THANIE CALLAS v. GEORGE CALLAS

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1099-04T51099-04T5

THANIE CALLAS,

Plaintiff-Respondent,

v.

GEORGE CALLAS,

Defendant-Appellant.

_______________________________________

 

Submitted November 16, 2005 - Decided

Before Judges Fall and Lihotz.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, FM-02-118-02.

Aronsohn, Weiner & Salerno, attorneys for appellant (Richard H. Weiner, on the brief).

Einhorn, Harris, Ascher, Barbarito, Frost & Ironson, attorneys for respondent (Jennifer Barbaris Fortunato, on the brief).

PER CURIAM

In this contentious matrimonial matter, defendant George Callas appeals specific provisions of a post-judgment order enforcing litigant's rights entered on September 20, 2004. At our request, by order dated February 2, 2005, the trial court submitted a written memorandum decision on March 7, 2005, setting forth the findings of fact and conclusions of law relied upon to enter the order of September 20, 2004. Defendant challenges this disposition asserting:

POINT I

THE COURT'S DENIAL OF DEFENDANT'S REQUEST FOR A REDUCTION IN HIS LIFE INSURANCE OBLIGATION WAS AN ABUSE OF DISCRETION.

POINT II

IT WAS ERROR TO REQUIRE DEFENDANT TO PAY FOR EXTRACURRICULAR EXPENSES TO WHICH PLAINTIFF DID NOT SEEK HIS CONSENT.

POINT III

THE TRIAL COURT ERRED WHEN IT AWARD PLAINTIFF COUNSEL FEES.

As more particularly set forth below, the Family Part's decision is affirmed in part and reversed in part.

The parties were married on July 21, 1985. They have three children: Constantine, age 18; Nicholas, age 12; and Andreas, age 9. The Dual Final Judgment of Divorce filed on December 23, 2002, incorporated a negotiated Property Settlement Agreement (hereinafter "PSA"), dated September 23, 2002, which comprehensively addressed all collateral issues.

Paragraph 24 of the PSA delineated the parties' financial status used to fix the support provisions for the benefit of the minor children. Child support was calculated and agreed upon utilizing a "minimum base salary" for defendant of $130,000.00. The agreement disclosed defendant was unemployed at the time of execution. Plaintiff was also not employed, and had not worked for approximately fifteen years. Beginning at paragraph 45, the agreement terms delineate the obligations for support of the children. Provisions relevant to the discussion of this matter include:

EXTRACURRICULAR ACTIVITIES/COMPUTERS

52. The Husband shall be responsible for the costs related to the agreed upon extracurricular activities (sports and hobbies, tutors, lessons etc.) and computers (including computers, printers and maintenance thereof) for the children through emancipation. It is specifically agreed that the Wife will obtain the Husband's consent prior to enrolling the Children in a particular activity or purchase of any computer equipment. The Husband shall pay the agreed upon expenses directly to the payee within fourteen (14) days of being presented with a bill, invoice or other proof of required payment.

. . .

CAMPS

57. The Husband shall be responsible

for the cost of camp or other summer

program for the three children up to $1,000

per year per child.

. . .

LIFE INSURANCE

60. The Husband shall also maintain, at a minimum, decreasing term life insurance on his life consistent with the attached schedule, see Exhibit C, during the minority of the Children [for] the direct benefit of the Children, and shall maintain said insurance until such time as all of the Children are emancipated. Upon the emancipation of the youngest Child, the Children shall be designated as equal beneficiaries with respect to any remaining proceeds paid pursuant to said policy. Husband shall provide proof of the existence of this policy on a yearly basis.

The Exhibit C referenced in paragraph 60 defined the requisite amount of life insurance, as set forth on an amortization schedule based upon the greatest annual amount of defendant's financial obligation for the children. For example, during the first five years the total life insurance need was fixed at $106,000.00 ($48,000.00 for support, $3,000.00 for camp and $55,000.00 as the maximum additional support based upon an anticipated bonus). Thereafter, the annual amount increased due to the addition of anticipated college costs. The total required life insurance benefit, based upon the anticipated obligation for the support of the children, extended over the calculated seventeen year period of coverage was $1,394,904.57. This sum decreased over time until year seventeen when the obligation ended.

Paragraphs 97 and 101 of the PSA stated that "[s]hould either party willfully or knowingly fail to abide by the terms of [the PSA], the defaulting party will indemnify and hold harmless the other for all expenses and costs, including attorneys fees and court costs, incurred in successfully enforcing" the agreement. Paragraph 97 required prior notice of default be given, along with the opportunity to cure the default.

Enforcement problems occurred shortly after entry of the final judgment of divorce. An order issued on April 15, 2003 established defendant's child support arrears; a bench warrant had been issued to enforce those arrears; and an order entered on May 23, 2003 acknowledged defendant's payment of the sum due.

On May 5, 2003, defendant filed an application to reduce his child support obligation arguing he remained unemployed and lacked the financial resources to pay $4,000 per month in child support. Plaintiff filed a cross motion seeking enforcement of the PSA provisions relating to the payment of support, extra curricular activities, medical expenses and counsel fees and to compel production of the requisite policy insuring defendant's life.

On September 5, 2003, the court issued an order, denying defendant's motion in its entirety and finding defendant was in violation of litigant's rights. The order granted plaintiff's requests to enforce the terms of the PSA. Pertinently, the order required defendant to obtain "a term life insurance policy, with the minimum benefit of $1,400,000[;]" to "reimburse plaintiff for all extracurricular activity expenses incident to the children's sports, hobbies, camps and other activities in the amount of $3,978.49 within 15 days[;]" and to pay a counsel fee in the amount of $1,030." The court's disposition included a finding that defendant was underemployed, and that he had failed to disclose all of his income and assets as required by R. 5:5-4(a). No specific finding regarding reimbursement of the extracurricular activity costs was included in the court's opinion.

Further post-judgment activity included an order entered on September 30, 2003, which established defendant's ongoing arrears resulting from the September 5, 2003 determination, and an order relating to enforcement of defendant's financial obligations in the PSA entered on January 14, 2004, then amended on January 26, 2004. On February 24, 2004, the Family Part reaffirmed defendant's obligation to provide a $1,400,000.00 death benefit via a policy insuring defendant's life to protect the children's support interest. The court's findings entered at that time stated:

Based on the post[-]judgment motion, the

Order and Opinion of the Court dated September 5, 2003, as well as the testimony of the defendant taken at oral argument, the Court is satisfied that the defendant's income is sufficiently substantial to warrant the requirement that defendant execute the $1,400,000 life insurance policy to protect his children's interest in child support, and that the Court finds that the defendant has done everything in his power to thwart said obligation. The Court finds that there is clear and convincing evidence that the defendant has the ability to pay.

On April 28, 2004, the court ordered defendant to pay his first monthly life insurance payment and affirmed his obligation to pay on specific future dates.

On July 22, 2004, plaintiff's motion for enforcement was filed resulting in the order which is the subject of this appeal. Defendant filed a cross motion opposing the relief sought by plaintiff, seeking credits for certain sums paid, and enforcing other PSA provisions. The motions were considered by the Family Part on the papers, despite requests for oral argument.

The twenty-one provisions of the court's order issued on September 20, 2004, granted all of plaintiff's requests except for the reimbursement of photocopying costs, and denied defendant's requests except for a credit for medical insurance premiums paid and the enforcement of parenting time.

With respect to the issues raised on appeal, the court denied defendant's request to reduce the amount of his life insurance obligation; granted plaintiff's application to require defendant to reimburse her $13,165.96 "for expenses related to the 2003 and 2004 tutor, lessons, computer costs and maintenance, religious educational classes, extracurricular activities, sports, hobbies and camps" of the children[;]" and awarded plaintiff counsel fees to be paid by defendant in the amount of $3,500.

Defendant first challenges the court's denial of his request to reduce the requisite death benefit of the life insurance policy from the current $1,400,000. He asserts an inability to meet the monthly premium, contending he cannot afford the current $22,000.00 per year cost because his gross annual income is only $150,000.00. Defendant also explains he is unable to obtain alternative coverage due to his heart condition. Finally, he argues that the PSA life insurance provision should be set aside due to mutual mistake inasmuch as the actual premium cost was not known when the agreement was struck. Defendant agrees he should retain coverage, but seeks a reduction in the extent of coverage to reasonably reduce his monthly premium expense.

Regarding the payment of the extracurricular activity costs per paragraph 52 of the PSA, and the payment of camp costs per paragraph 57, defendant asserts the extracurricular activity expenses ordered to be reimbursed to the plaintiff were not agreed to, as plaintiff never advised him of those costs nor did she consult with him as required by the provisions of paragraph 52. Defendant also notes that the camp costs he was ordered to pay exceed the $1,000.00 per child per year limit of paragraph 57.

Finally, defendant requests the reversal of the award of counsel fees if he is successful on appeal.

"The scope of appellate review of a trial court's fact-finding function is limited. The general rule is that findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). Moreover, "[b]ecause of the family court's special jurisdiction and expertise in family matters, appellate courts should accord deference to family court fact finding." Id. at 413. If evidence is lacking to sustain the court's finding, it is only then that the findings must be set aside.

The parties' PSA employed the use of a life insurance policy as security for the defendant's financial obligations for the children; a commonly utilized vehicle to assure the children's continued future care. Jacobitti v. Jacobitti, 135 N.J. 571, 574-75 (1994); Schwarz v. Schwarz, 328 N.J. Super. 275, 286 (App. Div. 2000); McCarthy v. McCarthy, 319 N.J. Super. 138, 146 (App. Div. 1999). Both consensual agreements and judicial decrees are subject to the same standard of "changed circumstances" to modify a provision imposed for the benefit of the children. Lepis v. Lepis, 83 N.J. 139, 148 (1980). Modification will not be granted, however, if the parties have expressly provided for the circumstances that have now changed. Innes v. Innes, 117 N.J. 496, 504 (1990). One "changed circumstance" warranting modification in the amount of a support obligation is a change in the supporting spouse's income. Lepis, supra, 83 N.J. at 151. Here, defendant bears the burden of persuasion to show the change in his financial circumstances. Id. at 157.

The PSA establishes defendant's imputed level of annual gross income at $130,000. His current base salary has increased $20,000.00 from that level, as he now earns $150,000 gross per year. Although defendant does not now receive bonuses, this fact is not controlling because he was actually unemployed when the parties divorced. There also exists evidence verifying that defendant receives unearned income from investments and capital gains. In his certification supporting the cross motion, defendant states that he owns and has sold rental real estate. At the time of divorce defendant retained income-producing premarital assets and had other sums by way of inheritance or family gifts.

Support modification applications must consider the parties' incomes from all sources, earned and unearned. Miller v. Miller, 160 N.J. 408, 421 (1999); Lepis, supra, 83 N.J. at 153; Bonnano v. Bonnano, 4 N.J. 268, 275 (1950). As specifically mandated in Isaacson v. Isaacson, 348 N.J. Super. 560, 585-586 (App. Div.), certif. denied, 174 N.J. 364 (2002), the supporting parent must produce his tax returns and a case information statement (CIS) on a changed circumstances application. Defendant declined to submit verification of unearned income received from all sources. He also failed to supply a CIS, R. 5:5-4(a), only generally discussing his real estate transfers in his certification. Thus, defendant failed to carry his burden to show a change of financial circumstances such that he cannot fulfill the previously ordered obligation.

Defendant's application is also out of time for relief pursuant to R. 4:50-1 and, in any event, his evidence fails to establish a mutual mistake of fact. Therefore, the Family Part's decision to enforce the provisions requiring defendant to supply life insurance of approximately $1,400,000 is supported by adequate evidence, and must be affirmed.

However, proof difficulties exist when reviewing the court's findings concerning plaintiff's request for reimbursement of the claimed costs incurred for extracurricular activities and camp expense. Although the plaintiff attaches numerous invoices showing expenses paid to and for the benefit of the children, there was no verification in her certification of compliance with paragraph 52 demonstrating that prior notice of these costs was given to the defendant, and that plaintiff obtained his consent for enrollment in those activities.

The PSA mandates defendant shall pay for "agreed upon extra-curricular activities" after plaintiff obtains defendant's consent prior to enrollment. The agreement terms allow defendant to pay the third party providers directly for these costs. Plaintiff's reply certification concludes that defendant knows about the activities and was sent multiple copies of the invoices for payment. The trial court's determination that defendant was responsible for the payment of the expressed expenses was based on a finding that "defendant was certainly well aware of the activities his children customarily engaged in during the parties' marriage, and the Court did not find evidence to indicate that plaintiff had suddenly enrolled the children in any new, unusual or expensive types of activities post-divorce."

Although this finding might support a conclusion that defendant had knowledge of the children's extracurricular activities, there is no evidence in this record that plaintiff consulted with defendant prior to enrolling the children in these activities or obtained his consent. Defendant adamantly denies he was ever consulted or that he consented to all items for which reimbursement was sought.

Similarly, the court's conclusion that all of the children are involved in the same activities as they were in the past is not supported by the evidence submitted by plaintiff. She sought reimbursement for SAT prep courses and unspecified registrations. No proof of prior engagement in these activities exists in the record. The only prior order enforcing this PSA provision is dated September 5, 2003, and it addresses religious education costs. Additionally, plaintiff's attached expenditures include requests which do not appear to be "extracurricular activities" as defined by the PSA that is, "sports and hobbies, tutors, lessons etc." Registration in the student directory, application for the Home and School Association and the purchase of photographs are among those that do not fall within that definition.

The prior consent provision is neither perfunctory nor surplusage; it must be afforded its intended meaning. The parties, represented by counsel, bargained at arm's length to include very specific language triggering defendant's payment obligations. Equitable enforcement of stipulations between litigants which are set forth in settlement agreements must be provided if no harsh or unfair contract results. Carlsen v. Carlsen, 72 N.J. 363, 370-371 (1977); Berkowitz v. Berkowitz, 55 N.J. 564, 569 (1970); Schlemm v. Schlemm, 31 N.J. 557, 581-582 (1960). "Such agreements are essentially consensual and voluntary in character and therefore entitled to considerable weight with respect to their validity and enforceability notwithstanding the fact that such an agreement has been incorporated in a judgment of divorce. Carlsen, [supra, 72 N.J. at 371.]" Petersen v. Petersen, 85 N.J. 638, 642 (1981). Here, plaintiff presents no showing of unfairness, necessitating that the PSA terms stand. The trial court should not supply terms which the parties did not adopt or ignore the terms expressly stated; such a determination is an abuse of discretion. Berkowitz v. Berkowitz, 55 N.J. 564, 569 (1970).

This is not to say that some expenses are not a continuation of previously agreed upon activities for which defendant had notice and consented. Indeed, defendant expressed both his knowledge of, and acquiescence to, payment of some of the children's activities for which reimbursement was due plaintiff. However, plaintiff bears the burden of proving notice and consent on all challenged activities, even if by an appropriate inference. In the event of a factual dispute regarding whether defendant had knowledge and gave consent, a plenary hearing on this issue should have been held. Tancredi v. Tancredi, 101 N.J. Super. 259, 261 (App. Div. 1968).

Defendant's challenge that the children's camp expense exceed the maximum agreed amount of $1,000 per child per year must also be considered, as plaintiff's documentation reflects camp costs for two children in excess of the $1,000 limit.

Therefore, we are constrained to reverse that part of the order requiring defendant to pay the amount ordered for his contribution toward the costs of the children's extracurricular activities and camp, and remand the matter to the Family Part for a review of the plaintiff's claims and her compliance with the PSA requisites, consistent with this opinion.

Defendant also contests the award of counsel fees to plaintiff of $3,500. An award of counsel fees in matrimonial actions is discretionary with the trial court, R. 4:42-9(a)(1), and an exercise thereof will not be disturbed in the absence of a showing of abuse of discretion. Berkowitz, supra, 55 N.J. at 570. In considering plaintiff's request, the court must examine the provision of the PSA, at paragraphs 97 and 102; the factors set forth in R. 4:42-9(a)(1) and R. 5:3-5(c); and R. 1:10-3.
"The application of these factors and the ultimate decision to award counsel fees rests within the sound discretion of the trial judge. Yueh v. Yueh, 329 N.J. Super. 447, 460 (App. Div. 2000); Guglielmo v. Guglielmo, 253 N.J. Super. 531, 544-45 (App. Div. 1992)." Loro v. Colliano, 354 N.J. Super. 212, 227 (App. Div.), certif. denied, 174 N.J. 544 (2002).

The trial court found a violation of litigant's rights, R. 1:10-3, requiring: reimbursement of medical expenses; the payment in relation to defendant's 2002 income tax return; defendant to release his 2003 income tax return and employment contract; and defendant to pay back support. The factors of R. 5:3-7 support plaintiff's request for attorney fees and costs inasmuch as there is a disparity in income, defendant has an ability to pay, plaintiff's positions on those issues were reasonable; and she displayed good faith in instituting the enforcement application. See Williams v. Williams, 59 N.J. 229, 233 (1971). Accordingly, we find no abuse of discretion and affirm the Family Part's award of counsel fees.

We also comment on the court's refusal to grant oral argument and the lack of factual findings and conclusions when the court initially issued its decision. The trial court "shall ordinarily grant requests for oral argument on substantive and non-routine discovery motions and ordinarily deny requests for oral argument on calendar and routine discovery motions." R. 5:5-4(a) (emphasis added). R. 1:7-4(a) requires that deciding a motion, the trial court is required, "by an opinion or memorandum decision, either written or oral, find the facts and state its conclusions of law thereon[.]" The failure to perform that function here, until prompted by this court, constitutes a disservice to the litigants, the attorneys, and this court. Curtis v. Finneran, 83 N.J. 563, 569-70 (1980).

In conclusion, we affirm those portions of the September 20, 2004 order requiring defendant to maintain life insurance in the amount agreed to, and requiring defendant to pay counsel fees. We reverse that portion of the order requiring defendant to reimburse plaintiff the sum of $13,165.96 for "tutor, lessons, computer costs and maintenance, religious educational classes, extracurricular activities, sports, hobbies and camps," and remand that issue to the Family Part for a hearing and further findings as to compliance with paragraphs 52 and 57 of the parties' PSA as related to the payment of extracurricular activity costs and camp expenses. Whether a plenary hearing will be required to resolve the issues will turn on "whether a material fact is in dispute" after review by the court of "the supporting documents and affidavits of the parties[,]" bearing in mind that "[c]onclusory allegations would, of course, be disregarded." Lepis, supra, 83 N.J. at 159.

 
Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

(continued)

(continued)

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A-1099-04T5

December 15, 2005