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The web site itself may have changed. You can check the current page or check for previous versions at the Internet Archive. Yahoo! is not affiliated with the authors of this page or responsible for its content. The Basics CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 Romanowski Law Offices Divorce, Custody & Reconciliation New Jersey Divorce Lawyer NJ Divorce Information Romanowski Law Offices Phone 732.603.8585 475 Main Street Direct 732.603.0999 Metuchen, NJ 08840 Fax 732.603.8580 NJ Divorce, Family & Matrimonial Law E-Mail: divorcenewjersey@prodigy.net New Jersey Divorce Lawyer Case Law Primer www.DivorceNewJersey.com RLO On-Line The Basics Pivotal Principles Alimony Enforcement Walles v. Walles, 295 N.J.Super. 498 (App. Div. 1996)
Superior Court of New Jersey,
Appellate Division.
Carolyn L. WALLES, Plaintiff-Respondent/Cross-Appellant,
v.
Peter P. WALLES, Defendant-Appellant/Cross-Respondent.
Submitted Oct. 29, 1996.
Decided Dec. 4, 1996.
685 A.2d 508
KLEINER, J.A.D. Out of this appeal and cross-appeal from a
final order in the Family Part regarding
plaintiffs motions to enforce litigants rights
and defendants cross-motion to reduce his
alimony and child support obligations, emerges an issue of first impression
discussed within section VIII of this opinion:
whether the Family Part may order a payer
of alimony to disclose his (her) income
periodically in order to assist an ex-spouse
in future applications to reinstate the original CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 2 alimony award. We conclude that the Family
Part may entertain such a request and grant
appropriate relief. Our holding applies to
those instances where a court, by its
modification order, has reduced a prior
award of alimony or where the court has
reduced the amount of alimony negotiated
by the parties and incorporated in a final
judgment of divorce. I Plaintiff Carolyn Walles and defendant Peter
Walles negotiated a property settlement
agreement which was subsequently incorporated into a judgment of divorce.
During the negotiations, both parties were
represented by counsel. This present action
arose when plaintiff filed a motion to enforce
litigants rights pursuant to R. 1:10-3.
Plaintiff alleged that defendant had failed to
comply with those provisions of the property
settlement agreement that defined his
obligations to pay permanent alimony to
plaintiff and child support for Jeffrey, the
only child of the marriage. Under the terms of the property settlement
agreement dated November 11, 1990,
defendant agreed to pay $17,000 per
month **511 as indefinite term alimony, not
rehabilitative in nature. Additionally, defendants child support obligation was
fixed at $1,500 per month commencing
November 1, 1990. The agreement
provided, in part: *504 The extent of Peters ongoing obligation, if
any, to provide child support to Carolyn for
Jeffrey following high school shall be subject
to renegotiation at that time taking into
account whether and where Jeffrey attends
college, the costs associated therewith, and
where Jeffrey resides both during the
academic year as well as during vacation
periods. In addition to child support, the agreement
also required defendant to pay all sums as
shall be reasonably necessary for payment
of tuition, room and board, book expenses
and reasonable travel costs so as to enable
Jeffrey to attend college. The agreement
also provided that defendant had the right to
approve the selection of the college and to
participate in the selection process. Plaintiffs initial motion was granted, and
defendant paid in full those arrears owed to
plaintiff on his alimony and child support obligations. The court reserved decision on
plaintiffs application for counsel fees. After plaintiffs initial motion, the court was
asked on five additional occasions to
enforce plaintiffs rights. The motion judge
was also asked, on a cross-motion filed by
defendant, to reduce or terminate the
original alimony and child support obligations. As discussed in greater detail infra, the
motion judge enforced plaintiffs rights by
invading defendants only attachable property, his pension plan. This pension had
been equitably divided when the parties
were divorced. The judge also held a
plenary hearing to determine if, in fact, there
was a change of circumstances warranting a
reduction in alimony and child support. The
motion judge concluded that, because of a
substantial reduction in defendants income,
reductions in both alimony and child support
were warranted. Both reductions were made
retroactive to January 1993. In a
supplemental opinion, the judge awarded
both counsel fees and costs to plaintiff. Plaintiff moved for reconsideration of the
judges final order. Specifically, plaintiff
asked the court to reconsider the
retroactivity of the reductions in both alimony
and child support. Additionally, plaintiff
requested that the court establish a
mechanism which would require defendant
to disclose his future income to *505 plaintiff
on a regular basis. Such a mechanism
would aid plaintiff in any future application to
reinstate the original amounts of alimony
and child support as encompassed in the
final divorce judgment. The motion judge
refused to reconsider his final order as to
retroactivity and also refused to grant
plaintiffs request to create an automatic
discovery mechanism. Defendant, Peter Walles, appeals from the
terms of the final order of modification.
Defendant contends that the motion judge
erred in: (a) not sufficiently reducing the
amount of alimony and child support; (b)
ordering the invasion of defendants pension
plan as a mechanism to satisfy arrears owed
to plaintiff; (c) awarding plaintiff counsel fees
and expert costs incurred in her post-divorce
motions to enforce litigants rights including
fees and costs incurred in the post-judgment
plenary hearing; and (d) requiring defendant
to pay $2,500 to defray educational CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 3 expenses incurred by Jeffrey Walles while
attending college during the summer term of
1993. We affirm each component of the various
orders encompassed within this appeal but
reverse that component of the order which
reduced defendants child support obligation
retroactive to January 1993. We also
reverse that portion of the order which
denied plaintiff the right to receive
periodically information regarding defendants future income. We remand to
the trial court for the entry of an order
consistent with this opinion which will
establish an equitable mechanism enabling
plaintiff to monitor defendants future
income. II Due to the number of proceedings which led
to the plenary hearing which, in turn,
resulted in the reduction of alimony and child
support, we deem it necessary to discuss
the entire post-divorce procedural history in
greater detail. **512 After the entry of the judgment of divorce on
November 13, 1990, defendant fell into
arrears on his alimony payments. This led to
plaintiffs first motion to enforce litigants
rights, returnable *506 September 25, 1992.
An order was entered on October 19, 1992,
which required defendant to pay all of the
then-outstanding alimony arrears. The judge
reserved decision on plaintiffs request for
counsel fees. Although defendant apparently complied
with the October 19, 1992, order, he once
again became delinquent in his alimony and
child support payments. Plaintiff filed her
second motion to enforce litigants rights on
April 7, 1993. This motion was argued on
May 7, 1993. The plaintiffs motion and
supporting pleadings indicated that defendant at that time was $26,000 in
arrears on alimony and $4,800 in arrears on
child support. When the parties appeared in court on May
7, 1993, plaintiffs counsel correctly
represented that as of June 1, 1993,
assuming defendant had not made any
additional payments, defendants total
arrears on both alimony and child support
would total $65,300. Prior to the return date
of plaintiffs motion, defendant filed a cross- motion seeking to reduce his alimony and
child support obligations. [FN1] FN1. In the colloquy between counsel for
both parties and the court, it is clear that
defendant had been apprised, prior to the
court date, that Jeffrey Walles intended to
attend summer school during the summer of
1993. Plaintiffs counsel expressed a
concern that defendant might refuse to pay
the anticipated educational expenses. The
motion judge properly ruled that any issue
regarding Jeffreys educational expenses
was not before the court as that issue was
not encompassed in plaintiffs motion or
defendants cross-motion. At the May 7, 1993, hearing, the motion
judge determined that defendants pleadings, as then filed, failed to
demonstrate a substantial change in
defendants income. It is implicit in the
colloquy between the motion judge and
defendants counsel that defendants application for a modification of the
judgment of divorce would be continued to a
future date, affording plaintiff an opportunity
to serve interrogatories and to depose
defendant. In the interim, defendant was
ordered to pay all outstanding arrears. The
judge did not establish a specific method for
the payment of *507 the arrears, nor did the
judge identify the source that defendant was
to use to comply with the enforcement order. Although the judge intimated that it may be
necessary to enforce litigants rights by a
levy, including a possible levy upon
defendants vested pension, the court did
not in fact order an invasion of that pension
plan. The judge again reserved any decision
on plaintiffs counsel fee request, which
included a request for counsel fees not
awarded on October 19, 1992. Thereafter, defendants counsel prepared a
Qualified Domestic Relations Order,
pursuant to N.J.S.A. 2A:34-23. This order
provided, in part, for the payment of $65,750
to plaintiff from defendants existing pension
plan. The proposed order was consented to
by plaintiffs counsel and was then submitted
to and executed by the motion judge on July
16, 1993. On that same date, plaintiff filed another
motion, returnable August 6, 1993, seeking
enforcement of litigants rights. Plaintiffs CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 4 motion was based on defendants failure to
pay his alimony and child support obligation
due on July 1, 1993. The motion also
specifically addressed defendants alleged
refusal to pay Jeffreys summer school
expenses. The motion was returnable on
August 6, 1993. In plaintiffs pleadings she certified that
Jeffrey had entered the Berklee School of
Music in September 1992. Shortly after
entering school, Jeffrey needed an
emergency appendectomy. Due to the
appendectomy, Jeffrey withdrew from
classes for the fall semester. Defendant
received a full refund for all monies paid to
the college for the fall semester. Jeffrey re-
enrolled as a student at the start of the
spring semester and planned to attend
school during the 1993 summer term in
order to take those courses which he had
been unable to complete due to his medical
problems. In response to plaintiffs motion, defendant
filed a cross-motion seeking to terminate his
alimony obligation and to reduce his child
support obligation. **513 *508 On August 6, 1993, defendant
was ordered to pay $38,000--his obligation
for July and August of 1993. [FN2]
Consistent with the prior consent order, the
judge ordered that a Qualified Domestic
Relations Order be prepared. Thereafter,
an appropriate order was submitted and
executed September 2, 1993. Defendants
original motion seeking a modification of the
judgment of divorce and defendants cross-
motion seeking termination of alimony and a
reduction in child support were both
continued pending the completion of
discovery and the scheduling of a plenary
hearing. FN2. Defendants total alimony and child
support obligation was $18,500 per month.
The record does not reflect why the order
required defendant to pay $38,000 rather
than $37,000; however, there is reference in
the record that defendant may have made a
partial payment on his obligation during that
period of time. Perhaps this accounts for the
discrepancy. On October 29, 1993, plaintiff filed another
enforcement action after not receiving
alimony and child support for September and October. The matter was ultimately
argued December 10, 1993, at which time
defendants arrears totalled $72,000. [FN3] FN3. Defendant was given credit for
payments actually paid from the date of the
last preceding order. Plaintiff was again required to file a similar
enforcement proceeding on February 3,
1994, which resulted in another enforcement
order requiring the payment of $34,000. A
renewed cross-motion by defendant seeking
relief from the judgment of divorce was
again continued as a plenary hearing was
scheduled to commence on March 15, 1994. Although the plenary hearing did in fact
begin that day, it was not completed until
June 15, 1994. On April 14, 1994, during the
delay between trial dates, plaintiff filed her
last enforcement action. On May 9, 1994,
defendant was ordered to pay $15,500 of
arrears and $1,500 in summer school tuition.
The judge specifically reserved his decision
respecting the balance of arrears until the
completion of the plenary hearing. On July
25, 1994, following the plenary hearing, the
trial judge issued a written opinion and then
*509 entered an order on September 1,
1994. The order reduced the alimony
obligation from $204,000 to $150,000 per
year. The order also reduced the amount of
child support from $18,000 to $5,200 per
year. Defendant remained responsible for
the cost of the childs education. Both of the
reductions were made retroactive to January
1, 1993. A supplemental order was signed by the
judge ordering defendant to pay $2,500 as a
portion of the summer school tuition
expenses, $12,000 in attorneys fees, and
$4,000 in expert fees. Thereafter, plaintiff filed a motion seeking
reconsideration of the retroactivity of the
reductions in alimony and child support. The
motion also sought enforcement of litigants
rights. The judge denied plaintiffs motion for
reconsideration but did enforce litigants
rights. [FN4] FN4. The details of plaintiffs enforcement
application and the relief granted are not
pertinent to this appeal. III CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 5 To best understand the decision of the
motion judge, we must highlight some of the
salient facts elicited at the plenary hearing. Plaintiff and defendant were married on
June 14, 1969. Defendant is an ophthalmologist and is the only professional
employee of his own professional association, Ophthalmologic Regional Associates, P.A. in Westville. Plaintiff did not
work during the marriage and is not
employed now. While residing together, the
parties maintained a luxurious lifestyle. Their
marital home was owned free-and-clear of
any mortgage debt, they vacationed
frequently, and plaintiff was permitted to
maintain an extensive wardrobe. It is
uncontradicted that plaintiff spent approximately $825 per week on clothing,
jewelry, and household items. During the
last year of the marriage, defendants gross
income was $764,284, a sum which was
consistent with his income during the years
preceding the divorce. *510 In 1988 defendant became romantically involved with Sandra Mallon
and separated from plaintiff on July 25 of
that year. After the separation, defendant
hired Mallon to **514 work in his
professional office. Although Mallons salary
in 1990 was $9,242.61, her salary as of the
date of the plenary hearing and at the time
that defendant initially cross-moved for
modification of the divorce judgment had
increased dramatically to $73,647.75. Prior
to the divorce, defendant contracted to build
a new private residence at a cost of
$1,000,000, which he intended to share with
Mallon. Soon after the divorce, defendant
and Mallon married. The fifty-three page property settlement
agreement entered into by Peter and
Carolyn Walles equitably divided the parties
assets. Aside from the marital home, three
other parcels of property, various bank
accounts, certificates of deposits, and a
stock account, the most substantial asset
available for distribution was defendants
pension plan. Plaintiff received, pursuant to
a Qualified Domestic Relation Order, one-
half of the pension plan as of September 30,
1988, plus $25,000 from the defendants
retained interest in the plan. In addition, defendant agreed to pay plaintiff
$275,000 as follows: an immediate payment
of $50,727.51; $49,272.49 no later than January 31, 1991; and $175,000 no later
than January 31, 1992. Simple interest of
nine percent per annum would accrue on the
unpaid deferred distribution effective February 1, 1991. Defendants cross-motion seeking a modification of his alimony and child support
obligations was predicated on the contention
that his post-divorce income had substantially changed. Defendant indicated
that his income has dropped as follows:
1991--$656,800; 1992--$572,000; and 1993-
-$444,000. To verify his contentions,
defendant provided copies of the professional associations federal and state
tax returns and the joint tax returns which he
filed with Mallon, his new wife. Evidence presented at the plenary hearing
revealed that, in June 1992, defendant
moved his professional practice to new
offices. At the former location, defendant
rented 2,500 square *511 feet at a monthly
rental of $825; at his new location,
defendant rented 5,000 square feet of office
space for $1,385. Additionally, defendant
made improvements to the new office at a
cost of $80,000 and added the cost to his
lease, thus incurring an added expense of
$10,000 per year. These improvements did
not include the cost of custom-built office
cabinets or a new machine for testing
glaucoma. Defendant had to pay $1,000 per
month for five years for the cabinets and
$500 per month for three years for the
glaucoma testing equipment. Plaintiff argued before the motion judge that
defendants reduced income was a result of
his increased rent, the cost of capital
improvements, and the exorbitant salary that
defendant paid to his second wife.
Defendant attributed the decline in his
income to new Medicaid-approved rates for
glaucoma treatment which substantially
reduced the fees that he could recover from
treating Medicaid patients. After four days of testimony, the motion
judge reserved decision and thereafter
issued a letter opinion which stated, in part: Based on my initial analysis I find there has
been a substantial change in Dr. Walles
income even using the 1990 figures (the
year in which the divorce was finalized). If
reference is made to 1989 the reduction is
even more significant. The doctors gross
income in 1990 ... was $773,387. The CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 6 corresponding figure in 1993 was $449,460.... In Schedule B I attempted to contrast the
doctors available dollars with those of Mrs.
Walles. I recognize it does not include all
sources of income for Mrs. Walles. Her
passive income is missing in each of the
calculations. However I am satisfied that the
comparisons are reasonable. As demonstrated the doctor had a substantial
part of the family income in calendar year
1990. There was less of a difference in 1991
and 1992 and if he had paid all of the
support due and owing under the Property
Settlement Agreement in 1993 he would
have had less available dollars than Mrs.
Walles. This analysis supports the conclusion that there was a substantial
change in circumstances. .... Based on the information that has been
presented to me and the substantial **515
change in Dr. Walles circumstances I have
made a new Order regarding alimony and
child support. Commencing with January
1993 the doctors obligation to pay alimony
to Mrs. Walles is reduced from $204,000
annually to $150,000 annually. His child
support figure is reduced from $18,000 to
$5,200. He continues to be responsible for
all tuition, books, fees, costs and reasonable
transportation associated with his sons
college.... *512 In making this Order I recognize that Mrs.
Walles lifestyle will be substantially
modified. By the same token, Dr. Walles
lifestyle is substantially modified. Neither
party will be able to continue to maintain the
lifestyle that has been in effect. Both are
going to have to make significant changes. IV [1] Under N.J.S.A. 2A:34-23, courts are
given an equitable power to modify alimony
and support orders: 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, and also as to the care,
custody, education and maintenance of the
children, or any of them, 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. [Ibid.] Modification of an award of alimony or child
support is appropriate when there has been
a showing of changed circumstances.
Lepis v. Lepis, 83 N.J. 139, 146, 416 A.2d
45 (1980) (citing Chalmers v. Chalmers, 65
N.J. 186, 192, 320 A.2d 478 (1974), inter
alia). [2] The Supreme Court defined changed
circumstances in Lepis. The Court began its
discussion by noting that [t]he supporting
spouses obligation is mainly determined by
the quality of economic life during the
marriage, not bare survival. Lepis, supra,
83 N.J. at 150, 416 A.2d 45. When support
of an economically dependent spouse is at
issue, the general considerations are the
dependant spouses needs, that spouses
ability to contribute to the fulfillment of those
needs, and the supporting spouses ability to
maintain the dependant spouse at the
former standard. Id. at 152, 416 A.2d 45. It
is therefore clear that the original judgment
establishing alimony creates the standard of
living of the supported spouse. Courts look
at this figure in addressing future
applications for modifications of the
judgment based upon allegations of
changed circumstances. *513 [3] In reviewing a trial courts conclusions in
a non-jury civil action, we are bound to grant
substantial deference to the trial courts
findings of fact and conclusions of law. See
Rova Farms Resort, Inc. v. Investors Ins.
Co., 65 N.J. 474, 483-84, 323 A.2d 495
(1974). A trial courts conclusions should not
be disturbed unless we are convinced that
they are so manifestly unsupported by or
inconsistent with the competent, relevant
and reasonably credible evidence as to
offend the interests of justice. Id. at 484,
323 A.2d 495 (quoting Fagliarone v.
Township of North Bergen, 78 N.J.Super.
154, 155, 188 A.2d 43 (App.Div.), certif.
denied, 40 N.J. 221, 191 A.2d 61 (1963)). [4] In the present case, the motion judge set
forth very clearly the basis of his decision.
He analyzed the former income of
defendant, he looked at the budget of
plaintiff, and he examined the funds
available to both parties. Based on these CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 7 factors, the judge reduced the amount of
alimony from $17,000 per month to $12,500
per month and reduced the child support
order from $18,000 per year to $5,200 per
year. In reducing child support, the judge
retained the component of the original
judgment which required defendant to pay
all of Jeffreys educational expenses. At the
plenary hearing there was testimony that
those educational expenses were approximately $25,000 per year. The judge
adopted that figure in the schedules which
he attached to his letter opinion. The
respective reductions were retroactively
effective as of January 1, 1993. **516 The judges findings were perfectly
consistent with the competent evidence. The
judge analyzed the evidence and, with
cogent reasoning, reduced the alimony and
child support in a fair and even-handed
manner. The result was a sound
compromise to what both parties were
seeking and one which was clearly within
the bounds of sound discretion. The trial
judges conclusions will not be disturbed. [5] As noted, plaintiff filed a motion for
reconsideration challenging the retroactive
commencement date of the final order. The
trial judge refused to modify his decision.
We conclude that *514 the trial judge failed
to consider properly N.J.S.A. 2A:17-56.23a
which provides, in part: No payment or installment of an order for
child support, or those portions of an order
which are allocated for child support
established prior to or subsequent to the
effective date of [2A:17-56.23(a) ] 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. [Ibid.] Here, defendants initial cross-motion
seeking a reduction of child support was
filed April 30, 1993. Thus, the decision
retroactively reducing child support payments commencing January 1, 1993,
violated the statutory mandate. That
component of the final order is reversed,
and on remand the final order shall be
amended to reflect a retroactive commencement date of May 1, 1993. [6] There is no analogous statutory provision
that prohibits retroactive reduction of
alimony payments. We have previously
concluded that the retroactivity decision is
left to the sound discretion of the trial judge.
Brennan v. Brennan, 187 N.J.Super. 351,
357, 454 A.2d 901 (App.Div.1982). We
cannot conclude that the trial judge abused
his discretion by selecting January 1, 1993,
as the effective date of the reduced alimony
award. V On appeal, defendant contends that the trial
court erred when he ordered defendant to
pay $2,500 as partial reimbursement of
Jeffreys summer school expenses incurred
during the summer of 1993. We disagree. [7] As we have noted, when Jeffrey withdrew
from college during the fall term of 1992,
defendant was fully reimbursed by Berklee
School of Music for all sums paid for that
semester. Plaintiff had informed defendant
as early as March 1993 that Jeffrey intended
to enroll at Berklee for its summer session in
1993 to make-up for the withdrawn
semester. Defendant had the opportunity to
voice objection to that proposed plan prior to
*515 the commencement of the summer
session, yet defendant failed to do so. At the plenary hearing, evidence established
that, although Jeffrey did enroll at Berklee
during the summer, he withdrew from all but
one of the courses and therefore only
received three credits for his summers
work. Clearly the judge took into account
that defendant was entitled to some
equitable consideration as to his responsibility in paying educational expenses. Consistent with the original
judgment and consistent with the order
entered after the plenary hearing, the judge
did not entirely void defendants responsibility for the expenses incurred.
Plaintiffs request to be reimbursed $7,500
was reduced to $2,500 but was not entirely
rejected. That decision was a fair adjustment
of the parties respective claims and appears
consistent with the seminal decision on
parental responsibility for the cost of higher
education, Newburgh v. Arrigo, 88 N.J. 529,
545, 443 A.2d 1031 (1982), particularly
factor seven, the commitment to and
aptitude of the child for the requested
education. Ibid. (emphasis added). VI CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 8 Defendant also contends, citing DOro v.
DOro, 193 N.J.Super. 385, 474 A.2d 1070
(App.Div.1984), that the trial judge erred
when he ordered defendant to utilize a
portion of his retained pension to pay
alimony and child support arrears. We
disagree. **517 [8] As noted earlier, at the second
enforcement proceeding the trial judge
ordered defendant to pay all arrears. The
trial judge did not order defendant to use
any particular asset to satisfy his obligation.
Defendant was free to utilize any available
asset or to obtain a loan to satisfy his
obligation. The judge did intimate that
defendants failure to abide by the
enforcement order might result in a levy on
defendants property including a levy on
defendants pension. Thereafter, defendants counsel prepared an order
which provided for the satisfaction of the
existing arrears from defendants pension
under a Qualified Domestic Relations Order
and submitted the proposed order to
plaintiffs counsel for his consent. *516 That
consent order was signed by the judge.
Although at the third and subsequent
enforcement proceedings the judge, in fact,
ordered the payment of arrears from
defendants pension, those subsequent
orders were consistent with defendants
voluntary decision to comply with the second
enforcement order by voluntarily utilizing his
pension. We do not conceive that the
judges successive orders were proscribed
by DOro. The judge was not using
defendants pension to determine his
income for the purpose of establishing
alimony; he merely considered defendants
pension as an asset available to defendant
which defendant might use to satisfy past
due alimony and child support obligations. VII Defendant also contends that the trial court
erred when he ordered defendant to pay
$12,000 in counsel fees and $4,000 for the
costs of plaintiffs expert. Counsel fees in family matters are permitted
by statute, N.J.S.A. 2A:34-23, which states,
in part: [t]he court shall determine the appropriate
award for counsel fees, if any, at the same
time that a decision is rendered on the other
issue then before the court and shall
consider the factors set forth in the court rule on counsel fees, the financial circumstances
of the parties, and the good or bad faith of
either party. [Ibid.] and Court Rule, R. 4:42-9(a)(1): In a family action, the court in its discretion
may make an allowance both pendente lite
and on final determination to be paid by any
party to the action, including if deemed to be
just any party successful in the action, on
any claim for divorce, nullity, support,
alimony, custody, visitation, equitable
distribution, separate maintenance, enforcement of interspousal agreements
relating to family type matters.... [Ibid.] [9] [10] [11] In Williams v. Williams, 59 N.J.
229, 281 A.2d 273 (1971), the Supreme
Court discussed factors to be considered in
awarding counsel fees in a matrimonial
action. Those factors include the wifes
need, the husbands financial ability to pay
and the wifes good faith in instituting or
defending the action. Id. at 233, 281 A.2d
273. Here, although plaintiffs financial
circumstances *517 might not have
warranted an award of counsel fees in a
routine post-divorce application, other
factors certainly supported such an award.
Plaintiff was forced to retain counsel and to
file five successful enforcement proceedings
resulting from defendants continuous failure
to pay alimony and child support. Plaintiff
also had to engage counsel to defend
defendants cross-motion for a reduction of
alimony and child support, necessitating a
four-day plenary trial. The award of counsel
fees was warranted. The modest sum
awarded demonstrates that the court was
fully appreciative of the fact that plaintiff was
financially able to pay the bulk of her own
counsel fees. Moreover, an award of
counsel fees and costs is left to the sound
discretion of the trial court. Ibid. Defendant
has failed to demonstrate that the judge
abused his discretion. VIII On plaintiffs motion for reconsideration, she
requested an order which would compel
defendant to disclose his income periodically
to plaintiff. Such a mechanism would be an
aid to plaintiff in seeking to reinstate the
original award of alimony should defendants
fortunes once again turn. The motion judge CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 9 **518 denied that relief. We conclude that
the particular facts of this case warranted
granting this extraordinary relief. Under Lepis, supra, 83 N.J. at 157, 416 A.2d
45, a party seeking modification of a
judgment of divorce must demonstrate a
substantial change in circumstances. Once
a prima facie case of changed circumstances has been established, then,
and only then, will the party be permitted to
engage in discovery prior to a plenary
hearing. Ibid. We note, however, that the
Lepis procedure was enunciated in a case
where a dependent spouse sought an
increase in alimony. Thus, the Supreme
Court phrased the moving partys obligation
as a demonstration that changed circumstances have substantially impaired
the ability to support himself or herself. Ibid.
As noted in Lepis, [t]he supporting spouses
obligation is mainly determined by the
quality of economic life during the *518
marriage.... [T]he needs of the dependent
spouse and children contemplate their
continued maintenance at the standard of
living they had become accustomed to prior
to the separation. Lepis, supra, 83 N.J. at
150, 416 A.2d 45 (quoting Khalaf v. Khalaf,
58 N.J. 63, 69, 275 A.2d 132 (1971)). [12] Here, defendant, as the sole
professional employee of a professional
association, has provided the court and
plaintiff with his professional associations
business records and income tax returns to
demonstrate that his gross income has been
substantially reduced by in excess of
$300,000. Despite the substantial salary
paid to defendants second wife and despite
the inordinate increase in office operating
expenses and rent, the judge still concluded
that defendants income had been substantially reduced as a result of a
reduction in the Medicaid reimbursement
allowed for the treatment of glaucoma.
Defendant also waived any claim of
confidentiality by openly disclosing for
review his joint income tax returns filed with
his second wife, a decision which we infer
was concurred in by his second wife. Plaintiffs standard of living was established
by the terms of the 1990 property settlement
agreement. Defendant agreed to pay plaintiff
$17,000 per month in alimony without
term. Plaintiff may not hereafter seek an
order reinstating her former alimony award
without first demonstrating a substantial change in her circumstances. Yet, here it is
not plaintiffs circumstances which will
warrant an increase in alimony. It is
defendants future increase in income which
will be determinative. This is not a case
where a former spouse seeks an increase in
alimony predicated on a claim that the
supporting spouses income has increased
since the divorce and where the supported
spouse seeks to raise her standard of living
to a status greater than the status enjoyed
during the marriage. Here, any future
application by the supported spouse will be
aimed at returning her to the status which
was enjoyed during the marriage. If
defendants income were to rise dramatically
to the level enjoyed before his divorce from
plaintiff, plaintiffs alimony award should
likewise be returned to *519 the amount
agreed upon in the property distribution
agreement and incorporated in the divorce
decree. Must plaintiff be forced to monitor
defendants lifestyle or his corporate activity
from afar so as to gather evidence indicative
of a change in circumstances to obtain
future discovery after filing a costly motion
with assistance of counsel? We think not.
Defendant justifiably sought a reduction in
his alimony obligation. Defendant should be
obliged to reveal his annual income and the
income tax return of his professional
association. From the evidence presented at
the plenary hearing, it is clear that defendant
has relocated to new modern offices with the
finest furniture, equipment, and fixtures. His
debt service is fixed, and his rent is fixed.
The only aspect of defendants ability to pay
alimony which is not fixed is the salary paid
to defendant and to defendants second
wife. Defendant is solely in control of those
variables. Should not there be a mechanism
in place to analyze this information for
determining when and if defendants income
has increased sufficiently to warrant further
review of the modified order? We answer
our question in the affirmative. [13] We do not conclude that the relief
sought here is appropriate in every case. In
fact, the relief sought should be deemed
extraordinary and sparingly granted by the
**519 Family Part. We do conclude,
however, that where the standard of living of
an obligee has been established by a
divorce judgment or by an agreement
incorporated within a divorce judgment, and CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 10 where the obligor seeks a modification
predicated on a reduction in income, a
mechanism must be created in order to
monitor reliable evidence and to determine
whether the need which necessitated the
modification is on-going. [14] As a corollary, assuming defendants
income gradually increases, the trial court
should devise a mechanism or formula
designed to restore, although gradually, the
alimony payments to the original judgment
sum. Such a devise or formula will avoid
multiple motions and needless litigation. The
obligee need not resort to subterfuge to
discern a change in defendants lifestyle.
*520 Defendants financial records will
trigger the modification with little or no
further judicial intervention. Parenthetically,
we note that escalation clauses that are fair
and equitable are not prohibited. Petersen v.
Petersen, 85 N.J. 638, 646, 428 A.2d 1301
(1981); Rolnick v. Rolnick, 262 N.J.Super.
343, 354, 621 A.2d 37 (App.Div.1993);
Dunne v. Dunne, 209 N.J.Super. 559, 566,
508 A.2d 273 (App.Div.1986). We believe this rule is consistent with recent
statutory enactments that require the review
of all child support orders every three years.
N.J.S.A. 2A:17-56.8: Every complaint, notice or pleading for the
entry or modification of an order of a court
entered or modified which includes child
support shall include a written notice to the
obligor stating that the child support
provision of the order shall ... be enforced by
an income withholding.... The written notice
shall also state that the amount of a IV-D
child support order ... shall be reviewed and
updated, as necessary, at least every three
years. [Ibid. (emphasis added).] The legislature amended the statute in 1990
to include the provision for review of child
support orders every three years. This was
done so that a court could determine
whether a particular child support order was
in full compliance with the support guidelines
set forth in New Jerseys Court Rules. Here, the automatic discovery mechanism is
necessary to determine whether or not an
obligor can afford to comply with the dictates
of a divorce judgment. There is no reason
that a recipient of alimony should be
permanently required to live at a standard of living below that which was established by a
judgment of divorce. Defendant might very
well return to his pre-divorce income level,
and plaintiff should be able likewise to return
to the standard of living to which she was
accustomed. Without the above-described
mechanism, plaintiff would be unable to
make a prima facie case of changed
circumstances. [15] In the present case, it is appropriate for
defendants financial data to be delivered
directly to plaintiff. Defendant has waived
any claim of confidentiality as to his own
finances, and his second wifes entire
income is derived solely from her
employment *521 in defendants professional association. In those cases
where a second wifes (husbands) income
is not derived wholly from employment by a
party litigant, the motion judge must
determine whether direct discovery or an in
camera inspection is more appropriate. [16] If, in the future, defendants wifes
income is no longer solely derived from her
work in defendants office, the motion judge
will, upon request, determine whether in
camera inspection is the more appropriate
mechanism. In any case, the motion judge
will be required to weigh plaintiffs discovery
needs against defendants right to protect
the financial privacy of his second wife. See
Lepis, supra, 83 N.J. at 157, 416 A.2d 45. The order is affirmed in part, reversed in
part, and the matter is remanded to the trial
court, which shall modify the order
consistent with this opinion. We do not retain
jurisdiction.
The web site itself may have changed. You can check the current page or check for previous versions at the Internet Archive. Yahoo! is not affiliated with the authors of this page or responsible for its content. The Basics CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 Romanowski Law Offices Divorce, Custody & Reconciliation New Jersey Divorce Lawyer NJ Divorce Information Romanowski Law Offices Phone 732.603.8585 475 Main Street Direct 732.603.0999 Metuchen, NJ 08840 Fax 732.603.8580 NJ Divorce, Family & Matrimonial Law E-Mail: divorcenewjersey@prodigy.net New Jersey Divorce Lawyer Case Law Primer www.DivorceNewJersey.com RLO On-Line The Basics Pivotal Principles Alimony Enforcement Walles v. Walles, 295 N.J.Super. 498 (App. Div. 1996)
Superior Court of New Jersey,
Appellate Division.
Carolyn L. WALLES, Plaintiff-Respondent/Cross-Appellant,
v.
Peter P. WALLES, Defendant-Appellant/Cross-Respondent.
Submitted Oct. 29, 1996.
Decided Dec. 4, 1996.
685 A.2d 508
KLEINER, J.A.D. Out of this appeal and cross-appeal from a
final order in the Family Part regarding
plaintiffs motions to enforce litigants rights
and defendants cross-motion to reduce his
alimony and child support obligations, emerges an issue of first impression
discussed within section VIII of this opinion:
whether the Family Part may order a payer
of alimony to disclose his (her) income
periodically in order to assist an ex-spouse
in future applications to reinstate the original CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 2 alimony award. We conclude that the Family
Part may entertain such a request and grant
appropriate relief. Our holding applies to
those instances where a court, by its
modification order, has reduced a prior
award of alimony or where the court has
reduced the amount of alimony negotiated
by the parties and incorporated in a final
judgment of divorce. I Plaintiff Carolyn Walles and defendant Peter
Walles negotiated a property settlement
agreement which was subsequently incorporated into a judgment of divorce.
During the negotiations, both parties were
represented by counsel. This present action
arose when plaintiff filed a motion to enforce
litigants rights pursuant to R. 1:10-3.
Plaintiff alleged that defendant had failed to
comply with those provisions of the property
settlement agreement that defined his
obligations to pay permanent alimony to
plaintiff and child support for Jeffrey, the
only child of the marriage. Under the terms of the property settlement
agreement dated November 11, 1990,
defendant agreed to pay $17,000 per
month **511 as indefinite term alimony, not
rehabilitative in nature. Additionally, defendants child support obligation was
fixed at $1,500 per month commencing
November 1, 1990. The agreement
provided, in part: *504 The extent of Peters ongoing obligation, if
any, to provide child support to Carolyn for
Jeffrey following high school shall be subject
to renegotiation at that time taking into
account whether and where Jeffrey attends
college, the costs associated therewith, and
where Jeffrey resides both during the
academic year as well as during vacation
periods. In addition to child support, the agreement
also required defendant to pay all sums as
shall be reasonably necessary for payment
of tuition, room and board, book expenses
and reasonable travel costs so as to enable
Jeffrey to attend college. The agreement
also provided that defendant had the right to
approve the selection of the college and to
participate in the selection process. Plaintiffs initial motion was granted, and
defendant paid in full those arrears owed to
plaintiff on his alimony and child support obligations. The court reserved decision on
plaintiffs application for counsel fees. After plaintiffs initial motion, the court was
asked on five additional occasions to
enforce plaintiffs rights. The motion judge
was also asked, on a cross-motion filed by
defendant, to reduce or terminate the
original alimony and child support obligations. As discussed in greater detail infra, the
motion judge enforced plaintiffs rights by
invading defendants only attachable property, his pension plan. This pension had
been equitably divided when the parties
were divorced. The judge also held a
plenary hearing to determine if, in fact, there
was a change of circumstances warranting a
reduction in alimony and child support. The
motion judge concluded that, because of a
substantial reduction in defendants income,
reductions in both alimony and child support
were warranted. Both reductions were made
retroactive to January 1993. In a
supplemental opinion, the judge awarded
both counsel fees and costs to plaintiff. Plaintiff moved for reconsideration of the
judges final order. Specifically, plaintiff
asked the court to reconsider the
retroactivity of the reductions in both alimony
and child support. Additionally, plaintiff
requested that the court establish a
mechanism which would require defendant
to disclose his future income to *505 plaintiff
on a regular basis. Such a mechanism
would aid plaintiff in any future application to
reinstate the original amounts of alimony
and child support as encompassed in the
final divorce judgment. The motion judge
refused to reconsider his final order as to
retroactivity and also refused to grant
plaintiffs request to create an automatic
discovery mechanism. Defendant, Peter Walles, appeals from the
terms of the final order of modification.
Defendant contends that the motion judge
erred in: (a) not sufficiently reducing the
amount of alimony and child support; (b)
ordering the invasion of defendants pension
plan as a mechanism to satisfy arrears owed
to plaintiff; (c) awarding plaintiff counsel fees
and expert costs incurred in her post-divorce
motions to enforce litigants rights including
fees and costs incurred in the post-judgment
plenary hearing; and (d) requiring defendant
to pay $2,500 to defray educational CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 3 expenses incurred by Jeffrey Walles while
attending college during the summer term of
1993. We affirm each component of the various
orders encompassed within this appeal but
reverse that component of the order which
reduced defendants child support obligation
retroactive to January 1993. We also
reverse that portion of the order which
denied plaintiff the right to receive
periodically information regarding defendants future income. We remand to
the trial court for the entry of an order
consistent with this opinion which will
establish an equitable mechanism enabling
plaintiff to monitor defendants future
income. II Due to the number of proceedings which led
to the plenary hearing which, in turn,
resulted in the reduction of alimony and child
support, we deem it necessary to discuss
the entire post-divorce procedural history in
greater detail. **512 After the entry of the judgment of divorce on
November 13, 1990, defendant fell into
arrears on his alimony payments. This led to
plaintiffs first motion to enforce litigants
rights, returnable *506 September 25, 1992.
An order was entered on October 19, 1992,
which required defendant to pay all of the
then-outstanding alimony arrears. The judge
reserved decision on plaintiffs request for
counsel fees. Although defendant apparently complied
with the October 19, 1992, order, he once
again became delinquent in his alimony and
child support payments. Plaintiff filed her
second motion to enforce litigants rights on
April 7, 1993. This motion was argued on
May 7, 1993. The plaintiffs motion and
supporting pleadings indicated that defendant at that time was $26,000 in
arrears on alimony and $4,800 in arrears on
child support. When the parties appeared in court on May
7, 1993, plaintiffs counsel correctly
represented that as of June 1, 1993,
assuming defendant had not made any
additional payments, defendants total
arrears on both alimony and child support
would total $65,300. Prior to the return date
of plaintiffs motion, defendant filed a cross- motion seeking to reduce his alimony and
child support obligations. [FN1] FN1. In the colloquy between counsel for
both parties and the court, it is clear that
defendant had been apprised, prior to the
court date, that Jeffrey Walles intended to
attend summer school during the summer of
1993. Plaintiffs counsel expressed a
concern that defendant might refuse to pay
the anticipated educational expenses. The
motion judge properly ruled that any issue
regarding Jeffreys educational expenses
was not before the court as that issue was
not encompassed in plaintiffs motion or
defendants cross-motion. At the May 7, 1993, hearing, the motion
judge determined that defendants pleadings, as then filed, failed to
demonstrate a substantial change in
defendants income. It is implicit in the
colloquy between the motion judge and
defendants counsel that defendants application for a modification of the
judgment of divorce would be continued to a
future date, affording plaintiff an opportunity
to serve interrogatories and to depose
defendant. In the interim, defendant was
ordered to pay all outstanding arrears. The
judge did not establish a specific method for
the payment of *507 the arrears, nor did the
judge identify the source that defendant was
to use to comply with the enforcement order. Although the judge intimated that it may be
necessary to enforce litigants rights by a
levy, including a possible levy upon
defendants vested pension, the court did
not in fact order an invasion of that pension
plan. The judge again reserved any decision
on plaintiffs counsel fee request, which
included a request for counsel fees not
awarded on October 19, 1992. Thereafter, defendants counsel prepared a
Qualified Domestic Relations Order,
pursuant to N.J.S.A. 2A:34-23. This order
provided, in part, for the payment of $65,750
to plaintiff from defendants existing pension
plan. The proposed order was consented to
by plaintiffs counsel and was then submitted
to and executed by the motion judge on July
16, 1993. On that same date, plaintiff filed another
motion, returnable August 6, 1993, seeking
enforcement of litigants rights. Plaintiffs CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 4 motion was based on defendants failure to
pay his alimony and child support obligation
due on July 1, 1993. The motion also
specifically addressed defendants alleged
refusal to pay Jeffreys summer school
expenses. The motion was returnable on
August 6, 1993. In plaintiffs pleadings she certified that
Jeffrey had entered the Berklee School of
Music in September 1992. Shortly after
entering school, Jeffrey needed an
emergency appendectomy. Due to the
appendectomy, Jeffrey withdrew from
classes for the fall semester. Defendant
received a full refund for all monies paid to
the college for the fall semester. Jeffrey re-
enrolled as a student at the start of the
spring semester and planned to attend
school during the 1993 summer term in
order to take those courses which he had
been unable to complete due to his medical
problems. In response to plaintiffs motion, defendant
filed a cross-motion seeking to terminate his
alimony obligation and to reduce his child
support obligation. **513 *508 On August 6, 1993, defendant
was ordered to pay $38,000--his obligation
for July and August of 1993. [FN2]
Consistent with the prior consent order, the
judge ordered that a Qualified Domestic
Relations Order be prepared. Thereafter,
an appropriate order was submitted and
executed September 2, 1993. Defendants
original motion seeking a modification of the
judgment of divorce and defendants cross-
motion seeking termination of alimony and a
reduction in child support were both
continued pending the completion of
discovery and the scheduling of a plenary
hearing. FN2. Defendants total alimony and child
support obligation was $18,500 per month.
The record does not reflect why the order
required defendant to pay $38,000 rather
than $37,000; however, there is reference in
the record that defendant may have made a
partial payment on his obligation during that
period of time. Perhaps this accounts for the
discrepancy. On October 29, 1993, plaintiff filed another
enforcement action after not receiving
alimony and child support for September and October. The matter was ultimately
argued December 10, 1993, at which time
defendants arrears totalled $72,000. [FN3] FN3. Defendant was given credit for
payments actually paid from the date of the
last preceding order. Plaintiff was again required to file a similar
enforcement proceeding on February 3,
1994, which resulted in another enforcement
order requiring the payment of $34,000. A
renewed cross-motion by defendant seeking
relief from the judgment of divorce was
again continued as a plenary hearing was
scheduled to commence on March 15, 1994. Although the plenary hearing did in fact
begin that day, it was not completed until
June 15, 1994. On April 14, 1994, during the
delay between trial dates, plaintiff filed her
last enforcement action. On May 9, 1994,
defendant was ordered to pay $15,500 of
arrears and $1,500 in summer school tuition.
The judge specifically reserved his decision
respecting the balance of arrears until the
completion of the plenary hearing. On July
25, 1994, following the plenary hearing, the
trial judge issued a written opinion and then
*509 entered an order on September 1,
1994. The order reduced the alimony
obligation from $204,000 to $150,000 per
year. The order also reduced the amount of
child support from $18,000 to $5,200 per
year. Defendant remained responsible for
the cost of the childs education. Both of the
reductions were made retroactive to January
1, 1993. A supplemental order was signed by the
judge ordering defendant to pay $2,500 as a
portion of the summer school tuition
expenses, $12,000 in attorneys fees, and
$4,000 in expert fees. Thereafter, plaintiff filed a motion seeking
reconsideration of the retroactivity of the
reductions in alimony and child support. The
motion also sought enforcement of litigants
rights. The judge denied plaintiffs motion for
reconsideration but did enforce litigants
rights. [FN4] FN4. The details of plaintiffs enforcement
application and the relief granted are not
pertinent to this appeal. III CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 5 To best understand the decision of the
motion judge, we must highlight some of the
salient facts elicited at the plenary hearing. Plaintiff and defendant were married on
June 14, 1969. Defendant is an ophthalmologist and is the only professional
employee of his own professional association, Ophthalmologic Regional Associates, P.A. in Westville. Plaintiff did not
work during the marriage and is not
employed now. While residing together, the
parties maintained a luxurious lifestyle. Their
marital home was owned free-and-clear of
any mortgage debt, they vacationed
frequently, and plaintiff was permitted to
maintain an extensive wardrobe. It is
uncontradicted that plaintiff spent approximately $825 per week on clothing,
jewelry, and household items. During the
last year of the marriage, defendants gross
income was $764,284, a sum which was
consistent with his income during the years
preceding the divorce. *510 In 1988 defendant became romantically involved with Sandra Mallon
and separated from plaintiff on July 25 of
that year. After the separation, defendant
hired Mallon to **514 work in his
professional office. Although Mallons salary
in 1990 was $9,242.61, her salary as of the
date of the plenary hearing and at the time
that defendant initially cross-moved for
modification of the divorce judgment had
increased dramatically to $73,647.75. Prior
to the divorce, defendant contracted to build
a new private residence at a cost of
$1,000,000, which he intended to share with
Mallon. Soon after the divorce, defendant
and Mallon married. The fifty-three page property settlement
agreement entered into by Peter and
Carolyn Walles equitably divided the parties
assets. Aside from the marital home, three
other parcels of property, various bank
accounts, certificates of deposits, and a
stock account, the most substantial asset
available for distribution was defendants
pension plan. Plaintiff received, pursuant to
a Qualified Domestic Relation Order, one-
half of the pension plan as of September 30,
1988, plus $25,000 from the defendants
retained interest in the plan. In addition, defendant agreed to pay plaintiff
$275,000 as follows: an immediate payment
of $50,727.51; $49,272.49 no later than January 31, 1991; and $175,000 no later
than January 31, 1992. Simple interest of
nine percent per annum would accrue on the
unpaid deferred distribution effective February 1, 1991. Defendants cross-motion seeking a modification of his alimony and child support
obligations was predicated on the contention
that his post-divorce income had substantially changed. Defendant indicated
that his income has dropped as follows:
1991--$656,800; 1992--$572,000; and 1993-
-$444,000. To verify his contentions,
defendant provided copies of the professional associations federal and state
tax returns and the joint tax returns which he
filed with Mallon, his new wife. Evidence presented at the plenary hearing
revealed that, in June 1992, defendant
moved his professional practice to new
offices. At the former location, defendant
rented 2,500 square *511 feet at a monthly
rental of $825; at his new location,
defendant rented 5,000 square feet of office
space for $1,385. Additionally, defendant
made improvements to the new office at a
cost of $80,000 and added the cost to his
lease, thus incurring an added expense of
$10,000 per year. These improvements did
not include the cost of custom-built office
cabinets or a new machine for testing
glaucoma. Defendant had to pay $1,000 per
month for five years for the cabinets and
$500 per month for three years for the
glaucoma testing equipment. Plaintiff argued before the motion judge that
defendants reduced income was a result of
his increased rent, the cost of capital
improvements, and the exorbitant salary that
defendant paid to his second wife.
Defendant attributed the decline in his
income to new Medicaid-approved rates for
glaucoma treatment which substantially
reduced the fees that he could recover from
treating Medicaid patients. After four days of testimony, the motion
judge reserved decision and thereafter
issued a letter opinion which stated, in part: Based on my initial analysis I find there has
been a substantial change in Dr. Walles
income even using the 1990 figures (the
year in which the divorce was finalized). If
reference is made to 1989 the reduction is
even more significant. The doctors gross
income in 1990 ... was $773,387. The CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 6 corresponding figure in 1993 was $449,460.... In Schedule B I attempted to contrast the
doctors available dollars with those of Mrs.
Walles. I recognize it does not include all
sources of income for Mrs. Walles. Her
passive income is missing in each of the
calculations. However I am satisfied that the
comparisons are reasonable. As demonstrated the doctor had a substantial
part of the family income in calendar year
1990. There was less of a difference in 1991
and 1992 and if he had paid all of the
support due and owing under the Property
Settlement Agreement in 1993 he would
have had less available dollars than Mrs.
Walles. This analysis supports the conclusion that there was a substantial
change in circumstances. .... Based on the information that has been
presented to me and the substantial **515
change in Dr. Walles circumstances I have
made a new Order regarding alimony and
child support. Commencing with January
1993 the doctors obligation to pay alimony
to Mrs. Walles is reduced from $204,000
annually to $150,000 annually. His child
support figure is reduced from $18,000 to
$5,200. He continues to be responsible for
all tuition, books, fees, costs and reasonable
transportation associated with his sons
college.... *512 In making this Order I recognize that Mrs.
Walles lifestyle will be substantially
modified. By the same token, Dr. Walles
lifestyle is substantially modified. Neither
party will be able to continue to maintain the
lifestyle that has been in effect. Both are
going to have to make significant changes. IV [1] Under N.J.S.A. 2A:34-23, courts are
given an equitable power to modify alimony
and support orders: 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, and also as to the care,
custody, education and maintenance of the
children, or any of them, 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. [Ibid.] Modification of an award of alimony or child
support is appropriate when there has been
a showing of changed circumstances.
Lepis v. Lepis, 83 N.J. 139, 146, 416 A.2d
45 (1980) (citing Chalmers v. Chalmers, 65
N.J. 186, 192, 320 A.2d 478 (1974), inter
alia). [2] The Supreme Court defined changed
circumstances in Lepis. The Court began its
discussion by noting that [t]he supporting
spouses obligation is mainly determined by
the quality of economic life during the
marriage, not bare survival. Lepis, supra,
83 N.J. at 150, 416 A.2d 45. When support
of an economically dependent spouse is at
issue, the general considerations are the
dependant spouses needs, that spouses
ability to contribute to the fulfillment of those
needs, and the supporting spouses ability to
maintain the dependant spouse at the
former standard. Id. at 152, 416 A.2d 45. It
is therefore clear that the original judgment
establishing alimony creates the standard of
living of the supported spouse. Courts look
at this figure in addressing future
applications for modifications of the
judgment based upon allegations of
changed circumstances. *513 [3] In reviewing a trial courts conclusions in
a non-jury civil action, we are bound to grant
substantial deference to the trial courts
findings of fact and conclusions of law. See
Rova Farms Resort, Inc. v. Investors Ins.
Co., 65 N.J. 474, 483-84, 323 A.2d 495
(1974). A trial courts conclusions should not
be disturbed unless we are convinced that
they are so manifestly unsupported by or
inconsistent with the competent, relevant
and reasonably credible evidence as to
offend the interests of justice. Id. at 484,
323 A.2d 495 (quoting Fagliarone v.
Township of North Bergen, 78 N.J.Super.
154, 155, 188 A.2d 43 (App.Div.), certif.
denied, 40 N.J. 221, 191 A.2d 61 (1963)). [4] In the present case, the motion judge set
forth very clearly the basis of his decision.
He analyzed the former income of
defendant, he looked at the budget of
plaintiff, and he examined the funds
available to both parties. Based on these CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 7 factors, the judge reduced the amount of
alimony from $17,000 per month to $12,500
per month and reduced the child support
order from $18,000 per year to $5,200 per
year. In reducing child support, the judge
retained the component of the original
judgment which required defendant to pay
all of Jeffreys educational expenses. At the
plenary hearing there was testimony that
those educational expenses were approximately $25,000 per year. The judge
adopted that figure in the schedules which
he attached to his letter opinion. The
respective reductions were retroactively
effective as of January 1, 1993. **516 The judges findings were perfectly
consistent with the competent evidence. The
judge analyzed the evidence and, with
cogent reasoning, reduced the alimony and
child support in a fair and even-handed
manner. The result was a sound
compromise to what both parties were
seeking and one which was clearly within
the bounds of sound discretion. The trial
judges conclusions will not be disturbed. [5] As noted, plaintiff filed a motion for
reconsideration challenging the retroactive
commencement date of the final order. The
trial judge refused to modify his decision.
We conclude that *514 the trial judge failed
to consider properly N.J.S.A. 2A:17-56.23a
which provides, in part: No payment or installment of an order for
child support, or those portions of an order
which are allocated for child support
established prior to or subsequent to the
effective date of [2A:17-56.23(a) ] 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. [Ibid.] Here, defendants initial cross-motion
seeking a reduction of child support was
filed April 30, 1993. Thus, the decision
retroactively reducing child support payments commencing January 1, 1993,
violated the statutory mandate. That
component of the final order is reversed,
and on remand the final order shall be
amended to reflect a retroactive commencement date of May 1, 1993. [6] There is no analogous statutory provision
that prohibits retroactive reduction of
alimony payments. We have previously
concluded that the retroactivity decision is
left to the sound discretion of the trial judge.
Brennan v. Brennan, 187 N.J.Super. 351,
357, 454 A.2d 901 (App.Div.1982). We
cannot conclude that the trial judge abused
his discretion by selecting January 1, 1993,
as the effective date of the reduced alimony
award. V On appeal, defendant contends that the trial
court erred when he ordered defendant to
pay $2,500 as partial reimbursement of
Jeffreys summer school expenses incurred
during the summer of 1993. We disagree. [7] As we have noted, when Jeffrey withdrew
from college during the fall term of 1992,
defendant was fully reimbursed by Berklee
School of Music for all sums paid for that
semester. Plaintiff had informed defendant
as early as March 1993 that Jeffrey intended
to enroll at Berklee for its summer session in
1993 to make-up for the withdrawn
semester. Defendant had the opportunity to
voice objection to that proposed plan prior to
*515 the commencement of the summer
session, yet defendant failed to do so. At the plenary hearing, evidence established
that, although Jeffrey did enroll at Berklee
during the summer, he withdrew from all but
one of the courses and therefore only
received three credits for his summers
work. Clearly the judge took into account
that defendant was entitled to some
equitable consideration as to his responsibility in paying educational expenses. Consistent with the original
judgment and consistent with the order
entered after the plenary hearing, the judge
did not entirely void defendants responsibility for the expenses incurred.
Plaintiffs request to be reimbursed $7,500
was reduced to $2,500 but was not entirely
rejected. That decision was a fair adjustment
of the parties respective claims and appears
consistent with the seminal decision on
parental responsibility for the cost of higher
education, Newburgh v. Arrigo, 88 N.J. 529,
545, 443 A.2d 1031 (1982), particularly
factor seven, the commitment to and
aptitude of the child for the requested
education. Ibid. (emphasis added). VI CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 8 Defendant also contends, citing DOro v.
DOro, 193 N.J.Super. 385, 474 A.2d 1070
(App.Div.1984), that the trial judge erred
when he ordered defendant to utilize a
portion of his retained pension to pay
alimony and child support arrears. We
disagree. **517 [8] As noted earlier, at the second
enforcement proceeding the trial judge
ordered defendant to pay all arrears. The
trial judge did not order defendant to use
any particular asset to satisfy his obligation.
Defendant was free to utilize any available
asset or to obtain a loan to satisfy his
obligation. The judge did intimate that
defendants failure to abide by the
enforcement order might result in a levy on
defendants property including a levy on
defendants pension. Thereafter, defendants counsel prepared an order
which provided for the satisfaction of the
existing arrears from defendants pension
under a Qualified Domestic Relations Order
and submitted the proposed order to
plaintiffs counsel for his consent. *516 That
consent order was signed by the judge.
Although at the third and subsequent
enforcement proceedings the judge, in fact,
ordered the payment of arrears from
defendants pension, those subsequent
orders were consistent with defendants
voluntary decision to comply with the second
enforcement order by voluntarily utilizing his
pension. We do not conceive that the
judges successive orders were proscribed
by DOro. The judge was not using
defendants pension to determine his
income for the purpose of establishing
alimony; he merely considered defendants
pension as an asset available to defendant
which defendant might use to satisfy past
due alimony and child support obligations. VII Defendant also contends that the trial court
erred when he ordered defendant to pay
$12,000 in counsel fees and $4,000 for the
costs of plaintiffs expert. Counsel fees in family matters are permitted
by statute, N.J.S.A. 2A:34-23, which states,
in part: [t]he court shall determine the appropriate
award for counsel fees, if any, at the same
time that a decision is rendered on the other
issue then before the court and shall
consider the factors set forth in the court rule on counsel fees, the financial circumstances
of the parties, and the good or bad faith of
either party. [Ibid.] and Court Rule, R. 4:42-9(a)(1): In a family action, the court in its discretion
may make an allowance both pendente lite
and on final determination to be paid by any
party to the action, including if deemed to be
just any party successful in the action, on
any claim for divorce, nullity, support,
alimony, custody, visitation, equitable
distribution, separate maintenance, enforcement of interspousal agreements
relating to family type matters.... [Ibid.] [9] [10] [11] In Williams v. Williams, 59 N.J.
229, 281 A.2d 273 (1971), the Supreme
Court discussed factors to be considered in
awarding counsel fees in a matrimonial
action. Those factors include the wifes
need, the husbands financial ability to pay
and the wifes good faith in instituting or
defending the action. Id. at 233, 281 A.2d
273. Here, although plaintiffs financial
circumstances *517 might not have
warranted an award of counsel fees in a
routine post-divorce application, other
factors certainly supported such an award.
Plaintiff was forced to retain counsel and to
file five successful enforcement proceedings
resulting from defendants continuous failure
to pay alimony and child support. Plaintiff
also had to engage counsel to defend
defendants cross-motion for a reduction of
alimony and child support, necessitating a
four-day plenary trial. The award of counsel
fees was warranted. The modest sum
awarded demonstrates that the court was
fully appreciative of the fact that plaintiff was
financially able to pay the bulk of her own
counsel fees. Moreover, an award of
counsel fees and costs is left to the sound
discretion of the trial court. Ibid. Defendant
has failed to demonstrate that the judge
abused his discretion. VIII On plaintiffs motion for reconsideration, she
requested an order which would compel
defendant to disclose his income periodically
to plaintiff. Such a mechanism would be an
aid to plaintiff in seeking to reinstate the
original award of alimony should defendants
fortunes once again turn. The motion judge CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 9 **518 denied that relief. We conclude that
the particular facts of this case warranted
granting this extraordinary relief. Under Lepis, supra, 83 N.J. at 157, 416 A.2d
45, a party seeking modification of a
judgment of divorce must demonstrate a
substantial change in circumstances. Once
a prima facie case of changed circumstances has been established, then,
and only then, will the party be permitted to
engage in discovery prior to a plenary
hearing. Ibid. We note, however, that the
Lepis procedure was enunciated in a case
where a dependent spouse sought an
increase in alimony. Thus, the Supreme
Court phrased the moving partys obligation
as a demonstration that changed circumstances have substantially impaired
the ability to support himself or herself. Ibid.
As noted in Lepis, [t]he supporting spouses
obligation is mainly determined by the
quality of economic life during the *518
marriage.... [T]he needs of the dependent
spouse and children contemplate their
continued maintenance at the standard of
living they had become accustomed to prior
to the separation. Lepis, supra, 83 N.J. at
150, 416 A.2d 45 (quoting Khalaf v. Khalaf,
58 N.J. 63, 69, 275 A.2d 132 (1971)). [12] Here, defendant, as the sole
professional employee of a professional
association, has provided the court and
plaintiff with his professional associations
business records and income tax returns to
demonstrate that his gross income has been
substantially reduced by in excess of
$300,000. Despite the substantial salary
paid to defendants second wife and despite
the inordinate increase in office operating
expenses and rent, the judge still concluded
that defendants income had been substantially reduced as a result of a
reduction in the Medicaid reimbursement
allowed for the treatment of glaucoma.
Defendant also waived any claim of
confidentiality by openly disclosing for
review his joint income tax returns filed with
his second wife, a decision which we infer
was concurred in by his second wife. Plaintiffs standard of living was established
by the terms of the 1990 property settlement
agreement. Defendant agreed to pay plaintiff
$17,000 per month in alimony without
term. Plaintiff may not hereafter seek an
order reinstating her former alimony award
without first demonstrating a substantial change in her circumstances. Yet, here it is
not plaintiffs circumstances which will
warrant an increase in alimony. It is
defendants future increase in income which
will be determinative. This is not a case
where a former spouse seeks an increase in
alimony predicated on a claim that the
supporting spouses income has increased
since the divorce and where the supported
spouse seeks to raise her standard of living
to a status greater than the status enjoyed
during the marriage. Here, any future
application by the supported spouse will be
aimed at returning her to the status which
was enjoyed during the marriage. If
defendants income were to rise dramatically
to the level enjoyed before his divorce from
plaintiff, plaintiffs alimony award should
likewise be returned to *519 the amount
agreed upon in the property distribution
agreement and incorporated in the divorce
decree. Must plaintiff be forced to monitor
defendants lifestyle or his corporate activity
from afar so as to gather evidence indicative
of a change in circumstances to obtain
future discovery after filing a costly motion
with assistance of counsel? We think not.
Defendant justifiably sought a reduction in
his alimony obligation. Defendant should be
obliged to reveal his annual income and the
income tax return of his professional
association. From the evidence presented at
the plenary hearing, it is clear that defendant
has relocated to new modern offices with the
finest furniture, equipment, and fixtures. His
debt service is fixed, and his rent is fixed.
The only aspect of defendants ability to pay
alimony which is not fixed is the salary paid
to defendant and to defendants second
wife. Defendant is solely in control of those
variables. Should not there be a mechanism
in place to analyze this information for
determining when and if defendants income
has increased sufficiently to warrant further
review of the modified order? We answer
our question in the affirmative. [13] We do not conclude that the relief
sought here is appropriate in every case. In
fact, the relief sought should be deemed
extraordinary and sparingly granted by the
**519 Family Part. We do conclude,
however, that where the standard of living of
an obligee has been established by a
divorce judgment or by an agreement
incorporated within a divorce judgment, and CURTIS J. ROMANOWSKI, ESQ., EDISON, NJ 2004 10 where the obligor seeks a modification
predicated on a reduction in income, a
mechanism must be created in order to
monitor reliable evidence and to determine
whether the need which necessitated the
modification is on-going. [14] As a corollary, assuming defendants
income gradually increases, the trial court
should devise a mechanism or formula
designed to restore, although gradually, the
alimony payments to the original judgment
sum. Such a devise or formula will avoid
multiple motions and needless litigation. The
obligee need not resort to subterfuge to
discern a change in defendants lifestyle.
*520 Defendants financial records will
trigger the modification with little or no
further judicial intervention. Parenthetically,
we note that escalation clauses that are fair
and equitable are not prohibited. Petersen v.
Petersen, 85 N.J. 638, 646, 428 A.2d 1301
(1981); Rolnick v. Rolnick, 262 N.J.Super.
343, 354, 621 A.2d 37 (App.Div.1993);
Dunne v. Dunne, 209 N.J.Super. 559, 566,
508 A.2d 273 (App.Div.1986). We believe this rule is consistent with recent
statutory enactments that require the review
of all child support orders every three years.
N.J.S.A. 2A:17-56.8: Every complaint, notice or pleading for the
entry or modification of an order of a court
entered or modified which includes child
support shall include a written notice to the
obligor stating that the child support
provision of the order shall ... be enforced by
an income withholding.... The written notice
shall also state that the amount of a IV-D
child support order ... shall be reviewed and
updated, as necessary, at least every three
years. [Ibid. (emphasis added).] The legislature amended the statute in 1990
to include the provision for review of child
support orders every three years. This was
done so that a court could determine
whether a particular child support order was
in full compliance with the support guidelines
set forth in New Jerseys Court Rules. Here, the automatic discovery mechanism is
necessary to determine whether or not an
obligor can afford to comply with the dictates
of a divorce judgment. There is no reason
that a recipient of alimony should be
permanently required to live at a standard of living below that which was established by a
judgment of divorce. Defendant might very
well return to his pre-divorce income level,
and plaintiff should be able likewise to return
to the standard of living to which she was
accustomed. Without the above-described
mechanism, plaintiff would be unable to
make a prima facie case of changed
circumstances. [15] In the present case, it is appropriate for
defendants financial data to be delivered
directly to plaintiff. Defendant has waived
any claim of confidentiality as to his own
finances, and his second wifes entire
income is derived solely from her
employment *521 in defendants professional association. In those cases
where a second wifes (husbands) income
is not derived wholly from employment by a
party litigant, the motion judge must
determine whether direct discovery or an in
camera inspection is more appropriate. [16] If, in the future, defendants wifes
income is no longer solely derived from her
work in defendants office, the motion judge
will, upon request, determine whether in
camera inspection is the more appropriate
mechanism. In any case, the motion judge
will be required to weigh plaintiffs discovery
needs against defendants right to protect
the financial privacy of his second wife. See
Lepis, supra, 83 N.J. at 157, 416 A.2d 45. The order is affirmed in part, reversed in
part, and the matter is remanded to the trial
court, which shall modify the order
consistent with this opinion. We do not retain
jurisdiction.
