CAROL HERNANDEZ v. RONALD HERNANDEZ

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

CAROL HERNANDEZ,

Plaintiff-Respondent/

Cross-Appellant,

v.

RONALD HERNANDEZ,

Defendant-Appellant/

Cross-Respondent.

_______________________________

March 18, 2015

Submitted November 3, 2014 - Decided

Before Judges Lihotz and St. John.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-586-01.

Nemergut & Duff, attorneys for appellant/ cross-respondent (Howard Duff, of counsel; Christopher M. Kelly, on the briefs).

Carol Hernandez, respondent/cross-appellant pro se.

PER CURIAM

Defendant Ronald Hernandez appeals from a June 12, 2013 post-judgment matrimonial order, entered following a plenary hearing, denying his motion to terminate the spousal support obligation to plaintiff Carol Hernandez. Defendant challenges the denial of his motion as erroneous, arguing the income imputed to plaintiff was not supported by the record. Plaintiff cross-appeals, asserting the Family Part judge erred in reducing the prior alimony award, arguing the modified amount was insufficient to meet her needs. Following our review, we reject plaintiff's contentions, as stated in the cross-appeal and agree with defendant that the level of income imputed to plaintiff was not grounded on the facts of record and resulted in the motion judge's flawed conclusion to continue the alimony award, albeit at a reduced level.

These facts are taken from the motion record. A final judgment of divorce (FJD), filed on February 20, 2004, ended the parties' twenty-seven-year marriage. The FJD was entered after trial, presided over by Judge Jessica R. Mayer. Plaintiff was awarded $165 per week alimony based on defendant's annual income as a sheet metal worker and her $675 per week imputed income, as if employed as a secretary. Judge Mayer's findings and conclusions were affirmed on appeal. Hernandez v. Hernandez, No. A-4163-03 (App. Div. Jan. 21 2005) (slip op. at 1).

Defendant filed this motion seeking to terminate his spousal support obligation, alleging he experienced a change in circumstances. At the time of the plenary hearing, which was conducted by a different Family Part judge (the motion judge), defendant was in his early sixties and had filed for early retirement because of his deteriorating health and injuries, ending his employment as a lineman for Verizon. Defendant applied for and was awarded Social Security Disability (SSD) based on his documented medical conditions, including seven herniated discs, nerve damage in his feet, asbestosis, and asthma.

In addition to SSD, defendant received distributions from two pensions: one emanated from his employment during the marriage, which had been equitably distributed; the other was earned in the years following divorce.1 Annualized, his total receipts, approximated $30,600.2

Plaintiff, also in her early sixties, resumed working after the divorce, holding various positions. Since 2006, plaintiff worked as an office assistant in a dental office, earning eighteen dollars per hour and working between twenty-one to twenty-eight hours per week. She testified she was never able to earn the level of income imputed in the FJD. The motion judge found, "[a]lthough she stated she attempted to find employment equivalent to the amount imputed to her, she was unable to provide any details as to any job searches to support her contention." Plaintiff's certification and case information statement (CIS), filed in opposition to defendant's motion, listed her wages from 2006 to 2012, as follows: 2006-$16,586; 2007-$26,605; $2008-$23,285; 2009-$22,046; 2010-$22,000 plus unemployment of $1,930; and 2011-$22,212, plus unemployment of $4,305. As of December 18, 2012, a forty-eight week period, she earned $20,583.50, received unemployment compensation of $6,765, pension receipts of $529 per month, and alimony. Unemployed at the time of the plenary hearing, plaintiff offered no explanation or documentation surrounding the circumstances of her job loss or her search for employment.

Plaintiff admitted she received her equitable share of defendant's pension. She also had accumulated her own retirement account, which she acknowledged she was not yet drawing. Further, the parties' oldest adult child lives with plaintiff. Plaintiff claims the child had been working, but was laid off prior to the plenary hearing. Plaintiff's CIS itemized monthly expenses for herself and the child as $3,023.

In the statement of reasons attached to the post-judgment order, the motion judge found defendant had proven he suffered a change in financial circumstances as a result of his disability. Further, defendant's income receipts were less than one-half the gross income earned at the time of the divorce. As to plaintiff, the motion judge imputed annual income of $20,000, suggesting that sum represented her "average" earnings over the years. The judge considered plaintiff's expenses, which he reduced by an amount attributed to the adult child, determining plaintiff's monthly needs were $2,354. Without explanation, the motion judge concluded plaintiff could not meet the marital lifestyle and needed support. Also, he found defendant, despite his reduced income, could provide support and denied defendant's request to terminate his obligation. The judge reduced defendant's alimony obligation to $100 per week, retroactive to December 6, 2012, and stipulated how plaintiff would reimburse defendant for amounts he had overpaid. Both parties appealed.

On appeal, defendant argues the trial court erred in declining to impute the level of income found to represent plaintiff's earning ability at the time of divorce. He maintains the motion judge's finding was unsupported by the record and must be reversed.

Plaintiff's cross-appeal challenges as unfounded the ordered reduction in alimony, arguing she needs additional support, which defendant can pay. Plaintiff asserts she never earned the level of income imputed to her in the FJD, was unemployed at the time of the plenary hearing, and the motion judge's use of $20,000 was "fit, just and reasonable."

In an argument not addressed by the motion judge, plaintiff notes defendant is remarried and his wife is employed. Accordingly, defendant's claimed monthly expenses must be reduced to account for his wife's share of these costs. Plaintiff finally asserts the motion judge erred in considering pension receipts because these sums were subject to equitable distribution and should not be considered when assessing her need for alimony.

Our review of a trial judge's factual findings, following a non-jury trial, is limited. Cesare v. Cesare, 154 N.J. 394, 411 (1998). Generally, "findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." Id. at 411-12. In matrimonial matters, this "[d]eference is especially appropriate when the evidence is largely testimonial and involves questions of credibility," id. at 412 (citation and internal quotation marks omitted), because the trial judge has "a feel of the case" and is in the best position to "make first-hand credibility judgments about the witnesses who appear on the stand." N.J. Div. of Youth & Family Servs. v. E.P., 196 N.J. 88, 104 (2008) (citation and internal quotation marks omitted). Review of the cold record alone "can never adequately convey the actual happenings in a courtroom." N.J. Div. of Youth & Family Servs. v. F.M., 211 N.J. 420, 448 (2012) (citing E.P., supra, 196 N.J. at 104).

Reversal is warranted only when a mistake must have been made because the trial court's factual findings are "'so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice . . . .'" Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974) (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963)). Further, "the trial judge's legal conclusions, and the application of those conclusions to the facts, are subject to our plenary review." Reese v. Weis, 430 N.J. Super. 552, 568 (App. Div. 2013). See also Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

"The modification of alimony is best left to the sound discretion of the trial court." Innes v. Innes, 117 N.J. 496, 504 (1990). When determining an appropriate alimony award, a trial judge has discretion to decide whether the facts require income to be imputed to the parties. Tannen v. Tannen, 416 N.J. Super. 248, 261 (App. Div. 2010), aff'd o.b., 208 N.J. 409 (2011). See also Storey v. Storey, 373 N.J. Super. 464, 474-80 (App. Div. 2004) (imputing income to obligor based on earning capacity despite actual job earning a lower income); Arribi v Arribi, 186 N.J. Super. 116, 118 (Ch. Div. 1982) ("[O]ne cannot find himself in, and choose to remain in, a position where he has diminished or no earning capacity and expect to be relieved of or to be able to ignore the obligations of support to one's family."). While an "abuse of discretion . . . defies precise definition," we will not reverse the decision absent a finding the judge's decision "rested on an impermissible basis," considered "irrelevant or inappropriate factors," Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002) (citations and internal quotation marks omitted), "failed to consider controlling legal principles or made findings inconsistent with or unsupported by competent evidence." Storey, supra, 373 N.J. Super. at 479.

"'Imputation of income is a discretionary matter not capable of precise or exact determination[,] but rather requir[es] a trial judge to realistically appraise capacity to earn and job availability.'" Gnall v. Gnall, 432 N.J. Super. 129, 158 (App. Div. 2013) (quoting Storey, supra, 373 N.J. Super. at 474), certif. granted, 217 N.J. 52 (2014). When examining the ability to earn income, the same principles used to determine whether to impute income to an obligor equally apply to a supported spouse. Id. at 154-55. Consequently, a supported spouse's circumstances, including earning potential, must be included in the calculus when discerning whether an award of alimony is appropriate.

In light of the evidence in this record, we reject defendant's contention the motion judge abused his discretion by imputing to plaintiff a level of income less than the $35,000 per year set forth in the FJD. During the plenary hearing, plaintiff testified she had never been able to secure employment earing $675 per week since the divorce. Although plaintiff did not produce proof of job searches verifying her asserted inability to secure full-time employment, she demonstrated the maintenance of steady employment with the same employer for more than six years, during which she was assigned work for approximately twenty-five hours per week. We determine the motion judge's acceptance of the established earnings plaintiff received over the prior six years soundly showed her earning ability. In this light, we cannot agree income should have been imputed based on the facts presented in 2004 when the FJD was entered.

That said, we agree with defendant and determine this record devoid of substantial, credible evidence to sustain the motion judge's finding plaintiff's "average" income "over the past few years" was a mere $20,000. Thus, we reverse this determination.

Despite preparing a written statement of reasons, the motion judge gave no explanation for imputing $20,000 per year to plaintiff. He recited the record evidence showing plaintiff's annual earnings since 2007, always exceeded $20,000. In fact, only plaintiff's 2006 reported wages sank below this level. However, plaintiff's 2006 wages resulted from her newly commenced dental office position, without clarification of the period of payment or whether additional earnings were received that year.

Plaintiff was paid eighteen dollars per hour for several years, and during 2012, which was the year prior to the plenary hearing, she earned $22,212 along with unemployment compensation of $6,765, for a total of $28,977.3

"Rule 1:7-4 requires a judge to provide findings of fact and conclusions of law on every [decision] decided by a written order that is appealable by right." Fodero v. Fodero, 355 N.J. Super. 168, 170 (App. Div. 2002). See R. 1:7-4 (requiring a trial judge to accompany all opinions with findings of fact and conclusions of law). The omission of critical factual findings, supporting the basis to supplement the Guidelines support award, impedes our review and requires a remand limited to this issue. See Ducey v. Ducey, 424 N.J. Super. 68, 74 (App. Div. 2012).

[Elrom v. Elrom, __ N.J. Super. __, __ (App. Div. Feb. 23, 2015) (slip op. at 26-27).]

Here, the finding by the motion judge that plaintiff's income averaged $20,000 per year is unsubstantiated and belied by the uncontroverted evidence in the record. Further, although plaintiff was laid off, she testified she suffered no medical impediment precluding her reentry to the workforce. She also made a point to state she was not applying for social security retirement or using her retirement account, suggesting she would continue working.

Examining whether an award of alimony should remain requires review of the parties' incomes, needs, and the marital standard of living. Pointedly, we must discern whether defendant is able to pay support, whether plaintiff is in need of financial assistance, and whether she can be sustained at the former marital standard of living. Stamberg v. Stamberg, 302 N.J. Super. 35, 42 (App. Div. 1997).

As noted, defendant's current sources of income include social security disability ($2,073 per month) and pension receipts ($726 per month), for a total annual income of $33,588. The documentation underpinning his social security disability award refute any suggestion he can continue in his prior physically demanding occupation and there is no evidence defendant can continue working. See Diehl v. Diehl, 389 N.J. Super. 443, 451 (App. Div. 2006) ("[T]he determination of [a litigant's] disability is prima facie evidence of an inability to pursue gainful employment").

We recognize a social security award does not preclude all earning possibility, but the "standard for establishing disability is stringent one . . . ." Robinson v. Richardson, 360 F. Supp. 243, 249 (E.D.N.Y. 1973). Disability is defined by the Social Security Act as the "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months." 42 U.S.C.A. 423(d)(1)(A).4 On this record, there is no evidence defendant has the ability to earn additional income.

We also cannot ignore the legal preclusion from considering receipts from a pension equitably divided when determining an obligor's ability to pay alimony. "When a share of a retirement benefit is treated as an asset for purposes of equitable distribution, the court shall not consider income generated thereafter by that share for purposes of determining alimony." N.J.S.A. 2A:34-23(b). See also Innes, supra, 117 N.J. at 505. Thus, defendant's annual income available to pay alimony, reduced by his equitably distributed pension, was $28,764.5

Defendant's CIS reported monthly expenses of $6,996, which include alimony. After removing the alimony payment, the budget is $6,281 per month. The CIS does not identify whether the expenses listed are defendant's proportionate share or whether they represent the total household expenditures to which his wife contributes. In any event, defendant's disability and pension receipts without reduction for any possible tax liability,6 cannot meet even half the monthly expenses.

Turning to plaintiff's circumstances, her 2012 earnings and unemployment over the forty-eight week period totaled $25,083. Over a fifty-two week period, this would be $27,173. Her CIS reflected she paid state and federal taxes and assessments of $73 per week or $3,803 per year, leaving a net income of $23,370. Plaintiff also received her share of defendant's pension income totaling $6,348 per year.

The standard of living established during the marriage was described by Judge Mayer as "a very modest life style." The monthly expenses reported by plaintiff in her 2004 CIS were lower than those now recited in her recent CIS. The motion judge accepted this report to establish plaintiff's needs, as reduced to account for the adult child's expenses. Plaintiff's annual expenses were $28,248. The record establishes plaintiff's ability to earn $18 per hour, which along with her share of defendant's pension receipts, allow her to meet her annual expenses, without the benefit of alimony.7

Because the motion judge based his conclusion on erroneous facts, the order denying defendant's motion to terminate alimony may not stand and the motion judge's determination must be reversed.

Reversed.

1 The pension subject to equitable distribution will change on March 1, 2016, at which time both parties' monthly payment will increase. We did not account for this change in our computations of the parties' current available income.

2 Probation Services attached defendant's pension in error, decreasing his receipt and correspondingly increasing plaintiff's receipt of funds by $2,892 per year. For purposes of our review, we consider defendant's entitlement, not the lesser amount he received after the mistaken garnishment.

3 We also find error in the motion judge's exclusion of plaintiff's unemployment compensation, after reasoning these receipts were "temporary." We presume the court mistakenly applied the principle that unemployment may be a temporary condition and may not serve as a basis for modification of support. See Larbig v. Larbig, 384 N.J. Super. 17, 23 (App. Div. 2006). Although the level of unemployment earnings do not match actual income and receipt may be temporary, unemployment benefits are not excluded from annual receipts when determining a party's total annual funds available to provide support.

4 To determine disability under the Social Security Act, the law is clear four elements of proof, considered in combination, must be shown: "(1) objective medical facts and clinical findings, (2) diagnoses and medical opinions of examining physicians, (3) subjective evidence of pain and disability as testified to by [the claimant] and corroborated by others who have observed her, and (4) [claimant]'s age, educational background, and work history." Rosario v. Harris, 492 F. Supp. 414, 418 (D.N.J. 1980).

5 It is not clear how the motion judge determined defendant s annual income was $30,696, as no explanation accompanied this finding.

6 Although we can safely assume defendant's current pension receipts alone are insufficient to trigger an income tax consequence, we cannot determine whether taxes would result upon filing a joint return with his wife.

7 We reject plaintiff's argument that her share of the pension is excluded from consideration as N.J.S.A. 2A:34-23(b)(10) allows consideration of "the equitable distribution of property ordered."