If you’re a regular reader of this blog, you’ve seen many a post about changes in circumstances and modifications of support obligations. In fact, Apple Sulit-Paralejo in our Atlantic City office recently published a post on the Ferstenfeld decision. The thing is with changed circumstances, in this economic climate and job market, it is a popular topic for courts and new decisions are being delivered on a fairly frequent basis.
Today’s post is about proving the change in circumstances and stems from the unpublished Appellate Division decision of Romito v. Romito, A-0486-09, decided March 29, 2011. This appeal came from an Essex county trial court decision made after Mr. Romito filed what was at least his second motion to reduce his alimony and child support obligations stemming from a 2002 divorce and property settlement agreement.
Mr. Romito’s application was supported by his Certification attesting to the failure of his remaining businesses and a sworn statement of his ability to earn $52,000/yr working for a friend’s business, similar to what he had previously operated. It was also supported by a current Case Information Statement and copies of income tax returns. Part of the relief sought was a hearing pursuant to Lepis v. Lepis, to prove the changed circumstances.
Ms. Romito filed a cross motion in response opposing this application and seeking other forms of economic and additional relief. Her application was supported by a Certification attesting that she and the children were in desperate financial straits due to Mr. Romito’s failure to pay his support obligations and his unfair competition with her business. She attested that Mr. Romito owned the business of his friend that he claimed to only work at and that he was concealing income and living a lifestyle inconsistent with his alleged reduced economic circumstances. It was also supported by her current Case Information Statement, tax returns and proof of expenses that were not paid.
In response, Mr. Romito denied the allegations made in the cross motion and attested that Ms. Romito’s economic problems were of her own doing and stemmed from her inability to profitably run the business. He proposed that if Ms. Romito would agree to turn the Montclair office over to him, he’d pay her $2,000/month in alimony (still a reduction from the parties’ agreement but more than he’d been paying).
The trial court issued an oral opinion denying Mr. Romito’s request for a hearing under Lepis v. Lepis, on the basis that Mr. Romito had “unclean hands“. This was based upon the history of a failure to pay support and, in part, Mr. Romito’s offer to pay $2,000/month in alimony if Ms. Romito was willing to turn over the Montclair office to him. The judge inferred that this offer was an attempt to extract concessions from Ms. Romito or otherwise a statement from Mr. Romito that he’d only exercise his superior earning power if Ms. Romito gave back the business the court previously took from him.
Despite the financial documentation submitted by both parties, the denial by the trial court of what is commonly referred to as a Lepis hearing was based primarily on those last two facts. On appeal, the Appellate Court remanded the trial court’s opinion, agreeing with Mr. Romito’s argument that the trial court had failed to make findings of fact that justify the denial of his motion. The trial court’s oral opinion did not provide sufficient factual findings to enable to Appellate Court to defer to its decision making. An example given was the fact that the trial court’s oral opinion referenced factual findings made in 2004 at an ability to pay hearing, but did not explain what the findings were or how they’d be relevant today. Further, the Appellate Court disagreed with the trial court’s interpretation of Mr. Romito’s offer to pay $2,000/month in alimony in exchange for the Montclair office. Rather, they viewed it as an assertion that Mr. Romito is a better business person, could turn a profit in that office, and would share that profit with Ms. Romito.
While the trial court denied the application despite the proofs submitted on both sides, the Appellate Court found that sufficient evidence was presented to demonstrate changed circumstances and that the trial judge must order discovery on Mr. Romito’s current assets and income, and if there’s a claim of voluntary underemployment, his ability to earn more income. If, after discovery is concluded, there’s still disputed issues of material fact, the court must conduct a hearing.
While the lower court did not believe Mr. Romito had met his burden of proof, the higher court disagreed. The highly relevant pieces of information a court will look at to determine if changed circumstances have been proven are : judgment of divorce, settlement agreement, court orders setting forth the support obligation; old and current Case Information Statements; complete copies of personal and business tax returns evidencing a decline in income available for support purposes; and a Certification of the party making the application explaining the changed circumstances. Of course, this list isn’t all-inclusive but provides the bare minimum for this type of application.