DOUGLAS HILLMAN v. SUSAN HILLMAN

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NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3562-04T3

DOUGLAS HILLMAN,

Plaintiff-Appellant,

v.

SUSAN HILLMAN,

Defendant-Respondent.

________________________________

 

Submitted March 13, 2006 - Decided August 3, 2006

Before Judges Cuff and Gilroy.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Camden County, Docket No. FM-04-453-02.

Adinolfi and Spevak, attorneys for appellant (Scott J. Levine, on the brief).

Zabel & Associates, attorneys for respondent (Deidre E. Gannon, on the brief).

PER CURIAM

Plaintiff, Douglas Hillman, appeals from those portions of the post-judgment of divorce order entered on January 10, 2005, that: 1) denied his application to terminate his alimony obligation to defendant, Susan Hillman, due to her co-habitation with an unrelated male; and 2) denied his application to reduce his alimony obligation due to a significant reduction in his income. Plaintiff also appeals from that portion of the order of February 25, 2005, denying his motion for reconsideration. We affirm in part; and reverse in part.

Plaintiff and defendant were married on March 20, 1988, separated in May 2000, and divorced on October 31, 2001. Two children were born of the marriage: Lindsay, born April 1, 1995; and Ashley, born December 22, 1999. The final judgment of divorce incorporated the terms of a property settlement agreement (PSA) dated July 3, 2001, that provided: 1) the parties would share joint custody of their two children with defendant as the parent of primary residence; 2) plaintiff to pay defendant $1,800 a month alimony for a period of twelve years, after which the alimony would be reduced to $1,000 a month; and 3) plaintiff to pay $1,200 a month as support for their two children. Paragraph L.1 of the PSA provided for termination of plaintiff's alimony obligation upon five events, including: "(d) [t]he continuous cohabitation by the Wife with an unrelated adult male in accordance with the laws of the State of New Jersey; and (e) [a] substantial change of circumstances evidenced by the laws of New Jersey." Pursuant to the terms of the PSA, plaintiff executed a quit claim deed conveying all of his interest in the marital home to defendant in exchange for defendant relinquishing her interests in plaintiff's retirement accounts. Subsequent to the divorce, plaintiff remarried, and presently resides with his current wife and her two children.

On August 7, 2003, plaintiff filed a motion to reduce both alimony and child support obligations asserting a "significant reduction in his income." Determining that more time was required to ascertain whether plaintiff's reduction in income was temporary or permanent, the judge denied the motion "[s]ubject to further review after [plaintiff] has been [in] current employment for a period of 6 months," leaving open the issue of retroactivity should the trial court enter an order in the future reducing plaintiff's support obligations. On or about January 16, 2004, plaintiff renewed his motion. On February 27, 2004, an order was entered denying plaintiff's motion for reduction in his alimony obligation with the judge determining that "[t]his amount was agreed upon by the parties for a specific time and reason." The order also directed that "[t]he plaintiff's child support obligation shall be recalculated according to the New Jersey Child Support Guidelines as a result of a substantial change in circumstances and plaintiff's employment."

On or about March 18, 2004, plaintiff filed a motion for reconsideration of the portion of the order of February 27, 2004, that denied his request to modify alimony. On the same day, an order was entered denying plaintiff's request for reduction in his child support obligation as the recalculation under the Guidelines equaled $302 a week, which was not a substantial change from the original amount of $300 a week or $1,200 a month. In March or April 2004, plaintiff filed a motion seeking to terminate his alimony obligation "consistent with paragraph L, Subsection 1(d) of the parties' Final Judgment of Divorce" asserting that defendant was cohabitating with an unrelated male. By order of May 7, 2004, the judge adjourned plaintiff's motions until June 4, 2004, but directed that in the interim, "plaintiff's alimony obligation shall be reduced to $1,000[] per month without prejudice[,] including the months of 3/04 [and] 4/04." By order of June 4, 2004, a plenary hearing was scheduled "on the issues of cohabitation [and] standard of living/alimony."

The plenary hearing was held on November 29, 2004, November 30, 2004, December 1, 2004, December 15, 2004, and January 10, 2005. Testifying at the hearing were plaintiff; defendant; Linda Meile, plaintiff's private investigator; Eric Drake, defendant's boyfriend; and Ira Krassan, defendant's brother, an accountant.

On January 10, 2005, the judge rendered an oral opinion denying plaintiff's motions to terminate alimony due to defendant's cohabitation with an unrelated male, and to reduce his alimony obligation due to significant changed circumstances. In denying the motion for termination of alimony, the court analyzed the facts adduced during the hearing against the Supreme Court's decision in Konzelman v. Konzelman, 158 N.J. 185, 197 (1999), where the Court held: "[a] property settlement agreement that provides for termination of alimony where the dependent spouse enters a relationship that has all the indicia of a marriage is therefore enforceable." The motion judge stated:

The [Supreme] Court goes on[ ]to state [in Konzelman] that cohabitation is not defined or measured solely or even essentially by "sex" or even by gender as implied by the (indiscernible). The ordinary understanding of cohabitation is based on those factors that make the relationship close and enduring and requires more than a common residence although that is an important factor. Cohabitation involves an intimate relationship in which the couple has undertaken the duties and privileges that are commonly associated with the marriage.

These can include, but are not limited to living together, intertwined finances such as joint bank accounts, sharing living expenses and household chores, and recognition of the relationship in the couple's social and family circle.

Now this [c]ourt makes a distinction between people that present themselves as a couple and people that present themselves as a married couple, and I think that that is the key in this case. When two people are together, they may go out. They may date. They may even spend time in each other's homes. That according to this [c]ourt is presenting themselves as a couple. They go out. They hold hands. They go out to dinner. They go to functions at each other['s] family. That is a couple.

A married couple goes beyond that, and for purposes of this decision, the [c]ourt in fact does have to stereotype because in this time and age, there are many different kinds of marriages as you can see. Of course, there are people that are married who do [not] behave like they are married at all. But for purposes of [Konzelman],this [c]ourt finds that in order for the [c]ourt to make a finding that . . . cohabitation exists, they have to present themselves as a married couple. And what does that mean? That means that they have to behave themselves and do things that traditionally have been things that married couples do, which means that as in [Konzelman], you have to see in this case [defendant's] significant other mowing the lawn. This is a condo, so there would not be that. But fixing things around the house, buying things for the house, going on vacations together where he may be paying to a certain extent.

The testimony that was presented here is not sufficient for this [c]ourt to make a finding of cohabitation. In this case, even though there was a private investigator that observed [defendant's] home for a period of 11 days, first of all it was not 11 consecutive days, so it did not include the weekend. Second of all, it was 11 days as compared to 127 days. So does the [c]ourt think that he spends a lot of time in the house and stay there? Yes. He does. But is it sufficient for this Court to think that they are behaving as a married couple? No.

The testimony was that in fact he does not contribute the expenses in the house. He has not purchased anything for the house. When they go out, each one of them pays for the expenses of their own children. He has another place where he resides. He -- and there was nothing to contradict this because the private investigator did not observe his house. So he claims that when he has his son, he stays at his house. So he claims that when he has his son, he stays at his house.

If in fact they were acting as if they were married, they would be living together and when his son came to stay, they would be staying at her house. So this [c]ourt does not find that in fact cohabitation existed, and therefore, it is not an automatic termination of alimony.

In denying plaintiff's motion for a reduction in his alimony obligation due to significant changed circumstances, the judge stated:

Now with respect to [plaintiff]. In the year 2000, the joint income was [$]124[,000] plus. His wages were [$]118[,000] at the time, and with the business loss, and the 1099, their joint income was [$]124,185.

In 2001, his income went up. It went up to [$]139[,000] and change. In 2002, his income went up further to [$]167[,000] and change. During those two years, when his income increased, and it increased significantly, he was living a lifestyle in accordance with the money that he was making. [Defendant] did not come in and request an increase in either child support or in alimony because he was making more money during that period of time.

He, however, fell on hard times. But even falling on hard times, his income in 2003 was [$]128[,000] and change. In 2003, that income was still above the income in the year 2000.

Now he is working at DeSimone BMW[,] and he says at this point that he anticipates that he will be making about [$]80[,000] or $90,000 per year. That [is] something that the [c]ourt would speculate to think that that [is] what he [was] going to make. He may very well make that amount of money. We certainly do [not] have the income tax return for 2004. We know that [what] he has made in 2004 is the first year that he had made less than what he was making in the year 2000. But he has vast experience in sales, and his income where he is now will be based largely on commission. I do [not] know what that [is] going to be. His job is not a salaried one. So if this [c]ourt were to be setting alimony for the first time, probably what we would be doing would be taking three or four years and averaging those three or four years out to determine what the amount of either child -- what his income would be. And if we were to average it, we would still be where we are right now.

I am not satisfied, and it has not been proved by [plaintiff], by a preponderance of the believable evidence that in fact he has the ability to make less, or in other words that he does not have the ability to continue to earn as his job develops at DeSimone, less than what he was making before. He probably will make less than [$]167[,000] which is what he was making at -- in 2002. This past year was a year that I think is not a year that we can use to determine what his ability to earn income is, because his jobs were in a state of flux. He went -- he received unemployment. He lost one job. He went to another job, then to another job. He is not making what he was making in 2002, and I think therein lies the problem for [plaintiff].

For three years in a row, and actually for more than that, his income increased every year, and he lived a lifestyle in accordance with the increase that he was receiving. Now that his income has gone down, he [is] having a hard time adjusting to the income that he is now making.

But this [c]ourt, as I [have] indicated, is not satisfied that his income, that he has an ability to earn less than what he was making at the time of the marriage.

. . . .

I believe that Mr. Hillman's problem is that he [is] having trouble adjusting to a lifestyle of less than $167,000 a year.

Therefore, I do not find that there is a substantial change in circumstance. And this is[,] in fact[,] consistent with my prior ruling because at one point when we were looking at child support, and I at one point had made a ruling that it was not -- that there was substantial change in circumstance for me to review the amount [of] child support. When I ran the [G]uidelines, I obviously was mistaken, because the [G]uidelines indicated that the amount of support that he had to pay was the same amount of child support that was as per the Property Settlement Agreement. So the [G]uidelines proved me wrong at the time, and accordingly, the amount of child support certainly was in accordance with the agreement that the parties had reached.

So I find that this is consistent with my finding when I ran the [G]uidelines indicating that there is not a substantial change in circumstance here.

A confirming order denying both motions was entered on January 10, 2005, and an order denying plaintiff's motion for reconsideration was entered on February 25, 2005.

On appeal, plaintiff raises the following issues for our consideration:

POINT I.

THE COURT ERRED BY NOT FINDING SIGNIFICANT CHANGED CIRCUMSTANCES IN THE PARTIES' FINANCIAL POSITIONS.

POINT II.

THE COURT ERRED BY NOT FINDING THAT THE DEFENDANT COHABITS WITH AN UNRELATED MALE.

"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). Such deference is "especially appropriate when the evidence is largely testimonial and involves questions of credibility." In re Return of Weapons to J.W.D., 149 N.J. 108, 117 (1997). Moreover, "[b]ecause of the family courts' special jurisdiction and expertise in family matters, appellate courts should accord deference to family court factfinding." Cesare, supra, 154 N.J. at 413. However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). It is against these standards that we review the decision below.

We have carefully considered plaintiff's argument challenging the denial of his motion to terminate alimony due to defendant's cohabitation with an unrelated male in light of the record and applicable law. We conclude that the argument lacks sufficient merit to warrant extended discussion in a written opinion. We affirm substantially for the reasons expressed by the motion judge in her oral decision of January 10, 2003. R. 2:11-3(e)(1)(A) and (E). The judge's findings are well supported by adequate, substantial credible evidence in the record. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974).

We next address plaintiff's arguments challenging the denial of his motion to reduce his alimony obligation due to significant changed circumstances. Plaintiff contends that the judge erred in determining that he had not suffered a significant change in circumstances because of a decrease in income from the time of divorce, and in imputing income to him when there was no evidence that he was voluntarily underemployed in his new sales position. We agree.

"[O]rders pertaining to alimony or other support `may be revised and altered by the court from time to time as circumstances may require . . . .'" Gibbons v. Gibbons, 86 N.J. 515, 525 (1981) (quoting N.J.S.A. 2A:34-23). Alimony obligations are subject to review and modifications based upon a showing of changed circumstances. Lepis v. Lepis, 83 N.J. 139, 146 (1980). "The party moving for modification 'bears the burden of making a prima facie showing of changed circumstances.'" Glass v. Glass, 366 N.J. Super. 357, 370 (App. Div.) (quoting Miller v. Miller, 160 N.J. 408, 420 (1999)), certif. denied, 180 N.J. 354 (2004). In reviewing an application for reduced alimony, the court must identify the marital standard of living, which is "critical . . . to any subsequent assessment of changed circumstances when an adjustment to alimony is sought." Crews v. Crews, 164 N.J. 11, 25 (2000). "The standard of living during the marriage is the way the couple actually lived, whether they resorted to borrowing and parental support, or if they limited themselves to their earned income." Hughes v. Hughes, 311 N.J. Super. 15, 34 (1998). "[W]here the marital standard has not been established, a judge addressing a modification application must make such determination." Glass, supra, 366 N.J. Super. at 371.

The supporting spouse has a responsibility "to contribute to the maintenance of the dependent spouse at the standard of living formerly shared." Lepis, supra, 83 N.J. at 152. Applications for modification of an established alimony obligation are informed by "the dependent spouse's needs, that spouse's ability to contribute to the fulfillment of those needs, and the supporting spouse's ability to maintain the dependent spouse at the former standard." Ibid. "Underpinning the basis of every support order is the proposition that the payor has the 'ability to pay' the amount set, or agreed to." Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App. Div.) 1998.

The law in New Jersey is well settled concerning imputation of income to a party in a matrimonial action. "[W]hen a [spouse], without just cause, is voluntarily unemployed or underemployed, income may be imputed to that [spouse] to provide for the [other spouse's] needs." Caplan v. Caplan, 182 N.J. 250, 268 (2005). Essential to a finding of underemployment is the belief that the obligor is purposefully earning less than he or she is able. Dorfman, supra, 315 N.J. Super. at 516.

Plaintiff was employed as a car salesperson by the Cherry Hill Toyota dealership from 2000 mid-year to 2003, where he earned $127,898; $141,222; $167,245; and $82,000, in each year respectively. In late June 2003, plaintiff was involuntarily terminated from his employment at Cherry Hill Toyota. On August 1, 2003, plaintiff commenced employment as a car salesperson with Team Toyota, Langhorne, Pennsylvania. Plaintiff's 2003 Federal Tax Return discloses reportable earnings of $115,705 from both employers, although plaintiff estimated that if he had been employed solely at Team Toyota for the year, his earnings would have decreased to between $80,000 and $90,000 depending upon sales. Also, he did not receive pre-tax automobile and medical benefits that he had received at Cherry Hill Toyota. It was due to this reduction in earnings that plaintiff filed his motion in 2003 seeking to reduce his alimony obligation.

On August 15, 2003, the judge denied plaintiff's motion without prejudice, subject to further consideration after plaintiff incurred six months experience in his employment with Team Toyota. After plaintiff renewed his motion for a reduction in alimony in 2004, plaintiff left employment with Team Toyota because the dealer was going to reduce his income, and obtained new employment as a car salesperson with DeSimone BMW, Marlton, New Jersey. Plaintiff earned $46,961 from Team Toyota in 2004, and anticipated at time of the hearing that he would earn between $80,000 and $90,000 per year at DeSimone BMW based upon salary and commission. As of the plenary hearing, he had earned approximately $23,000 at DeSimone BMW. Similar to his employment at Team Toyota, plaintiff does not receive the pre-tax automobile and health benefits he previously received at Cherry Hill Toyota.

The judge denied plaintiff's motion for a reduction in alimony determining that plaintiff had failed to prove a substantial change in circumstances by a reduction in his earnings due to change in employment, stating plaintiff's "problem is that he [is] having trouble adjusting to a lifestyle less than $167,000 a year." While not expressly imputing income to plaintiff, the judge stated plaintiff had not proven by a preponderance of the evidence that "he does not have the ability to continue to earn as his job develops at DeSimone, less than what he was making before." In reaching her decision, the judge, while acknowledging that the PSA was entered into in July 2001, assumed that the income figures contained in the PSA were based on the parties' income for the year 2000.

We are satisfied that plaintiff's proofs established he suffered a significant reduction in earnings from the year of his divorce, 2001, when he had a taxable income of $141,222, as compared to a taxable income in 2003 of $115,705, and an estimated income for 2004 of $80,000 to $90,000. The reduction in plaintiff's income of $25,517 from 2001 to 2003, the year in which he first filed his motion for a reduction in his alimony obligation, is significant on its face, and even more so when added to the loss of pre-tax health benefits and use of an automobile with car insurance, gasoline, and maintenance. Moreover, the difference in plaintiff's anticipated earnings, $80,000 to $90,000, for the year in which the hearing was conducted, 2004, versus the year of divorce, shows a reduction of between $51,222 and $61,222 in addition to the loss of pre-tax benefits. These are the monetary amounts that the judge was obligated to consider in determining whether plaintiff established a substantial change in circumstances. We also conclude it was improper for the judge to implicitly impute income to plaintiff by determining plaintiff had not established that he could not earn additional income in the future as he had in the past. The record is devoid of any evidence that defendant voluntarily left employment with Cherry Hill Toyota or is presently voluntarily underemployed. Dorfman, supra, 315 N.J. Super. at 516. Accordingly, we reverse that portion of the order of January 10, 2005, denying plaintiff's motion for a reduction in alimony based upon a significant change in circumstances due to a reduction in employment income, and remand the matter to the trial court for reconsideration of the motion in accordance with this opinion.

Affirmed in part; reversed in part, and remanded to the trial court for further proceedings in accordance with this opinion. We do not retain jurisdiction.

 

For the purpose of the PSA, the parties agreed that their respective net income was $100,000 for plaintiff, and $18,000 for defendant.

The annual income figures used in this opinion have been rounded up or down to the nearest dollar. According to plaintiff's W-2 wage and Federal income tax statement for the year 2000, the reportable net income was $118,992, while the gross income was $127,898. The difference appears to represent pre-tax benefits, including payments into plaintiff's 401K retirement account of $8,302.

At time of the divorce, plaintiff also received as benefits from Cherry Hill Toyota, free use of motor vehicles, car insurance, gasoline and maintenance for the cars, and medical insurance.

From this amount was deducted $2,176 for health insurance, resulting in reportable income for Federal tax purposes of $44,785.

Plaintiff's W-2 wage and Federal income tax statement for the year 2004, which was not available at time of the hearing, discloses that he earned $32,585 gross, and $31,667 after pre-tax deductions, at DeSimone BMW.

Based on plaintiff's W-2 wage and tax statements for 2004 which were not available at time of the hearing, plaintiff earned from his employment at Team Toyota $46,961; and from DeSimone BMW, $32,585, for a total of $79,546, or $61,676 less than he earned in 2001.

We disagree with defendant's argument that any reduction in income must be based upon comparing plaintiff's income for the years post-judgment against the base year of 2000, rather than 2001. However, even if we did, we are satisfied that there was a significant reduction in income requiring a modification in plaintiff's alimony obligation. Plaintiff earned $127,898 in the year 2000. When compared against his earnings of $115,705 for the year 2003, it shows a reduction in income of $12,193. When compared against plaintiff's anticipated income for the year 2004 as testified at the hearing, $80,000 to $90,000, it reflects a reduction in income of between $37,898 and $47,898. When compared to plaintiff's actual income for the year 2004 as reflected on his W-2 wage and tax statements, $79,546, it reflects a reduction of $48,352.

(continued)

(continued)

18

A-3562-04T3

August 3, 2006

 


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