JULIO WEXLER v. RHINA WEXLER

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4002-12T3

JULIO WEXLER,

Plaintiff-Appellant,

v.

RHINA WEXLER,

Defendant-Respondent.

________________________________

February 13, 2014

 

Argued January 23, 2014 Decided

 

Before Judges Fuentes, Simonelli and Haas.

 

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Hudson County, Docket No. FM-09-689-07.

 

Glen F. Haley argued the cause for appellant.

 

Respondent has not filed a brief.

PER CURIAM

In this post-judgment matrimonial matter, plaintiff appeals from the April 2, 2013 order of the Family Part denying his motion for a reduction of his alimony and child support obligations, based on an alleged reduction of his income. He also asserts that the trial judge erred in determining the amount of a credit due to him for overpayment of defendant's medical insurance premiums. We remand to the trial court solely for the purpose of entering an order correcting the calculation of the credit for the medical insurance premium payments. In all other aspects, we affirm.

The parties were married in November 1993, separated in June 2006, and, following a six-day trial, divorced in May 2008. They have two teenage children.

In the Dual Judgment of Divorce (DJOD), the court ordered plaintiff to pay defendant $500 per week in permanent alimony. Each party was granted primary residential custody of one of their children and the DJOD required plaintiff to pay defendant $52 per week in child support. The DJOD also required plaintiff to pay for defendant's medical insurance premium until such time that she earned $25,000 in annual income.

In April 2011, defendant filed a motion seeking, among other things, residential custody of the child then living with plaintiff, together with an increase in child support in connection with the change of custody. She also complained that plaintiff had stopped paying for her medical insurance. Plaintiff responded with a cross-motion to reduce his alimony obligation. In July 2011, defendant was granted physical and legal custody of both children. The judge, who had also presided over the parties' divorce trial, denied plaintiff's motion to modify his alimony payment.

Thereafter, however, the judge determined to require the parties to exchange discovery on the support issues and required plaintiff to reinstate defendant's medical insurance. Additional procedural motions and rulings were made over the course of the next year. In a September 11, 2012 order, the judge: (1) granted plaintiff's motion to strike defendant's further requests for relief based upon defendant's failure to provide discovery; (2) denied plaintiff's motion to reduce his $500 per week alimony obligation; (3) set plaintiff's child support obligation at $210 per week; (4) determined that plaintiff was $11,218 in arrears on his support obligations; (5) terminated plaintiff's obligation to pay for defendant's medical insurance as of October 1, 2012; and (6) allowed plaintiff a credit for the medical insurance premium payments he made from April 27, 2011 until October 1, 2012.

On November 28, 2012, the judge granted plaintiff's motion for reconsideration and directed that a plenary hearing be held concerning plaintiff's request to modify his alimony and child support obligations and to determine the amount of credit due plaintiff for his prior payments of defendant's medical insurance premiums. On January 4, 2013, the judge granted plaintiff a credit for the $8,215.38 he paid in premiums between April 2011 and October 2012 against his support arrears as established in the September 11, 2012 order.

The judge conducted a two-day plenary hearing on January 14, and February 12, 2013. Plaintiff and his forensic accountant testified. Defendant did not participate at the hearing.

The evidence presented at the hearing established that plaintiff worked as the head of accounts at LaFe Foods, Inc. (LaFe) where, among other things, he managed the accounting department and the employee health insurance plan. At the time of the DJOD, plaintiff had imputed annual income from LaFe of $110,000.

At the time of the plenary hearing, plaintiff earned $1800 per week from LaFe. Instead of paying plaintiff directly, however, LaFe invoiced his services and sent weekly checks to a separate entity, which in turn "paid" plaintiff his salary. In this regard, plaintiff was the sole owner of a limited liability company (LLC), which enabled him to deduct various work-related expenses as business expenses from his gross income. This arrangement also existed during the latter years of the parties' marriage. Between December 27, 2000 and 2011, the payments were routed from LaFe to plaintiff through an S-corporation named "Howard & Grace Wexler Consulting Services, Inc." This s-corporation was dissolved on June 12, 2012, but plaintiff's salary is now directed to him through its successor in interest, CarbarWex, L.L.C.

Plaintiff asserted that he had taken loans from LaFe to pay his personal expenses and that he "historically had $100 deducted from each [weekly] payment" he received from LaFe as salary. Plaintiff alleged that LaFe "was not requiring immediate repayment of these loans" for a number of years, but "once the loan balance kept increasing and no substantial payments were being made," LaFe "required the automatic deduction from the payments made to CarbarWex to mitigate some of the balance due." Thus, beginning in May 2011, LaFe began deducting an additional $900 per week from plaintiff's salary, leaving him with a weekly gross income of $800.

However, plaintiff also received income from Aetna Insurance Company by selling health insurance policies to LaFe employees. His commissions from these policies totaled $72,471 in 2010, $61,563 in 2011, and $49,795 in 2012. Plaintiff also received "miscellaneous income" from LaFe by performing jobs outside the scope of managing the accounts. In 2011, he earned $49,869 for these duties. However, this amount "was applied against his LaFe loan balance."

In addition, plaintiff owns two condominiums from which he receives rental income. He uses one of the condominiums as a personal residence and as the headquarters for CarbarWex. He received $35,625 in gross rental receipts for 2010 and $43,493 in 2011. However, due to reported losses for depreciation, real estate taxes, and mortgage interest, he claimed a net loss on each of the properties. Notably, plaintiff has not paid the mortgages on either unit since February 2011.

According to plaintiff's expert, plaintiff's net available income was $110,000 for 2007, $68,106 for 2010, $39,495 for 2011, and $145,195 for 2012. However, the expert asserted that plaintiff's 2012 income should be reduced to $92,195 based upon the payments made to LaFe for his personal loans in that year.

In December 2011, plaintiff filed for chapter seven bankruptcy. On April 5, 2012, the bankruptcy court granted plaintiff a discharge of his indebtedness pursuant to 11 U.S.C.A. 727. However, plaintiff's business debts, incurred in the name of his former S-corporation and CarbarWex, as well as the loans LaFe made to plaintiff, were not discharged.

According to defendant's tax returns, and not counting the alimony she received, defendant earned $28,863 in 2008 and $28,979 in 2009. Thus, defendant exceeded the $25,000 trigger set forth in the DJOD for assuming responsibility for paying for her own medical insurance. Plaintiff sought a refund for all of the payments he had made for the insurance from 2008 to November 30, 2010. Plaintiff determined the amount due in 2008 by taking "the difference between the family plan and the plan with the children and employee only," $481.26, and multiplying it by twelve months for a total of $5775.12. For 2009, the premium increased, and plaintiff paid $546.68 per month for defendant's medical insurance for a total of $6560.16 for the year. For 2010, he sought a credit for payments from April until November 30.1 The premium increased to $653.82, and he sought a total credit of $5230.15. Thus, the total credit plaintiff sought for 2008 to 2010 was $17,565.43.

In a thorough oral decision, the judge denied plaintiff's request for a downward support modification. The judge noted that plaintiff was working for the same employer as he had at the time of the DJOD and that he was earning a similar income. The only thing that had changed was that plaintiff was asserting that LaFe was now requiring him to repay the personal loans he had taken from his employer at a higher rate. The judge found that these loans had been taken solely to fund plaintiff's personal lifestyle, rather than to pay any of his marital debts. Indeed, the judge found that plaintiff's

lifestyle has always been funded by the monies that he borrows from his employer.

 

. . . .

 

So what do we have that's really changed here? Well, [plaintiff] still works for the same company, still does the same job, and he still takes loans that he takes for himself. And not for any reason having to do with the marriage.

 

Additionally, because plaintiff had not paid anything toward his mortgages since February 2011 and he was "actually getting shelter without paying for it," the judge considered that to be "positive cash flow . . . as though he's receiving money, and obviously living rent free."

Because plaintiff "borrowed and . . . continues to borrow . . . us[ing] his employer as an ATM . . . to maintain his lifestyle," the judge determined that plaintiff's circumstances had not substantially changed since the entry of the DJOD. The judge was "not satisfied that there is any change of circumstance in [plaintiff's] income" because "[h]e makes as much now as he made before." The judge concluded that "[i]f anything, his cash flow's gotten better" because plaintiff has stopped paying his bills.

Thus, plaintiff was still required to pay defendant $500 per week in alimony. The judge recalculated plaintiff's child support obligation based upon the information developed at the hearing to be $266 per week.

Regarding the credit due to plaintiff for the medical insurance payments he made for defendant, for 2008, the judge only granted a $481.25 credit for the month of December because the DJOD was "put in place" in November 2008. She gave plaintiff a $6,560.16 credit for the full year of 2009, and a $5,230.56 credit for the full year of 2010.2 These credits were applied to extinguish plaintiff's outstanding support arrears. Because plaintiff still had a credit due, the judge ordered that he could reduce his $500 per week alimony support obligation by $100 per week until the credit was exhausted. This appeal followed.

On appeal, plaintiff argues that the judge erred by denying his motion to reduce his alimony and child support obligations. He also continues to argue that he was entitled to a credit of over $17,000 for the medical insurance premiums he paid after defendant's income exceeded $25,000. We disagree. Having considered plaintiff's arguments in view of the record and the applicable law, we affirm substantially for the reasons expressed by the trial judge in her thorough oral opinion. We add only the following brief comments.

The scope of our review of the Family Part's order is limited. We owe substantial deference to the Family Part's findings of fact because of that court's special expertise in family matters. Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). Thus, "'[a] reviewing court should uphold the factual findings undergirding the trial court's decision if they are supported by adequate, substantial and credible evidence on the record.'" MacKinnon v. MacKinnon, 191 N.J. 240, 253-54 (2007) (alteration in original) (quoting N.J. Div. of Youth & Family Servs. v. M.M., 189 N.J. 261, 279 (2007)).

While we owe no special deference to the judge's legal conclusions, Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995), "we 'should not disturb the factual findings and legal conclusions of the trial judge unless . . . convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice' or when we determine the court has palpably abused its discretion." Parish v. Parish, 412 N.J. Super. 39, 47 (App. Div. 2010) (quoting Cesare, supra, 154 N.J. at 412). We will only reverse the judge's decision when it is necessary to "'ensure that there is not a denial of justice' because the family court's 'conclusions are [] "clearly mistaken" or "wide of the mark."'" Id. at 48 (alteration in original) (quoting N.J. Div. of Youth & Family Servs. v. E.P., 196 N.J. 88, 104 (2008)).

Plaintiff's arguments concerning the denial of his motion to have his alimony and child support obligations reduced, in light of the record, reveal nothing so "wide of the mark" that a clear mistake was made. Ibid. The judge found that plaintiff's financial situation at the time he filed his motion for a support modification was substantially similar to what existed at the time of the DJOD. Plaintiff worked at the same job, performed the same duties, and received the same income. The only thing that had changed was that plaintiff now alleged that LaFe was insisting that the loans it had provided to him be repaid at a higher rate than previously. However, there was ample evidence in the record to support the judge's determination that plaintiff took these loans to fund his personal lifestyle, rather than to meet his support obligations. The record also fully supports the judge's finding that plaintiff's cash flow had actually improved since the DJOD. His personal debts were discharged in bankruptcy and, because he is no longer paying the mortgages on the two condominiums he owns, plaintiff lives rent free, while still collecting rent payments on these units. Based upon these well-supported findings, we discern no basis for disturbing the judge's decision to deny plaintiff's motion for a downward modification of his support obligations.

The judge also properly rejected plaintiff's claim for over $17,000 in credit for the medical insurance premiums he paid for defendant. The major difference between the credit determined by the judge and that claimed by plaintiff is that he alleges that he is entitled to recover the payments he made between April and November 2008. However, because the DJOD was not entered until November 2008, the judge correctly determined that plaintiff should only receive credit for the premium payments he made after the DJOD went into effect.

Our review of the record indicates that a mathematical error was made in calculating the amount of the credit the judge awarded. The monthly insurance rate was based upon a fiscal year of April to April. However, in determining the monthly premium payments, the judge based her calculation upon a calendar year. In addition, the judge did not credit plaintiff for the months of January to March 2009.

Based upon the record, we have determined that plaintiff was entitled to a credit of $13,715.76 for the following time periods:

December 1, 2008 to March 31, 2009 at a rate of $481.26 per month for a total of $1,925.04;

 

April 1, 2009 to March 31, 2010 at a rate of $546.68 per month for a total of $6,560.16; and

 

April 1, 2010 to November 30, 2010 at a rate of $653.82 per month for a total of $5,230.56.

 

Therefore, we remand this matter to the trial court for the sole purpose of entering an order correcting the credit due to plaintiff for the medical insurance premiums he paid for defendant.

Plaintiff argues that, in the event of a remand, the matter should be assigned to another judge. We find this argument wholly unsupported by the record and without sufficient merit to warrant further discussion. R. 2:11-3(e)(1)(E).

 

Remanded to the trial court to correct the credit awarded to plaintiff for the medical insurance premiums. In all other respects, the Family Part order of April 2, 2013 is affirmed. We do not retain jurisdiction.

1 Plaintiff did not pay defendant's medical insurance premiums during the period between November 30, 2010 and April 26, 2011 and, therefore, he did not seek a credit for this time period.

2 Although these credits totaled $12,271.97, the judge only credited plaintiff for $11,971.97 in the order.