EDWARD KOZLOVSKY v. IRINA KOZLOVSKY

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4602-06T14602-06T1

EDWARD KOZLOVSKY,

Plaintiff-Respondent/

Cross-Appellant,

v.

IRINA KOZLOVSKY,

Defendant-Appellant/

Cross-Respondent.

________________________________________________________________

 
Telephonically Argued October 2, 2008 - Decided

Before Judges Lisa and Sapp-Peterson.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-2139-04.

Irina Kozlovsky, appellant/cross-respondent, argued the cause pro se.

Kelly Berton Rocco argued the cause for respondent/cross-appellant.

PER CURIAM

Defendant, Irina Kozlovsky (Irina), appeals from several post-annulment orders. She challenges provisions in an order entered on February 1, 2007 providing for only a marginal increase in the child support obligation of plaintiff, Edward Kozlovsky (Edward); the denial of her motion for sole legal custody of their daughter; the denial of her motion to require Edward to increase the amount of life insurance; and the grant of Edward's cross-motion to alternate the dependent deduction and child care credits. She further appeals from the April 20, 2007 order denying her reconsideration motion regarding those provisions, and an additional portion of that order denying her motion to increase the child support obligation to include the cost of private preschool.

Edward cross-appeals, alleging that the trial judge erred by failing to sanction Irina for her flagrant disregard of court procedures and rules and for failing to award him counsel fees and costs.

We reject the arguments of both parties and affirm on the appeal and cross-appeal.

I

Both parties were born in the Soviet Union. Irina was working as an insurance agent in South Florida and Edward was completing his medical residency as an oral maxillofacial surgeon at the University of Medicine and Dentistry of New Jersey (UMDNJ) when they met through an internet dating service in July 2003. Irina relocated to Hackensack to live with Edward. She began taking the necessary steps to continue her insurance career in New Jersey, and also engaged in part-time work in other fields.

The parties were married on November 6, 2003. Marital strife quickly ensued, and the parties separated. Irina returned to Florida. She was pregnant and gave birth on December 5, 2004.

Following her daughter's birth, Irina took up residence in a townhouse in Florida owned by her brother-in-law. She agreed to pay monthly rent of $1993, which covered the mortgage obligation on the property. She lives in the house with her mother and daughter. According to Irina, her mother requires constant supervision due to a permanent visual impairment. Irina's father suffers from heart disease and lives with Irina's sister, brother-in-law and two nephews. Irina's sister works at the brother-in-law's dental practice while Irina supervises the home schooling of her two nephews. Irina expressed a wish to follow the same home schooling program with her daughter.

A judgment of annulment was entered on December 23, 2004. The judgment required Edward to pay Irina, in six installments, a sum of $15,000 in full satisfaction of all claims by Irina for support, maintenance, equitable distribution, and medical expenses. The judgment provided for joint legal custody, designating Irina as the primary residential parent. The parties agreed to a $200 per week child support obligation for the first year after their daughter's birth. The judgment further provided: "Thereafter the support shall be paid pursuant to the applicable child support guidelines." The judgment further obligated Edward to maintain his present $150,000 life insurance policy through employment for the benefit of the child. It was further agreed that "this could be reviewed in the future as child support is reviewed."

On August 7, 2006, Irina filed a motion to increase child support, to change the custody arrangement, and to increase the face amount of Edward's life insurance policy to $1 million (a demand she later reduced to $250,000). She alleged that Edward's salary increased substantially since completion of his UMDNJ residency program in June 2006, and that his income would continue to increase with his dual employment in the UMDNJ faculty and in private practice. She sought an increase in the life insurance amount based on Edward's alleged improvement in financial standing and also because, she claimed, Edward engaged in extremely hazardous activities on a regular basis. Irina sought sole legal custody of the child based on her contention that there was no communication between her and Edward and that Edward had not exercised joint responsibility for the child and had no intention of doing so.

Irina filed a Case Information Statement (CIS), reflecting only $59 per month in sporadic commission payments, supplemented by her weekly child support and receipt of food stamps. She reported expenses of $5660 per month for herself and her daughter, including these approximate amounts: $1850 in rent, $220 in public transportation, $650 in food and household supplies, and $300 in vacations. She also reported $54,000 in debt, including attorney's fees and credit card obligations.

Edward cross-moved for various forms of relief. As relevant to the issues on appeal, he sought an order permitting him to claim the dependent deduction and child care credit in alternating years and requiring Irina to contribute toward the cost of the child's medical insurance. He certified that Irina possessed the necessary qualifications to obtain good employment, and that the responsibility for the care of Irina's mother and their daughter did not change this fact. At the motion hearing, Irina acknowledged that she had a college education, speaks three languages, and she "can" work as an insurance broker. She contended the responsibility for caring for her mother and daughter precluded full-time employment.

Edward refuted the asserted improvement in his financial situation. He claimed to be "barely able to stay afloat." He had incurred a large business loan to construct his private practice and he had a large student loan obligation, for which he was paying about $1830 per month. As part of a child support worksheet prepared by his attorney, Edward claimed to have a gross taxable income of $1231 per week, yielding a $199 weekly child support obligation. Further, he contended that Irina told him that prior to their relationship "she enjoyed working and was earning approximately between $75,000 and $100,000 as an insurance broker. She also stated that she could work from home in any state." Irina later denied that she ever made more than $75,000.

As required by the court, Irina submitted tax returns for 2003, 2004 and 2005, which revealed little reported earned income. Canceled checks and bank statements demonstrated she was paying the mortgage and maintenance fees on her brother-in-law's property.

Judge Langan issued an order on February 1, 2007 increasing Edward's weekly child support obligation to $262 retroactive to the filing date of the motion, denying Irina's request for sole legal custody and an increase in the life insurance, and granting Edward's motion to alternate the dependent deduction and child care credit for tax purposes "if applicable."

The judge appended a six-page explanation of the child support modification. The judge imputed $153,780 income to Edward, a sum higher than proposed by Irina. Although the judge believed there was "undisputed" evidence that Irina had previously earned at least $75,000 per year as an insurance broker, he imputed less annual income to her. He explained:

[Irina] has stated that she spends her days at home caring for her daughter and mother, while home-schooling her sister's children. For purposes of calculating the support obligation under the Child Support Guidelines, the Court therefore imputes her income to be $30,970 per annum in accordance with the New Jersey Department of Labor and Workforce Development Statewide New Jersey Workforce Wages 2006 Statistics, that being the mean salary for a Pre-School Teacher.

The judge also set forth his determination of the treatment of Edward's student loan obligations, in accordance with Lozner v. Lozner, 388 N.J. Super. 471 (App. Div. 2006), which we will discuss later in this opinion.

The order contemplated that Edward's coverage of the child's health insurance over and above $250 would warrant further modification of the child support sum. Edward was ordered "to provide health insurance for [the child] at [his] sole cost until such time as [he] may establish the marginal cost of coverage for [the child] and move for modification to include such cost in the Child Support Guidelines." Relying on this language, Edward moved for reconsideration seeking an amendment to the order "to properly reflect [his] child support obligation as $248.00 per week . . . so that it includes the appropriate deduction for the marginal cost of health insurance coverage for [the child]."

Irina filed a cross-motion for reconsideration, asking the court to amend its findings on the imputation of income and the effect of Edward's student loan debt, and to increase the child support award accordingly to $343 per week. In this motion, for the first time, Irina asked the court to add $11 to the child support award for the purchase of an "approved pre-kindergarten home schooling program."

Upon consideration of the cross-motions for reconsideration, the judge entered an order on April 20, 2007 granting Edward's motion to adjust the child support award from $262 to $246 per week, to account for his coverage of the child's medical insurance and prescription drug requirements. Irina's application to require Edward to pay an additional sum for home schooling was denied. The judge rejected Irina's arguments regarding imputed income and explained the numerous factors considered and the manner in which it was calculated in a thorough written opinion.

This appeal and cross-appeal followed.

II

Our standard of review is clear. We defer to the trial court's discretionary authority unless the court did not consider controlling legal principles or the factual findings are inconsistent with or unsupported by sufficient credible evidence in the record. Beck v. Beck, 86 N.J. 480, 496 (1981) (quoting State v. Johnson, 42 N.J. 146, 162 (1964)); Storey v. Storey, 373 N.J. Super. 464, 479 (App. Div. 2004). We defer to the Family Part's special expertise in post-divorce (or post-annulment) matters. Cesare v. Cesare, 154 N.J. 394, 412 (1998).

Irina argues that the court erred in its determination of Edward's available income and in its imputation of income to her, thus reaching an erroneous result in only increasing the child support obligation to $246 per week. We will address the income issue as to each of the parties in turn.

Irina argues that the court's pre-tax "dollar for dollar" deduction of Edward's student loan debt misreads and misapplies Lozner. She argues that only a small percentage of the obligation should have been deducted from Edward's income in determining his ability to pay. She also asks this court to designate an end date beyond which there will be no further deductions of the student loan debt.

To calculate Edward's disposable net income, the judge used as a starting point the imputed income of $153,780. As we have stated, this sum was higher than that proposed by Irina; Edward has not cross-appealed from that determination. The judge then deducted income tax, as well as the amounts payable for principal and interest on the student loan. This resulted in net annual income of about $86,000.

The Family Part retains the equitable power to modify a child support order upon a sufficient showing of "changed circumstances." Lepis v. Lepis, 83 N.J. 139, 157 (1980). When this change takes the form of an upswing in the supporting parent's economic good fortune, the court may pass off part of this benefit to the child in order to provide for the child's needs. Connell v. Connell, 313 N.J. Super. 426, 430 (App. Div. 1998). The court should examine tax returns and other evidence of the paying spouse's financial status in order "to make an informed determination as to 'what, in light of all the [circumstances] is equitable and fair.'" Lepis, supra, 83 N.J. at 158 (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)).

Irina alleged, and Edward did not dispute, that a prima facie showing of changed circumstances was established. There was no dispute about Edward's actual income, nor regarding the amount imputed to him. The only dispute regarded the effect of his large student loan obligation on his ability to contribute to the child's support. The repayment of a reasonable student loan debt limits even the intact family's child care expenditures. Thus, it is permissible to deduct from a parent's gross earned income the cost of reasonable "education expenses" if the failure to do so would lead to an unjust application of the child support guidelines. Lozner, supra, 388 N.J. Super. at 479-80 (citing Caplan v. Caplan, 182 N.J. 250, 264 (2005)); N.J.S.A. 2A:34-23(a)(9); R. 5:6A; Child Support Guidelines, Pressler, Current N.J. Court Rules, Appendix IX-A(21) to R. 5:6A at 2303 (2008).

The dispute here revolves around what portion of Edward's education expenses should be applied against his earned income. The financing of higher education through student loans can turn what should be a blessing into a curse for the borrower's children. Lozner, supra, 388 N.J. Super. at 479. An increase in a parent's earning capacity should bring with it an improved standard of living for parent and child alike. The assumption of a large amount of debt by the borrower, however, can harm his or her child if the borrower, rightly or wrongly, argues that this debt diminishes his practical ability to support the child. "[A]ny benefit to the child would be elusive if the debt is so large that a dollar for dollar or substantial deduction would reduce current support to an alarmingly low level. This is compounded by the fact that student loan repayment often takes place over an extended period of time." Ibid.

Trial courts are afforded substantial discretion regarding the reasonableness of the parent's debt, the percentage of the debt to be deducted, and for what duration the deduction should be allowed. Id. at 481-83. The overriding consideration remains the best interests of the child. Id. at 484.

Irina relies upon this passage from our opinion in Lozner:

[A] dollar for dollar deduction of a student loan from net income that significantly and substantially reduces the child support award for many years would often not be in the best interests of the child. Such a deduction would usually fail to balance properly the competing concerns, especially those which seek to ensure that the child share in the supporting parent's economic good fortune.

[Id. at 483 (citations omitted).]

However, we followed this conclusion with a comment about the particular circumstances in that case. The supporting spouse in Lozner sought to deduct the entirety of his "enormous" weekly debt payment (about $575). We noted that a dollar for dollar deduction would leave the couple's child with a level of support comparable to the child of a law student making about $30,000 per year. Id. at 483. In the case before us, however, allowance of the full deduction leaves Edward with a net annual income of about $86,000. This sum does not place the child in this case in the same predicament as the child in Lozner.

Unlike the supporting spouse in Lozner, an attorney with a large New York firm, the judge in this case recognized that Edward was in the process of building his private practice. This required start up time, initial capital, and the forbearance of short term profit. Wanting to give Edward the opportunity to pursue this path, the judge understood that there would not be large amounts of income available immediately. Nevertheless, the judge expressed his willingness to revisit the situation periodically. This is the correct approach. If Edward's practice indeed flourishes, that changed circumstance will provide a basis for increased child support.

Irina challenges the imputation of over $30,000 in annual income to her. She claims it is not possible for her to leave her home to find employment because she must care for her disabled mother, outside income will not cover the offsetting costs of child care, she needs to stay home to oversee their daughter's home schooling in a few years, and she lacks the means of transportation to obtain employment.

The fairness of a child support award depends on an accurate determination of a parent's net income. Caplan, supra, 182 N.J. at 265; Pressler, supra, Appendix IX-A(12) at 2292. To ensure an equitable award, the court must impute income to either parent if the parent "without just cause, is voluntarily unemployed or underemployed." Caplan, supra, 182 N.J. at 268. This preliminary finding must be made before the court chooses to impute income to the unemployed or underemployed parent. Dorfman v. Dorfman, 315 N.J. Super. 511, 516 (App. Div. 1998).

In determining whether income should be imputed to a parent and the amount of such income, the court should consider: (1) what the employment status and earning capacity of that parent would have been if the family had remained intact or would have formed, (2) the reason and intent for the voluntary underemployment or unemployment, (3) the availability of other assets that may be used to pay support, and (4) the ages of any children in the parent's household and child-care alternatives. The determination of imputed income shall not be based on the gender or custodial position of the parent. Income of other household members, current spouses, and children shall not be used to impute income to either parent except when determining the other-dependent credit. When imputing income to a parent who is caring for young children, the parent's income share of child-care costs necessary to allow that person to work outside the home shall be deducted from the imputed income.

[Pressler, supra, Appendix IX-A at 2293.]

This determination should account for "other similar considerations" like "whether one party would remain out of the workforce to care for the children" had the family remained intact. Caplan, supra, 182 N.J. at 268. The purpose of income imputation remains to promote "a fair and just allocation of the support obligation," id. at 269, consistent with the "circumstances of the parties and the nature of the case," N.J.S.A. 2A:34-23.

Judge Langan's February 1, 2007 written opinion relied on the mean salary of a preschool teacher to impute $30,990 in annual income to Irina. His April 20, 2007 written opinion elaborated:

After an exhaustive exploration of the possible child support guidelines output awards that would result from the various income imputations that seemed reasonable based on the information presented to the Court, the Court imputed income to both parties in the manner that it found to be in the best interests of the child as well as most equitable to the parties at the time.

The judge chose to rely on the mean salary of "All Other Physicians and Surgeons" to impute over $150,000 in annual income to Edward. The mean salary for oral and maxillofacial surgeons was only $92,920. He chose this more "equitable" number after a review of Irina's circumstances:

[Irina] stated that she is a full time mother, breast feeding around the clock, and also the caretaker of her aging mother. [Irina] stated that she presently does not have any income. In [Edward's] moving papers, he alleged that [Irina] had previously earned between $75,000 and $100,000 per year as an insurance broker. . . . [The OES Wage Survey] showed the mean income of "Insurance Sales Agents" to be $69,430. To ensure that the amount imputed to [Irina] would be appropriate, the court further considered the factors in Appendix IX-A(12). . . . The court determined that [Irina's] earning capacity would have been the same if the family had remained intact. [Irina's] employment status may have been different if the family had remained intact, insofar as she may have remained unemployed for a longer period after giving birth to the parties' daughter. [Irina's] stated reasons and intent for remaining unemployed include her responsibilities as caretaker to her daughter and her mother. [Irina] does not appear to have alternate resources to support her child, although her tax returns did indicate prior ownership of an income generating property. The parties' child is the only child in [Irina's] household, and there does not appear to be alternate means of child care. . . . The court further considered that child care costs would be necessary to allow [Irina] to work outside of the home, although no such costs were annexed to the original motion papers.

After considering various alternate calculations, the judge continued:

The multitude of considerations bearing on establishing an equitable award caused the court to explore an additional option, which was to impute income to [Irina] which was below the amount imputable to her based on her previous occupation. The court considered [Irina's] testimony that her sister's children spent every day at [Irina's] home, and also [Irina's] asserted intention to begin home-schooling the parties' child. The court found that imputing income to [Irina] as a pre-school teacher, whom the 2006 data showed to earn $30,970 per year, would alleviate three of the court's equitable considerations. First, imputing such an income would take into consideration the reduction due [Irina] for child-care needs. Second, such an income would reflect the activities in which [Irina] is presently engaged. Third, it would satisfy the court's need to impute some income to [Irina], who is voluntarily unemployed. The court therefore found that imputing income to [Irina] as a pre-school teacher at $30,970 per year was the most equitable option available.

Applying these imputed income figures to each party, the judge deemed the result equitable and in the best interests of the child.

We find no mistaken exercise of discretion in the judge's thorough analysis. We agree with the judge's rejection of Irina's contention that she should be allowed to remain at home without imputation of income. This was a marriage of extremely short duration, and there is no basis to conclude that the parties intended that she would be a stay-at-home mom, especially early in her career and in light of her significant qualifications and prior employment history. Further, staying home to care for her mother is a voluntary decision on her part, as is her role in caring for her nephews.

Considering the record as a whole, the interrelated components entering into the child support calculation, the judge's thorough analysis, and the broad discretion afforded trial judges in making these determinations, we find no basis to reverse the child support order based upon the circumstances of the parties at the time it was entered.

The remaining issues raised by both parties lack sufficient merit to warrant extended discussion in a written opinion. R. 2:11-3(e)(1)(E). We add these brief comments.

There was no error in denial of Irina's request for sole legal custody. "Joint legal custody provides rights and responsibilities to custodial parents, but it also confers rights with less significant responsibilities to non-custodial parents." Pascale v. Pascale, 140 N.J. 583, 596 (1995). An award of joint legal custody seeks to maintain the child's attachment to both parents by permitting each to take part in the "major" decisions affecting the child's life. Beck, supra, 86 N.J. at 486-87. The primary caretaker in a joint custody arrangement possesses "more authority to decide issues in the event of a disagreement." Boardman v. Boardman, 314 N.J. Super. 340, 348 (App. Div. 1998). This general limitation on the secondary caretaker's role does not conflict with the preferred use of joint legal custody as the optimal way to foster the best interests of the child. Grover v. Terlaje, 379 N.J. Super. 400, 406 (App. Div. 2005); Nufrio v. Nufrio, 341 N.J. Super. 548, 555 (App. Div. 2001).

There is no basis here to conclude that Edward is an unfit parent. The parties agreed to joint legal custody, and there is no basis to find substantial changed circumstances since that agreement. We find no mistaken exercise of discretion in the judge's decision to leave that arrangement intact.

We also find no error in the judge's refusal to order Edward to increase the amount of his life insurance. Although the use of imputed income resulted in sufficient changed circumstances to modify the child support award, there is no demonstration of changed circumstances that would warrant an increase, after so short a time, in the amount of Edward's life insurance. We note that, with respect to Edward's alleged hazardous activities, Irina alleged he engaged in such activities prior to the time they met, and, therefore, this would not constitute any change in circumstances. As with the child support obligation, further changed circumstances might warrant a future modification of the life insurance provision, but, considering the circumstances of the parties at the time of the request for modification, the judge acted within his discretion in rejecting it.

In rejecting Irina's request for the cost of the pre-kindergarten program, the judge determined that the child support award includes this "predictable and recurring" educational cost and that there was no reason "to add these expenses as court approved extraordinary expenses." The judge cited the judgment of annulment's silence on Edward's duty to pay for private schooling. The thrust of Judge Langan's written opinion in support of his April 20, 2007 order suggests that, while this early educational program "might" be beneficial for the child, the judgment of annulment did not contemplate Edward's payment of this extraordinary cost for a child under the age of three. We find no error in this analysis.

We also find no mistaken exercise of discretion in the judge's determination that it was fair and equitable to rotate on an annual basis the right of the parties to claim the dependent deduction and child care credits for tax purposes.

Finally, Edward's cross-appeal from the failure of the trial judge to award him counsel fees because of Irina's alleged improprieties in the court proceedings is not properly before us because Edward never made a motion in the trial court requesting counsel fees. While he wrote several letters to the court complaining about Irina's conduct, he never filed a motion to strike her allegedly improper submissions or to request counsel fees. As a result, he was never denied such relief, and we have no jurisdiction to consider the trial court's "omissions."

Affirmed.

The notice of appeal also references an order entered on February 26, 2007. However, that order merely corrected a clerical error in a prior order and it does not affect our analysis of the appeal issues.

(continued)

(continued)

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A-4602-06T1

November 24, 2008