CELESTE MACHADO v. ESTATE OF RAUL MACHADO

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6609-05T36609-05T3

CELESTE MACHADO

Plaintiff-Appellant,

v.

ESTATE OF RAUL MACHADO,

Defendant-Respondent.

________________________________

 

Argued October 15, 2007 - Decided

Before Judges Parrillo, Graves and Alvarez.

On appeal from the Superior Court of New Jersey,

Chancery Division, Family Part, Essex County,

Docket No. FM-07-11997-79.

Francis W. Donahue argued the cause for appellant

(Donahue, Hagan, Klein, Newsome & O'Donnell, attorneys;

Mr. Donahue, of counsel and on the brief; Phyllis Klein O'Brien, on the brief).

Aericka J. Heavens argued the cause for respondent

(Poe & Freireich, attorneys; Harvey R. Poe, of counsel;

Ms. Heavens, on the brief).

PER CURIAM

Plaintiff Celeste Machado appeals from a June 26, 2006 order of the Family Part denying her application for alimony arrearages and interest in the amount of $55,353.59, calculated from November 19, 1999 to January 13, 2006; terminating the alimony obligation of defendant Raul Machado, effective November 19, 1999; terminating defendant's obligation to name plaintiff as a one-fourth beneficiary of an insurance policy, also effective November 19, 1999; vacating restraints imposed on the distribution of the assets of defendant's estate; and denying plaintiff's request for counsel fees. We affirm in all respects save for the denial of plaintiff's request for counsel fees and remand on that issue for findings of fact and conclusions of law.

The material facts are essentially undisputed. The parties were married on July 24, 1964 and had four children, the youngest of whom was emancipated on May 8, 1989. After seventeen years of marriage, the parties divorced on June 23, 1981. The final judgment of divorce (FJD) set spousal support at $150 per week and child support at $100 per week, for a total weekly support obligation of $250. The FJD also provided that plaintiff be named as one-fourth beneficiary, and the children named as three-fourths beneficiaries, of the life insurance policies held by defendant on January 1, 1980, which included a Hartford policy in the amount of $25,000 and an Arrow Uniform policy, in an unspecified amount. Defendant's obligation to maintain this insurance for the benefit of plaintiff and their children was to continue as long as he was obligated to pay support.

Defendant remarried after the divorce and subsequently acquired part of his ex-father-in-law's business, Arrow Uniforms, for which he worked during his marriage to plaintiff. He later started a new consulting business for which he came to work only part-time due to health problems. He reported gross sales from the consulting business of $44,934 in 2003, and $21,790 in 2004. Defendant's gross income in 2005 was $38,794.

Plaintiff did not work during her marriage to defendant. Two years after her divorce, in 1983, plaintiff began residing in her home with her boyfriend Michael Campione, with whom she lived for twenty years until his death in June 2003. Although they never married, they held themselves out to others as husband and wife, and the children called Campione their stepfather. In 1985, they started a video rental business which closed in 1992, after which plaintiff held a series of part-time jobs, and Campione became employed as a salesman. Plaintiff is currently employed as a medical biller earning approximately $35,000 a year.

Throughout the years, as each of the parties' children became emancipated, defendant would reduce his child support proportionately without formal modification of the FJD and by informal agreement. And despite plaintiff's cohabitation with Campione, defendant also continued paying alimony to maintain good will and because it was, in his opinion, "in the best interests of the children," who resided with plaintiff and Campione. However, defendant eventually terminated alimony as of November 19, 1999 and his last payment on May 7, 2001 reflected alimony arrears for five weeks in October and November 1999.

This much appears undisputed. The parties part company, however, over whether there was mutual agreement to terminate spousal support. According to defendant, he advised plaintiff in November 1999 that he could no longer afford to pay alimony and he assumed she agreed to the arrangement because she never pursued the matter thereafter: "that was what I felt that she had agreed to, she never asked for anything else. She never went to court, never said anything, [and] never asked me for a dime. We were at family functions after that, [and she] never said a word about [alimony payments]." Plaintiff, on the other hand, claims that defendant told her she was ineligible for alimony because of her cohabitation with Campione and that she "foolishly" believed him, although she also admits being aware that remarriage would terminate alimony. In fact, it was not until Campione's death in June 2003 that plaintiff consulted an attorney about having her alimony "reinstated."

As a result of that consultation, plaintiff's attorney sent defendant a letter dated December 27, 2004 requesting resumption of alimony payments and $39,000 in alimony arrears. When that effort proved unsuccessful, plaintiff filed a motion seeking the same relief. Defendant cross-moved to terminate alimony due to plaintiff's cohabitation with Campione. Both motions were denied without prejudice pending a plenary hearing. Discovery ensued, including the taking of depositions and an exchange of interrogatories. In the interim, defendant passed away, his estate was substituted as party to the action, and the parties entered into a consent order restraining the disposition of life insurance proceeds as well as any other assets of defendant's estate pending resolution of their dispute.

Eventually, the parties entered into a joint stipulation and the remaining factual issues were tried on May 23, 2006 with plaintiff as the only testifying witness. At the conclusion of the hearing, the Family Part judge, by order of June 26, 2006, denied plaintiff's application in its entirety. In a written opinion of same date, the judge concluded:

It was plaintiff's burden to show the economic effect from the cohabitation and that she [was] neither supporting nor being supported by Mr. Campione. The plaintiff's cohabitation with Mr. Campione was three years longer than her seventeen year marriage to the defendant. Where there is a showing of cohabitation, there is a rebuttal presumption shifting the burden of proof to the supported spouse to show that there is no actual economic benefit being received.

. . . .

The plaintiff waited almost six years to enforce her alimony payment after she stopped receiving alimony in 1999 and more than two years after her paramour died on June 13, 2003. The plaintiff and Michael Campione shared a common residence, had a long-term intimate relationship, jointly contributed to household expenses, shared a business together and their relationship was known to family and friends for over twenty years . . . . The plaintiff's conduct or failure to act on her alimony claim gives credibility to the defendant's claim that he and the plaintiff orally agreed to the termination based on her cohabitation with Mr. Campione and defendant's claimed inability to pay after 1999. Given the facts of this case, the court finds the parties agreed to terminate alimony as of 1999. The court is also satisfied the plaintiff did not and could not establish there was no actual economic benefit she received from cohabiting with Michael Campione as defined by Gayet and Konzelman. The parties were clearly free to agree to terminate defendant's alimony obligation based on their 1999 domestic and economic circumstances . . . . [Moreover] . . . since 1999 the plaintiff and Mr. Campione had all the information necessary for the court to make a finding regarding cohabitation and whether alimony should be modified or eliminated based on the economics of their relationship. The plaintiff failed to produce any economic evidence as to her cohabitation with Mr. Campione.

On appeal, plaintiff raises the following issues:

I. IN HIS DETERMINATION, THE JUDGE CONSIDERED FACTS AND ISSUES BEYOND THE WRITTEN STIPULATIONS OF THE PARTIES AND THE LIMITED TESTIMONY OF THE PLAINTIFF AND, THEREBY, VIOLATED DUE PROCESS.

II. THE FINDING THAT THERE WAS AN AGREEMENT TO TERMINATE ALIMONY IS AGAINST THE WEIGHT OF THE CREDIBLE EVIDENCE.

III. THE CREDIBLE EVIDENCE SUPPORTS PLAINTIFF'S CLAIM OF A CONTINUED NEED FOR ALIMONY.

IV. DEFENDANT'S ESTATE MUST COMPLY WITH JUDGMENT OF DIVORCE REGARDING LIFE INSURANCE AND ALIMONY ARREARAGES.

V. THE FAILURE TO ADDRESS PLAINTIFF'S REQUEST FOR COUNSEL FEES IS ERROR.

In her reply brief, plaintiff reiterates these, and raises additional issues:

I. THE TRIAL JUDGE CONSIDERED FACTS BEYOND THE PARTIES' JOINT STIPULATIONS, VIOLATING THE PLAINTIFF'S DUE PROCESS.

II. THE FINDING THAT THERE WAS AN AGREEMENT TO TERMINATE ALIMONY IS AGAINST THE WEIGHT OF THE CREDIBLE EVIDENCE. FURTHERMORE, THE PLAINTIFF ESTABLISHED HER CONTINUED NEED FOR ALIMONY.

III. THE RESPONSIBILITY TO FILE AN APPLICATION REGARDING THE ALIMONY WAS THE DEFENDANT'S NOT THE PLAINTIFF'S. THEREFORE, IT WAS THE DEFENDANT WHO DELAYED. THUS, DEFENDANT'S RELIEF, IF ANY, SHOULD BE RETROACTIVE ONLY TO THE DATE OF HIS NOVEMBER 2005 APPLICATION.

IV. DEFENDANT'S ESTATE MUST COMPLY WITH THE JUDGMENT OF DIVORCE REGARDING LIFE INSURANCE AND ALIMONY ARREARAGES AND THE COURT HAS THE AUTHORITY TO ENFORCE THIS OBLIGATION.

We are satisfied that there is sufficient credible evidence in the record to support the trial court's determinations of a mutual agreement to terminate alimony as of November 1999, Pascale v. Pascale, 113 N.J. 20, 33 (1988), and that plaintiff failed to meet her burden of showing no economic benefit derived from her cohabitation arrangement. Ozolins v. Ozolins, 308 N.J. Super. 243, 248-49 (App. Div. 1998). Thus, except for the issue of counsel fees which we remand for further consideration, we affirm substantially for the reasons stated by Judge Convery in his comprehensive written decision of June 26, 2006. We add only the following comments.

The purpose of alimony is to assist the obligee in maintaining the marital standard of living. Lepis v. Lepis, 83 N.J. 139, 152 (1980). Of course, an alimony award "may be revised and altered by the court from time to time as circumstances may require." N.J.S.A. 2A:34-23; see also Lepis, supra, 83 N.J. at 145-156. Thus, the standard for modification of an alimony award is a change in circumstances of either party. Lepis, supra, 83 N.J. at 146, 157; Italiano v. Rudkin, 294 N.J. Super. 502, 506 (App. Div. 1996). A reduction in income of the obligor may constitute a change in circumstances warranting a reduction in alimony, Lepis, supra, 83 N.J. at 151, and the obligee's cohabitation with another may also suffice. Konzelman v. Konzelman, 158 N.J. 185, 196 (1999) (holding that the obligee must derive economic benefit from the cohabitation); see also Gayet v. Gayet, 92 N.J. 149, 153-54 (1983) ("[Alimony may be reduced where] one cohabitant supports or subsidizes the other under circumstances sufficient to entitle the supporting spouse to relief."); Wertlake v. Wertlake, 137 N.J. Super. 476, 487 (App. Div. 1975) (stating that even where there is no economic benefit to the obligee, there is no requirement for an obligor to support the obligee's live-in paramour) (citing Garlinger v. Garlinger, 137 N.J. Super. 56, 64 (App. Div. 1975)). Once the obligor proves the obligee is cohabitating with another, the burden of proof shifts to the obligee, creating a presumption of economic benefit which the obligee must then rebut. Ozolins, supra, 308 N.J. Super. at 249.

Here, the judge found that plaintiff failed to produce evidence to rebut the presumption of economic benefit from her cohabitation with Campione, and, moreover, that when defendant ceased paying alimony in November 1999, it was by agreement with plaintiff. These findings are entitled to considerable deference in light of the court's "special jurisdiction and expertise in family matters." Cesare v. Cesare, 154 N.J. 394, 413 (1998). Such deference is especially due where the trial judge had the opportunity to see and hear the witnesses and judge their credibility. Bonnco Petrol, Inc. v. Epstein, 115 N.J. 599, 607 (1989). It is also afforded, in particular, to the review of support awards crafted pursuant to the factors enunciated in N.J.S.A. 2A:34-23. See Cox v. Cox, 335 N.J. Super. 465, 473 (App. Div. 2000) (citing Reid v. Reid, 310 N.J. Super. 12, 22 (App. Div.), certif. denied, 154 N.J. 608 (1998)). The trial court has substantial discretion in making such an award, see Pascale v. Pascale, 140 N.J. 583, 594 (1995), and if consistent with the law, it "will not be disturbed unless it is 'manifestly unreasonable, arbitrary, or clearly contrary to reason or to [other] evidence, or the result of whim or caprice.'" Raynor v. Raynor, 319 N.J. Super. 591, 605 (App. Div. 1999) (quoting DeVita v. DeVita, 145 N.J. Super. 120, 123 (App. Div. 1976)).

Governed by these standards, we are in accord with the trial judge's findings that plaintiff failed to produce evidence, beyond bald assertions, that she did not benefit economically from her cohabitation with Campione and, therefore, the presumption of economic benefit remained. Although the presumption does not necessarily compel termination, rather than a reduction of alimony, Ozolins, supra, 308 N.J. Super. at 248-49, that conclusion is nevertheless warranted here under all the circumstances.

We are also satisfied there is substantial credible evidence in the record to support the judge's other determination that there was mutual agreement to terminate alimony as of November 1999. In the first place, plaintiff admitted that she and defendant had a history of informally agreeing to adjust the child support obligation, requiring no formal order from the court. Moreover, plaintiff did not formally pursue alimony and arrearages until December 2004, eighteen months after Campione's death, three years after defendant made a late payment to her in May 2001, and five years after he effectively ceased making alimony payments in November 1999. Indeed, in the interim, plaintiff never demanded resumption of alimony or arrearages in writing, or even verbally after 2001, despite the many opportunities that were presented. And when she finally asserted her claim, it was in the nature of "reinstatement." Finally, plaintiff was well aware of the financial consequences upon remarriage, and presumably of those attending her cohabitation with Campione, separate and apart from any representations that may have been made to her by defendant. Thus, from the totality of the circumstances, especially the inordinate delay in seeking relief, it may reasonably be inferred that the parties mutually agreed to a cessation of alimony in November 1999.

Plaintiff nevertheless contends it was error for the court to go outside the joint stipulation for evidence in support of this finding. We disagree.

"[S]tipulations [of undisputed facts] permit parties in a civil case to agree on relevant facts, thereby narrowing the area of dispute requiring the production of evidence and promoting the efficient administration of justice." N.J. Div. of Youth & Family Servs. v. J.Y., 352 N.J. Super. 245, 265 (App. Div. 2002) (citations omitted); see also N.J.R.E. 101(a)(4). Stipulations of fact are binding as long as they are "definite and certain" and assented to by the parties, J.Y., supra, 352 N.J. Super. at 265 (citing Kurak v. A.P. Green Refractories Co., 298 N.J. Super. 304, 325 (App. Div.), certif. denied, 152 N.J. 10 (1997); Schere v. Twp. of Freehold, 150 N.J. Super. 404, 407-08 (App. Div. 1977)), but will not be construed as reaching matters not clearly included therein. Triffin v. Mellon PSFS, 372 N.J. Super. 221, 223-24 (App. Div. 2004), overruled on other grounds, Triffin v. TD Bank-North, N.A., 190 N.J. 326 (2007). "[P]arties cannot complain [when] the . . . court [accepts] as true facts which [are] not contested or challenged." Scott v. Salerno, 297 N.J. Super. 437, 447 (App. Div.) (citation omitted), certif. denied, 149 N.J. 409 (1997). Nor can they object when their own testimony admits of facts intended to be proven. See State v. Neal, 361 N.J. Super. 522, 534 (App. Div. 2003); see also N.J.R.E. 101(a)(4).

By the same token, the judge was not bound to consider only the joint stipulation. Rather, the judge was clearly entitled to consider all available relevant evidence in order to find facts not stipulated. Moreover, the fact that the parties stipulated that defendant "assumed" there was an agreement does not preclude a finding that the basis for that assumption was a mutual understanding that given the circumstances of defendant's ill health, financial woes and plaintiff's continuing cohabitation with Campione, defendant would cease paying alimony. These findings are not mutually exclusive and, as noted, are reasonably based in the evidence. Therefore, we reject, as without merit, plaintiff's claim that the judge made findings contrary to stipulated facts.

Plaintiff's final claim, however, does warrant relief. Although she applied for attorney's fees and submitted the required affidavits pursuant to R.P.C. 1.15(a) and Rule 4:42-9(b), the trial judge denied her application without reason and without any analysis of the Rule 5:3-5(c) factors. See Williams v. Williams, 59 N.J. 229, 233 (1971); Clark v. Clark ex rel. Constine, 359 N.J. Super. 562, 572 (App. Div. 2003); Chestone v. Chestone, 322 N.J. Super. 250, 255-56 (App. Div. 1999). Of course, the fact that plaintiff did not prevail on her substantive application for relief is not dispositive of the counsel fee issue, see Kingsdorf ex rel. v. Kingsdorf, 351 N.J. Super. 144, 158-59 (App. Div. 2002), and the court "must" consider the factors set forth in Rule 5:3-5(c). Chestone, supra, 322 N.J. Super. at 256. The failure to do so here precludes meaningful review of the trial court's exercise of discretion. R. 1:7-4; Curtis v. Finneran, 83 N.J. 563, 569-70 (1980).

 
Accordingly, we remand for the limited purpose of making findings of fact and conclusions of law as to plaintiff's application for counsel fees. We affirm the order of June 26, 2006 in all other respects.

Defendant died on January 13, 2006, at age sixty-three, and his estate was substituted as party to this action. For ease of reference, the deceased Raul Machado will hereinafter be referred to as defendant.

(continued)

(continued)

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A-6609-05T3

November 7, 2007