MARLENE A. SCHWITZER v. STEVEN SCHWITZER

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0022-04T10022-04T1

MARLENE A. SCHWITZER,

Plaintiff-Respondent,

v.

STEVEN SCHWITZER,

Defendant-Appellant.

_________________________________

 

Argued April 26, 2005 - Decided

Before Judges Stern and Wecker.

On appeal from the Superior Court of New

Jersey, Chancery Division, Family Part,

Hunterdon County, FM-10-112-96.

Donald F. Scholl, Jr. argued the cause for

appellant (Reed and Scholl, attorneys;

Mr. Scholl, of counsel and on the brief).

Nina Rossi argued the cause for respondent.

PER CURIAM

This appeal requires us to decide whether an arbitrator's award on post-judgment motions concerning alimony and other issues went beyond the scope of the parties' submission. Because we conclude that the award of a retroactive increase in alimony covering the eight-year period since entry of the judgment of divorce was beyond the parties' submission to the arbitrator, the Family Part judge erred in confirming the award. We now reverse.

I

Plaintiff, Marlene A. Schwitzer, and defendant, Steven Schwitzer, were married on August 4, 1979. Two children were born of the marriage: Scott, born October 30, 1982, and Julia, born April 16, 1984. After nearly seventeen years of marriage, a dual final judgment of divorce, with an attached property settlement agreement (the Agreement or PSA), was entered on June 7, 1996. The judgment specifically provided that although the court took no testimony respecting the terms of the Agreement, it "determined that both parties have voluntarily executed the Agreement and have accepted the terms thereof as fair and equitable."

Prior to the birth of the parties' children, plaintiff was employed as a registered nurse; following their births, she was not employed outside of the home. At or about the time of the divorce proceedings, however, plaintiff became employed as a private duty nurse on a part-time basis; she worked seventeen hours per week, earning $15 per hour, with a weekly gross income of $255, or $13,260 per year. Defendant had been unemployed periodically during the marriage as a result of layoffs; at the time of the divorce, however, he was earning $28.77 per hour as an electrician. The average of defendant's gross annual earnings for the years 1991 through 1996 was approximately $60,000. As a member of the International Brotherhood of Electrical Workers, Local 456, defendant also had an annuity and pension fund.

Paragraph 3 of the PSA provided for alimony as follows:

The husband shall pay to the wife term alimony, in the amount of $75.00 per week . . . .

The payment of term alimony shall be reviewed in six (6) years, to coincide with the younger child of the marriage graduating from high school. The continued payment of alimony beyond six (6) years shall be weighed considering the wife's income and number of hours of employment per week. . . . Full-time employment shall be a factor in considering the termination of alimony, in June, 2002.[]

Pursuant to the terms of the PSA, plaintiff remained in possession of the marital home. The parties agreed that the fair market value of the home was $195,000, and as of May 31, 1996, the mortgage balance was $16,563.21. Thus, the net equity was $178,436.79, and the agreed upon fifty-percent interest of each party was $89,218.39. Defendant conveyed his interest in the house to plaintiff, in exchange for plaintiff giving up her interest in other assets listed in the PSA, particularly defendant's retirement benefits. Defendant conveyed $32,220.85 to plaintiff by way of a Qualified Domestic Relations Order, thereby effectuating an equal division of their marital property.

At the time of divorce, the parties' son, Scott, was thirteen years old, and their daughter, Julia, was twelve. According to the final order fixing custody, dated March 11, 1996, the parties agreed to joint legal custody, with plaintiff "the primary and residential caretaker" and defendant "the secondary caretaker." Pursuant to the PSA, defendant was to pay $200 per week in child support, unallocated between the two children.

Child support was later increased to $303 per week by a post-judgment order dated April 12, 2002, which also provided that Scott's college expenses, including "tuition, room and board and books shall be allocated 68.59% to the Husband and 31.41% to the Wife." The court's decision on the allocation of college expenses reflected the parties' percentage share of income at that time, indicated on a child support guidelines worksheet: plaintiff earned net income of $589 per week (31.60%), and defendant earned net income of $1,275 per week (68.40%).

On August 21, 2002, defendant filed a post-judgment notice of motion, seeking to terminate alimony "concurrent with the filing date of this motion which, as provided in the property settlement agreement . . . was to be reviewed at the conclusion of six (6) years which would coincide with the graduation from high school of the parties' daughter." Defendant also sought to reduce outstanding child support, to enforce a portion of the April 2002 order providing that plaintiff would reimburse the sum of $2,000 to an education account, and to adjust his percentage of the contribution towards college expenses to be "predicated upon a reduction in income with the elimination of overtime."

Plaintiff filed a cross-motion seeking an order requiring defendant to produce current financial information, to convert rehabilitative to permanent alimony, and to increase the amount of alimony awarded.

Following a hearing on October 4, 2002, the judge entered an order dated October 8, 2002, which provided, in pertinent part:

1. DEFENDANT'S REQUEST FOR AN ORDER terminating alimony concurrent with the filing date of this motion, which as provided in the property settlement agreement incorporated in the Final Judgment of Divorce was to be reviewed at the conclusion of six years, which would coincide with the graduation from high school of the parties' daughter, is referred to binding mediation (arbitration) by agreement of the parties who have agreed to supply the court with the names and C.V.'s of two mediators, not later than October 15, 2002, one of whom will be appointed by the court.

2. DEFENDANT'S REQUEST FOR AN ORDER reducing the outstanding child support award in consideration of the following changed circumstances, including the graduation from high school of the parties' daughter and her intention to enroll in college full time and assume residency off campus in a full year leased unit that the father will be contributing to; the cessation of overtime hours which the father was previously working; and increase in the mother's income and available work hours; by agreement of the parties will be resolved by conferring between the parties and their attorneys and by using the formula recommended by the Court Order of April 12, 2002.

. . . .

4. DEFENDANT'S REQUEST FOR AN ORDER adjusting the percentage contribution of the Father towards college tuition predicated upon a reduction in income with the elimination of overtime is MOOT for the reasons set forth in paragraph 2 above.

. . . .

7. PLAINTIFF'S REQUEST FOR AN ORDER converting rehabilitative to permanent alimony and increasing the amount alimony awarded is MOOT for the reasons set forth in paragraph 1 above.

[Emphasis added].

Following arbitration proceedings which included three days of testimony and concluded on March 16, 2004, the arbitrator set forth his decision in a letter to the parties' counsel dated June 3, 2004.

Although the arbitrator noted that the "primary issues" before him included "alimony, child support, college contributions expressed as a percentage of the total costs to be paid by each party, emancipation of the children, tax dependency exemptions, legal fees and mediation/arbitration fees," only the issues of alimony and college contributions are raised by this appeal.

The arbitrator concluded that the alimony provided by the PSA had been insufficient to meet plaintiff's needs, while defendant had an excess of income over his needs, and that there was a cumulative "shortfall" in alimony in the amount of $47,520.00 "from the month of the divorce [June 1996] through May of 2004." (Emphasis added). The arbitrator's decision continued as follows:

To compensate for this inequity, I direct that Steve transfer, by Qualified Domestic Relations Order, the sum of $60,000 from his Defined Contribution Plan to Marlene's IRA. This should take place within thirty (30) days of the date of this decision. Marlene will bear the tax consequences of a subsequent withdrawal, which it is anticipated she will make in order to pay unsecured debt and perhaps counsel fees. It is anticipated that the taxes and penalties from the withdrawal will "net" Marlene approximately $48,000.

With respect to college contributions, the arbitrator decided that "[o]n a prospective basis, effective with the Fall semester of 2004, the parties shall contribute equally toward college expenses as defined in the Property Settlement Agreement."

On June 30, 2004, defendant filed a notice of motion to vacate the arbitration award. According to defendant, "[t]he arbitrator exceeded his authority and entered relief outside the bounds of the arbitration" by retroactively modifying alimony, as this relief "was not the subject of the request" of either party, or "the underlying motion of the defendant . . . to terminate alimony and the cross motion of the plaintiff[] to make the alimony award permanent and for an increase."

The Family Part judge entered an order dated August 6, 2004, granting plaintiff's cross-motion to confirm the arbitration award and denied defendant's requests to vacate or modify the award.

II

The Supreme Court has recognized that "arbitration of matrimonial disputes may offer an effective alternative method of dispute resolution." Faherty v. Faherty, 97 N.J. 99, 107 (1984); see also Chen v. Chen, 297 N.J. Super. 480, 489 (App. Div. 1997). In Faherty, the Court noted that the advantages of arbitration in domestic relations cases include: "reduced court congestion, the opportunity for resolution of sensitive matters in a private and informal forum, reduction of the trauma and anxiety of marital litigation, minimization of the intense polarization of the parties that often occurs, and the ability to choose the arbitrator." Id. at 107-08.

In Tretina Printing, Inc. v. Fitzpatrick & Assocs., Inc., 135 N.J. 349 (1994), the Court adopted the rule governing judicial review of arbitration set forth in Chief Justice Wilentz's concurring opinion in Perini Corp. v. Greate Bay Hotel & Casino, Inc., 129 N.J. 479, 496 (1992):

Basically, arbitration awards may be vacated only for fraud, corruption, or similar wrongdoing on the part of the arbitrators. [They] can be corrected or modified only for very specifically defined mistakes as set forth in [N.J.S.A. 2A:24-9]. If the arbitrators decide a matter not even submitted to them, that matter can be excluded from the award.

[Tretina, supra, 135 N.J. at 358 (alterations in original) (quoting Perini, supra, 129 N.J. at 548 (Wilentz, C.J., concurring)).]

Thus, a court may vacate an arbitration award only on the narrow grounds specified in N.J.S.A. 2A:24-8:

The court shall vacate the award in any of the following cases:

a. Where the award was procured by corruption, fraud or undue means;

b. Where there was either evident partiality or corruption in the arbitrators, or any thereof;

c. Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause being shown therefor, or in refusing to hear evidence, pertinent and material to the controversy, or of any other misbehaviors prejudicial to the rights of any party;

d. Where the arbitrators exceeded or so imperfectly executed their powers that a mutual, final and definite award upon the subject matter submitted was not made.

[Ibid. (emphasis added).]

Defendant argues that the award should be vacated because the arbitrator "exceeded the limits prescribed within his authority." We agree. The adequacy of the alimony provided under the PSA and incorporated in the 1996 judgment, much less the retroactive modification of alimony, was never submitted to the arbitrator. Where parties voluntarily agree to arbitration, the "arbitrator's jurisdiction . . . hinges upon 'what the . . . parties to the contract have agreed should be submitted to arbitration.'" Chen, supra, 297 N.J. Super. at 489 (quoting Laborers' Local Union v. Interstate Curb & Sidewalk, 90 N.J. 456, 463 (1982)).

The record in this case does not include a written arbitration contract defining the scope of the arbitrator's authority. Thus, as defendant contends, the parties' agreed submission, and thus the arbitrator's authority, must be inferred from the relief originally requested by the parties in their motion and cross-motion respectively; from the order referring the matter to arbitration by agreement of the parties; and from the statement of issues submitted to the arbitrator.

Defendant's post-judgment notice of motion, filed in August 2002, sought an order granting the following relief respecting alimony:

A. Terminating alimony concurrent with the filing date of this motion which, as provided in the property settlement agreement incorporated in the final judgment of divorce, at page 3, paragraph 3, was to be reviewed at the conclusion of six (6) years which would coincide with the graduation from high school of the parties' daughter.

[Emphasis added].

Plaintiff's notice of cross-motion sought an order "[c]onverting rehabilitative to permanent alimony and increasing the amount of alimony awarded." (Emphasis added).

The Order dated October 8, 2002, addressed those motions as follows:

1. DEFENDANT'S REQUEST FOR AN ORDER terminating alimony concurrent with the filing date of this motion, which as provided in the property settlement agreement incorporated in the Final Judgment of Divorce was to be reviewed at the conclusion of six years, which would coincide with the graduation from high school of the parties' daughter, is referred to binding mediation (arbitration) by agreement of the parties[,] who have agreed to supply the court with the names and C.V.'s of two mediators, not later than October 15, 2002, one of whom will be appointed by the court.

[Emphasis added].

In a statement of issues that defendant submitted to the arbitrator, defendant noted that the alimony payments that were ordered as part of the divorce judgment had been predicated on plaintiff's weekly income at the time of the judgment. Thus, the agreement recited that "[a]t the time of this Agreement, the wife is earning $15 per hour, working part time. The wife's weekly gross income is $225. The hours presently worked are part-time, or 17 hours. Full-time employment shall be a factor in considering the termination of alimony, in June, 2002." Defendant, therefore, urged the arbitrator to terminate his obligation to pay alimony effective June 1, 2002 because plaintiff's hourly wage had increased to $27.50, and she was working at least 30 hours per week. Defendant further requested that in the event that defendant's obligation to pay alimony was to be adjusted, that the arbitrator "[credit] the husband approximately $36,000 representing the capital gains tax exposure by his concession at settlement to permit the wife and children to reside in the marital home post divorce and offset equally his pension and annuity against the accrued equity in the marital home." (Emphasis added).

The record does not contain a statement of issues submitted by plaintiff, but does include "plaintiff's Closing Statement" to the arbitrator. In her statement, plaintiff set forth the following argument:

In this case, the Trial Court made no inquiry as to the standard of living or as to whether the award of alimony was sufficient to enable the plaintiff to maintain the standard of living enjoyed during the marriage. A review of the alimony award and the parties' needs at the time that the Judgment of Divorce was entered reveals it to be inadequate from the start. The award of alimony, even when combined with the child support award and with plaintiff's earned income, was woefully inadequate to maintain the plaintiff and the children at the standard of living maintained during the marriage.

. . . .

The initial award of alimony in the amount of $75 per week has done little to assist plaintiff in meeting her needs. She has had to resort to borrowing to bridge the gap between her income and the expenses necessary to maintain the standard of living. Despite her best efforts and, given the constraints under which she operated in combining belated efforts to build her career with remaining child care responsibilities, she has been unable to become economically self-sufficient and has accumulated substantial debt.

Plaintiff obviously sought the arbitrator's determination that the alimony provided by the PSA was inadequate. But she did so in the context of her request for permanent alimony in an increased amount.

To determine whether the arbitrator exceeded his powers under N.J.S.A. 2A:24-8(d), a close look at his entire decision respecting alimony is telling. That portion of the arbitrator's decision reads as follows:

The Supreme Court's landmark decision in Crews v. Crews, 164 N.J. 11 (2000) has applicability to this case. In Crews, the Court stated:

"The marital standard of living is the measure for assessing initial awards of alimony, as well as for reviewing any motion to modify such awards." Crews at 35.

Thus, it appears that the Crews [decision] requires an assessment of the standard of living established during the marriage and, determination as to whether the alimony award, whether by way of trial or settlement, was sufficient or adequate to maintain a reasonably comparable lifestyle post-divorce.

In the Schwitzer case, there is no reference in the Property Settlement Agreement or Final Judgment as to the marital standard of living. This is not a criticism of counsel since the substantial majority of divorce agreements prior to Crews made no reference to standard of living. Therefore, we are now left to reconstruct that standard after the fact.

In that regard, the parties testified in significant detail regarding their marital standard of living discussing such items as vacations and restaurants. While their testimony diverged to some extent, it appears for the most part that they lived a fairly modest middle class lifestyle focusing, to their mutual credit, upon the needs of their children and specifically their many extra-curricular activities and interests.

The marital standard of living can best be admeasured by the Case Information Statement budgets filed by the parties prior to the settlement. Marlene's expenses total $3,492 per month[] and Steve's $1,854 per month.

Marlene's budget included the mortgage mentioned above[,] the monthly payment for which was approximately $810 at the time. Had the mortgage been paid off within 2 1/2 years, as originally planned, her budget would have been reduced to approximately $2,682. Certainly[,] neither party's budget can be considered inflated or unreasonable and I conclude that they accurately portray the standard of living enjoyed during the marriage.

According to her 1996 Federal Income Tax return, Marlene earned $16,796 at STAT's Nursing during that year. This would equate to approximately 20 hours per week at the time, which does not appear unreasonable or unexpected given the ages of the children, the fact that Steve could not and was not exercising overnight parenting time and the fact that the parties had recently divorced.

I have used Marlene's 1996 reported income of $16,796 as the starting point of my analysis. I have deducted 15% for taxes and concluded therefore that she would have earned income of $1,190 per month after taxes.[] I also tax effected the alimony at 15% which results in after-tax payment of $275.[]

At 4.3 weeks per month, the amount of child support she received was $860.[]

Accordingly, Marlene's total after-tax income in 1996 was $2,325[] leaving a shortfall of $1,167.[]

After satisfaction of the mortgage liability, some 30 months later, her shortfall would be reduced by $810, to $357 per month.[]

Thus, the alimony payments were not sufficient to maintain Marlene's lifestyle.

The second half of the analysis is to determine whether Steve had the ability to pay more than $75 per week in alimony at the time of divorce.

Steve's income in 1996 was $56,705. After deducting 28% for taxes, his net monthly income was $3,402.[]

His alimony payments, tax-effected at 28%, were $234.[] His child support was $860 and his budget was $1,854.

Accordingly, Steve has an excess of $454.[]

For the first 30 months post-divorce, from July 1996 through and including December 1998, additional non-taxable support payments in the amount of $810.50[] per month would have "spread the pain evenly" between Steve's excess and Marlene's shortfall. The total paid for that time would have been $24,315.[]

Once the mortgage was paid off, beginning January 1999, Steve would have been in a position to meet Marlene's complete shortfall of $357 per month. Since there are 65 months that have transpired since then (through May of 2004), the total paid out would have been $23,205.[]

Accordingly, I conclude that there is a "shortfall" in support of $47,520 from the month of the divorce through May of 2004.[]

To compensate for this inequity, I direct that Steve transfer, by Qualified Domestic Relations Order, the sum of $60,000 from his Defined Contribution Plan to Marlene's IRA. This should take place within thirty (30) days of the date of this decision. Marlene will bear the tax consequences of a subsequent withdrawal, which it is anticipated she will make in order to pay unsecured debt and perhaps counsel fees. It is anticipated that the taxes and penalties from the withdrawal will "net" Marlene approximately $48,000.

On a going forward basis, Steve shall continue to pay alimony at the rate of $75 per week until the first to occur among the following: the death of either party, Marlene's remarriage or cohabitation as defined in the Property Settlement Agreement, or upon the graduation of the second child but in that case no later than May 2006. Alimony shall terminate at that time without exception.

In confirming this award, the judge cited Crews v. Crews, supra, 164 N.J. at 35, and explained his reasons for denying defendant's motion to vacate the arbitration award:

The arbitrator was charged with restructuring the marital standard of living "after the fact" because no reference was made to same in the Final Judgment. The arbitrator rendered an impartial decision in a nine-page report, with reasons set forth therein, following three days of testimony and numerous exhibits. The arbitrator correctly examined the parties' income from previous years and determined the lump sum payment of spousal support. The court does not find any basis in law or in fact to hold that the arbitrator exceeded his powers or so imperfectly executed his powers that a mutual, final and definite award upon the issue of spousal support was not made.

We disagree. We fully recognize the limited scope of appellate review set forth in Tretina, in particular, that errors of law do not constitute grounds for vacating an arbitration award unless the parties so provide in their arbitration agreement. But under Tretina, "[i]f the arbitrators decide a matter not even submitted to them, that matter can be excluded from the award." 135 N.J. at 358 (quoting Perini, supra, 129 N.J. 479, 548 (Wilentz, C.J., concurring)).

It is well-settled that "[c]ourts have the equitable power to establish alimony and support orders in connection with a pending matrimonial action, or after a judgment of divorce or maintenance, and to revise such orders as circumstances may require." Crews v. Crews, supra, 164 N.J. at 24 (citing Lepis v. Lepis, 83 N.J. 139, 145 (1980)). "'As a result of this judicial authority, alimony and support orders define only the present obligations of the former spouses. Those duties are always subject to review and modification on a showing of 'changed circumstances.''" Ibid. (quoting Lepis, supra, 83 N.J. at 146).

In Crews, the Supreme Court "reaffirm[ed] the Lepis principle that the goal of a proper alimony award is to assist the supported spouse in achieving a lifestyle that is reasonably comparable to the one enjoyed while living with the supported spouse during the marriage." 164 N.J. at 16. The Court emphasized "[t]he importance of establishing the standard of living experienced during the marriage . . . . It serves as the touchstone inquiry for the initial alimony award and for adjudicating later motions for modification of the alimony when 'changed circumstances' are asserted." Ibid.

The Court concluded in Crews that it was unable to determine whether a continuation and conversion to permanent alimony was appropriate in the absence of findings respecting the marital standard of living to guide its review. Id. at 36. The Court determined that the "case must be remanded to the trial court for a specific finding of the standard of living established during the Crews' marriage. Once that finding is made, then the motion to modify may be properly considered." Id. at 35. The Court also stated the following:

In reviewing Mrs. Crews' motion to modify, the motion court should also re-examine the original alimony award in light of the established marital standard of living.

The motion court may conclude that the initial alimony award was not consistent with the standard of living established during the marriage but that it was all that Mr. Crews could afford at the time. If the court so finds, then it should exercise its inherent equitable power to modify alimony awards and tailor a modified alimony award that takes into account the marital standard of living and Mr. Crews' current financial condition.

[Ibid. (citing Lepis, supra, 83 N.J. at 148-49.]

Nothing in Crews, however, supports the conclusion that the Court intended a retroactive increase in alimony, in a lump sum or otherwise. In this case, it is apparent that the arbitrator, following the then applicable mandate to establish the Schwitzers' marital standard of living, on his own determined that he had authority to modify the original award.

After the arbitrator issued his award on June 3, 2004, but before the August 6, 2004 order confirming that award, the Supreme Court decided Weishaus v. Weishaus, 180 N.J. 131 (2004), modifying its earlier decision in Crews. The Weishaus Court concluded as follows:

We now hold that in uncontested divorce actions, trial courts must have the discretion to approve a consensual agreement that includes a provision for support without rendering marital lifestyle findings at the time of entry of judgment. Our holding in Crews should no longer be read to require findings on marital lifestyle in every uncontested divorce. A trial court may forego the findings when the parties freely decide to avoid the issue as part of their mutually agreed-upon settlement, having been advised of the potential problems that might ensue as a result of their decision. Even if the court does decide not to make a finding of marital standard, however, it nonetheless should take steps to capture and preserve the information that is available.

[Weishaus, supra, 180 N.J. at 144 (emphasis added).]

Significantly, even before the decision in Weishaus, Crews did not stand for the proposition that determining the marital lifestyle, in the course of a post-judgment application for modification, permitted retroactive modification of alimony. The instruction of Crews, unchanged by Weishaus, was that a court should consider the marital standard of living (after reconstruction from preserved information if necessary), in addressing a post-judgment application to modify support. See Crews, supra, 164 N.J. at 16.

We have previously noted that in determining whether a property settlement agreement is fair and equitable, courts

must consider issues such as the adequacy of the agreement at inception, the presumed understanding of the parties at that time, the reasonable expectation of the parties during the life of the agreement, the manner in which the parties acted and relied on the agreement as well as the previously stated principle that agreements by their very nature carry with them a stability that must be respected at the time of enforcement or even during periods when modification is at issue.

[Glass v. Glass, 366 N.J. Super. 357, 372 (App. Div.) (citation omitted), certif. denied, 180 N.J. 354 (2004).]

In the present case, the parties' nineteen-page PSA included twenty-eight separate provisions respecting alimony, child support, payment of college expenses, and equitable distribution. Paragraph 18 of the PSA reads as follows: "This Agreement is made voluntarily by both parties and in the negotiations preceding execution, the parties were represented by counsel of their own choosing." Both parties initialed the following statements:

a. Each party has reviewed each and every paragraph of the Agreement, individually and with their respective attorneys, and have had each and every paragraph explained to them by their attorney.

b. No one has forced or coerced either party to sign this Agreement.

c. This Agreement is deemed by each party to be fair, just, and equitable.

d. Each party has had sufficient time to review the terms hereof and have voluntarily executed this Agreement.

Moreover, the judgment of divorce specifically provided "that both parties have voluntarily executed the Agreement and have accepted the terms thereof as fair and equitable."

There is no record and no allegation that plaintiff ever filed a motion to modify alimony during the six years preceding 2002, when she filed her notice of cross-motion in response to defendant's motion to terminate alimony. Yet eight years after the PSA was entered into by the parties and incorporated into the judgment of divorce, the arbitrator effectively determined that the agreement was not fair and equitable. Clearly, this is against the public policy of this State favoring the finality and enforcement of property settlement agreements. See, e.g., Faherty v. Faherty, supra, 97 N.J. at 107 ("New Jersey has long recognized the validity and enforceablity of separation agreements between divorcing spouses."); Glass v. Glass, supra, 366 N.J. Super. at 372 ("[T]here is a strong public policy favoring stability of consensual arrangements for support in matrimonial matters." (quoting Avery v. Avery, 209 N.J. Super. 155, 160 (App. Div. 1986)).

We recognize the tension between the policy favoring finality of judgments and the policy favoring finality of an arbitrator's award. Here, we resolve that tension in favor of finality of the divorce judgment, because its retroactive modification was not within the scope of the submission or the arbitrator's powers.

"A court also may vacate an award if it is contrary to existing law or public policy." State v. Int'l Fed'n of Prof'l & Technical Eng'rs, Local 195, 169 N.J. 505, 514 (2001) (citations omitted).

III

In an order dated April 12, 2002 and entered on April 15, the Family Part judge had ordered that the children's college expenses "shall be allocated 68.59% to the Husband and 31.41% to the Wife, . . . retroactive to the fall semester 2001." With respect to the allocation of the children's college expenses, the arbitrator stated in his 2004 decision: "I do not intend to readjust or reallocate the college contributions made by the parties up through and including the Spring 2004 semester . . . . On a prospective basis, effective with the Fall semester of 2004, the parties shall contribute equally toward college expenses as defined in the Property Settlement Agreement." Defendant now argues that "the modified percentage should be applied retroactively to the date of [his] motion," which was filed in 2002. To the contrary, the arbitrator's decision amending the parties' shared obligations for college expenses was obviously and inextricably related to his alimony award, and cannot be addressed in isolation.

IV

Regrettably, in light of the time, energy, and money that has been expended in this ongoing post-judgment dispute, the order confirming the arbitrator's award is reversed and the motions respecting alimony and college expense contributions are remanded for further proceedings. The appeal does not challenge the confirmation of the arbitrator's award on other financial matters, specifically, child support. On remand, the Family Part judge shall determine whether that portion of the award is severable, or whether it is so inextricably related to the vacated portions of the award that it should be reconsidered. The judge on remand shall also address any application for counsel fees incurred on this appeal. See R. 2:11-4.

 
Reversed and remanded for further proceedings. We do not retain jurisdiction.

Paragraph 3 also included these provisions:

The wife holds a Bachelor of Arts and Science degree from Rutgers University and prior to the children of the marriage being born, was employed as a registered nurse. During the marriage, following the birth of the parties' children, the wife was not employed outside the home; although, in 1992, the wife took refresher courses in Princeton with the intention of working. At or about the time of the marital dissolution proceedings, the wife became employed on a part-time basis as a private duty nurse.

. . . .

. . . At the time of preparation of this Agreement, the wife is earning $15.00 per hour, working part-time. The wife's weekly gross income is $255.00. The hours presently worked per week are part-time, or 17 hours. . . .

The parties acknowledge that the husband has been unemployed periodically during the marriage, each year, as the result of layoffs. The husband is an electrician and a member of the International Brotherhood of Electrical Workers, Local #456.

In recognition of the husband's work history[,] and more specifically, periodic lay-offs, the parties agree that if the husband is unemployed for a period of two (2) weeks or more or alternately, for a period of three (3) weeks where he is called back to work on a temporary basis for a maximum of two (2) days, then the husband shall be entitled to reduce alimony to $25.00 per week, effective the second week of unemployment. Any arrearage for the period of unemployment would be waived. If the husband's employment is otherwise affected, he reserves the right to make application to the Court on changed circumstances on the issues of marital and child support. To the extent the husband invades the annuity during a period of unemployment, it being understood that the husband is not required to; such circumstance waives the reduction discussed in this paragraph.

Unfortunately, despite these provisions, the children spent little or no time with defendant, and he has had little participation in their lives.

We note an unusual circumstance, in that the arbitrator first acted as mediator. In a letter to the parties dated February 5, 2003, the then-mediator referred to their inability to reach an agreement, warned them against "the more expensive and risky process of arbitration," and conveyed a "proposal" with the "hope" that each would "be willing to compromise in order to bring an end to this process." That proposal, which is part of the record before us, provided for "permanent" alimony of $100 per week, child support of $334 per week for three summer months and $167 per week for nine months, and college expenses to be contributed 62% by defendant and 38% by plaintiff. The hope for compromise was obviously not realized. Nonetheless, defendant does not cite the arbitrator's earlier role as mediator, to which he apparently agreed, as grounds for vacating the award, and we need not comment further.

Although the PSA outlined "college expenses" to be shared by the parties it did not provide the apportionment of expenses between the parties.

Defendant also claimed that the arbitrator's decision contained "mathematical errors." That argument is moot in light of our decision vacating the award on other grounds.

Although no case information statements were included in the record on appeal, the one-page appendix submitted by plaintiff, illustrating a "Table of Earned/Unearned Income, Expenses and Debt" for the years 1996 through 2003, shows "Expenses" (without an itemized description) for 1996 in the amount of $41,892, and dividing this number by twelve equals $3,491 per month.

$16,796 X .85 = $14,276.60 / 12 = $1,189.72

This number appears to be the average of two calculations ($75 X 52 = $3,900 / 12 = $325.00 X .85 = $276.25) and ($75 X 4.3 = $322.5 X .85 = $274.13).

$200 X 4.3 = $860

$1,190 + 860 + 275 = $2,325

$3,492 - 2,325 = $1,167

$1,167 - 810 = $357

$56,705 X .72 = $40,827.60 / 12 = $3,402.30

This calculation ($75 X 52 = $3,900 X .72 = $2,808 / 12 = $234) appears to reflect a credit for the 28% tax on defendant's annual income calculated prior to deducting the amount of alimony payments.

$3,402 - 234 - 860 - 1854 = $454

The arbitrator arrived at this figure by adding plaintiff's "shortfall" to defendant's "excess" and dividing that sum in half: -$1,167 + 454 = -$713 / 2 = -$356.50. Thus, to "spread the pain evenly" between the parties, defendant would have to pay an additional $810.50 to plaintiff each month of the 30-month period in which plaintiff would have been liable for the mortgage: -$1,167 + 810.50 = -$356.50 and $454 - 810.50 = -$356.50. Accordingly, both parties would have a "shortfall" of $356.50 each month.

$810.50 X 30 = $24,315

$357 X 65 = $23,205

$24,315 + 23,205 = $47,520

While such a provision may be inferable from the parties' agreement to submit their opposing motions to arbitration, we need not reach that question.

(continued)

(continued)

28

A-0022-04T1

January 25, 2006