SUE CAROL GOULDEN v. FREDRIC LAURENCE GOULDEN

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0745-10T4

SUE CAROL GOULDEN,

Plaintiff-Respondent,

v.

FREDRIC LAURENCE GOULDEN,

Defendant-Appellant.

____________________________________________

June 3, 2011

 

Argued April 12, 2011 - Decided

 

Before Judges Baxter and Hayden.

 

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-22264-90C.

 

Jean M. Ramatowski argued the cause for appellant (Ramatowski, Spilka & Schwartz, attorneys; Ms. Ramatowski and Stacey Z. Rodkin, on the brief).

 

Brett R. Schwartz argued the cause for respondent (Lebensfeld Borker Sussman & Sharon L.L.P., attorneys; Mr. Schwartz, on the brief).

PER CURIAM

In this post-judgment matrimonial matter, defendant Fredric Goulden appeals provisions of the Family Court order dated August 27, 2010, denying his motion to modify or terminate alimony payments to plaintiff Sue Goulden. For the reasons that follow, we reverse and remand.

I.

The record reflects that plaintiff and defendant were married on August 13, 1972. They have three children, now emancipated. The parties obtained a dual judgment of divorce on April 28, 1993, which incorporated their property settlement agreement (PSA). The agreement provided permanent alimony of $400 a week to plaintiff for five years, and $300 a week thereafter. At the time of the agreement defendant owned his own business and earned approximately $90,000 per year. In discussing alimony, the PSA states in pertinent part:

The husband specifically acknowledges and agrees that he shall NOT be entitled to a reduction as a result of wife s employment which has been anticipated in the resolution of this issue. Likewise, the wife shall not have the right to seek any increase in support in the event that she does not generate the income that was contemplated by the parties at the time they reached this accord.

 

In 1999, defendant sold his business and worked as a consultant to the new owner for a few years. He also filed a motion for modification of alimony and child support, based upon an allegation of changed circumstances. After an extensive discovery period, defendant withdrew his motion due to his new employment and the cost of litigation. In 2005, defendant and his new wife moved to Florida and currently live in Boca Raton.

In July 2009, defendant again filed a motion to reduce his alimony obligation based on changed financial circumstances. Defendant also requested the trial judge to order plaintiff to disclose her current finances and schedule a plenary hearing. He reported in his Case Information Statement (CIS) that he had only earned $60,000 in 2008. In explaining the decreased income, defendant asserted that "business is bad," and that he did not always get paid. He also alleged that plaintiff must have received a "financial windfall" because she bought an expensive home worth $600,000. He certified that there must have been a significant improvement in her lifestyle but he did not know the extent or the source.

Plaintiff opposed defendant s motion. She acknowledged receiving a modest inheritance when her father died in 2004, just as defendant had received when his parents died. She stated that she had used the inheritance, the proceeds from the sale of her home and her savings to buy a home in a secure retirement community. She pointed out that she was a disabled brain cancer survivor who was living on disability payments and savings, and she needed the alimony.

On October 29, 2009, the judge denied defendant's motion. The judge noted that defendant s CIS showed that, when unearned income was included, he had a total income in 2008 of approximately $79,000. Finding that defendant s current income was not significantly less than his income at the time of the divorce, the judge held that defendant had failed to establish a prima facie case of changed circumstances. Furthermore, the judge found defendant's assertion that plaintiff was financially well off was not relevant to the issue of defendant s changed circumstances. Based on the parties agreement in the PSA that plaintiff's employment income would not be used to modify the alimony payment, the judge found that plaintiff's financial good fortune could not be considered to establish changedcircumstances. Defendant did not appeal this order.

In August 2010, defendant filed again for a reduction or termination of alimony, an order compelling plaintiff to disclose her finances, and counsel fees and costs. Defendant provided his current CIS, which showed $40,203 in earned income and $21,049 in unearned income in 2009. He also asserted that in 2010 he had earned $13,100 as of June 30, 2010. He stated that the company he worked for was failing but he doubted any other business would hire him as he was sixty-four years old. He also reported that he had health issues, including coronary artery disease, high blood pressure and a recent diagnosis of prostate cancer. He also certified that plaintiff had come into a recent inheritance of about one million dollars.

Plaintiff opposed defendant s motion and also sought counsel fees. She stated that only by selling her home and her parents home, was she able to buy the home where she currently resides. She questioned the veracity of defendant's alleged low income and pointed out that the company he worked for was half owned by his wife and operated out of his home. Plaintiff stated that defendant's lifestyle had not changed and she suggested that he was manipulating his income to appear impoverished.

On August 27, 2010, the judge denied defendant s motion. He ruled that defendant had failed to make a prima facie case that changed circumstances substantially impaired his ability to support himself. The judge found that defendant had produced insufficient documentation to support his allegations. In addition, the judge again denied the relevancy of plaintiff's alleged financial improvement to defendant s claim due to the parties' agreement not to use plaintiff's employment income to modify alimony. Defendant appealed.

II.

On appeal, defendant makes the following contentions:

POINT I. THE LOWER COURT ABUSED ITS DISCRETION IN DENYING DEFENDANT S REQUEST FOR A TERMINATION OR MODIFICATION OF HIS ALIMONY OBLIGATION PURSUANT TO LEPIS V. LEPIS, 83 N.J. 139 (1980) AND ITS PROGENY.

 

POINT II. THE LOWER COURT ABUSED ITS DISCRETION IN DENYING DEFENDANT S REQUEST FOR ADDITIONAL DISCOVERY OF THE PLAINTIFF S FINANCIAL STATUS, DUE TO DEFENDANT S PRIMA FACIE SHOWING OF CHANGED CIRCUMSTANCES, PURSUANT TO LEPIS V. LEPIS, 83 N.J. 139 (1980).

 

POINT III. THE LOWER COURT ABUSED ITS DISCRETION IN INTERPRETING THE PARTIES DUAL JUDGMENT OF DIVORCE TO ELIMINATE ANY FUTURE EXAMINATION OF THE PLAINTIFF S UNEARNED INCOME.

 

Having reviewed the record in light of these contentions and the applicable law, we conclude that the trial judge was correct in holding that defendant had not made a prima facie case of changed circumstances based upon his diminution of income. However, we conclude that the trial judge s failure to consider defendant s claim of changed circumstances based upon a substantial increase in plaintiff s non-employment income was error warranting reversal and a remand for further proceedings.

Our analysis of this matter begins with certain settled legal principles. N.J.S.A. 2A:34-23 authorizes modification of all support orders, including permanent alimony. In addition, courts have the equitable power to establish alimony and support orders and "to revise such orders as circumstances may require." Crews v. Crews, 164 N.J. 11, 24 (2000) (citing Lepis, supra, 83 N.J. at 145).

"As a result of this judicial authority, alimony and support orders define only the present obligations of the former spouses. Those duties are always subject to review and modification on a showing of changed circumstances." Lepis, supra, 83 N.J. at 146 (citations omitted). Alimony "reflects 'the important policy of recognizing that marriage is an adaptive economic and social partnership.'" Glass v. Glass, 366 N.J. Super. 357, 369 (App. Div.), (quoting Cox v. Cox, 335 N.J. Super. 465, 479 (App. Div. 2000)), certif. denied, 180 N.J. 354 (2004).

Even where the parties entered into an agreement about alimony, a former spouse may seek judicial review or modification of the spousal support based upon a showing of changed circumstances. Ibid. (citing Miller v. Miller, 160 N.J. 408, 419 (1999)). Changed circumstances apply equally to "where there has been a significant change for the better in the circumstances of the dependant spouse as where there has been a significant change for the worse in the payor s own circumstances." Stamberg v. Stamberg, 302 N.J. Super. 35, 42 (App. Div. 1997) (citing Aronson v. Aronson, 245 N.J. Super 354, 364 (App. Div. 1991)).

A trial judge has broad discretion in reviewing an application to modify alimony. Storey v. Storey, 373 N.J. Super. 464, 470 (App. Div. 2004) (citing N.J.S.A. 2A:34-23). "Whether an alimony obligation should be modified based upon a claim of change of circumstances rests within the Family Part judge's sound discretion." Larbig v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006) (citing Innes v. Innes, 117 N.J. 496, 504 (1990)).

To vacate a trial court's findings in a proceeding modifying alimony, an appellate court must conclude that the trial court clearly abused its discretion, failed to consider "all of the controlling legal principles," or it must otherwise be "well satisfied that the finding[s] [were] mistaken," or that the determination could not "reasonably have been reached on sufficient credible evidence present in the record after consideration of the proofs as a whole."

 

[Rolnick v. Rolnick, 262 N.J. Super. 343, 360 (App. Div. 1993) (citations omitted).]

 

The moving party in an alimony modification proceeding has the burden of proving a prima facie case of changed circumstances prior to the court ordering discovery, full financial disclosure of both parties, and a plenary hearing. Lepis, supra, 83 N.J. at 157-59. The moving party must demonstrate that "changed circumstances have substantially impaired the ability to support himself or herself." Id. at 157. However, modification of alimony is not warranted if the change in circumstances is "only temporary." Id. at 151. Moreover, in determining ability to pay alimony, other factors besides present earnings are considered, including potential to generate income, "[r]eal property, capital assets, investment portfolio and capacity to earn by 'diligent attention to business.'" Miller, supra, 160 N.J. at 420-21 (quoting Innes, supra, 117 N.J. at 503)).

Here, defendant established a diminution in income but failed to demonstrate that the change was permanent. Defendant offered mere conclusory statements that "business is bad" and he stayed with a failing business because he did not think any one would hire him. He did not provide any competent evidence as to what industry he was working in, what was happening in that industry that was causing business to decline, and whether that decline was temporary or permanent. He also failed to establish that he could not earn up to his full income-earning potential at another company or in some other line of work. The record is devoid of information concerning what efforts he made to try to find other work. In addition, defendant mentioned he had several health issues. Nevertheless, he did not claim or provide any documentation that they affected his ability to work.

By noting these deficits in defendant's proofs, we are not suggesting that a prima facie case of changed circumstances must be proven by detailed proofs that would be required in discovery or at a hearing. Rather, the burden of proof requires that the moving party provide information in his or her control that is more than unsupported allegations of changed circumstances. Otherwise, unnecessary and costly discovery and litigation may ensue in cases where such costs were unwarranted.

Here, defendant, while proving that his income had been reduced, offered no verifiable evidence that he was making efforts to work up to his full capacity in order to support himself and pay the alimony. Consequently, we find that the judge was correct in holding that defendant did not present a prima facie case of changed circumstances due to his diminished income.

However, defendant also asserted that the alimony should be decreased because plaintiff had recently inherited one million dollars. The judge did not consider plaintiff's alleged improved financial picture due to the parties agreement that plaintiff's income from employment could not be a factor in setting alimony. We find that the judge was incorrect in his interpretation of the PSA.

We have held that changed circumstances apply not just to significant reductions in the supporting spouse's ability to pay the alimony, but also to a significant change for the better of the financial circumstances of the supported spouse. Stamberg, supra, 302 N.J. Super. at 42. Specifically, this court held that inheritance income is not exempt from being considered income. Ibid.; Aronson, supra, 245 N.J. Super. at 363. In Aronson, which addressed an issue strikingly similar to the one at bar, the parties had agreed that alimony could not be modified as a result of the supported spouse's employment income. Aronson, supra, 245 N.J. Super. at 361. However, as the uncontested evidence showed that the supported spouse had received a substantial inheritance which might be generating income, we remanded for a further more "thorough analysis of the parties financial circumstances in light of the [supported spouse's] receipt of inheritance income." Id. at 365.

The PSA in this case provides that defendant is not entitled to a "reduction as a result of wife's employment" and plaintiff may not seek "any increase in support in the event that she does not generate the income that was contemplated by the parties." Nowhere in the PSA did the parties agree that a significant increase in plaintiff s non-employment income would not be considered. Thus, the parties agreed only that plaintiff's employment or lack thereof would not be considered in modifying alimony. We find that the trial judge read the agreement too broadly as encompassing an agreement not to consider any income. As this interpretation contradicts the plain language of the PSA, we find it is incorrect.

As we have held, an agreement that employment income does not constitute changed circumstances does not insulate non-employment income, such as income from inheritance, from being considered for changed circumstances. Id. at 363. Absent a clearly expressed provision to the contrary, income from a significant inheritance can be considered in determining whether a significant change in circumstances has "altered the status quo which existed at the time of the entry of the support order under review." Stamberg, supra, 302 N.J. Super. at 42. Here the parties' PSA does not contain such a provision. Thus, the trial judge erred in not considering defendant's allegations that plaintiff has had substantial financial improvement since the entry of the alimony agreement.

The determination whether the moving party has established a prima facie case of changed circumstances must be made by the trial judge. Lepis, supra 83 N.J. at 157-59. Here defendant has asserted that plaintiff recently inherited one million dollars. As the trial judge in this instance did not make the determination of whether defendant had proved a prima facie case based on the allegation of significant improvement of wife's non-employment financial circumstances, this matter is remanded to the trial judge for that determination.

Reversed and remanded for further proceedings in conformity with this opinion. We do not retain jurisdiction.