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
- "The parties hereby waive their rights for modification based upon changed circumstances as set forth in the case of Lepis."
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NOT FOR PUBLICATION WITHOUT THE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-2599-23
SAMUEL R. YOUNG,
Plaintiff-Appellant,
v.
MELISSA M. YOUNG,
n/k/a MELISSA M. WOLFE,
Defendant-Respondent.
__________________________
Submitted December 1, 2025 – Decided February 3, 2026
Before Judges Natali and Walcott-Henderson.
On appeal from the Superior Court of New Jersey,
Chancery Division, Family Part, Atlantic County,
Docket No. FM-01-0707-16.
Law Office of Thomas J. Hurley, LLC, attorney for
appellant (Thomas J. Hurley, on the briefs).
Jacobs & Barbone, PA, attorneys for respondent (David
A. Castaldi, on the brief).
PER CURIAM
Plaintiff Samuel R. Young appeals from orders entered on March 18 and
April 18, 2024 (in part), following a plenary hearing in the Family Part. The
March 18 order granted defendant Melissa M. Wolfe's application to enforce
alimony, including the payment of arrears, and awarded counsel and expert fees
as detailed in the subsequent April order. Plaintiff primarily argues the court
misapplied the standard for modification or termination of alimony under Lepis
v. Lepis, 83 N.J. 139 (1980), by failing to consider defendant's financial
circumstances even after concluding he had established a substantial change in
circumstances. For the reasons that follow, we vacate the court's orders and
remand.
Given the extensive record of these proceedings, we detail only the
relevant facts to provide context for our opinion. After approximately twenty-
five years of marriage, plaintiff filed a complaint for divorce in January 2015.
Following years of litigation, in October 2017 the court granted the parties a
final judgment of divorce ("FJOD"), which incorporated a marital separation
agreement ("MSA"). There is no dispute that throughout the marriage plaintiff
was the supporting spouse and defendant was a full-time homemaker and
primary caretaker to the parties' three children.
A-2599-23
2
The MSA required plaintiff to pay defendant limited duration alimony in
the amount of $21,500 per month for ten years, followed by $15,000 per month
for three more years in lieu of child support, whereupon plaintiff's alimony
obligation would terminate. The MSA also detailed three circumstances in
which alimony would terminate: (1) plaintiff's death; (2) defendant's death; or
(3) defendant's remarriage.
Relevant to the issues on appeal, paragraph 3.2 of the MSA addressed the
parties' financial circumstances at the time of their agreement:
3.2 Lepis/Crews Basis: The circumstances which
existed as of this [a]greement are that [plaintiff] had
been earning reported taxable income in the range of
$350,000 to $450,000 during 2010-2012 which
changed substantially post-separation when a merger
with Meridian Health Systems took place and
[plaintiff's] income increased to approximately
$600,000 [i]n 2014, with a projected gross income
increasing to approximately $700,000 in 2015. This
new business venture with Meridian has the potential to
provide [plaintiff] with significant income going
forward, but there are also risks involved in the fitness
industry which could adversely impact upon the
business venture with Meridian, and as a consequence,
adversely impact upon [plaintiff's] income.
[Defendant] has been out of the job market and a full
time homemaker since approximately 1995. Both
parties are college graduates, [defendant] having a
[master's d]egree.
A-2599-23
3
Approximately one year after they executed the MSA, the parties executed
to an addendum, in which they agreed "to eliminate the remarriage of
[defendant] as a condition for termination of alimony." It further, provided that,
"[t]his modification shall in no way limit [plaintiff's] right to seek a modification
or termination of alimony in the event of a change of his circumstances in
accordance with current statutory and case law standards."
Within two years after the entry of the FJOD, plaintiff informed defendant
via their respective counsel that "a substantial change in circumstances ha[d]
occurred regarding [his] income," warranting an adjustment in the amount of
alimony he was paying to defendant. At the time, plaintiff owned several gyms
and claimed to have fallen behind in his payments. At the start of the COVID-
19 pandemic in March 2020, plaintiff again informed defendant that the closure
of his gyms worsened his financial situation and that he would no longer be able
to continue making alimony payments.1
Defendant moved, pursuant to Rule 1:10-3, to enforce the alimony and
equitable distribution provisions of the MSA. In response, plaintiff cross-moved
1
In March 2020, Governor Murphy issues Executive Order 107, requiring "non-
essential" businesses, including gyms, remain "close[d] to the public" for as long
as the order remained in effect. Exec. Order No. 107 (Mar. 21, 2020),
https://nj.gov/infobank/eo/056murphy/pdf/EO-107.pdf
A-2599-23
4
for termination or modification of his alimony obligation and suspension of his
equitable distribution payments.
In its initial June 1, 2020 order, the court granted defendant's motion to
enforce her rights to alimony and equitable distribution and ordered plaintiff to
pay defendant $26,354.84 in pro-rated alimony and support arrears that had
accrued from the date he last made a payment until May 7, the date he filed his
cross-motion. With respect to the equitable distribution payments, the court
concluded plaintiff was required to "pay in full $21,890.64, the total equitable
distribution arrears that ha[d] accrued since the date [p]laintiff last made an
equitable distribution payment," and denied plaintiff's cross-motion to suspend
equitable distribution payments.
The court referred plaintiff's cross-motion for modification of his alimony
and support obligations to mediation pursuant to Rule 5:5-6, and ordered
plaintiff to produce the following documents by June 1, 2020: "2019 [f]inancial
[s]tatements and tax returns for the closely held entities in which [p]laintiff
maintains an ownership interest"; earnings records from plaintiff's service on
the OceanFirst Financial Corporation's ("OFFC") board of directors for the years
2019 and 2020; payroll data for 2019 and 2020; "2019 and 2020 statements of
financial assets held by [p]laintiff"; plaintiff's 2019 financial records, including
A-2599-23
5
the records from all of his closely held entities; and "[a]ny other records and
documentation that would provide information for [defendant's] expert . . . to
analyze [p]laintiff's pretax cash flow for the year end[ing] December 31, 2019[,]
and the first quarter of 2020."
When mediation proved unsuccessful, the court conducted oral arguments
on the motion and cross-motion. Following these arguments, the court found
plaintiff had "proven a prima faci[e] case of a substantial change in
circumstances warranting [the court] to conduct a plenary hearing regarding the
issues raised in this case involving the amount of alimony." The court also
granted plaintiff's request for defendant to provide a case information statement
and her joint marital tax returns. The court, however, explained it would "stay
[that] portion of [its order] pending . . . defendant's appeal." It also denied
without prejudice defendant's cross-motion to sequester plaintiff's assets and
denied without prejudice plaintiff's motions to reduce his alimony obligation
and eliminate all accrued arrears pending the plenary hearing.
Further motion practice ensued, and on April 15, 2021 the court: (1)
denied defendant's application to defer disposition of the issues; (2) granted
defendant's motion "to continue without prejudice payments of $1,600 per
month"; (3) granted plaintiff's application to require discovery; (4) granted
A-2599-23
6
plaintiff's application for the parties to attend another round of mediation; and
(5) denied both parties' motions for counsel fees.
On October 2, 2022, plaintiff filed another motion, this time seeking an
order requiring defendant to produce various financial documents. Defendant
cross-moved for a protective order. The court heard oral arguments on
November 18, 2022 and subsequently granted plaintiff's motion to compel,
denied defendant's cross-motion, and entered a conforming order that same day.
Defendant argued plaintiff was not entitled to any of her financial
documents because the addendum to the parties' MSA provided "that any
modification is about a change of [plaintiff's] circumstances." The court
rejected defendant's argument, explaining that:
If I find a change in circumstances . . . that's just one
analysis. I, then, have to apply the factors of . . . the
statute. I don't agree with [defendant's counsel] that it
stops there. There's nothing here that says that's the
only basis that I can . . . terminate or amend the
alimony. It says . . . "[t]his modification shall in no
way limit husband's right to seek a modification or
termination of alimony in the event of a change of his
circumstances in accordance with current statutory and
case law standards."
In anticipation of the plenary hearing, the court bifurcated the issues as
follows: (1) whether plaintiff had experienced a substantial change in
circumstances during the years 2020 through 2022 that required a retroactive
A-2599-23
7
modification of plaintiff's alimony and arrears obligations; and (2) whether
plaintiff had demonstrated a change in circumstances from 2023 onward. The
court found plaintiff had established a prima facie case of a substantial change
in circumstances, prompting the court to conduct a plenary hearing.
The court conducted a plenary hearing over the course of twelve days, in
which it heard testimony from plaintiff, defendant's financial expert Gregory
Cowhey, and plaintiff's financial expert Michael Saccomanno, CPA. The court
first explained defendant's financial circumstances would only "come[] into play
if [plaintiff] can establish a substantial change of circumstances."2
Plaintiff testified he had entered the fitness industry in 1991 after leaving
active-duty service in the Navy. He further testified he initially "operated three
fitness centers, a small one in Mays Landing, one in Northfield that [he] owned
[fifty-]percent of, one in Galloway, and then one in Ocean County that [he]
owned a third of with Meridian at that time." He further explained in 2015 or
2016 Hackensack-Meridian Health ("Hackensack-Meridian") bought half of his
clubs and he purchased half of their fitness clubs and as a result of this deal, he
2
As to this point, "[the court] saw this as a gateway issue because if [plaintiff]
does not establish a substantial change in circumstances, then [it would not] get
to the issue of [defendant's] financial circumstances and that testimony would
be irrelevant."
A-2599-23
8
operated eight clubs, with $120,000 of income per club, until the revenue
associated with his businesses "ceased to exist" when the Governor ordered all
gyms to shut down in response to the COVID-19 pandemic.
The record contains substantial testimony regarding plaintiff's finances.
Plaintiff testified regarding the value of his several bank accounts, including his
Charles Schwab investment and retirement accounts on direct and cross-
examination. He acknowledged various bank and investment statements that
showed fluctuations in the value of his various Charles Schwab accounts,
including one account that showed an increase from $868 in 2020 to $94,396 in
2021 and $234,216 as of October 2022; another investment account that showed
a decrease from $360,082 in 2020 to $196,775 as of October 2022; an IRA
account with $951,776 in January 2020, which had decreased to $951,742 in
October 2022; and another IRA account with $76,252 in January 2020 which
increased to $115,252 as of October 2022.
Plaintiff agreed that the overall balances in those accounts increased from
$1,388,000 in 2020 to $1,497,966 as of October 2022. He further explained that
he had transferred approximately $1,850,000 between 2020 and 2022 from his
Charles Schawb accounts into two PNC checking accounts and wrote checks or
made other deductions from those funds. And, as to his Charles Schwab
A-2599-23
9
accounts, plaintiff explained they were "funded since March of 2020 exclusively
with [his] Ocean 3 asset distribution and the deferred comp[ensation]
distribution."
Plaintiff acknowledged "total assets of $4,668,230[,] and total liabilities
of $4,875,000," giving him a negative net worth of $206,770. He agreed that he
listed his fifty-percent ownership share in Tilton Vista, LLC ("Tilton") as
$2,000,000, even though Tilton lost most of its tenants in August 2020 due to
the COVID-19 pandemic and had a $7,000,000 mortgage; of which he was liable
for $3,500,000.
Plaintiff also testified he retired from OFFC's Board in March 2020, two
months before the governance committee was expected to vote not to renew his
position, and at the time of his retirement, he had approximately $111,000 of
deferred OFFC compensation remaining. He next commenced employment as
the CEO for Habitat for Humanity in Pensacola, Florida, earning $100,000
annually prior to receiving a raise to $150,000 and was receiving a monthly
pension of $4,000 from the Navy.
3
During plaintiff's testimony he references "Ocean assets" and "Ocean funds"
with regard to Ocean City Home Bank and its successor OceanFirst Bank, an
OFFC holding, which merged on November 30, 2016 prior to the parties' final
judgment of divorce and MSA entered on October 13, 2017.
A-2599-23
10
Defendant presented the testimony of her financial expert, Cowhey, who
testified in detail regarding plaintiff's various accounts, "focusing in on cash
flow from day one, not taxable income." Cowhey explained plaintiff's PNC
account (ending in no. 1393) received deposits of $660,809 in 2020;
$447,372.25 in 2021; and $342,062.27 in 2022 and another account (ending in
no. 0212) showed deposits of $377,500 in 2020; $60.50 in 2021; and $24,871.21
in 2022, for a total of $402,431.71 during the 36-month period. He opined that
plaintiff had deposited $1,852,674.58 into his PNC accounts in the three-year
period from 2020 to 2023.
As to plaintiff's Charles Schwab accounts, Cowhey explained there was
growth in at least one account of approximately $871,000, of which plaintiff
cashed out $802,000 between 2020 and 2022. Nevertheless, Cowhey noted the
account balance grew by $68,604. He further concluded that based on his
analysis, between May 2020 and January 2023, plaintiff owed defendant
$653,445 in alimony arrearages. Cowhey also disputed plaintiff's claim of
negative equity in Tilton and he opined that based on Tilton's 2021 tax returns,
plaintiff had approximately $1,500,000 in equity. Cowhey estimated plaintiff
had a positive net worth of $3,102,000, contrary to plaintiff's assertion he had a
negative net worth of $841,000.
A-2599-23
11
Plaintiff also sought to present testimony from Samantha Roessler, a real
estate appraiser, to offer evidence regarding the value of the Tilton's building in
Galloway. Defendant moved to bar Roessler's testimony and her report based
on plaintiff's belated submission. In denying plaintiff's application, the court
noted plaintiff proffered this expert and her report "after five days of trial [and]
after starting this trial ten months ago."
Plaintiff next called Saccomanno as his expert in forensic analysis and
accounting. Saccomanno testified he used a cash flow analysis to calculate
plaintiff's income over the three year period because "[w]hen you're dealing with
a self-employed individual, you can't just look at the tax return. . . . [S]o we
looked at the tax return, his business tax returns, the income that flowed from
those tax returns, and then the actual distributions received." Saccomanno
testified that in 2020, plaintiff received $20,890 in W-2 income; $50,000 from
Tilton Fitness Management, LLC; $19,547 in unemployment compensation;
$32,917 in pension income; a $10,000 distribution from Tilton; $17,464 in
dividend income from his Charles Schwab accounts; $152,672 from "O[F]FC
stock option exercise"; and $84,658 from "[v]ested O[F]FC shares." He
calculated plaintiff's gross income for 2020 to be $249,385. According to
Saccomanno, the $152,672 from "O[F]FC stock option exercise" was distributed
A-2599-23
12
to defendant as part of her equitable distribution payments. Accordingly,
Saccomanno did not believe those assets should be considered in determining
plaintiff's ability to pay.
Saccomanno calculated plaintiff's 2021 income using approximately
$142,000 from his W-2 and $33,465 from his pension, which Saccomanno
"backed . . . out as the pension was already distributed and [defendant] received
her share of that pension"; $1 in interest income and $20,336 in dividend income
from two non-retirement Charles Schwab accounts; $88,997 in deferred
compensation that defendant also received; and $29,164 in deferred
compensation. He calculated plaintiff's gross income for 2021 at $177,896.
Saccomanno estimated plaintiff's 2022 gross income was $194,440:
$150,000 in W-2 income; $33,854 in pension income, which Saccomanno again
"backed out" of his calculation; $29,813 in dividend income from his two non-
retirement Charles Schwab accounts; $88,997 in deferred compensation from
OFFC which he "backed out"; $29,345 in deferred compensation; and $36,282
from ACY Fitness. He explained plaintiff's account balances in his two non-
retirement Charles Schwab accounts increased from $249,689 in March 2020 to
$688,811 in June 2020 "due to liquidation of [plaintiff's] deferred [OFFC] . . .
asset holdings." He disagreed with Cowhey's analysis of plaintiff's Charles
A-2599-23
13
Schwab accounts in two areas explaining that Cowhey's analysis "include[d] all
four accounts and . . . he [did] not indicate . . . if it's a retirement account and/or
an investment account." Second, Saccomanno believed Cowhey's analysis gave
"an inaccurate picture of the economic reality of [plaintiff] because there are
[OFFC] deferred holdings account that feeds into his entire asset picture . . .
[and plaintiff's] assets decreased and . . . Cowhey [was] indicating that his assets
increased."
On cross-examination, however, Saccomanno acknowledged the stock
options plaintiff received from [OFFC] were not included in the parties' MSA
and the balance in plaintiff's four Charles Schwab accounts grew by $68,604
between 2020 and 2022, despite plaintiff making $802,150 in withdrawals.
Thus, both parties' experts agreed with respect to the increase in assets contained
in plaintiff's Schwab accounts.
Following the plenary hearing, the court issued a 111-page written opinion
and accompanying order: enforcing plaintiff's alimony arrears obligation, plus
2% compounded interest per annum, in the amount of $657,433.48; freezing and
sequestering all of plaintiff's Charles Schwab accounts until further order of the
court; denying plaintiff's application for a termination or reduction of his
alimony arrears obligation for 2020, 2021, and 2022; denying plaintiff request
A-2599-23
14
to reduce his life insurance obligation, without prejudice; granting defendant's
request for attorneys' fees, hard costs, and expert fees subject to oral argument
on the issue of counsel and expert fees, which was scheduled for April 11, 2024.4
The court began its decision by stating, "pursuant to Lepis . . . defendant
had submitted sufficient evidence to require a plenary hearing on the issue of
whether or not the plaintiff had sustained a substantial change in circumstances
so as to require this court to either terminate or reduce his alimony obligation as
set forth in the parties' [MSA]." The court noted that the amount of alimony
arrears (without interest) was not in dispute, however, the parties and their
experts disagreed on the second part of the analysis: whether or not the court
should terminate or reduce plaintiff's alimony obligation and if plaintiff has the
ability to pay during 2020, 2021 and 2022. The court further also stated, it
decided that the best approach was to "bifurcate the issues of the trial" as
previously noted.
Of the three witnesses who testified, the court found plaintiff marginally
credible, stating he "was a believable witness on some issues and not believable
4
The court issued two amended orders as follows: a March 19, amended order
for judgment; and an April 11, order clarifying the exhibits that were not entered
into evidence, including D-3 through D-15, D-36 through D-38, and D-45 and
D-57. The court noted that the exhibits did not affect its analysis or decision.
A-2599-23
15
on others." More particularly, the court found that plaintiff at times delayed in
responding as though searching for the "right" answer, creating the impression
that his testimony was less spontaneous and more rehearsed, and that on several
occasions he went beyond the scope of the questions to inject additional
commentary expressing his views on the litigation and asserting that he had been
financially devastated by the closure of his businesses, the pandemic, and related
issues.
As to Cowhey, the court found him to be a believable witness and noted
that he provided "a very detailed analysis of the financial documents which was
supported by the evidence." And, as to Saccomanno, who testified as plaintiff's
forensic accounting expert, the court found, he offered believable testimony as
it related to "some" of the plaintiff's financial status but when pressed, "was
forced to admit that his opinions were unsupported by the evidence." The court
reasoned that Saccomanno's credibility is a "mixed bag" because he would not
concede the most obvious points until he was pressed repeatedly by opposing
counsel.
The court next summarized plaintiff's testimony regarding his pre-
COVID-19 pandemic assets, liabilities, and distributions made under the MSA,
the closure of his gyms during the pandemic, and the fact that plaintiff could not
A-2599-23
16
find comparable employment in the fitness industry and switched careers to
become CEO of Habitat for Humanity. During this time, the court noted plaintiff
made several financial decisions that impacted his ability to pay alimony.
On April 11, 2024, the court held oral argument to address defendant's
request for attorney's and expert fees. The court found that Cowhey's fees of
$214,375, over a four-year period, were reasonable. With respect to defendant's
request for attorney's fees, the court explained it would not award costs for pre-
litigation work and awarded counsel fees in the amount of $325,000,5 and
entered a corresponding order dated April 16, 2024. Plaintiff appealed.
II.
"Our review of a Family Part judge's findings is limited, . . . 'afford[ing]
substantial deference to the Family Part's findings of fact because of that court's
special expertise in family matters.'" Voynick v. Voynick, 481 N.J. Super. 207,
220-21 (App. Div. 2025) (quoting W.M. v. D.G., 467 N.J. Super. 216, 229 (App.
Div. 2021)). 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 v. Cesare, 154 N.J. 394, 411-12 (1998)). "Reversal is warranted only
5
The court also denied plaintiff's request for a stay of its order enforcing
plaintiff's alimony obligation and ordering the payment of arrears.
A-2599-23
17
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) (alteration in original) (quoting Rova Farms Resort, Inc. v. Invs. Ins.
Co. of Am., 65 N.J. 474, 484 (1974)). "We apply that deference to a Family
Part judge's decision regarding a motion to amend a marital-support obligation."
Voynick, 481 N.J. Super. at 221 (citing Cardali v. Cardali, 255 N.J. 85, 107
(2023)). "Thus, a Family Part judge's decision regarding a support obligation
should not be disturbed unless 'the court made findings inconsistent with the
evidence or unsupported by the record or erred as a matter of law.'" Voynick,
481 N.J. Super. at 221 (quoting Reese v. Weis, 430 N.J. Super. 552, 572 (App.
Div. 2013)). 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).
An "award of counsel fees and costs in a matrimonial action rests in the
discretion of the trial court." Guglielmo v. Guglielmo, 253 N.J. Super. 531, 544-
45 (App. Div. 1992). We will disturb a counsel fee decision "only on the 'rarest
occasion,'" Strahan v. Strahan, 402 N.J. Super. 298, 317 (App. Div. 2008)
(quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)), and, even then, only on
"an abuse of discretion involving a clear error in judgment." Tannen v. Tannen,
A-2599-23
18
416 N.J. Super. 248, 285 (App. Div. 2010). Stated differently, we will intervene
only when a trial judge's determination of fees is based on "irrelevant or
inappropriate factors" and is "not premised upon consideration of all relevant
factors." Masone v. Levine, 382 N.J. Super. 181, 193 (App. Div. 2005) (citing
Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)).
A.
Before us, plaintiff maintains the court erred by not following the
requirements of Lepis and by bifurcating the matter into two stages: 2020
through 2022 and thereafter. Plaintiff asserts the court properly found he had
"proven a prima facie case of a substantial change in circumstances warranting
a plenary hearing," yet failed to follow the procedures outlined in Lepis by:
failing to allow the exploration of defendant's financial status, and thus , made
an "uniformed determination as to what, in light of all of the circumstances, is
fair and equitable." Plaintiff maintains the court did not do what it said it would
and never ordered defendant to provide her financial information, despite
knowing that defendant's finances were substantial. Simply put, plaintiff
maintains "[c]hange circumstances require a judge to examine both of the
parties['] current situation and the situation when the order was entered."
A-2599-23
19
Defendant maintains the decision "whether an alimony obligation should
be modified based upon a claim of changed circumstances rests within a Family
Part judge's sound discretion," based on their experience as applied to all the
relevant circumstances presented. And, relying on Rova Farms, defendant
maintains, we are to accord deference to the court's factual and legal
conclusions, unless they are so manifestly unsupported by or inconsistent with
the competent, relevant, and reasonably credible evidence as to offend the
interest of justice. 65 N.J. 474, 484 (1974).
We note that from the onset, the court explained that it had determined
that defendant's financial circumstances would "come into play" only if plaintiff
established a substantial change in his circumstances. The court explained that
it took this view because of the parties' amendment to their MSA in an
addendum, which provided that with respect to alimony, the parties agreed "to
eliminate the remarriage of [defendant] as a condition for termination of
alimony. This modification shall in no way limit [plaintiff's] right to seek a
modification or termination of alimony in the event of a change of his
circumstances in accordance with the current statutory and case law standards."
(Emphasis in original).
A-2599-23
20
N.J.S.A. 2A:34-23 authorizes the Family Part to modify alimony and child
support awards when circumstances warrant. See Spangenberg v. Kolakowski,
442 N.J. Super. 529, 535 (App. Div. 2015). The statute expressly provides that
support orders "may be revised and altered by the court from time to time as
circumstances may require." N.J.S.A. 2A:34-23. Our courts have long
interpreted this language to require a party seeking a modification to
demonstrate "changed circumstances." Spangenberg, 442 N.J. Super. at 536
(alteration in original) (quoting Lepis, 83 N.J. at 157).
Once a movant establishes a prima facie showing of changed
circumstances, the court may order discovery and, if material facts remain in
dispute, conduct a plenary hearing to determine whether changes in the parties '
needs or abilities to pay justify modification or termination of support. Miller
v. Miller, 160 N.J. 408, 420 (1999). Further, courts have recognized several
circumstances that may satisfy this prima facie threshold, including an "increase
or decrease in the supporting spouse's income," Lepis, 83 N.J. at 151, and the
maturation of a child and resulting changes in needs, J.B. v. W.B., 215 N.J. 305,
313 (2013). Additionally, in assessing whether changed circumstances exist,
the court must compare the parties' current financial circumstances to those that
existed at the time the support obligation was last fixed. Beck v. Beck, 239 N.J.
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21
Super. 183, 190 (App. Div. 1990). This inquiry is not confined to circumstances
contemplated at the time of divorce but rather focuses on whether the change is
continuing and whether the agreement or judgment accounted for that change.
Deegan v. Deegan, 254 N.J. Super. 350, 354-55 (App. Div. 1992) (quoting
Lepis, 83 N.J. at 152). The same principles govern both termination and
modification of support obligations. Voynick, 481 N.J. Super. at 223.
It is also well-settled that parties may include an anti-Lepis clause in a
MSA reasonably limiting the circumstances that could qualify as a change in
circumstances sufficient to modify an alimony obligation. Quinn v. Quinn, 225
N.J. 34, 49-50 (2016). We have previously determined that such anti-Lepis
clauses do not offend public policy and are enforceable so long as they are
entered into "with [the] full knowledge" of both impacted parties. Morris v.
Morris, 263 N.J. Super. 237, 241 (App. Div. 1993). An anti-Lepis clause,
however, must clearly state that the change-of-circumstances standard does not
apply, or detail how the parties intend to handle modification of alimony
requests. See, e.g., Morris, 263 N.J. Super. at 240 ("The parties hereby waive
their rights for modification based upon changed circumstances as set forth in
the case of Lepis."). This is because, parties who "bargain for a fixed payment
or establish [their own] criteria for payment to the dependent spouse," must have
A-2599-23
22
"full knowledge" of their departure from the Lepis modification standard, as
courts do not otherwise read an anti-Lepis clauses into MSAs. Id. at 241.
Here, it is undisputed that after finding plaintiff had established a
substantial change in his finances, the court nevertheless did not require
defendant to provide her financial records for analysis. Rather, the court
determined that based on the evidence adduced at trial and notwithstanding
plaintiff's reduction in income from 2020 through 2022, plaintiff had the
financial ability to pay his alimony arrears and meet his ongoing alimony
obligation.
Under these circumstances, we conclude the court misapplied the Lepis
framework and, in doing so, erred as a matter of law. We reach this conclusion
based on our de novo review of the record. We note the court had an extensive
twelve-day hearing and authored a comprehensive and detailed opinion based
on its review of extensive financial testimonial and documentary evidence. We
are, however, convinced that having found plaintiff had established a prima facie
showing of sufficient changed circumstances, the court erred when it declined
to consider defendant's financial circumstances, deeming them "irrelevant"
based on its interpretation of the language in the parties' addendum to the MSA,
which the court found akin to a "hybrid anti-Lepis provision."
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We are satisfied that nothing in the addendum expressly modifies
plaintiff's right to seek a modification of alimony pursuant to Lepis. In fact, the
language in the addendum solely eliminates defendant's remarriage as a
condition of termination of plaintiff's alimony obligation while expressly
maintaining plaintiff's right to seek a modification or termination of alimony in
the event of a change of his circumstances "in accordance with current statutory
and case law standards," which necessarily includes an evaluation of both
parties' financial circumstances once a prima facie change has been shown. See
Beck, 239 N.J. Super. at 190; N.J.S.A. 2A:34-23(k).
Moreover, we are not persuaded by defendant's emphasis on the use of the
word "his" in paragraph two of the addendum—limiting plaintiff's ability to seek
a modification or termination of alimony in the event of "his" circumstances.
We are unpersuaded that the use of the word "his" in this context should be
interpreted to encompass only plaintiff's financial circumstances, as that
interpretation ignores the remainder of the sentence, which specifically requires
consideration "in accordance with current statutory and case law standards."
Additionally, we review MSAs by applying basic contract principles and,
therefore, strive to discern and implement the parties' intent. J.B., 215 N.J. at
326. When interpreting an MSA, "[t]he court's role is to consider what is written
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in the context of the circumstances at the time of drafting and to apply a rational
meaning in keeping with the 'expressed general purpose.'" Pacifico v. Pacifico,
190 N.J. 258, 266 (2007) (quoting Atl. N. Airlines, Inc. v. Schwimmer, 12 N.J.
293, 302 (1953)).
Guided by these principles, we are satisfied the court erred in construing
the addendum as an anti-Lepis provision, eliminating from consideration
defendant's income. Moreover, we note that although this may not have been
the court's original intent—based on its own prior statements—it ultimately
made its ruling without consideration of defendant's income, which constitutes
error.
B.
Plaintiff further argues the court erred by including in its calculations of
his income money from his Ocean fund, which he maintains was previously
distributed under the MSA and is "an asset – not income or 'cashflow,'" which
he used to satisfy his alimony obligation. Defendant concedes that "[a]n asset
which was equitably distributed may not thereafter be considered in an alimony
calculation." Innes v. Innes, 117 N.J. 496, 504-05 (1990); see also Miller v.
Miller, 160 N.J. 408, 422 (1999). However, defendant additionally asserts,
"where a 'contumacious' obligor fails to pay alimony, the obligor's equitably
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distributed assets can and should be used as a fund to satisfy an alimony
obligation." See Slayton v. Slayton, 250 N.J. Super. 47, 50-51 (App. Div. 1991).
Defendant maintains "the [c]ourt correctly considered [p]laintiff's equitably
distributed assets, which can be tapped as a fund to satisfy a legitimate alimony
obligation."
On this point, the court found it is "mandated by Slayton to consider all
of the plaintiff's assets in analyzing his ability to pay his alimony obligation,
including those assets already equitably distributed," and concluded "plaintiff
had sufficient assets to satisfy his alimony obligation during the years 2020 ,
2021 and 2022 based on Mr. Cowhey's appropriate and in-depth case flow
analysis."
Having considered the record and applicable legal principles, we reject
plaintiff's contention the court should not have considered his Ocean assets as
income because he was only able to satisfy his alimony and equitable
distribution obligations through the depletion of those assets. It is well-
established that a supporting spouse's property, and capital assets are proper
considerations in determining their ability to pay in the context of an application
to modify or terminate alimony. Innes, 117 N.J. at 503 (quoting Bonanno, 4
N.J. at 275).
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Here, the OFFC payments plaintiff received after his departure from that
board are a form of deferred compensation from stock options. Pascale v.
Pascale, 140 N.J. 583, 611 (1995). Thus, the court properly included this income
in calculating plaintiff's ability to pay his arrears and alimony obligation. See
Miller, 160 N.J. at 422 (recognizing that a supporting spouse's assets may be
considered when calculating alimony). The court, however, failed to complete
its own analysis and show its calculation to support its finding plaintiff has the
financial ability to satisfy the arrears and pay his alimony obligation.6
6
Moreover, with respect to the OCHB stock options plaintiff received in 2010,
the court also found that none of "the $257,551.49 received by [plaintiff] as a
result of his exercise of 2010 options in 2020" were included in the parties MSA.
This was incorrect as paragraph 4.8 of the MSA expressly addressed the
distribution of OCHB stock to defendant, accounting for the period between
when plaintiff exercised his options and the day before the MSA was executed,
stating:
[Plaintiff] is the owner of stock in [OCHB] with an
approximate value of $430,000. Included in this stock
are shares recently purchased by [plaintiff] when he
exercised options using funds borrowed from his father
in the amount of $250,000. [Plaintiff] shall pay to
[defendant] a sum equal to one-half of the difference
between the current market value of these shares as of
March 31, 2016 and the $250,000 loan owed to his
father for [defendant's] interest in these shares, within
30 days of April 1, 2016 the execution of this [MSA].
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C.
Finally, we address plaintiff's argument the court erred in prohibiting him
from presenting Roessler's expert report and testimony at trial warrants reversal.
"[T]he decision to admit or exclude evidence is one firmly entrusted to the trial
court's discretion." Est. of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J.
369, 383-84 (2010) (citing Green v. N.J. Mfrs. Ins. Co., 160 N.J. 480, 492
(1999)). Therefore, we review a trial court's "[e]videntiary decisions . . . under
[an] abuse of discretion standard." Id. at 383-84. An abuse of discretion arises
when the court's "decision [was] made without a rational explanation,
inexplicably departed from established policies, or rested on an impermissible
basis." United States ex rel. U.S. Dep't of Agric. v. Scurry, 193 N.J. 492, 504
(2008) (alteration in original) (quoting Flagg, 171 N.J. at 571).
We reject plaintiff's assertion the court abused its discretion and that
reversal is warranted on this basis. Because Roessler's statements constituted
an expert opinion, plaintiff was required to identify and disclose this expert
either: (1) in its response to defendant's interrogatory requests on or before
"[twenty] days prior to the end of the discovery period," R. 4:17-7; see also R.
4:10-2(d)(1); R. 4:17-4(a), or (2) less than "[twenty] days prior to" the
conclusion of discovery, "only" upon a motion to amend its responses
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accompanied by a certification stating "the information requiring the
amendment was not reasonably available or discoverable by the exercise of due
diligence prior to the discovery end date," R. 4:17-7. Moreover, "[i]n the
absence of [a] certification, [a] late amendment shall be disregarded by the court
and adverse parties." Ibid. Where a party fails to disclose an expert's report
pursuant to Rule 4:17-4(a) but attempts to introduce the expert's testimony at
trial, "[t]he court . . . may exclude the testimony." R. 4:23-5(b); see also
DePalma v. Bldg. Inspection Underwriters, 350 N.J. Super. 195, 216 (App. Div.
2002) (upholding a court's exclusion of an expert's testimony where the offering
party did "not name[] the [expert] or provide[] his report during the discovery
period, and its belated attempt to call [the expert] to offer a legal opinion, and
to introduce [new information,] . . . came as a surprise during the trial .").
Here, there is no dispute plaintiff failed to identify Roessler as an expert
prior to the conclusion of discovery and did he move to amend his discovery
responses. Instead, as the court explained, plaintiff simply "c[a]me to . . . court
ten months into trial and tr[ied] to introduce new evidence after . . . Cowhey's
testimony ha[d] been completed[ and] after . . . defendant's case in chief ha[d]
been completed." Against this backdrop, we observe no abuse of discretion by
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the court in denying plaintiff's belated attempt to introduce Roessler as an
expert.
In sum, we vacate the court's orders granting defendant's application to
enforce the MSA and for payment of arrears, denying plaintiff's cross-motion
for modification or termination of alimony, and granting defendant's attorney's
costs and fees. On remand, a different judge shall determine what discovery
defendant must provide to plaintiff to determine the parties' respective financial
circumstances pursuant to Lepis, and conduct a new or supplemental plenary
hearing, as needed to address any outstanding issues. We reach this conclusion
because this judge previously made credibility findings, and thus, it is
"appropriate that the matter be assigned to a different trial court." R.L. v.
Voytac, 199 N.J. 285, 306 (2009). We further note that, we have no quarrel with
the court's determination to bifurcate the issues for trial or its denial of plaintiff's
motion to call Roessler as an expert. In light of our decision to order a new
hearing, however, we leave it to the court's discretion to reconsider its decision
with respect to Roessler's expert testimony. Nothing in our opinion should be
interpreted as an expression of our view on the merits of the remanded
proceedings.
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Vacated and remanded in accordance with this opinion, we do not retain
jurisdiction.
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