recognizing that a supporting spouse's assets may be considered when calculating alimony
How later courts described this case
- recognizing that a supporting spouse's assets may be considered when calculating alimony
- finding no error in imputing income to the supporting spouse for child support purposes where his claimed salary was less than his prior earnings and did not reflect his income from other sources
- sanctioning a five-year income averaging for alimony purposes
Written by the judges who cited it.
The opinion
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2904-21
PATRICIA ENRIGHT HOWARD,
Plaintiff-Respondent,
v.
TODD LEWIS HOWARD,
Defendant-Appellant.
_____________________________
Submitted October 10, 2024 – Decided October 18, 2024
Before Judges Mawla and Natali.
On appeal from the Superior Court of New Jersey,
Chancery Division, Family Part, Bergen County,
Docket No. FM-02-1062-14.
Kearns Rotolo Law, attorneys for appellant (Charles C.
Rifici, on the brief).
Atkins, Tafuri, Minassian, D'Amato, Beane & Miller,
PA, attorneys for respondent (Robert J. Tafuri and
Stacey L. Miller, on the brief).
PER CURIAM
Defendant Todd Lewis Howard appeals from: an October 1, 2021 order
denying his motion to modify the alimony he pays plaintiff Patricia Enright
Howard; an April 29, 2022 order denying his motion for reconsideration and
awarding plaintiff counsel fees; an August 23, 2022 order granting him a stay,
contingent upon posting a supersedeas bond to cover his alimony arrears and a
second bond to guarantee his ongoing alimony obligations pending appeal; and
a May 12, 2023 order denying his motion to vacate the August 2022 order,
granting plaintiff's motion to enforce the parties' marital settlement agreement
(MSA) requiring the parties to exchange financial documentation, and awarding
her counsel fees. We affirm in part, and reverse and remand in part, for the
reasons expressed in this opinion.
Following a more than three-decade marriage, the parties entered an MSA,
which stipulated they would arbitrate the outstanding issues they could not
resolve, including plaintiff's alimony claim. An arbitrator rendered awards on
December 19 and 20, 2018, whose provisions were incorporated with the MSA,
into the judgment of divorce.
Defendant was required to pay plaintiff open durational alimony
structured into three tiers. The tier one alimony payment referred to as base
alimony was $102,500 per year. According to the MSA, "[t]ier [o]ne [a]limony
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2
shall be based on [defendant]'s income up to $400,000[] per year and, therefore,
said alimony is based on [defendant]'s first $400,000[] of earned income a year."
The December 20 award further provided as follows:
[Plaintiff] is currently not employed, but the
parties have agreed to add together an imputation of
earned income to her of $40,000[] from employment
and an imputed investment income (unearned income)
return of $60,000[] on her inherited immune assets to
arrive at the $100,000[] total income imputation figure
for [plaintiff].
Only [plaintiff]'s combined income in excess of
$100,000[] per year, from earnings through
employment and/or investment income returned on her
inherited immune assets, will have any further impact
on the alimony. Therefore, [plaintiff] having income of
up to $100,000[] per year from these two sources shall
not be considered a change in circumstances for
purposes of modifying the alimony.
The MSA defined the tier two alimony as "[a]dditional [a]limony." The
December 20 award explained the tier two alimony would be based on
defendant's "income between $400,001[] to $1,000,000[,] and [plaintiff]'s total
income in excess of $100,000[] per year, from earnings through employment
and/or investment income on her inherited immune assets." The additional
alimony would be "[t]hirty-three percent . . . of the difference between
[defendant]'s gross annual income . . . in excess of $400,000[], up to
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3
$1,000,000[], less the gross annual income of [plaintiff] . . . in excess of
$100,000[] per year." The award defined "gross annual income" to
include such income as shall be reported on W-2 or cash
distributions set forth on a Schedule K-1 . . . and 1099s.
It shall include all cash (base and bonus, if applicable),
the value of all vested and/or unrestricted equities . . .
and deferred compensation when said compensation is
taxed, for each calendar year. It shall also include any
and all income from any sources, including investment
income and any realized capital gains from inherited
assets. Annual [e]arned [i]ncome shall not include
assets or income related to assets which were subject to
equitable distribution . . . .
The tier three alimony was comprised of payments defendant had been
receiving from an executive retirement plan, which the MSA treated as equitable
distribution and was excluded from gross annual income. The amounts and
percentages paid under this tier are not relevant to the issues raised on this
appeal. The MSA excluded "any income earned by either party from their
investment of their share of marital assets from equitable distribution . . . from
'gross annual income'" for purposes of calculating alimony.
The December 20 award required the parties to exchange year end
paystubs for as long as alimony was payable and exchange "all tax reporting
documents[,]" namely the W-2s, K-1s, and 1099s referenced in the paragraph
defining gross annual income. Elsewhere in the award, it required the parties to
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annually exchange: W-2 forms; "any and all documentation from their
employment that shows their compensation for the prior year"; tax returns; "any
and all additional financial information of any nature whatsoever"—to confirm
that "the appropriate amount of alimony was paid for the prior year, including
but not limited to 1099s and any other tax reporting documents; investments,
retirement and bank account statements; and accounting for real estate rental
income and expenses;" and quarterly paycheck statements.
The MSA stipulated neither party waived
any rights they may have . . . to a modification as to
both the base and additional alimony based upon . . .
Lepis v. Lepis, 83 N.J. 139 (1980) with the exception
that [plaintiff] waives a right to make an application to
increase alimony in the event [defendant] has earned or
unearned income in excess of $1,000,000[].
The parties also agreed the Lepis change in circumstances standard would not
apply to the tier three alimony.
The December 20 award contained the following language under the tier
three alimony heading: "In the event there is a dispute as to the amount [of
alimony], [defendant] . . . shall, at the very least, pay that part of the amount that
is not in dispute." Moreover, "[e]ither party may proceed immediately with an
application to the [c]ourt. The [c]ourt shall have the discretion to determine if
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interest and/or penalties are due or if one party should pay the counsel fees of
the other."
Motion practice ensued in August 2020 with plaintiff moving to enforce
alimony and defendant cross-moving to modify or suspend his obligation.
Defendant certified he was terminated from his position as senior executive and
received a five-month severance beginning in May 2019. He claimed his 2019
income, including the severance, was $281,012.21. Although his 2019 W-2
showed earnings totaling $323,279.49, he asserted his earnings were overstated
because they included Medicare wages, which he alleged the court previously
found was not income.1
In November 2019, defendant began new employment, earning an annual
salary of approximately $225,000. His 2019 W-2 from the new employer
showed earnings totaling $34,615.38.
In March 2020, defendant was laid off again due to the COVID-19
pandemic and began receiving unemployment benefits. He certified he applied
to different positions. Because he was unsure if he could return to his field of
work, he studied software and took an insurance agent/broker course. He
1
The appellate record contains no such finding by the trial court.
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6
claimed he could not achieve his prior earnings capacity due to his age and
because his "entire industry was decimated by the lockdowns and shutdowns[,]"
resulting in greater competition for fewer jobs.
In November 2020, defendant began a new, commission-based job. He
claimed the new position was comparable to his prior employment as a senior
executive at the time the parties entered into the MSA, and the pay structure
offered the potential for income far greater than prior earnings. Defendant did
not earn a commission in 2020. His 2020 tax return showed a gross earned
income of $198,834.
Defendant did not earn a commission until late 2021. His October 19,
2021 case information statement (CIS) certified he was paid an $83,000
commission quarterly or $332,000 per year. The CIS listed an average gross
weekly income of $3,953.85 or $205,600 per year.
In 2022, defendant began a new position with a different company. His
employment agreement listed an annual salary of $290,000. Defendant's 2022
W-2 showed earnings totaling $126,979.10.
In 2018, plaintiff had income from her inherited assets totaling
$40,905.56. This sum was comprised of $32,125.94 in realized gains from
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various trust accounts, and $8,779.63 in net rental income from her twenty-five
percent interest in an inherited property in Virginia.
In 2019, plaintiff began working for a management company. Her total
income that year was $42,657.04, comprised of W-2 earnings of $9,615.30 and
$33,041.74 in income from her inherited assets.
In 2020, plaintiff's income totaled $75,279.77, comprised of an earned
income of $50,433.87, and $24,845.90 from inherited assets. Her 2021 income
totaled $74,910.27, including an earned income of $52,023.02 and $26,387.25
from inherited assets.
In June 2021, defendant moved for a downward modification of his
alimony obligation based on a change in his circumstances. He also argued
plaintiff's income should include the unrealized income from her equitable
distribution, which would increase her income and operate to decrease alimony.
Defendant submitted the certification of a forensic accountant who
reviewed the parties' finances. The accountant averred that plaintiff's income
should include her unrealized capital gains because plaintiff controlled her
investment accounts and could determine when to sell a security. This would
put her income over the imputation threshold and lower the alimony. The
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8
accountant also questioned if plaintiff's Virginia property was being rented at
the market rate.
Plaintiff opposed the motion and filed a cross-motion to enforce
defendant's alimony obligation and arrears. She submitted a certification from
her accountant certifying that her analysis of plaintiff's 2021 records yielded
similar numbers as plaintiff had represented to the court, namely, that plaintiff
had a total combined income of $78,410. Although the accountant did not verify
plaintiff's rental expenses, she certified she "review[ed] invoices and bank
statements evidencing many of the expenses paid."
On October 1, 2021, the motion judge filed an order denying defendant's
motion to modify alimony and granting plaintiff's cross-motion. The judge
found defendant did not suffer either a permanent or significant change in
income and failed to demonstrate any efforts to find remunerative employment.
He also rejected defendant's claim that plaintiff's income should include
unrealized gains because the arbitration order did not include this category of
income for purposes of the alimony calculation.
Defendant moved for reconsideration, and plaintiff filed an opposition and
again cross-moved for enforcement. On April 29, 2022, the motion judge
entered an order denying the reconsideration motion. The judge granted plaintiff
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9
attorney's fees and costs for the motion. Defendant appealed from the October
2021 and April 2022 orders.
In May 2022, plaintiff moved to enforce defendant's alimony obligation
and sought a judgment against him in the amount of $236,935.13, reflecting the
arrears accrued as of May 27, 2022. Defendant opposed the motion and cross-
moved for a stay of the October 2021 and April 2022 orders.
On August 5, 2022, the motion judge granted the stay contingent on
defendant posting a supersedeas bond in the amount of $232,992.83,
representing the current alimony arrears amount. Defendant posted the bond on
August 19, 2022. The judge then clarified the bond only stayed defendant's
obligation to pay alimony arrears, and that he must post a second supersedeas
bond to stay his ongoing alimony obligation. On August 23, 2022, the judge
entered an order memorializing this finding, and directing defendant to post a
second supersedeas bond in the amount of $153,570, to stay his ongoing alimony
obligation. The judge calculated this amount based on eighteen months of
alimony he projected defendant would pay until we adjudicated his appeal.
Defendant amended his notice of appeal to include the August 23 order.
In January 2023, defendant moved to vacate or stay the August 23 order
pending the outcome of the appeal. Plaintiff opposed the motion and cross-
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10
moved to compel financial discovery, counsel fees and costs, and other relief.
On May 12, 2023, the motion judge denied defendant's motion and granted
plaintiff's request for discovery in part and her request for attorney's fees.
Defendant amended his notice of appeal to include the May 2023 order.
Defendant moved to stay the May 2023 order. On August 25, 2023, the
motion judge denied the motion. We denied defendant's motion to amend the
notice of appeal again, to include the August 2023 order.
I.
As a general proposition, "we accord great deference to discretionary
decisions of Family Part judges." Milne v. Goldenberg, 428 N.J. Super. 184,
197 (App. Div. 2012) (citing Donnelly v. Donnelly, 405 N.J. Super. 117, 127
(App. Div. 2009)). This is "[b]ecause of the family courts' special jurisdiction
and expertise in family matters . . . ." Cesare v. Cesare, 154 N.J. 394, 413
(1998). We defer to factual findings "supported by adequate, substantial,
credible evidence" in the record. Gnall v. Gnall, 222 N.J. 414, 428 (2015) (citing
Cesare, 154 N.J. at 411-12). "Reversal is warranted only when . . . the trial
court's factual findings are 'so manifestly unsupported by or inconsistent with
the competent, relevant and reasonably credible evidence as to offend the
interests of justice[.]'" Reese v. Weis, 430 N.J. Super. 552, 567 (App. Div. 2013)
A-2904-21
11
(quoting Rova Farms Resort, Inc. v. Invs. Ins. Co. of Am., 65 N.J. 474, 484
(1974)) (alteration in original). Conversely, we review questions of law and the
Family Part's legal rulings de novo. Amzler v. Amzler, 463 N.J. Super. 187,
197 (App. Div. 2020).
II. Alimony
A.
Defendant argues the motion judge erred when he denied his motion to
modify alimony on account of the decrease in his income. He claims plaintiff
acknowledged the change in circumstances and the court should have
recalculated his alimony obligation retroactive to: September 2019 when his
severance expired; November 2019 when he began his new position; and March
2020 when he was laid-off from the new position. Defendant asserts the judge
imputed an income to him that he could no longer earn and incorrectly calculated
his income by annualizing his 2019 earnings. The judge also erred by faulting
him for finding employment albeit at a lower earnings rate, applied the wrong
legal standard in assessing his request to modify alimony, and erred when he
failed to take judicial notice of the effects of the pandemic on his earnings.
It is well known that an alimony award may be reviewed and modified if
either party experiences a substantial change in financial circumstances. Reese,
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12
430 N.J. Super. at 569 (citing Lepis, 83 N.J. at 146). N.J.S.A. 2A:34-23(k) lists
ten factors a court should consider when a non-self-employed party seeks
modification of alimony.
The motion judge denied defendant's motions to modify and for
reconsideration 2 because defendant's changes in employment and income were
not prima facie evidence of a substantial change in circumstances. The judge
found: defendant failed to demonstrate that he was involuntarily underemployed
or unemployed; the circumstances were temporary in nature; and the 2019
change in income was not substantial. We discern no reversible error in these
rulings.
"[P]rima facie evidence is defined as 'evidence that, if unrebutted, would
sustain a judgment in the proponent's favor.'" Cardali v. Cardali, 255 N.J. 85,
109 (2023) (quoting Baures v. Lewis, 167 N.J. 91, 118 (2001), overruled on
other grounds by Bisbing v. Bisbing, 230 N.J. 309, 328-36 (2017)). This
requires a court to examine a party's claims "with an appreciation that if
supported by competent evidence they would establish a prima facie cause of
action." Conforti v. Guliadis, 128 N.J. 318, 328 (1992).
2
We do not address the order denying reconsideration because defendant has
not briefed it. Sklodowsky v. Lushis, 417 N.J. Super. 648, 657 (App. Div. 2011).
A-2904-21
13
Where a party seeks a downward modification of alimony due to the loss
of income, a court must consider the reasons for a party's loss of income.
N.J.S.A. 2A:34-23(k)(1). If the income loss is due to unemployment or
underemployment, the court must consider whether the supporting party made
good faith efforts to obtain either replacement or alternative employment.
N.J.S.A. 2A:34-23(k)(3). A court may consider the party's efforts to find
commensurate employment to determine whether their decreased salary
constitutes a change in circumstances, or whether the court should impute
income to that party based on their prior earnings. Dorfman v. Dorfman, 315
N.J. Super. 511, 516-17 (App. Div. 1998). By showing their attempts to find
commensurate employment, the supporting spouse can "demonstrate[] that [they
are] working at a capacity in employment consistent with skills and experience"
and not "voluntarily underemployed in the new job." Storey v. Storey, 373 N.J.
Super. 464, 472 (App. Div. 2004) (citing Dorfman, 315 N.J. Super. at 516-17).
In Dorfman, we concluded the supporting spouse had established a change
in circumstances warranting modification where he lost his job, made concerted
efforts to find the same work at comparable pay, and eventually accepted a lower
paying position. 315 N.J. Super. at 517. In Storey, we held the supporting
spouse was not entitled to modification based on his career change from a
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14
computer technician to a massage therapist, which resulted in a significant
reduction in income, because of his failure to offer "any credible reason" for
declining to pursue other areas of employment, and his limited job search efforts
when he lost his prior position. 373 N.J. Super. at 469, 475-77.
We have imputed income to the supporting spouse where there is no career
change, but their new, lower salary is inconsistent with their earning capacity.
See, e.g., Gormley v. Gormley, 462 N.J. Super. 433, 446-47 (App. Div. 2009)
(concluding that the trial court did not properly assess the supporting spouse's
earning capacity when determining his support obligation, in a proceeding where
the supporting spouse's commission income had decreased); Elrom v. Elrom,
439 N.J. Super. 424, 437-38 (App. Div. 2015) (finding no error in imputing
income to the supporting spouse for child support purposes where his claimed
salary was less than his prior earnings and did not reflect his income from other
sources).
The motion judge found defendant lacked a basis to modify alimony
because he failed to justify the periods of unemployment and underemployment
when he accepted a decreased salary, then remained unemployed in 2020, and
then accepted a lesser position when he regained employment. Our review of
the record confirms the judge's findings defendant offered no proof or details
A-2904-21
15
about his job search efforts to demonstrate that he was involuntarily unemployed
and involuntarily underemployed during his periods of unemployment.
Defendant did not submit a log of his job searches or identify the number of job
applications he submitted. He provided no proof to corroborate the claim that
his options were limited by the fact there were no positions commensurate with
his prior position or earning capacity. He presented insufficient facts to permit
the judge to assess the reasonableness of his employment decisions.
The motion judge declined to take judicial notice of the economic impact
of the COVID-19 pandemic, reasoning he could not "take judicial notice of a
certain industry" and defendant had failed to demonstrate how the pandemic had
impacted his earning capacity. "Our review of the trial court's evidential rulings
'is limited to examining the decision for abuse of discretion.'" Ehrlich v.
Sorokin, 451 N.J. Super. 119, 128 (App. Div. 2017) (quoting Parker v. Poole,
440 N.J. Super. 7, 16 (App. Div. 2015)).
Pursuant to N.J.R.E. 201(b), the motion judge could not take judicial
notice of facts reasonably subject to dispute. Rice v. Miller, 455 N.J. Super. 90,
102 (App. Div. 2018). The record lacked specific information about how the
pandemic impacted defendant or his industry, and the parties disputed whether
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16
there was such an impact. Therefore, the judge did not err when he declined to
take judicial notice of the pandemic as a reason to modify alimony.
The motion judge also correctly declined to retroactively modify alimony
for defendant's periods of temporary unemployment. Defendant was
unemployed for two months in 2019 and six months in 2020. N.J.S.A. 2A:34-
23(k) permits courts to consider "the length of time a party has been
involuntarily unemployed or has had an involuntary reduction in income"—
although the statute notes this should not be the court's only consideration. The
statute limits a party from seeking modification until they are either unemployed
or unable to find employment at prior income levels "for a period of [ninety]
days." Ibid. But this does not mean that a period of unemployment greater than
ninety days, as defendant experienced here, constitutes an automatic basis for
finding a change in circumstances.
There is no "brightline rule by which to measure when a changed
circumstance has endured long enough to warrant a modification of a support
obligation[,]" because the determination is discretionary and based on the
totality of the circumstances. Larbig v. Larbig, 384 N.J. Super. 17, 22-23
(2006). We discern no abuse of discretion in the judge's finding the periods of
unemployment were temporary.
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Alimony is an economic right designed to provide "the dependent spouse
with 'a level of support and standard of living generally commensurate with the
quality of economic life that existed during the marriage.'" Mani v. Mani, 183
N.J. 70, 80 (2005) (quoting Stiffler v. Stiffler, 304 N.J. Super. 96, 99 (Ch. Div.
1997)). These goals cannot be realized by subjecting support to every
fluctuation in the supporting spouse's income, especially where, as here, there
was a long-term marriage and the post-judgment motion practice commenced
shortly after the divorce.
Accordingly, Family Part judges account for income fluctuations and
whether they meet the substantial change in circumstances standard by
measuring that party's income against their earning capacity. The tools available
to judges to analyze a party's income, include income imputation or averaging
income across periods of time. See Platt v. Platt, 384 N.J. Super. 418, 426-27
(App. Div. 2006) (sanctioning a five-year income averaging for alimony
purposes).
For these reasons, defendant's assertion the judge erred by annualizing his
income lacks merit. Defendant was unemployed for just two months in 2019.
The judge's finding that the 2019 earnings of $357,904.87, as compared with the
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$400,000 in the MSA, did not constitute a substantial change in circumstances
and was not an abuse of discretion.
Moreover, defendant's CIS listed assets totaling over $3,000,000 with
which to pay alimony. See Miller v. Miller, 160 N.J. 408, 422 (1999)
(recognizing that a supporting spouse's assets may be considered when
calculating alimony). Under these circumstances, the less than eleven percent
decrease in defendant's income did not warrant a modification of alimony.
B.
Defendant argues alimony should have been modified based on the
increase in plaintiff's earned income over the $40,000 imputed to her in the
MSA. He alleges the motion judge erred by excluding plaintiff's unrealized
capital gains from her inheritance income. If the judge had calculated plaintiff's
income correctly, it would have exceeded the $100,000 imputed to her in the
MSA and led to a downward modification because she had less need for the
alimony. He asserts the judge should have granted him discovery to assess
plaintiff's need for continued alimony.
"'Imputation of income is a discretionary matter not capable of precise or
exact determination[,] but rather [requires] a trial judge to realistically appraise
capacity to earn and job availability.'" Elrom, 439 N.J. Super. at 434 (citations
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19
omitted) (first alteration in original). According to the MSA, alimony was based
on an imputed income of $40,000 from employment and $60,000 from
investments. The December 20 order memorialized the arbitrator's decision that
"gross annual income" was "any and all income from any sources, including
investment income and any realized capital gains from inherited assets."
(emphasis added).
The motion judge "categorically reject[ed] the idea that unrealized income
should somehow be added to the income of . . . plaintiff . . . ." We decline to
disturb this finding because the terms of the December 20, 2018 order are clear
and the law of the case.
Defendant points to a provision in the December 20 order, that states gross
annual income "shall also include any and all income from any sources,
including investment income and any realized gains from inherited assets."
(emphasis added). He argues the underscored language includes plaintiff's
unrealized gains. We are unpersuaded.
"The participle including typically indicates a partial list[.]" Black's Law
Dictionary, (12th ed. 2024) (WEST). Our Supreme Court has stated: "In
interpreting non-exhaustive lists . . . courts may apply a canon of statutory
interpretation known as ejusdem generis, which literally means 'of the same
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20
kind.'" Williams v. N.J. State Parole Bd., 255 N.J. 36, 53 (2023) (quoting
Norman J. Singer & J.D. Shambie Singer, 2A Sutherland Statutory Construction
§ 47:17, at 364-86 (7th ed. 2022)).
Defendant's interpretation of this language ignores the fact that the phrase
"any and all income from any sources" is then delimited by the word "including,"
which is then followed by "investment income and any realized capital gains
from inherited assets" as to what is considered a source of gross annual income.
If we adopted defendant's interpretation, it would render "investment income
and any realized gains from inherited assets" meaningless. Unrealized and
realized capital gains are not "of the same kind." Ibid. Moreover, defining
income as limited to realized gains from inherited assets is sensible not only
under the facts of this case, but also considering that "only gains that are actually
realized are considered income for taxation purposes." Miller, 160 N.J. at 421.
The motion judge correctly found defendant was not entitled to a
modification of alimony on account of plaintiff's income because it never
exceeded the $100,000 combined imputed amount in the MSA. Defendant's
assertion that we should interpret the MSA and the December 20 order to mean
that if plaintiff earned more than $40,000 from employment, he would be
entitled to a modification, lacks merit. The December 20 order clearly stated:
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21
[T]he parties have agreed to add together an
imputation of earned income to [plaintiff] of $40,000[]
from employment and an imputed investment income
(unearned income) return of $60,000[] on her inherited
immune assets to arrive at the $100,000[] total income
imputation figure for [plaintiff].
Only [plaintiff]'s combined income in excess of
$100,000[] per year, from earnings through
employment and/or investment income returned on her
inherited immune assets, will have any further impact
on the alimony. Therefore, [plaintiff] having income of
up to $100,000[] per year from these two sources shall
not be considered a change in circumstances for
purposes of modifying the alimony.
(emphasis added.)
The plain language of the December 20 order makes it clear there is no
individual threshold on the amount of earned and unearned income imputed to
plaintiff. Rather, the intended threshold is the combined total of both sources
of income and whether it exceeds $100,000.
Because plaintiff's income never exceeded the $100,000, her need for the
alimony did not decrease. Defendant was not entitled to discovery because he
did not make a prima facie showing of a change in circumstances based on
plaintiff's earnings. Cardali, 255 N.J. at 101 (citing Lepis, 83 N.J. at 157).
Defendant contends the motion judge erred by failing to find plaintiff
conceded there was a change in circumstances. He points to numerous emails
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22
between the parties, in which he sought an agreement to decrease his alimony
obligation based on his change in income. He also highlights a statement from
one of plaintiff's certifications, which stated she had been willing to temporarily
modify defendant's alimony obligation because "[h]is circumstance changed in
2020 with his layoff due to [the pandemic] and now again with his new
employment."
The MSA states: "No modification or waiver of any terms of this
[a]greement shall be valid unless in writing and executed with the same
formality as this [a]greement." Defendant claimed the parties had reached an
agreement to modify alimony when he brought his first modification motion in
September 2020. In the resultant order, which is not a part of this appeal, the
judge found there was no formal modification agreement. Defendant abandoned
this claim in his subsequent motions, which are the subject of this appeal, and
during oral argument advised the judge he had accepted the finding there was
no agreement to modify alimony.
The determination there was no alimony modification agreement is now
res judicata. Moreover, we do not consider this argument because it was not
raised in the proceedings that concern this appeal. Nieder v. Royal Indem. Ins.
Co., 62 N.J. 229, 234 (1973). Even if plaintiff had made a concession in a
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23
certification, it did not meet the MSA's requirement of a formal modification
agreement required by the MSA.
C.
Defendant contends the judge should have enforced a provision in the
December 20 order ("the disputed alimony provision") that required him to only
pay the undisputed portion of alimony until the alimony modification dispute
was resolved. He claims the provision applied to all three tiers of alimony.
After the motion judge denied defendant's modification and
reconsideration motions, plaintiff moved to enforce alimony, and asked the court
to enter a judgment against defendant in the amount of $236,935.13, reflecting
the arrears accrued as of May 27, 2022. Defendant then cross-moved for a stay
and argued he was only required to pay the undisputed alimony amounts.
Plaintiff asserted the provision defendant was relying upon only pertained
to the tier two alimony. Even if the provision applied to tier one alimony, the
judge had resolved the dispute by denying defendant's motions.
The motion judge found that if he adopted defendant's interpretation it
would permit the suspension of alimony for an indefinite period while the
appellate process proceeded, and would "bring[] about an absurd result." The
judge reasoned Rule 1:10-3 granted him jurisdiction to enforce his orders, and
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under Rule 2:9-5, he had the authority to stay his own order pending appeal.
Therefore, rather than suspend defendant's obligation to pay, the judge
conditioned the stay on defendant posting a supersedeas bond.
The disputed alimony provision resides under the subheading for tier three
alimony. That level of alimony was already being paid to defendant as a part of
his executive compensation and untethered to the vicissitudes of his earned
income. This lends credence to defendant's claim the disputed alimony
provision applied to the other alimony tiers, which are subject to fluctuations in
the parties' incomes, and could give rise to disputes such as the ones in this
appeal. Assuming arguendo, that the provision applied to all tiers of alimony,
we nonetheless conclude the judge did not err when he concluded defendant
could no longer invoke the provision after the court had adjudicated the alimony
dispute.
Indeed, the provision contemplates defendant would pay the portion of
alimony not in dispute until either party sought court intervention and the court
resolved the dispute having the discretion to award "interest and/or penalties"
on the unpaid alimony or counsel fees. The plain language of this provision
does not permit defendant to withhold alimony pending appeal. Otherwise, it
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would have said so. The motion judge interpretated this provision sensibly.
Defendant's interpretation would lead to absurd result.
III. The stay and supersedeas bonds
Defendant contends the motion judge erred in requiring him to pay a
second supersedeas bond to stay his ongoing alimony obligation. He claims the
judge lacked jurisdiction to enter orders enforcing this obligation because: a
supersedeas bond applies to judgments, not orders; the judge could not stay or
modify his own orders once they were appealed; and the second bond constituted
an improper modification of the judge's order because it was entered sua sponte,
without either party having filed a motion. He also argues the second bond was
in an excessive amount.
Defendant requested a stay pending appeal after plaintiff sought a
judgment against him for the alimony arrears. At oral argument before the
motion judge, defense counsel raised the issue of whether a bond was necessary
for a stay. Defense counsel later suggested a bond was not appropriate because
the judge had not entered a money judgment.
In his August 5, 2022 order, the motion judge concluded he had authority
to stay his order subject to defendant posting a bond in the amount of the arrears.
Thereafter, both attorneys wrote to the court disputing whether the bond stayed
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only the arrears, or if it included defendant's ongoing alimony obligation.
Plaintiff urged the former and defendant the latter. According to defendant, the
judge's order did not carve out any exceptions to the bond and it would be
difficult to calculate the amount of a supersedeas bond to stay the ongoing
alimony obligation, because it would lead to speculation about how long it
would take to resolve the appeal.
The motion judge found that although the August 5, 2022 order stayed
both the October 1, 2021, and April 29, 2022, orders, the bond amount only
covered defendant's outstanding arrears. He explained the purpose of the bond
was to protect plaintiff who had prevailed but could not collect because of the
pending appeal, but he had overlooked the issue of the ongoing alimony
payments. As a result, the judge conditioned the stay of the ongoing alimony
obligation on the posting of a second supersedeas bond. Defense counsel
objected, and argued the judge could not modify his order. The judge opined he
was not modifying his order, but instead addressing something he overlooked.
On August 23, 2022, the motion judge reduced his ruling to an order,
clarifying the purpose of each bond. The order further directed that if defendant
failed to timely post the second bond, his ongoing alimony payments would
resume.
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Defendant moved to vacate or stay the August 23 order, reiterating the
initial bond applied to his alimony arrears and ongoing alimony obligation . On
May 12, 2023, the judge entered an order denying defendant's motion and
extending the time for him to post the second bond. In his oral findings, the
judge characterized the August 23 order as correcting a clerical mistake in the
August 5 order. The May 12 order also modified the August orders by adding
that if defendant failed to post the second bond not only would his ongoing
alimony obligation resume, but he would also have to pay $25,000 to his arrears.
A trial court has discretion whether to grant a stay "dependent upon the
equities of a given case." Avila v. Retailers & Mfrs. Distrib., 355 N.J. Super.
350, 354 (App. Div. 2002). We review a court's decision concerning a
supersedeas bond for abuse of discretion. Grow Co. v. Chokshi, 403 N.J. Super.
443, 479 (App. Div. 2008).
Although the filing of a notice of appeal typically deprives a trial court of
supervision and control of the proceeding, the trial court maintains authority to
stay its own orders pending appeal. R. 2:9-1(a)(3). Moreover, Rule 2:9-1(a)(7)
grants the trial court "continuing jurisdiction to enforce judgments and orders
pursuant to R[ule] 1:10 . . . ." A trial court can also stay its own proceedings
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pending appeal. R. 2:9-5(b). Rule 2:9-5(a) allows a stay of proceedings "with
or without terms," and states:
A judgment or order in a civil action adjudicating
liability for a sum of money . . . which is the subject of
an appeal . . . shall be stayed only upon the posting of
a supersedeas bond or other form of security pursuant
to R[ule] 2:9-6 . . . , unless the court otherwise orders
after notice and on good cause shown. Such posting or
deposit may be ordered by the court as a condition for
the stay of any other judgment or order in a civil action.
Rule 2:9-6 addresses the posting of a supersedeas bond. It requires the
bond amount to reflect the "judgment in full," together with interests and trial
costs, unless the party shows "good cause" to approve a bond for a lesser
amount, or to allow a different form of security. R. 2:9-6(a)(1), (b). The purpose
of a supersedeas bond is to "protect the respondent from the loss of the use of
funds otherwise immediately due." Grow Co., 403 N.J. Super. at 478 (citing R.
2:9-5).
We reject the argument the motion judge could not require the posting of
bond because he had entered an order and not a judgment. Rule 2:9-5(a) applies
to a judgment or an order. Although Rule 2:9-6 only references judgments, it
must be read in pari materia with Rule 2:9-5, which is the rule that authorizes
the court to impose a bond requirement in the form prescribed by Rule 2:9-6.
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However, we part ways with the motion judge's interpretation of Rule 2:9-
5(a) as it applied to defendant's ongoing alimony obligation. As we noted, the
Rule requires a supersedeas bond to stay "[a] judgment or order in a civil action
adjudicating liability for a sum of money . . . ." The amount of the second bond
was an educated guess about defendant's future obligation and not based on an
order adjudicating the sum certain defendant owed plaintiff in alimony.
Inasmuch as the motion judge maintained the ability to enforce his own
orders, if defendant continued not to pay alimony, the better practice would have
been for plaintiff to seek enforcement pending the duration of this appeal by
filing a motion certifying to the unpaid alimony, and the judge could then impose
a bond on a sum certain due and owing to plaintiff. For these reasons, we vacate
the portion of the May 2022 order imposing the second supersedeas bond.
The August 23 order was also procedurally defective as to the second bond
because the motion judge imposed new terms where neither party had moved for
reconsideration of the August 5 order. An essential component of the rules
governing motion practice is "to afford the party against whom relief is sought
notice of the application, together with a meaningful opportunity to respond. "
Klier v. Sordoni Skanska Constr. Co., 337 N.J. Super. 76, 84 (App. Div. 2001).
This is also central to the constitutional right to due process, which "[a]t a
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minimum, . . . requires that a party in a judicial hearing receive 'notice defining
the issues and an adequate opportunity to prepare and respond.'" J.D. v. M.D.F.,
207 N.J. 458, 478 (2011) (alteration in original) (quoting H.E.S. v. J.C.S., 175
N.J. 309, 321-22 (2003)).
A court cannot sua sponte "'shortcut' for the purposes of 'good
administration' and circumvent[] the basic requirements of notice and
opportunity to be heard." Klier, 337 N.J. Super. at 84-85. For these reasons, we
cannot concur with the motion judge's ruling the August 23 order was correcting
a clerical mistake. A clerical mistake is one which corrects "an obvious or
acknowledged error . . . ." McNair v. McNair, 332 N.J. Super. 195, 199 (App.
Div. 2000). The August 5 order stayed both the alimony arrears and the ongoing
alimony but did not distinguish between these obligations when the court
imposed the first bond. The August 23 order imposed an entirely new financial
obligation without affording either party the required due process.
Because we have found the second bond was flawed in purporting to
secure an obligation not yet incurred, it matters not that defendant was
eventually afforded due process when he later moved to vacate the second bond
because the process was flawed from the start. And because we have vacated
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the second bond, we do not reach defendant's argument regarding the court's
refusal to reduce the second bond amount.
It follows from this discussion that the portion of the May 12 order
requiring that defendant either post the second bond or resume paying alimony
and $25,000 to arrears should be vacated as well. This provision was not part
of the August 5 and August 23 orders, and it modified the stay imposed in the
August orders, which defendant had already appealed from.
To summarize, it is axiomatic the judge had jurisdiction to stay and
enforce his own orders pending appeal, including by imposing a bond
requirement on the alimony arrears. The judge erred in imposing the second
supersedeas bond because it secured alimony yet to be incurred and was imposed
without adequate notice to the parties and then modified the stay to require
defendant to pay $25,000 towards arrears. The portion of the August 23 order
pertaining to the second bond and the May 12 order are reversed. Defendant's
remaining arguments regarding the August and May 2022 orders lack sufficient
merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
IV. Discovery
Defendant contends we should reverse provisions in the May 12 order,
which required him to turn over financial documentation related to a limited
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liability corporation (LLC) and the sale of real property he received in equitable
distribution. He claims because the LLC was created from his equitable
distribution and the real property was his equitable distribution both are
excluded from disclosure because they are not included in calculating his
income for alimony purposes.
The May 12 order was the result of plaintiff's motion to enforce the
arbitration award's requirement that the parties exchange financial
documentation each year. Plaintiff claimed defendant formed the LLC in May
2019, but never disclosed this to her or the court. She contended she was entitled
to this information to determine defendant's total gross income.
Defendant claimed the LLC was an "unprofitable entity" that he formed,
which "never got off the ground." Further, the LLC was started with his
equitable distribution funds, which the MSA excluded as income for alimony
purposes. There was also no MSA or arbitration award that required him to give
documentation related to the sale of the property.
The May 12 order granted plaintiff's request for "the sales reports,
commission reports, balance sheet, and detailed analysis showing the economic
and non-economic benefits [d]efendant receives or received from" the LLC. The
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order also directed him to provide plaintiff with documentation regarding the
sale of the real property.
We are constrained to reverse and remand this portion of the May 12 order
because the motion judge made no findings as to why he granted the relief. We
cannot discern what impelled the judge to require the disclosure of this
information and why he apparently rejected defendant's assertion that it had no
bearing on his income for purposes of calculating alimony. On remand, the
judge should explain why this information should be disclosed despite the MSA
and arbitration award excluding it from consideration as income for alimony.
V. Counsel fees
Defendant challenges the award of counsel fees to plaintiff in the April
29, 2022 order. He also challenges the May 12, 2023 fee award.
The April 29 order awarded plaintiff fees when the motion judge denied
defendant's motion for reconsideration of the October 1 order that denied the
request to modify alimony. The judge determined defendant had the ability to
contribute towards plaintiff's counsel fees. He found defendant acted in bad
faith by making repeated requests without "any substantive evidence or proof"
to support his application, "despite previous warnings from the [c]ourt . . . that
the proof is needed for . . . defendant to bring a future application." The judge
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also noted he had denied the "vast majority of . . . [d]efendant's requests for
relief . . . ."
The fees awarded in the May 12 order compensated plaintiff for
responding to defendant's motion to vacate or stay the August 23 order. The
motion judge cited an MSA provision that "the defaulting party will indemnify
the other for any . . . reasonable expenses and costs, including attorney's fees,
incurred in successfully enforcing this [a]greement." The judge again found
defendant had the ability to contribute to plaintiff's counsel fees and had acted
in bad faith by failing to comply with the August 23 order and seeking to vacate
or stay it. He found plaintiff had successfully moved to enforce the MSA and
arbitration order provisions requiring the parties to exchange financial
information, and the motion practice could have been avoided were it not for
defendant's refusal to comply.
Defendant argues both fee awards were erroneous because the motion
judge did not have an updated CIS or financial information from plaintiff to
discern her ability to pay her own fees. Plaintiff's attorney filed a late
certification of services in connection with both awards, leaving defendant
inadequate time and opportunity to review and address the certification. The
judge's bad faith findings were also erroneous because defendant had only filed
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four motions (two for modification and two for reconsideration), and his
reconsideration motion was meritorious because it was based on newly
discovered evidence.
Rule 5:3-5(c), in connection with Rule 4:42-9, authorizes the Family Part
to award counsel fees to either party in an alimony proceeding. Both Rules set
forth factors for the Family Part to consider in deciding a counsel fee award. As
a result, an award "of counsel fees is discretionary, and will not be reversed
except upon a showing of an abuse of discretion." Barr v. Barr, 418 N.J. Super.
18, 46 (App. Div. 2011) (citation omitted).
We are satisfied the April 29 counsel fee award was not an abuse of
discretion. The motion judge had sufficient financial information from both
parties to consider the need for contribution to counsel fees and the ability to
pay. We decline to second-guess the judge's weighing of the parties'
reasonableness and good faith; plaintiff clearly prevailed and was entitled to an
award of fees. Indeed, the judge noted he had denied defendant's initial
modification motion due to insufficient proofs, and—despite having three more
chances to do so—defendant failed to present additional evidence to support his
claims and was unsuccessful in almost all of his requests for relief.
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We reach a different conclusion regarding the May 12 fee award. That
order was predicated in part on the judge having found plaintiff prevailed in
enforcement of the parties' obligations to exchange financial documentation .
However, we have reversed that part of the order because there was a lack of
findings whether defendant was required to disclose the LLC and real property
sale records under the MSA. For these reasons, the May 12 counsel fee award
and is remanded for reconsideration along with the discovery issue discussed in
section IV of this opinion. Due to the passage of time, the parties should provide
the motion judge with updated CISs to enable him to better understand their
financial circumstances if he decides to award counsel fees after deciding the
discovery dispute.
VI.
Finally, to the extent we have not addressed an argument raised by
defendant on appeal, it is because it lacks sufficient merit to warrant discussion
in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed in part, and reversed and remanded in part. We do not retain
jurisdiction.
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