1NANCY L. KUSMICK v. JEFFREY W. KUSMICK

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-01

A-5821-13T1

NANCY L. KUSMICK, a/k/a

NANCY HASBROUCK-KUSMICK,

NANCY KUSMICK-VEGA, and

NANCY VEGA,

Plaintiff-Respondent/

Cross-Appellant,

v.

JEFFREY W. KUSMICK,

Defendant-Appellant/

Cross-Respondent.

________________________________________________________________

December 23, 2015

Submitted May 11, 2015 Decided

Before Judges Lihotz and Espinosa.

On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Somerset County, Docket No. FM-18-864-03.

Jeffrey W. Kusmick, appellant/cross-respondent pro se.

Nancy L. Kusmick, respondent/cross-appellant pro se.

The opinion of the court was delivered by

ESPINOSA, J.A.D.

Since the parties' divorce in 2004, they have engaged in extensive motion practice, much of which has concerned defendant's efforts to compel plaintiff to pay child support, including college expenses. Defendant appeals from orders entered in October and November 2013, and June 2014. Plaintiff's cross-appeal is from the last of these orders. For the reasons that follow, we affirm the orders in all respects save one. We reverse that part of the order, dated June 24, 2014, which denied defendant taxed costs.

I.

We summarize only those facts and motions relevant to the issues before us.

The parties were divorced after approximately twenty-two years of marriage and three children: B.W.K., born March 23, 1987; L.B.K., born March 26, 1990; and R.J.K., born June 17, 1993. They shared custody of the children, but the children lived with the defendant full-time following the divorce.

The parties' judgment of divorce incorporated a matrimonial settlement agreement (MSA), which included provisions regarding child support, college expenses and the use of equity in the marital home. Pertinent paragraphs provide

29. The parties acknowledge that the primary mortgage (as opposed to the Home Equity Line) on the Custodial Home should be paid in full in approximately seven (7) years. At that time, the children s expenses which are now being paid by the Wife shall be shared by the parties in proportion to their incomes at [the] time as in accordance with the Child Support Guidelines ratio. This shall occur even if the parties elect [to] draw on the equity to pay for the Children s college expenses as set forth herein. As to any equity that the parties agree to take for college expenses, they shall be proportionately responsible for that part of the mortgage payment only. The Husband is and shall remain solely responsible for the mortgage and home equity loan. The Wife shall only be responsible for her proportionate share of any additional monies that are borrowed, by mutual agreement, for the sole purpose of funding some or all of [the] college expense.

. . . .

37. The parties agree that if the Children are academically capable of attending college, they shall pay for said educational expenses in proportion to their financial abilities at the time that each child attends. The parties shall exchange their tax returns (including the Husband s business returns) for the year preceding each child s attendance, along with all relevant schedules and attachments (i.e. W2 s, 1099s, K-1 s, etc.) so that their proportionate shares can be determined.

38. The parties respective obligations shall arise only after [the] exhaustion of any existing custodial accounts, trust funds, grants, loans, scholarships, or other funds that are available, if any, including equity in the two properties equitably distributed as set forth herein. In the event that the parties agree to take equity from one or both of the properties to pay for some or all of [these] expenses, they shall be responsible for the increase in the monthly payment in proportion to their incomes at that time.

[(Emphasis added)].

The parties owned two properties, referred to in the MSA as the "custodial home" and the "business property." They agreed the custodial home was to be maintained for the children "until the emancipation of the youngest child or as otherwise agreed by the parties." It was agreed plaintiff would gift her one-half interest in the custodial residence to the minor children under the Uniform Transfers to Minors Act (UTMA), N.J.S.A. 46:38A-1 to -57. This was accomplished in July 2004, as each party executed a quitclaim deed to transfer plaintiff s fifty-percent interest in the custodial home to the minor children.

As to the business property, plaintiff would hold her fifty-percent interest in the LLC in trust for the minor children until the sale of the . . . property. When the property was sold, plaintiff s proceeds were to "be transferred equally to the minor children and/or held in trust by [plaintiff] until the time of emancipation for each respective minor child. Plaintiff s fifty-percent interest in the business property was transferred to the LLC in trust by quitclaim deed in July 2004.

In 2009, defendant filed the first of three motions to enforce litigant's rights based upon his assertion that plaintiff failed to comply with provisions of the MSA concerning child support and was granted partial relief. Orders entered in September and November 2009, March 2011 and October 2013, awarded defendant sums for child support expenses, but denied his request for expenses the court deemed to be college-related. Because plaintiff failed to pay the amounts of child support awarded to defendant, the amounts were reduced to judgments, resulting in the garnishment of her wages.

The differentiation in the orders was based upon the motion judge's interpretation of the MSA as set forth in her statement of reasons for the September 2009 order

[Defendant] will not consent to first exhausting the equity in the parties' properties, as is required by the MSA. As a result, the Court finds that Plaintiff's obligation to contribute toward college expenses in proportion to her income has not yet been triggered. Therefore, Defendant shall not be entitled to reimbursement for college expenses paid from Plaintiff until such time as he first agrees to exhaust the equity in the parties' properties for the payment thereof.

Defendant did not appeal from the September 2009 order.

Approximately four years later, defendant filed his third motion to enforce litigant's rights, regarding child support expenses for the year 2008. An order entered in October 2013, awarded him a judgment for $7,692.52, but denied his request for $15,737.08 in college-related expenses. He filed a motion for reconsideration of the October 2013 order because he believed the original motion judge misinterpreted the relevant provisions of the MSA in entering the September 2009 order and that the motion judge who relied upon that interpretation in October 2013 did so erroneously. The motion judge denied defendant's motion for reconsideration, but provided the following clarification for her reliance upon the prior judge's interpretation of the MSA

The Court notes that [the prior judge's] finding of fact as to the language of the MSA are undisputed. Defendant takes issue with her conclusions of law as to how that language should be applied under the circumstances.

Furthermore, plaintiff certifies that defendant did not take out loans, apply for grants, or sell stocks. She specifically questions whether the Millennium Bank stocks have been sold and, if so, whether they have been used for the benefit of the children. Defendant does not address this issue. Paragraph 57 of the MSA provides that the parties own 343 shares of Millennium Bank stock, and "[a]t such time as they agreed to sell it, the proceeds shall be used for the benefit of the children."

The Court reiterates, once again, that "[t]he parties' respective obligations [to pay for college expenses] shall arise only after exhaustion of any existing custodial accounts, trust funds, grants, loans, scholarships, or other funds that are available, if any, including equity in the two properties equitably distributed as set forth [in the MSA]." The Millennium Bank stocks certainly qualify as "other funds that are available." They must be used before the parties' respective obligations to pay college expenses are triggered.

The court noted further that defendant's request for reconsideration essentially asked the court to reconsider the findings underlying the September 2009 order, a request that was "well beyond the twenty day limit imposed on motions for reconsideration by [Rule] 4:49-2."

Defendant filed a fourth motion to enforce litigant's rights in April 2014, seeking an order that would require plaintiff to pay child support expenses for years 2010 and 2011, and award him taxed costs and post-judgment interest. Plaintiff filed a cross-motion in which she asked that: defendant be found in violation of litigant's rights; the two quitclaim deeds she executed in 2004 be declared null and void based upon her claim "it was not made clear to [her] that she was signing a quitclaim deed"; the court compel the sale of one or both of the properties so that the equity could be used to pay for college expenses; and the wages previously garnished be applied to future child support obligations.

An order on the motion and cross-motion, dated June 24, 2014, and amended July 7, 2014,2 is the subject of defendant's second appeal and plaintiff's cross-appeal, Docket No. A-5821-13. Plaintiff's motion to compel the sale of the properties was denied without prejudice. The court denied all her remaining requests. Defendant's requests were granted in part and denied in part. The court found plaintiff in violation of litigant's rights, entered judgment against her in the amount of $4066.26 and ordered payment within sixty days. The court also ordered plaintiff to pay the sum of $6877.74, as her share of required child support expenses for 2011, within sixty days. The court denied defendant's requests for taxed fees and costs and post-judgment interest.

The motion judge rejected defendant s request to have plaintiff pay child support related to college expenses, stating

As provided by the September 2, 2009 and October 1, 2013 Orders, Defendant shall not be entitled to reimbursement from Plaintiff for any college expenses until such time as the equity in the parties properties is first exhausted for the payment thereof. Defendant s production of a letter from one single bank stating that he has been denied a home equity loan is insufficient to establish that the parties are unable to borrow against the equity in either of the two properties. Since the parties have not exhausted all available equity, their respective obligations to pay for college expenses have not been triggered.

Plaintiff moved for reconsideration of this order based on her belief that she had paid more than necessary to compensate for child support expenses. Her motion was denied.

In his first appeal, Docket No. A-1890-13, defendant appeals from the October 2013 order, and the November 2013 order denying hismotion forreconsideration andhis requestfor taxed costs. Defendant argues: the court erred in denying him costs for the motion for reconsideration in which he partially prevailed (Point I); the court erred in relying upon the misinterpretation of the MSA contained in the September 2009 order (Point II); the court abused its discretion by failing to adequately support its decision to rely upon the September 2009 order in the November 2013 order denying his motion for reconsideration (Point III); the court erred in admitting plaintiff's certifications into the record (Point IV); and the court erred in denying his request to amend the September 2009 order (Point V).

The order on the motion and cross-motion, dated June 24, 2014, is the subject of defendant's second appeal and plaintiff's cross-appeal, Docket No. A-5821-13. Defendant argues: the court erred in denying him costs for his motion to enforce litigant's rights in which he prevailed in part (Point I); the court abused its discretion by ordering plaintiff to pay child support expenses owed to him instead of entering judgment against her as he requested (Point II); and the court erred in adopting the interpretation of the MSA as requiring the exhaustion of equity before defendant could be reimbursed for college expenses (Point III).

In her cross-appeal in Docket No. A-5821-13, plaintiff maintains that the terms of the MSA were correctly interpreted in the September 2009 order. She argues further that she should be reimbursed for wages garnished; that the quitclaim deeds should be vacated because it was her intent to transfer her equity by way of a Uniform Transfers to Minors Act, N.J.S.A. 46:38A-1 to -57, transaction rather than under the Uniform Gifts to Minors Act, N.J.S.A. 46:38-13 to -41, and that the motion judge erred in ignoring facts and procedural deficiencies.

After reviewing these arguments in light of the record and applicable principles of law, we conclude that the issues raised by defendant in Points IV and V of his appeal in Docket No. A-1890-13 and Point II of his appeal in Docket No. A-5821-13 and all the issues raised by plaintiff in her cross-appeal lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

II.

In his appeals, defendant argues that the motion judges erred in failing to award him taxed costs of $159.81 in its June 24, 2014 order and $92.22 in the November 27, 2013 order that granted his motion for reconsideration by amending the case caption.

Rule 4:42-8 states that "[u]nless otherwise provided by law, these rules or court order, costs shall be allowed as of course to the prevailing party." If a party prevails, that party should receive costs as a matter of course even if there is an "incomplete success." Gallo v. Salesian Soc'y, 290 N.J. Super. 616, 660-62 (App. Div. 1996). "[A] prevailing party may be denied an award of costs only for 'special reasons.'" Knight v. AAA Midatlantic Ins. Co., 394 N.J. Super. 333, 337 (App. Div. 2007) (quoting Schaefer v. Allstate N.J. Ins. Co., 376 N.J. Super. 475, 487 (App. Div. 2005)).

A party prevails "'when actual relief on the merits of his [or her] claim materially alters the legal relationship between the parties by modifying the defendant's behaviors in a way that directly benefits the plaintiff.'" Tarr v. Ciasulli, 181 N.J. 70, 86 (2004) (quoting Farrar v. Hobby, 506 U.S. 103, 111-12, 113 S. Ct. 566, 573, 121 L. Ed. 2d 494, 503 (1989)). "[A] plaintiff who is awarded some affirmative relief by way of an enforceable judgment against defendant or other comparable relief through a settlement or consent decree is a prevailing party . . . ." Id. at 86-87.

The June 24, 2014 order granted defendant's motion in part and denied it in part. Defendant was awarded some affirmative relief in that order, which entered judgment against plaintiff in the amount of $4066.26 and ordered payment within sixty days, and also ordered plaintiff to pay the sum of $6877.74 as her share of required child support expenses for 2011 within sixty days. He was, therefore, a prevailing party in light of the fact that he obtained some affirmative relief and an enforceable judgment.

The motion judge reasoned that defendant was not entitled to costs because the motion "primarily sought reimbursement for college costs" by attempting "to relitigate issues which have already been the subject of a series of Court Orders from 2009 to 2013." This analysis fails to provide a basis for the denial of costs, which "are not discretionary," Regino v. Aetna Cas. & Sur. Co., 200 N.J. Super. 94, 100 (App. Div. 1985), and must be allowed to defendant as a matter of course. TWC Realty P'ship v. Zoning Bd. of Adjustment of Twp. of Edison, 321 N.J. Super. 216, 217 (App. Div. 1999).

Defendant is not entitled to court costs for the November 27, 2013 order because the only relief he received was the change in the caption. The order did not result in any change in the legal relationship between the parties or any enforceable judgment. Therefore, defendant was not a prevailing party entitled to court costs.

III.

The remaining issues concern the motion judges' interpretation and application of the provisions of the MSA regarding college expenses.

We conduct a limited review of a trial court's fact-finding function. "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); see also Gnall v. Gnall, 222 N.J. 414, 428 (2015). It is only "when the trial court's conclusions are so 'clearly mistaken' or 'wide of the mark'" that we will "intervene and make [our] own findings "to ensure that there is not a denial of justice." N.J. Div. of Youth & Family Servs. v. E.P., 196 N.J. 88, 104 (2008) (quoting N.J. Div. of Youth & Family Servs. v. G.L., 191 N.J. 596, 605 (2007)); see also Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974). 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 Twp. of Manalapan, 140 N.J. 366, 378 (1995). It is under these standards that we review the decisions of the Family Part judges.

The premise for those orders that denied defendant's request for college-related expenses was forged by a hybrid judicial determination consisting of the court's legal interpretation of the MSA and factual findings as to whether the conditions termed the triggering event for contribution for college expenses were met. As we have noted, the initial motion judge concluded the MSA required the exhaustion of specified assets, including the equity in the parties' properties, before an obligation to contribute to college expenses was triggered. Although he has challenged this interpretation as erroneous in subsequent motions and even sought an untimely and meritless amendment of the judgment pursuant to Rule 4:50-1, defendant did not appeal from the September 2009 order.

The language at issue in the MSA states the parties' respective obligations to contribute to college expenses

shall arise only after the exhaustion of any existing custodial accounts, trust funds, grants, loans, scholarships, or other funds that are available, if any, including equity in the two properties equitably distributed as set forth herein.

[(Emphasis added).

In discussing the parties' agreement regarding a change in how children's expenses would be shared when the primary mortgage was paid in full, Paragraph 29 of the MSA states this arrangement shall remain in place

even if the parties elect [to] draw on the equity to pay for the Children s college expenses as set forth herein. As to any equity that the parties agree to take for college expenses, they shall be proportionately responsible for that part of the mortgage payment only.

Defendant argues that this paragraph conditioned the exhaustion of equity in the properties upon the mutual consent of the parties. In other words, he was free to grant or withhold his consent. He argues further that, because Paragraph 38 speaks of the exhaustion of specific assets "or other funds that are available," it was necessary to show that such unused assets were "available," and in the case of the equity, that it was feasible to borrow against the properties.

The interpretation of the MSA is a legal question, subject to our de novo review. The words "elect" and "agree" in Paragraph 29 suggest that the parties anticipated having some discretion in whether or not to exhaust the equity in the properties before the obligations to contribute to college expenses arose. However, that is all it is, a suggestion. There is no language in the MSA that expressly reserves the right to withhold consent to the exhaustion of equity for either party. In contrast, Paragraph 38 is explicit, stating "[t]he parties respective obligations shall arise only after [the] exhaustion" of the enumerated assets.

We therefore conclude the motion judges did not err in their interpretation that exhaustion of the enumerated assets was required before the obligation to contribute college expenses arose under the MSA. We next turn to whether the motion judges' findings that this pre-condition was not satisfied are supported by the record.

In the motion to enforce litigant's rights that defendant filed in August 2013, he did not ask the court to find that the obligation to contribute to college expenses had been triggered. Rather, he asked for a judgment against plaintiff for $23,429.60 based upon her failure to pay her share of required child support expenses and included college expenses in the amount sought. He cited Paragraph 37 of the MSA, stating "college costs are to be paid by income ratio after loans, grants, and scholarships." Both his supporting and reply certifications were silent as to the exhaustion of equity in the properties.

The October 2013 order granted defendant's request for judgment based upon plaintiff's failure to pay required child support expenses for 2008, excising college-related expenses. The court reasoned that plaintiff's obligation to pay for college expenses was "not triggered until such time as [the parties] have exhausted existing custodial accounts, trust funds, grants, loans, scholarships, or other funds that are available, including equity in the two properties."

It was in his motion for reconsideration that defendant challenged the application of the MSA incorporated in the 2009 order. He contended the initial interpretation of the MSA as requiring the exhaustion of equity was a "factual error" that he did not challenge further because he was otherwise satisfied with the judgment. Defendant argued there were additional factual flaws in the September 2009 analysis. Pursuant to the MSA, plaintiff gifted her fifty-percent interest in both the custodial home and the business property to the children in 2004. Defendant refinanced the custodial home and became the sole mortgagee for that property in 2004. He contended that the equity in both properties had been equitably distributed and was therefore no longer "available" as a source for college expenses. He argued further that he retained the right to decline to agree to further encumber his interest and that he had spent a disproportionate amount on expenses. He also represented that such expenses had been included in prior judgments for years 2005 through 2007 and 2009.

Aside from these arguments, defendant presented no facts to show that assets enumerated in the MSA were either unavailable or had been exhausted. Therefore, we find no error in the court's determinations underlying the October and November 2013 orders, that the obligation to contribute to college expenses had not been triggered.

After the 2013 orders were entered, defendant unsuccessfully applied for a home equity line of credit. He then wrote to plaintiff, stating

[P]lease allow this letter to formally acknowledge that I mutually agree to borrow the custodial home's equity. As such, you will have 30 days from the date of this letter to make the appropriate bank application for an equity line of credit to borrow against the children's one-half equity interest in the custodial home. After the 30 day time period has expired, I will make to [sic] appropriate court motion for reimbursement of the college related expenses noted within the Oct. 1, 2013 Order.

The letter reveals that what defendant agreed to was for plaintiff to apply "for an equity line of credit to borrow against the children's one-half equity interest in the custodial home." He did not agree to borrow against his own equity interest in the custodial home.

Thereafter, defendant filed his fourth motion to enforce litigant's rights. At the time of this motion, in April 2014, the parties' oldest child was twenty-seven years old and had graduated from college in 2009. Their daughter was twenty-four years of age and had graduated college in 2013, with a bachelor's degree and a master's degree. Their third child was twenty years old and a junior in college.

Defendant asserted the following regarding the exhaustion of available funds to pay for the children's college expenses. He stated he asked plaintiff to meet him at the bank in 2006, to transfer or sell the approximately 340 shares of New Millennium Bank stock they jointly held, which had a value of $1.75 per share, to use towards B.W.K. s tuition. He stated plaintiff refused to meet him and, as a result, the shares remained jointly owned and unavailable for use on the children s expenses. In addition to the December 2013 letter quoted above, defendant stated he sent plaintiff a letter in May 2010, asking her to take the appropriate steps required to apply for a home equity line of credit on the custodial home with a bank of her choice, noting she would be solely responsible for payment of the line of credit. Defendant stated that, as of the time of his certification, plaintiff had failed to obtain any home equity line of credit. He noted further that plaintiff had gifted her fifty percent equity share in each property to the minor children. Defendant then referred to his December 2013 letter, his own application and denial for a home equity line of credit.

In the certification supporting her cross-motion, plaintiff alleged defendant had waited ten years before agreeing to use the equity in the properties for college expenses. In the interim, he had obtained a garnishment of her wages. She claimed that, as a result, she was behind on other bills, her home was in foreclosure and neither she nor defendant had a credit rating that would allow for an equity loan. Plaintiff did not provide any corroborative evidence of her claimed indebtedness, a foreclosure action or of any failed attempts to obtain an equity loan.3

The record is silent as to the feasibility of anyone obtaining an equity line of credit on a property in which the borrower does not have a property interest.

In the statement of reasons for the June 24, 2014 order, the court concluded the exhaustion of equity threshold had not been met. This conclusion was based upon the finding that defendant's production of one letter denying him a home equity loan was insufficient to establish that the parties are unable to borrow against the equity in the properties. This finding was supported by sufficient credible evidence in the record and will not be disturbed.

Accordingly, we reverse that portion of the order dated June 24, 2014 that denied defendant's request for taxed costs and remand for entry of judgment to defendant in the amount of $159.81. We affirm the orders in all other respects.

Affirmed in part and reversed in part. We do not retain jurisdiction.

1 These appeals, originally calendared back-to-back, are now consolidated for purpose of opinion.

2

The order was amended at defendant's request that the case captions be corrected to include plaintiff's "aliases."

3 On appeal, plaintiff asserts, without corroboration, that she attempted to obtain an equity loan in 2009. Her appendix also includes a letter from her former attorney to the motion judge in which her attorney argues that plaintiff had no way to pay for college expenses and defendant knew that.