MICHAEL STAFFORD v. LISA HACKETT

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2615-04T52615-04T5

MICHAEL STAFFORD,

Plaintiff-Appellant,

vs.

LISA HACKETT,

Defendant-Respondent.

__________________________________

 

Submitted: March 20, 2006 - Decided May 31, 2006

Before Judges Cuff and Lintner.

On appeal from the Superior Court of New Jersey, Chancery Division-Family Part, Essex County, Docket No. FM-7-744-04.

Michael Stafford, appellant pro se.

Respondent has not filed a brief.

PER CURIAM

In this post-judgment matrimonial appeal, we review an order denying plaintiff's request for a change of custody, enforcing the parties' property settlement agreement, establishing arrears, imputing income to plaintiff for child support purposes, and awarding counsel fees to defendant. We affirm the trial court's custody and support determinations. We reverse and remand the counsel fee award for consideration of all the factors enumerated in Rule 5:3-5(c).

Plaintiff Michael Stafford and defendant Lisa Hackett were married on August 18, 1989, and divorced in the State of New York on January 14, 1997. Miles, born September 8, 1995, is the only child of the marriage. The final judgment of divorce incorporated a property settlement agreement (PSA) that provided that New York law was to govern any and all disputes between the parties. In addition, defendant was given primary custody of Miles, and plaintiff was obligated to pay defendant 17% of his gross income as child support on a weekly basis, as defined by New York's Child Support Standards Act (CSSA), N.Y. Dom. Rel. 240(1-b). At the time, plaintiff was a licensed attorney in New York and New Jersey since 1993, but unemployed. The PSA stipulated that he have "gainful employment" by or before the end of 1996.

The present dispute arose in September 2003 when plaintiff filed a complaint against defendant seeking a change of custody based on changed circumstances. On February 13, 2004, defendant filed an answer and counterclaim seeking dismissal of plaintiff's complaint, application of New York law to enforce the child support provisions of the PSA, production of plaintiff's financial documents for calculation of child support arrears, imputation of income to plaintiff if unemployed or underemployed as an attorney, and counsel fees.

On March 23, 2004, the court entered an order enforcing the parties' final judgment of divorce and directing plaintiff to pay 17% of his gross annual income in child support, produce financial information from 1997 to date, pay his pro rata share of child care expenses, pay child care arrears since 1997, and pay other medical and education expenses. The order also permitted defendant to seek imputation of income, if plaintiff had been unemployed or underemployed since 1997. On April 9, 2004, plaintiff filed a motion for reconsideration, which was denied.

Trial proceeded in September 2004 on the custody and income issues. In the November 17, 2004 order, the judge enforced the PSA as to the parties' support and childcare obligations and applied New York law in calculating plaintiff's payments. In reaching his decision, the judge found no conflict of law relating to the enforcement or modification of the PSA and no changed circumstances warranting a change of custody. The court also awarded defendant counsel fees after determining that "plaintiff knew or should have reasonably known that he frivolously filed his custody application in bad faith in an attempt to continue evading his duty to support his son."

On appeal, plaintiff argues the denial of his application for a change in custody was reversible error as the court disregarded substantial, uncontroverted evidence of a material change in circumstances. Further, the court's interpretation and enforcement of the PSA was contrary to the terms of the agreement and the court improperly imputed income to plaintiff during his involuntary unemployment to calculate arrears. Finally, the court improperly calculated child support and abused its discretion in awarding counsel fees to defendant.

Plaintiff's contention that the judge committed error in denying his application for a change in custody is without merit and does not warrant extended discussion in this opinion. R. 2:11-3(e)(1)(A), (E). The facts undergirding this determination must be accorded substantial deference, Cesare v. Cesare, 154 N.J. 394, 412 (1998); Abouzahr v. Matera-Abouzahr, 361 N.J. Super. 135, 151 (App. Div. 2003), and the facts found by the trial judge are well-supported by the record.

As to plaintiff's child support obligations, including imputation of income and calculation of arrears, the trial court applied New York law as required by the PSA. The court ordered plaintiff to "pay 17% of his income, gross earned or imputed, as his defined total income would have been or should have been reported on his federal tax return." Under New York's CSSA, a basic child support obligation is arrived at by multiplying the combined parental income by certain fixed child support percentages, which are: (i) 17% for one child; (ii) 25% for two children; (iii) 29% for three children; (iv) 31% for four children; and (v) no less than 35% for five or more children. N.Y. Dom. Rel. 240(1-b)(b)(3) (emphasis added). The resulting figure is then prorated in the same proportion as each parent's income bears to the combined parental income to arrive at each parent's pro rata share of the basic child support obligation. N.Y. Dom. Rel. 240(1-b)(c)(2).

Where, as here, combined parental income exceeds $80,000, the statute gives the court greater leeway. The judge must determine the amount of child support for the amount of combined parental income in excess of $80,000 through consideration of the statutory factors governing variance from the child support guidelines, such as the financial resources of the custodial and noncustodial parents, N.Y. Dom. Rel. 240(1-b)(f)(1), as well as whether the gross income of one parent is substantially less than that of the other parent. N.Y. Dom. Rel. 240(1-b)(f)(7).

Thus, under New York's CSSA, plaintiff's child support obligation would amount to his prorated share of 17% of $80,000, which is $13,660 per year, or $262 per week. In addition, because the parties' combined income far exceeded $80,000, the court would have discretion to increase that obligation through consideration of the statutory factors governing variance from the child support guidelines.

Here, the court calculated plaintiff's past and current child support obligation based solely on his imputed gross income, which at the time was $78,600 in 1997. Using that figure, the court determined that "plaintiff's continuing child support obligation is $257 per week [plus childcare] based on 17% of $78,600 based on his 2003 gross income effective November 22, 2004," or approximately $13,360 a year. In addition, "plaintiff owes $13,360 in child support arrears for each year from 1997 through 2003 or a total of $93,548." The court also determined that plaintiff owed child support arrears for most of 2004. Thus, "plaintiff owe[d] a total child support arrearages amounting to $101,745," plus $2,319 in child care expenses. Plaintiff received a credit of $15,979 for payments made in 2004. Therefore, plaintiff owed $88,085 in support arrears.

Here, the judge departed from the methodology utilized to fashion child support awards under New York law. Rather than prorating the child support award derived from the sum of the gross income of both parents, the judge simply applied 17% to plaintiff's imputed gross income. This "shorthand" method is often used by family court judges when the child support calculation is unaffected by other dependents or shared parenting plans because, as here, it invariably produces the same result that would be derived from strict compliance with the prescribed methodology. Here, the deviation from the prescribed methodology has caused no harm to plaintiff.

Plaintiff also contests the imputation of income for the years 1997 to 2003 to calculate arrears. In determining a party's child support obligation, a court need not rely on the party's own account of his or her finances, but may impute income based on the party's past income or demonstrated earning potential. Rocanello v. Rocanello, 678 N.Y.S.2d 385, 385 (App. Div. 1998). Here, the parties' PSA explicitly indicated that it was "intended that the husband [plaintiff] shall obtain gainful employment before the end of this calendar year [1996]." Although plaintiff was a licensed attorney at the time, he did not obtain employment until December 2001, five years after the parties entered into the PSA and eight years after gaining admission to the bars of New York and New Jersey. Even when he did obtain employment, plaintiff's income only amounted to $4,912 in 2001 and approximately $10,000 in 2002. Based on those low figures, plaintiff was "deemed underemployed for child support purposes and [the court] impute[d] income" for those years, as well as for the four years prior that plaintiff was unemployed.

In calculating the amount of income to impute to plaintiff, the court analyzed the average earnings for attorneys as reported by the New Jersey Department of Labor (NJDOL) from 1997 through 2002 and determined that the use of plaintiff's 2003 gross income of $78,600 was "more reasonable and just as his imputed income from 1997 through 2002" because that figure was "less than the average earning of an attorney as reported by the [NJDOL] for each of those years . . . ."

Given plaintiff's considerable earning capacity and his failure to provide a valid reason for his prolonged unemployment and underemployment, we find the court's imputation of income to be both reasonable and appropriate. As the court explained below:

plaintiff owed a duty of support to his son and failed to provide any credible evidence that he was not employable based on his educational background and his occupational qualifications as a licensed attorney at law. The plaintiff obtained his Juris Doctorate in 1992. The plaintiff did not produce any tax returns from 1996 through 2000 claiming that he was not employed. The plaintiff testified that he earned $54,000 in 1994. The plaintiff failed to provide any reasons why he was not employed by January 1997 or why income should not be imputed to him as an attorney-at-law to satisfy his support obligation to 17% of such gross income as his child support.

Accordingly, we affirm the family court's imputation of income for substantially the same reasons expressed above.

Finally, plaintiff appeals the family court's award of counsel fees to defendant. Counsel fees in family matters are permitted by N.J.S.A. 2A:34-23, which states, in pertinent part:

[t]he court shall determine the appropriate award for counsel fees, if any, at the same time that a decision is rendered on the other issue then before the court and shall consider the factors set forth in the court rule on counsel fees, the financial circumstances of the parties, and the good or bad faith of either party.

[N.J.S.A. 2A:34-23.]

In addition, Rule 5:3-5(c) sets forth nine factors to be considered in making a fee award in a matrimonial action:

(1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.

[R. 5:3-5(c).]

Here, the trial court's written opinion contains no analysis of the factors set forth in Rule 5:3-5(c). Rather, the court based defendant's counsel fee award solely on the "bad faith" of plaintiff's claim, "as evidenced by unsubstantiated claims and his breach of his duty to support his son." Under Rule 5:3-5(c), the court must also consider other factors, such as the financial circumstances of the parties and "the degree to which fees were incurred to enforce existing orders or to compel discovery." R. 5:3-5(c). Thus, although "the need to produce economic information lessens as the 'bad faith' of the party against whom fees are sought increases," Kelly v. Kelly, 262 N.J. Super. 303, 307 (Ch. Div. 1992), N.J.S.A. 2A:34-23 requires a trial judge to examine all the "factors set forth in the court rule on counsel fees, the financial circumstances of the parties, and the good or bad faith of either party" in awarding attorneys' fees. Loro v. Del Colliano, 354 N.J. Super. 212, 227 (App. Div. 2002). Accordingly, the counsel fee award must be remanded for consideration of all the factors enumerated in Rule 5:3-5(c).

 
Affirmed in part; reversed and remanded in part.

At the time of trial in 2004, plaintiff's annual gross income was $78,600 and defendant's annual gross income was $286,320.

(continued)

(continued)

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A-2615-04T5

May 31, 2006