MICHAEL CHIARELLA v. BETH CHIARELLA

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5813-10T4

MICHAEL CHIARELLA,

Plaintiff-Appellant,

v.

BETH CHIARELLA,

 

Defendant-Respondent.

________________________________________________________________

April 15, 2013

 

Argued January 24, 2013 - Decided

 

Before Judges Grall and Koblitz.

 

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-1600-98.

 

John J. Marinan argued the cause for appellant.

 

Jessica S. Strugibenetti argued the cause for respondent (Law Offices of Peter C. Lucas, L.L.C., attorneys; Ms. Strugibenetti, on the brief).

PER CURIAM

Plaintiff Michael Chiarella appeals from the July 1, 2011 order, entered after a lengthy plenary hearing, denying his request for a credit against child support arrears for defendant Beth Chiarella's listing their three children as dependents on her tax returns, contrary to the parties' property settlement agreement (PSA).1 Michael also appeals the $6724 calculated as his share of his son's unreimbursed medical expenses, the amount of child support credit ordered by the court in light of the oldest child's emancipation and the $50,000 for Beth's counsel fees that Michael was ordered to pay. He further appeals the arrears repayment schedule that was set by the judge at $200 per week without taking additional testimony. After reviewing the record in light of the contentions advanced on appeal, we reverse and remand.

The parties were married in 1985 and have three boys. On October 13, 1998, a final dual judgment of divorce and PSA was entered. Michael originally agreed to pay child support of $2000 a month for five years, after which the support amount would be renegotiated. In 2002, his child support was reduced by the judge to $232 per week (approximately $1005 per month).2 The judge suspended payment of $80 of the $232 weekly amount, directing that the $80 payments accrue as arrearages.

Michael filed a motion to reduce his financial obligations and on August 10, 2009, a plenary hearing commenced and continued over eight nonconsecutive days, concluding nineteen months later in March 2011. Michael represented himself at trial. During the pendency of the hearing, other motions were decided.

We should not disturb the judge's findings unless the record does not support the determination with substantial, credible evidence. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974). Given the Family Part's special expertise, appellate courts must accord particular deference to fact-finding in family cases, and to the conclusions that logically flow from those findings. Cesare v. Cesare, 154 N.J. 394, 413 (1998). Additionally, deference attaches to evidentiary determinations made during trial that are to be "reversed only on a finding of an abuse of discretion[.]" Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 374 (2010). With those precepts in mind, we consider the issues raised by Michael on appeal.

TAX EXEMPTIONS

Michael asserts that he allowed Beth to take all three children as deductions "to partially offset [his] arrearages." Specifically, he argues that Beth benefited from being able to claim them as dependents and Michael "should have received a credit [for $7831, representing the reduction in Beth's tax liability] against his arrearages." Beth claims that Michael allowed her to take the deductions because, due to Michael's low income level, he would not have realized a benefit from the exemptions.

Michael initially claimed that he should be entitled to credits for 2003, 2004, 2005 and 2006. However, he later withdrew his claim with regard to the 2004 tax return because Michael told Beth she could take the deduction in 2004, both parties subsequently took the deduction and only Beth was held responsible by the IRS.3

Michael argues he should be credited the amount Beth gained by using the exemptions she was not entitled to receive pursuant to the PSA. Matthew Byock, an accountant, testified on behalf of Michael regarding Beth's diminished tax liability in her 2003, 2004, 2005 and 2006 state and federal tax returns based on her use of three dependents rather than one. Byock indicated that he had no knowledge or information about whether Michael suffered a loss when he filed his tax returns without using the exemptions.

The judge found "[t]hat it is up to [Michael] to show to what degree he has gained or lost as result of these claimings." Michael did not demonstrate any loss. Therefore, the judge's determination to deny Michael relief is supported by substantial, credible evidence.

CREDIT FOR ANDY'S4EMANCIPATION AND DIRECT PAYMENTS

Pursuant to the PSA, child support was initially set at $2000 per month. It was reduced to $232 per week as of February 1, 2002. Then, as of August 28, 2009, child support was reduced to $170 per week for the middle and youngest children only, retroactive to June 23, 2008. Thus, Michael was not paying child support for Andy as of August 28, 2009.

On July 1, 2011, after a thorough review of Andy's medical, education and employment history, the judge ordered that, pursuant to N.J.S.A. 2A:34-23(a), the appropriate emancipation date for Andy was June 30, 2008, a date accepted by both parties.

Michael argues that the judge failed to credit him with $3649 for support payments he provided directly to Beth, an amount the parties stipulated to at the hearing, as well as $3781 due to Andy's retroactive emancipation as of June 28, 2008. Beth argues that the child support Michael paid for Andy since June 2008 was credited via the judge's August 28, 2009 pendente lite order and need not be expressed in a final order. Additionally, the Monmouth County Probation Department (Probation) was directed to "re-compute the . . . child support arrears on the parties' Probation account to reflect the emancipation of [Andy], effective June 30, 2008[.]" There is no order reflecting that Michael was reimbursed the stipulated amount of $3649 for his direct support payments to Beth.

Probation was given the responsibility of adjusting the child support arrears to reflect Andy's emancipation. We do not have sufficient information to determine whether or not Probation performed that task as their accounting is not before us. However, no order was entered directing Probation to credit Michael's account with $3649 in direct payments to Beth. We remand for the judge to make the adjustment if he has not already provided this credit.

UNREIMBURSED MEDICAL BILLS

Beth indicated that she paid a total of $16,180.02 for Andy's unreimbursed medical bills. Michael argues that Beth's spreadsheet listing her expenditures was inadmissible because it was not properly authenticated, was not substantiated by testimony and failed to reflect the agreed-upon credit for $3462. Beth argues that Michael was acting in bad faith by requesting that she provide each bill associated with her spreadsheet and that it is Michael's burden to demonstrate that the judge's calculations are inaccurate.

A. Evidence

When Beth first submitted her spreadsheet of outstanding medical expenses to the judge, the judge questioned Beth's lack of supporting documentation. She was directed to gather invoices and records of payments. Over the course of the hearing, the spreadsheet was supplemented with such checks and invoices.

The judge reviewed the terms of the PSA and Beth's testimony and found that since the children were on Michael's health insurance, he would be in a better, if not the only position, to determine what applications were made to the insurance company and what fees were reimbursed.5

The judge found that requiring Beth to provide such documentation would be unduly burdensome for Beth and contrary to the parties' PSA. He explained,

The Court sees this as a tactic of [Michael] in order to make it so difficult for [Beth] . . . to make it impossible for her to comply and that she would, therefore, either simply outright lose her application or give up in such an application.

. . . .

 

[I]t is the responsibility of the other side, in this case [Michael], to come forward with evidence that these bills, even though they were paid for by [Beth], were not medically necessary treatment or advisable, or that the bills really are not accurate or authenticated.

... [Michael] chose not to call the doctors or to confirm anything. . . .

I am satisfied that [Beth], a nurse herself by training and still practicing as a nurse practi[ti]oner, I believe, would not be paying money willy-nilly to doctors for treatment that she did not reasonably believe was necessary, because of course the money first comes out of her pocket, and she was paying that money in order to care for her children.

 

When reviewing separation agreements, courts generally favor them

as a peaceful means of terminating marital strife and discord so long as they are not against public policy. Although we recognize that incorporation of a PSA into a divorce decree does not render it immutable, nor its terms solely governed by contract law, nevertheless, if found to be fair and just, it is specifically enforceable in equity.

 

[N.H. v. H.H., 418 N.J. Super. 262, 279-280 (App. Div. 2011) (citations and internal quotation marks omitted).]

Additionally, deference should be afforded for the trial judge's evidentiary determinations. Estate of Hanges, supra, 202 N.J. at 374. The judge found that Michael's documentary requests were an unfair litigation tactic. We have no reason to disagree with the judge's analysis.

B. Quantity

Beth's spreadsheet included costs for Andy's medical bills and school fees, their middle son's school fees and medical bills and their youngest son's medical bills. Pursuant to the PSA, each party was responsible for fifty-percent of "[n]ormal and reasonable uncovered health expenses of the children . . . ." The expenses as outlined in Beth's spreadsheet totaled $25,531.95. Beth claimed that Michael was responsible for half of that amount, $12,765.98, in unpaid medical expenses for the children. This figure, however, reflected expenses that were not solely medical in nature. Additionally, Beth agreed that Michael was entitled to a credit of $3462 in outstanding medical expenses for all three children, an amount not reflected in her spreadsheet.

Michael argues that the judge erred in the amount of money he awarded Beth for Andy's medical bills because he did not give Michael the credit agreed to on the record by the parties. Without denying the appropriateness of Michael's request for $3462 credit, Beth asserts that Michael bears the burden of demonstrating that the judge's calculations were made in error. She argues that Michael "has not submitted complete proofs in his appendix, or at a minimum his own calculation with proofs to indicate that the Court's calculation was inaccurate."

The judge found that Michael was responsible for half of Andy's medical expenses that were incurred before June 30, 2008, when Andy became emancipated. Without further explanation, the judge recalculated the amount of Andy's medical expenses from $16,180 to $13,447, a reduction of $2733. It is not clear from the record how the judge determined this reduction in Andy's outstanding medical expenses. The judge then determined that Michael's fifty-percent share in Andy's medical expenses was half of that amount, $6724.

The first three pages of Beth's spreadsheet apply to Andy only and total $16,180.02. This amount includes both Andy's medical and school expenses. Assuming the judge deducted the cost of Brookdale Community College, $3,601.48, because that charge is an educational expense rather than a medical expense, Andy's total medical expenses would have been $12,578.54. However, an additional $564 would have to be removed to reflect Andy's medical expenses incurred after his emancipation.6 Accordingly, Andy's medical expenses incurred prior to his emancipation total approximately $12,014.54 and Michael would be responsible for half of that amount, $6,007.27.

The parties explicitly agreed on the record that Michael should receive a credit of $3462 for the children's medical expenses. However, it appears that the judge did not consider the parties' stipulation in his calculations.

We remand for clarification as to how the judge calculated Andy's medical expenses, paying specific attention to the parties' stipulation.

COUNSEL FEES

 

The judge considered the counsel fees requested by Beth. The judge expressed his concern that Michael, who had relocated to Florida with his new wife, was unnecessarily elongating the trial, stating:

Mr. Chiarella, let me just see if I understand here. You understand, being a -- having been an attorney, you understand how long it can take this case to move through to a resolution, and you understand that at the rate we're going it will be well into the fall or later, given the amount of time we have to devote to this case, before we will get any kind of decisions. And it will require you to come back up here, and back up, and spend weeks here, right?

And you understand that. And you understand it's going to cost the other side, the attorney's fees or whatever, it's going to interrupt the -- the lives of your -- your family, whatever, you understand that. And you want to do that. You want to go through those things?

 

. . . .

 

Well, do you want to find a way that you get your points across, get your evidence that you want in, do it in -- do it quickly, all right, and so we save all that time, save you money? I don't think you have the time to get away from your job for that kind of thing.

 

. . . .

Now if you -- you feel that that is more important than getting to a quick resolution, I'll give you that time.

 

The judge further explained:

You can yellow mark [the exhibits] or highlight them to me. You can yellow mark them or whatever it is you want to do to me, and you're going to get the same impact as if you spend the time and walk it through and have somebody, who sometimes doesn't know anything about these e-mails, read out portions of e-mails like you were doing before.

 

. . . .

 

I mean, you -- that seems to me that that's the efficient way of getting what you want done, and then I can -- we can move ahead.

Citing N.J.S.A. 2A:34-23 and Williams v. Williams, 59 N.J. 229 (1971), the judge found that the court

may award both counsel fees and expert fees to one party where there is a finding of a need by one party for such an award, and that the other party has an ability to pay such an award. The Court should also consider the good or bad faith of either party in pursuing one or more aspects of the litigation.

 

The judge reviewed the following factors: (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; and (3) the reasonableness and good faith of the position advanced by the parties.

Michael asserts that the judge abused his discretion when ordering that he pay $50,000 towards Beth's counsel fees when he was the prevailing party. He asserts that he acted in good faith; the burden of proof shifted to Beth who pursued the litigation with regard to Andy's emancipation; and the judge conducted the hearings in a "piecemeal fashion" which contributed to Beth's counsel fees and Michael's travel expenses. Michael also notes that the judge should not have reviewed the parties' underlying or past conduct; considered the fact that he cross-examined his sons as he did so only after Beth called them as witnesses; or awarded fees that were grossly disproportionate to the amount in dispute. Beth asserts that the judge reviewed the necessary factors when imposing counsel fees and highlights the deference afforded a family court judge when making such determinations.

Our standard of reviewing counsel fee determinations by a Family Part judge, particularly one who has tried a plenary matrimonial case, is one of deference. See Williams, supra, 59 N.J. at 233. We should only overturn the judge's determination on fees "on the 'rarest occasion,'" and only for a "clear abuse of discretion." Barr v. Barr, 418 N.J. Super. 18, 46 (App. Div. 2011) (quoting Strahan v. Strahan, 402 N.J. Super. 298, 317 (App. Div. 2008)). Rule 5:3-5(c) states that "the court in its discretion may make an allowance, . . . to be paid by any party to the action, including, if deemed to be just, any party successful in the action, on any claim for . . . support,. . . and claims relating to family type matters." A judge should consider the following factors:

(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 both during and prior to trial; (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).]

 

Even though the decision on fees is discretionary, the court must consider the above factors in making its determination. Pressler & Verniero, Current N.J. Court Rules, comment 4.1 on R. 5:3-5 (2013).

In addition, Rule 4:42-9(b) requires that an affidavit of services be provided, which addresses the factors outlined in R.P.C. 1.5(a). Accordingly,

(a) A lawyer's fee shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following:
 
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

 
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

 
(3) the fee customarily charged in the locality for similar legal services;

 
(4) the amount involved and the results obtained;

 
(5) the time limitations imposed by the client or by the circumstances;

 
(6) the nature and length of the professional relationship with the client;

(7) the experience, reputation, and ability of the lawyer or lawyers performing the services;

 
(8) whether the fee is fixed or contingent.

 

[R.P.C. 1.5(a).]

 

If deemed just, an award may be made in favor of either party, whether or not they prevailed. See Kingsdorf v. Kingsdorf, 351 N.J. Super. 144, 158 (App. Div. 2002).

Throughout the trial, the judge regularly reminded Michael that his painstaking manner of going about the plenary hearing was slowing down the proceedings. The judge also found that a significant amount of time was spent trying to get Michael to follow the terms of the PSA.

The judge thoroughly reviewed the factors outlined in Rule 5:3-5(c). Under the first prong, the judge highlighted that although Michael went "through a rough patch" he continued to work, remarried, and has "no other substantial debts[.]" On the other hand, the judge noted that Beth works three jobs, is a nurse and is responsible for two of the children. Under the second prong, the judge commented that Michael "is an attorney and he chose to represent himself throughout these proceedings. . . . He conducted himself in many ways as an attorney. He behaved as an attorney throughout the proceeding, to his credit." Yet, Beth had to hire an attorney to represent her, otherwise the judge found that she would have be severely disadvantaged. The judge found "that she has limited ability to pay her own counsel fees, and certainly no ability to pay for the counsel fees of the other side." Based on Michael's Case Information Statement, the judge determined that Michael had the ability to make a contribution towards Beth's legal fees. Under the last prong, the judge commented that there have been frequent motions, extensive hearings and various issues raised by the parties for approximately four years.

The judge found that while Beth did not produce her evidence in the best way possible, she did inform Michael of what "needed to be done with regard to his sons, and that the father was not willing to accept that."

Additionally, the judge noted that Andy has a number of difficulties, and Beth proceeded with her opposition to the emancipation claim in good faith. While Beth incurred $70,519 in legal fees, she paid $11,400 of those fees, while Michael paid nothing because he represented himself. The judge found "that much of the time has been spent trying to force [Michael] to comply with elements of the property settlement agreement; more particularly with regard to the payment of the educational expenses" of the middle child.

While the judge did not go through R.P.C. 1.5(a) factor by factor, the judge requested additional certifications regarding the qualifications and background of Beth's legal counsel and did not finalize his order until he received that information.

In Mayer v. Mayer, 180 N.J. Super. 164, 169 (App. Div.), certif. denied, 88 N.J. 494 (1981), the court stated, "it is necessarily implicit that there may be allowed only such fees as represent reasonable compensation for such legal services performed as were reasonably necessary in the prosecution or defense of the litigation." (Citation omitted).

Michael relies on Chestone v. Chestone, 322 N.J. Super. 250, 259 (App. Div. 1999), for the proposition that a judge can not grant "an award of counsel fees which is grossly disproportionate to the amount in dispute." While Beth's recovery may have been significantly less than she originally claimed, she was seeking approximately $50,000 from Michael in arrearages.

Michael's claim that a pendente lite order shifts the burden of proof to the non-prevailing party is baseless. The purpose of such orders is to handle the realities of trial proceedings, not to make final judgments or shift a party's burden of proof.

In many instances the motion judge is presented reams of conflicting and, at times, incomplete information concerning the income, assets and lifestyles of the litigants. The [pendente lite] orders are entered largely based upon a review of the submitted papers supplemented by oral argument. Absent agreement between the parties, however, a judge will not receive a reasonably complete picture of the financial status of the parties until a full trial is conducted.

 

[Mallamo v. Mallamo, 280 N.J. Super. 8, 16 (App. Div. 1995).]

 

Additionally, while Michael told the judge that he was inconvenienced by having to travel from Florida, he never raised the issue of the cost of his travel expenses during the hearing.

The judge found that Michael was responsible, to a great extent, for the time it took the judge to reach his determination. The judge found the certifications and invoice provided by Beth's counsel to be reasonable. The fact that the hearing took place on various dates is a reflection on Michael's unwillingness to move his case along.

ARREARS PAYMENT SCHEDULE

Michael argues that he should have been granted a hearing before his $180 monthly payment in arrearages was increased to $200 per week. At oral argument, Michael's counsel conceded that the arrears were almost paid off, making this issue of little practical importance.

The judge ordered, "I will add to, as an arrears payment, an additional $200 per week, which shall be paid to [Beth] until such time as . . . [Michael]'s arrears are satisfied."

The judge conducted a lengthy hearing prior to making the arrears schedule. Should Michaelbe arrested for failure to pay court-ordered support, he would be entitled to another hearing within seventy-two hours after being arrested. Pasqua v. Council, 186 N.J.127, 153 (2006). The judge did not abuse his discretion in setting the arrears payment schedule.

Conclusion

We therefore remand this matter for forty-five days to allow the judge the opportunity to explain why he reduced Michael's share of outstanding medical expenses for Andy from $16,180 to $13,447 and to provide Michael credit for two different stipulated amounts, $3649 (in direct child support payments made to Beth) and $3462 (in medical reimbursements).

We reverse and remand. Within forty-five days the judge shall amend his reasons and/or modify his decision in conformance with this opinion. The judge's supplemental opinion and decision should be filed with the clerk of this court who will establish a briefing schedule. We retain jurisdiction.

1 For ease of reference, we will refer to the parties by their first names.

2 Michael suffered psychiatric problems after the divorce that resulted in the surrender of his law license. In 2001, he filed a bankruptcy petition and moved to Florida, where he "wait[ed[ tables, bartend[ed] and s[old] real estate."

3 Matthew Byock, an accountant who testified on Michael's behalf, explained that the IRS determined that Beth owed $4700 for 2004. He explained that in addition to that sum of money, she would also be subject to interest and penalties, which continue to accrue until all the money is paid back to the IRS. As of July 4, 2007, Beth still owed $1,775.22. Michael admitted that he should be responsible for the penalties and interest that resulted from Beth's misfiled 2004 tax return.

4 For ease of reference, and to protect the child's identity, we will refer to the oldest child by a fictitious name.

5 Michael argues, "[t]here was no testimony as to what was covered by insurance, or what was even submitted to insurance."

6 The spreadsheet also reflects a pharmacy cost of $1,114.58 for Andy that reflects costs from January 1, 2006 to October 15, 2008. We have no way to determine what portion of this cost was incurred after Andy's emancipation.