VIRGINIA S. KNUST v. FRANK VANORE

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0064-05T20064-05T2

VIRGINIA S. KNUST,

Plaintiff-Respondent,

v.

FRANK L. VANORE,

Defendant-Appellant.

___________________________________________________

 

Argued June 20, 2006 - Decided July 20, 2006

Before Judges Stern and Fall.

On appeal from the Superior Court of New

Jersey, Chancery Division, Family Part,

Monmouth County, Docket No. FM-13-1042-95.

Steven P. Monaghan argued the cause for appellant

(Mr. Monaghan, on the brief).

David C. Epler argued the cause for respondent

(Mr. Epler, on the brief).

PER CURIAM

Defendant, Frank Vanore, appeals from post-judgment orders of June 9, 2005, granting relief to plaintiff, enforcing litigant's rights and requiring the payment of $5,276 for college expenses and proof of life insurance benefits in the amount of $500,000, and an order of July 22, 2005 denying reconsideration. He argues that his application "set forth a prima facie showing of changed circumstance," that "the June 9, 2005 [order] was not a denial of defendant's reduction application [and] therefore defendant could bring a subsequent application" and that "the June 29, 2005 application of defendant set forth a prima facie showing of changed circumstances."

The dispute between the parties deals with enforcement of defendant's obligations under a consent order entered on August 9, 2000.

The parties were married on May 9, 1981. They had three children: Allison, born on May 29, 1982; Dana, born on February 25, 1984; and Krista, born on August 7, 1987. The final judgment of divorce was entered on November 28, 1995, and required defendant to pay child support at the rate of $1,067.31 per week until emancipation, and permanent alimony in the same amount, decreasing by $1,500 a month after the sale of the matrimonial premises.

On August 9, 2000, the parties signed a consent order, with respect to alimony and support which provided:

1. Alimony and child support shall be modified as follows with all support to be paid one-half by the 5th of each month and the other half by the 18th of each month.

A. For the period August 1, 2000 to June 30, 2001, Defendant, Frank L. Vanore, shall pay Virginia S. Knust $5,500 per month, allocated $3,500 alimony and $2,000 child support;

B. For the period July 1, 2001 to July 31, 2002, Defendant, Frank L. Vanore, shall pay Plaintiff, Virginia S. Knust, $5,000 per month, allocated $3,000 alimony and $2,000 child support;

C. For the period August 1, 2002 to August 31, 2005, Defendant, Frank L. Vanore, shall pay Plaintiff, Virginia S. Knust, $3,800 per month, allocated $2,800 alimony and $1,000 child support;

D. For the period September 1, 2005, Defendant, Frank L. Vanore, shall pay $2,800 per month, allocated 100% alimony.

The consent order also provided that defendant was to "pay 100% of all college related costs" with respect to the three daughters, and was to maintain medical insurance for the children.

On April 12, 2002, the court denied defendant's application to decrease his support obligation but ordered the parties "to engage in a period of discovery for 60 days on the issues of support." Defendant thereafter filed a bankruptcy petition. On November 26, 2003 a "discharge of debtor" was entered by the United States Bankruptcy Court. D

On March 12, 2005, plaintiff filed a "notice of motion" to enforce litigant's rights under the August 9, 2000 consent order. She sought the reimbursement of $5,276 which defendant failed to pay in connection with Dana's college expenses, an order "requiring Defendant to provide proof of life insurance in the amount of $1,500,000.00" and an increase in the payment of support arrears.

In his "notice of cross-motion," defendant sought discovery and a plenary hearing regarding "all enforcement issues," and a modification of the August 9, 2000 consent order to "decreasing the children['s] support and alimony payments, reallocating the college expense provision, and modifying the life insurance provision." Defendant also sought to "suspend enforcement" of the August 9, 2000 order. In his "opposition certification" opposing plaintiff's motion and in support of his own motion, defendant referred to a post-judgment application filed in 1998 to reduce his child support and alimony obligations. In connection therewith, defendant referred to the fact that a forensic accounting firm "was retained to analyze my income[,]" which the firm determined to be "$193,500 per year[,]" after which "the consent order of August 9, 2000 was entered."

Defendant's opposition certification thereafter detailed some economic difficulties that he confronted following the entry of the August 9, 2000 consent order, and asserted that he "simply could not continue to maintain the litigation at th[e] time [of the April 12, 2002 order] and the discovery was not conducted, and the original August 9, 2000 Order remained in effect." According to defendant's certification his "commissions and income have continued to drop." His income tax returns demonstrated that his "total income" for the year 2003 was $84,481, and $84,103 for 2004. He asserted that the reduced income provided a change of circumstances which warranted "a modification of the college expense provision for Dana and Krista, as well as the life insurance provisions[,]" and requested "discovery [and] . . . a plenary hearing for purposes of recalculating the child support and alimony provisions contained under the August 9, 2000 Order."

Plaintiff filed a certification in response to the cross-motion. Therein she noted her forensic accountant's March 23, 2000 report "was a draft . . . for discussion purposes only" based on information "supplied by defendant." She asserted that he "may not have been truthful in 2000." Plaintiff also supplied defendant's 1997 and 1998 federal income tax returns.

The motion judge denied defendant's application. In a comprehensive "Statement of Reasons Pursuant to R. 1:6-2(f)" dated June 9, 2005, the judge stated the following in his:

Defendant husband has not presented a substantial change in circumstances from the time of the consent order (200[0]) to the present. The 1997 tax return of defendant husband shows adjusted gross income (AGI) of $66,117. The AGI in 1998 was $92,763. There are no returns for 1999, 2000, 2001 or 2002. The 2003 AGI is $84,481. The 2004 AGI is $84,103. The 2000 consent order had to be based upon what husband earned prior to August 2000. Since defendant husband did not provide the 1999 returns, the court must presume that the 1998 and 1997 figures are accurate. Presumably, if defendant husband made more money in 1999 than he did in 1997 or 1998 then he would attach the 1999 return to his motion today so as to prove that when he entered into the consent order, he was making a lot more money than he is now. The failure to provide this information should create the negative inference that defendant husband's income in 1999 was similar to what it was in 1997 and 1998. The income figures for 1997 and 1998 are within range of what defendant husband earned in 2003 and 2004. Specifically, husband's AGI in 1997 was only $66,117. He is arguing that he cannot meet the obligations of the consent order. Defendant husband entered into the consent order 3 years after he earned $66,117 and now 3 years after the consent order he earns around $84,000. There has been no substantial change in circumstances. If anything, husband's income has increased.

On June 29, 2005, defendant filed a "notice of motion for reconsideration, alternatively, motion for reduction of alimony and other relief." He appended his 1999 federal tax return as one of the exhibits, which showed a total income of $83,203.83, and asserted that he had "established a prima facie change of circumstances warranting a recalculation of the alimony, child support, college allocation and life insurance provisions of the August 9, 2000 Order" and other relief. In denying defendant's motion for reconsideration and granting plaintiff's enforcement application on July 22, 2005, the motion judge prepared a "Statement of Reasons pursuant to Rule 1:6-2(f)," which included the following:

2. [Defendant's] main argument in this motion is that the court should not have compared the tax returns from 2000 and earlier to the current tax returns because the earlier tax returns did not reflect [his] true income. [Defendant] argues that the support figures reached in the 2000 consent order were not based upon his earnings as reflected in his tax returns, at least not his adjusted gross income figures. [Defendant] argues that in actuality he made much more than the tax returns reflected. [Defendant] argues that the support obligations reached in 2000 were made in accordance with the income figure that the expert report established at just under $200,000. [Defendant] now comes to the court with the argument that his current tax returns accurately reflect his income and that his income is much lower than what the expert established in 2000. A comparison of the tax returns however from 2000 and 2004 do not show any decrease in income. [Defendant] essentially wants the court to base its decision on the alleged accuracy of the current tax returns and the inaccuracy of the prior returns. The problem with this approach is that the court cannot be assured that the current tax returns do not also reflect an artificially decreased income.

. . . .

5. [Defendant's] motion for reconsideration and[/]or modification fails for other reasons as well. [Defendant] attributes his decreased earnings to the following causes: a) the stock market's decline in 2000, b)

the burst of the "tech" bubble, c) 9-11-01, d) the Afghanistan war, e) the Iraq war, and f) the Tax [A]ct of 2001 which apparently caused wealth[y] people to buy less life insurance than before because since their real estate tax liability went down they did not require as much liquidity to pay their tax obligations. Despite all of these events, [defendant] asserts that in 1997 he managed $11,479,726 for his clients which would make 1997 his most recent career high. 1997 is the year in which [defendant] only made an adjusted gross income of $66,117 as per his tax return. In 1998, [defendant] managed about $7 million and in 1999 [defendant] managed about $6 million. In 2004, [defendant] managed about $5 million. Therefore, [defendant] is currently managing only $1 million less than he did in 2000.

6. Parties were permitted to engage in discovery for 60 days and [chose] not to do so. Also, this court notes that the 2002 order did not modify [defendant's] support or even suspend his obligation for the 60 day discovery period. This court is entitled to look at the situation based on the most recent information supplied with this motion. Whether or not a change of circumstances occurred between 2000 and the court's order of 2002 is not the question now presented to this court. The question presented to this court is whether a change of circumstances occurred between 2000 and 2005.

7. The court repeats its reasoning from the prior motion. [Defendant] has not presented a substantial change in circumstances from the time of the consent order (2000) to the present. The 1997 tax return of [defendant] shows adjusted gross income (AGI) of 66,117. The AGI in 1998 was $92,763. The 2003 AGI is $84,481. The 2004 AGI is $84,103. The 2000 consent order had to be based upon what [defendant] earned prior to August 2000.

The 1997 return had been appended to defendant's motion for reconsideration, as was his 1999 return showing a total income of $83,203.83.

As a result of what was presented to the Family Part, Judge Reisner had defendant's federal individual income tax returns reflecting the following:

ADJUSTED GROSS BUSINESS INCOME

YEAR TOTAL INCOME INCOME OR LOSS

1997 $66,117.38 $11,064.38 ($4,965.00)

1998 $92,763.28 $41,318.20 $31,517.63

1999 $83,203.83 $44,743.83 $63,181.93

2003 $84,481.00 $50,245.00 $61,562.00

2004 $84,103.00 $38,593.00 $52,432.00

There was no return submitted for the year 2000, when the consent order was entered, for the year 2001, or for the year 2002, when discovery was conducted. The reports, and absence of same, support Judge Reisner's findings.

Defendant argues that the consent order entered on August 9, 2000 was premised on defendant's income as determined by plaintiff's accounting expert because he presented no contrary expert report and chose to accept her figures resulting in the consent order and payment of alimony and child support in an amount significantly higher than that embodied in the original judgment of divorce entered on November 28, 1995. Therefore, defendant argues, his certification in support of the 2005 motion shows a substantial reduction in income. Plaintiff-wife contends that there is no indication that the expert report in 2000 led to the consent order or, in any event, that the defendant acknowledged the income as determined by the plaintiff's expert, and the income asserted in the certification for 2003 and 2004 was not substantially less than it was at the time of the entry of the consent order.

In his certification in support of his motion for reconsideration, defendant stated:

17. Subsequent to the execution of my Certification, I located additional documents concerning the issue regarding my income considered at the time of the August 9, 2000 Consent Order. Regarding Ann Marie O'Hare's report, the Court should note that this report was in fact submitted to the Court by plaintiff's counsel, Linda L. Piff, on March 24, 2000, and as part of plaintiff's pre-trial submissions on April 4, 2000. See March 24, 2000 and April 4, 2000 correspondences, attached together as Exhibit P.

18. Also attached in Exhibit P is [a] correspondence forwarded by Ms. Piff during the settlement negotiations prior to the August 9, 2000 Consent Order. In her May 24, 1999 correspondence, a demand is made for $5,950.00 in child support and alimony based upon my supposed income of $208,657.00. The Court will note [] the final Order, which set child support and alimony at the combined amount of $5,500.00 per month for August 1, 2000 through June 30, 2001. Obviously, the parties contemplated that the total benefit I derived from my self-employment was not what was reflected on the tax returns, but rather was consistent with Ann Marie O'Hare's report, which put my income at nearly 200,000.00.

19. The fact is that during the final negotiations of the Consent Order, which took place at Ms. Piff's office, my attorney and I agreed to utilize the figures set forth in Ann Marie O'Hare's report for considering alimony and child support. I am confident that if there is a hearing on this issue that Ms. Helt and Ms. Piff will confirm that this was what was done.

[Emphasis added.]

We find no basis by virtue of the single emphasized sentence on which to conclude that defendant actually acknowledged that his income was as high as determined in 2000 by plaintiff's expert and substantially higher than reflected in his tax returns for the years 1997 and 1999, prior to the entry of the 2000 consent order, which was substantially the same as his income in the years 2003 and 2004. We therefore agree with the motion judge that there was no prima facie showing of changed circumstances warranting a further hearing.

Accordingly, we affirm the orders of June 9 and July 22, 2005, substantially for the reasons expressed by Judge Ronald Lee Reisner in his statements of reasons appended to the orders. Defendant's certifications with respect to his Lepis application, see Lepis v. Lepis, 83 N.J. 139 (1980), did not state that he actually accepted as true the income as stated by plaintiff's expert accountant's report in the year 2000, that it was an understatement of actual income, or that he understated his income in tax returns presented to the court for prior years, as a basis for showing that his income in 2003 and 2004 was, in fact, less than the amounts that he asserted in the proceedings resulting in the consent order in the year 2000. Accordingly, defendant did not make a prima facie showing of changed circumstances to warrant a Lepis hearing and we affirm the judgment under review.

Affirmed.

 

Krista will have turned eighteen the month before.

The 2003 and 2004 returns were attachments to an exhibit to defendant's certification.

(continued)

(continued)

12

A-0064-05T2

July 20, 2006