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.