that plaintiff made any effort until 2007 to contact licensing authorities in New York to inquire about defendant's home address or the location of his office. Finally, the record demonstrates that the parties' son, James, maintained cordial relations with both of his parents,
yet plaintiff made no effort through her son to learn defendant's whereabouts.

In short, the ex-wife snoozed on her rights and lost.

 

I have had two cases like this in my career.  In one, the disabled daughter sought payment of support arrears due her.  That case was resolved favorably for many of the same reasons as above, plus, in that case, the daughter was receiving Social Security Disability Insurance benefits which essentially offset the support that my client should have been paying, if he did, in fact, have an obligation.

In another case, the parties were divorced in the early 1970s.  The husband, my client, asserted that the wife came to him asking him to allow her to move out of state with the children (apparently something that was much harder for her to do in those times) where she would be remarried and her new husband was to adopt the children.  In exchange for his consent, she agreed to forego any child support.  This agreement was supposedly in writing.  Fast forward to the early 2000s where the wife saw a TV news show featuring a collection agency that specialized in collecting child support.  She hired them to go after my client who now lived in Texas.  After learning that Texas law would not allow equitable defenses such as laches, we filed a pre-emptive motion to determine that there were no arrears in NJ.  At oral argument, the trial judge was skeptical that the plaintiff had any claim at all.  However, since there were factual issues as to whether she knew where my client was, the Court ordered a hearing.  The case was resolved shortly thereafter with a small nuisance value payment as opposed to the hundreds of thousands of dollars that was sought. 
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Posted on January 9, 2009 by Robert A. Epstein

Roundup Continues in New Jersey for Child Support Delinquencies

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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Posted on August 22, 2008 by Sandra C. Fava

INTERESTING CONSIDERATION IN IMPUTING INCOME

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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Posted on July 4, 2008 by Robert A. Epstein

Economic Stimulus Rebate Checks Confiscated for Parents Behind on Child Support

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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Posted on June 19, 2008 by Robert A. Epstein

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.

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