MARGARET DOUGHERTY v. PAUL D. HEITMANN

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

MARGARET DOUGHERTY f/k/a

MARGARET HEITMANN,

Plaintiff-Appellant/

Cross-Respondent,

v.

PAUL D. HEITMANN,

Defendant-Respondent/

Cross-Appellant.

________________________________

September 15, 2014

Submitted September 9, 2014 Decided

Before Judges Koblitz and Haas.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-1432-08.

Warren Law Group, P.C., attorneys for appellant/cross-respondent (Bruce K. Warren, of counsel and on the brief).

Paul D. Heitmann, respondent/cross-appellant pro se.

PER CURIAM

In this post-judgment matrimonial matter, plaintiff appeals from the March 12, 2013 order of the Family Part granting defendant's motion to retroactively terminate his alimony obligation and requiring plaintiff to repay defendant $36,000. Defendant cross-appeals from the court's March 12, and March 27, 2013 orders denying his application for an award of counsel fees. We affirm.

The parties were married on February 25, 1984, separated on June 1, 2008 when plaintiff served defendant with her complaint for divorce, and divorced on July 9, 2009. They have four children, all of whom are emancipated.

Under the terms of their Property Settlement Agreement (PSA), defendant agreed to pay plaintiff $16,000 per year in alimony for a period of five years. Payments were to be made "in twenty four . . . equal bi-monthly payments of $666.67 each" beginning "on the first day of the month following the sale of the marital home." The PSA further provided that "[i]n the event of [plaintiff's] cohabitation in a romantic relationship with an unrelated male or female, then alimony shall be terminated."1 The parties sold their home on March 1, 2010 and defendant began paying alimony to plaintiff on April 1, 2010.

In October 2011, defendant filed a motion to terminate his alimony obligation. He asserted plaintiff had been cohabiting in a romantic relationship with her new husband, R.D.,2 since April 1, 2010. In support of his motion, defendant provided a report from a private investigator setting forth dates on which plaintiff's vehicle was observed parked at R.D.'s home during a two-week period. Based on the information defendant presented, Judge Michael Paul Wright found that defendant had "made a prima facie showing of cohabitation[,]" ordered the parties to exchange discovery, and scheduled a plenary hearing to give plaintiff the opportunity to rebut defendant's proofs.

The following facts are derived from the evidence presented at the two-day plenary hearing. At the time plaintiff filed her complaint for divorce in June 2008, both parties were still living in the former marital home in Morris County. Plaintiff worked as a nurse at a Morris County hospital for forty to fifty hours per week. Plaintiff and R.D. testified they met in September or October 2006, but did not begin dating "officially" until after the parties' divorce in July 2009.

On November 1, 2008, plaintiff moved out of the parties' home in Morris County and took a one-year lease on an apartment in Passaic County. This apartment was located approximately one-half mile from a condominium owned by R.D. R.D. testified he suggested that plaintiff leave Morris County because she could not afford the rental prices there. Defendant continued to live in the former marital home. Under the PSA, he was required to pay the "carrying costs for the home" until the parties sold it.

Toward the end of plaintiff's lease term, she asked defendant if she could move into the Morris County home. Defendant did not agree. During this same period, R.D. made an offer to purchase the former marital home. Defendant testified he knew that an offer had been made, but did not know that R.D. was the one who had made it. Defendant rejected the offer because he believed it was too low. R.D. claimed he did not discuss his offer with plaintiff before making it, and that he and plaintiff did not intend to live in the home if he purchased it. Instead, he asserted he wanted to "surprise" plaintiff and intended to "flip" the house as an investment property.

Plaintiff testified she moved out of her Passaic County apartment in October 2009. She continued to work in Morris County. R.D. continued to live in Passaic County. On November 5, 2009, plaintiff sent defendant an e-mail stating she had moved in with her parents in Camden County on November 1, 2009. Defendant became suspicious that plaintiff was not actually living in Camden County because of the long commuting distance between her parents' home and her job in Morris County.3 Plaintiff alleged she continued to live in Camden County until July 2012.

R.D. testified that plaintiff only spent one night at his residence in Passaic County between March 2009 and September 2010 and he did not stay at her residence during that time. In September 2010, R.D. stated he sold his Passaic County condominium and moved to a hotel in Camden County until December 2010, the month he and plaintiff became engaged. At that time, R.D. moved into a home he purchased in Ocean County. R.D. asserted he asked plaintiff to move in with him, but both he and plaintiff testified that she refused because she did not want to "play house" or set a bad example for her children by living with someone prior to marriage.

Plaintiff did not advise defendant of her engagement until March 2011. She sent him a note stating that she was engaged, had applied for a religious annulment of her marriage to defendant, and would be getting married when the annulment was granted. Plaintiff told defendant she still worked in Morris County and lived with her parents in Camden County. Defendant did not meet R.D. until May 2011, when he saw R.D. at a graduation ceremony. Defendant recognized R.D. as someone who had helped plaintiff move out of the former marital home in 2008. At that point, defendant hired a private investigator and subsequently filed a motion to terminate his alimony obligation.

In discovery, defendant obtained plaintiff's telephone, E-Z Pass, and credit card records. The telephone records showed that, on the 143 days for which records were available between April 1, and August 31, 2010, plaintiff made telephone calls from Passaic County, where R.D. lived, on ninety-six days at all hours of the day and night. On the other hand, she only made calls from Camden County, where she allegedly lived, on twenty-one days. Over this period, she made fewer calls from Camden County each month. After R.D. moved to Ocean County in December 2010, plaintiff's calling pattern changed, with the majority of her calls being made from Ocean County, rather than from Camden County where she allegedly lived with her parents.

Although plaintiff claimed she was commuting from Camden County to Morris County, her E-Z Pass records showed that she did not take the Garden State Parkway or the New Jersey Turnpike. Finally, plaintiff's credit card statements from December 2010 through July 2012 showed that the bulk of her purchases occurred in the counties where R.D. lived.

Plaintiff agreed to voluntarily terminate defendant's alimony obligation in July 2012. By that time, he had paid her $36,000.

At the conclusion of the hearing, Judge Wright issued a thorough written opinion granting defendant's motion to retroactively terminate his alimony obligation as of April 1, 2010 because plaintiff and R.D. were cohabiting in a romantic relationship in Passaic County from the time defendant's obligation commenced. The judge explained that, in the PSA,

the parties crossed out "subject to review under the case law" and handwrote "terminated" entering their initials next to this change. Thus it is clear that the parties did not intend for financial impact [as set forth in cases like Gayet v. Gayet, 92 N.J. 149 (1983)] to be taken into consideration in deciding whether cohabitation was sufficient to warrant a modification in [d]efendant's alimony obligation.

The judge found that, "given the plain language" of the parties' PSA, defendant only needed to establish "whether cohabitation took place, not whether any economic benefit was derived" by plaintiff from her relationship with R.D.

The judge next made specific credibility findings regarding the testimony presented by plaintiff and R.D. The judge found plaintiff's testimony was "less than credible." Although plaintiff asserted she was commuting from Camden County to Morris County after April 1, 2010, her telephone records indicated that the majority of her calls began and ended each day in Passaic County, where R.D. lived. Plaintiff attempted to explain this discrepancy by claiming she stayed in hotels or with friends and relatives in that county during this period. However, the judge found "she offered no proofs regarding her stays with relatives and friends, and the receipts for hotel stays [which she provided] were scant and represented only a small percentage of the nights in question."

The judge also "had difficulty believing much of [R.D.'s] testimony." The judge was especially skeptical of R.D.'s claim that he made an offer to purchase the parties' home in Morris County without first consulting plaintiff. The judge stated

[R.D.] testified to attempting to purchase the former marital home of the parties for reasons that were inconsistent. He testified to both not telling [p]laintiff of his attempt to purchase and [d]efendant of his relationship with [p]laintiff because he wished to "surprise" [p]laintiff. He next testified that the property was going to be used as an investment venture and that he never intended to live in it. If it was only to be a house that was to be "flipped," what surprise would be accomplished, and why the need to deceive [d]efendant?

On the other hand, the judge found that defendant's testimony was "far more credible as it was buttressed by evidentiary exhibits that were persuasive. These exhibits, coupled with the incredible testimony of [p]laintiff establish that [p]laintiff did not live in [Camden County] in April 2010, but rather with [d]efendant in [Passaic County], when the alimony payments commenced." Based upon this finding, the judge found that defendant's alimony obligation should be retroactively terminated as of April 1, 2010.

The judge denied both parties' requests for counsel fees because neither party had provided an affidavit of services as required by Rule 4:42-9(b). Thereafter, defendant submitted an affidavit of services for his attorney and requested that plaintiff pay his fees. After considering the factors set forth in Rule 5:3-5(c), the judge determined that each party should bear their own fees. This appeal and cross-appeal followed.

In her appeal, plaintiff argues that the judge erred by finding that she was cohabiting with R.D. and terminating her alimony. In his cross-appeal, defendant asserts the judge should have granted his motion for counsel fees. We disagree with both contentions.

The scope of our review of the Family Part's order is limited. Cesare v. Cesare, 154 N.J. 394, 411 (1998). We owe substantial deference to the Family Part's findings of fact because of that court's special expertise in family matters. Id. at 413. "[F]indings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence. Deference is especially appropriate when the evidence is largely testimonial and involves questions of credibility." Id. at 411-12 (citations and internal quotation marks omitted). "When the reviewing court is satisfied that the findings and result meet this criterion, its task is complete and it should not disturb the result, even though it has the feeling it might have reached a different conclusion were it the trial tribunal." Beck v. Beck, 86 N.J. 480, 496 (1981) (quoting State v. Johnson, 42 N.J. 146, 161-62 (1964)).

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)).

We have carefully reviewed the record and have determined that Judge Wright did not abuse his discretion in granting defendant's motion to terminate his alimony obligation and denying defendant's application for counsel fees. We affirm substantially for the reasons expressed by the judge in his written decisions. We add the following comments.

It is well established that cohabitation is a changed circumstance that could warrant a modification of an alimony obligation. Gayet, supra, 92 N.J. at 155. If the payor spouse can prove cohabitation of the dependent spouse, the payor can seek a reduction in alimony by showing either the dependent spouse's economic needs have decreased due to the financial assistance of another or by showing the payor's alimony payments are subsidizing the third-party cohabitant. Boardman v. Boardman, 314 N.J. Super. 340, 347 (App. Div. 1998). In the absence of an agreement to the contrary, courts determine the "true nature of the relationship" by examining whether the couple "bears the 'generic character of a family unit as a relatively permanent household.'" Gayet, supra, 92 N.J. at 155 (internal citation omitted). This includes

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 duties and privileges that are commonly associated with 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.

[Konzelman v. Konzelman, 158 N.J. 185, 202 (1999).]

However, in Konzelman, the Supreme Court recognized that the parties to a PSA may agree to modify the payor's alimony modification without regard to the financial impact of cohabitation on the dependent spouse. The Court stated

Where the court considers a motion for reduction of alimony based on a change of circumstances, the dependent spouse's finances and economic resources are ordinarily the court's only consideration. Nevertheless, a specific consensual agreement between the parties to terminate or reduce alimony based on a predetermined change of circumstances does not require an inquiry into the financial circumstances or economic status of the dependent spouse so long as the provision itself is fair. Thus, where the parties have agreed that cohabitation will constitute a material changed circumstance, and that the agreement has been judged fair and equitable, the court should defer to the arrangements undertaken by the parties. In that situation where the dependent spouse has entered a new marriage-like relationship, the court need not delve into the economic needs of the dependent former spouse.

[Id. at 197 (internal citation omitted).]

Here, Judge Wright found that the parties had included such a provision in their PSA, which provided that defendant's alimony obligation would be terminated upon plaintiff's "cohabitation in a romantic relationship with an unrelated male or female[.]" The record fully supports that determination. The parties specifically removed language from the PSA that would have required cohabitation to be determined "under the case law[,]" which would involve consideration of the economic consequences of plaintiff's cohabitation with R.D. Indeed, in her reply brief, plaintiff concedes that "in this matter, the parties agreed that there would not need to be a showing of economic dependency. The parties agreed that if [p]laintiff cohabited in a romantic relationship, alimony would be terminated."

Plaintiff argues the judge erred by finding that plaintiff was cohabiting with R.D. on April 1, 2010 when defendant's alimony obligation began. However, the record supports Judge Wright's conclusion that defendant presented compelling evidence demonstrating cohabitation. Contrary to plaintiff's contention that she was living in Camden County at that time, rather than with R.D. in Passaic County, defendant demonstrated from plaintiff's phone records that she began and ended the majority of her days in Passaic County. She also made a number of credit card purchases in Passaic County and, even though she allegedly commuted at least two hours each way between Camden County and her job in Morris County, she did not use the Turnpike or the Parkway.

Judge Wright also made detailed credibility findings concerning the testimony provided by plaintiff and R.D. He found neither witness credible. The judge concluded that "[t]he explanations offered by [p]laintiff to refute [defendant's] persuasive proofs were unbelievable and unsupported." He also "had difficulty believing much of [R.D.'s] testimony." We defer to these well-supported credibility determinations. Cesare, supra, 154 N.J. at 411-12.

In sum, we discern no basis for disturbing the judge's determination that plaintiff's alimony should be terminated because plaintiff was cohabiting with R.D. at the time defendant's obligation went into effect. We therefore affirm the judge's order requiring plaintiff to reimburse defendant for the alimony she received after April 1, 2010.

We next turn to defendant's contention in his cross-appeal that the judge erred in denying application for counsel fees. Defendant asserts that he was entitled to payment of his attorney's fees pursuant to Article 5.3 of the PSA, which provides

Should either party fail to abide by the terms of this Agreement, the defaulting party will indemnify and hold the other harmless for all reasonable expenses and costs, including attorney's fees and disbursements incurred in successfully enforcing this Agreement, or asserting or defending his or her rights hereunder as against the other party or third parties.

Defendant contends his motion to terminate alimony was an enforcement motion covered by this provision and, therefore, fees should have been granted.

We disagree. We review an order granting or denying counsel fees to determine if the trial court abused its discretion. Williams v. Williams, 59 N.J. 229, 233 (1971); J.E.V. v. K.V., 426 N.J. Super. 475, 492 (App. Div. 2012); Eaton v. Grau, 368 N.J. Super. 215, 225 (App. Div. 2004). "We will disturb a trial court's determination on counsel fees only on the 'rarest occasion' and then only because of clear abuse of discretion." Strahan v. Strahan, 402 N.J. Super. 298, 317 (App. Div. 2008) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)).

Here, we find no abuse of discretion in the trial court's decision to deny defendant's application. The judge considered defendant's argument concerning Article 5.3 of the PSA, but concluded that this was not an enforcement action covered by the parties' agreement. Instead, the parties had a bona fide dispute as to whether cohabitation had been proven. In litigating that issue, the judge found that neither party acted in bad faith and that each was fully capable of paying their own fees. We discern no basis to second-guess the judge's determination.

Affirmed.

1 As originally drafted, this provision of the PSA stated that "[i]n the event of [plaintiff's] cohabitation in a romantic relationship with an unrelated male or female, then alimony shall be subject to review under the case law."

2 Plaintiff and R.D. became engaged in December 2010, and married on September 21, 2012.

3 The one-way commute between Camden County and Morris County was between one-and-one-half and two-and-one-half hours.