ELIZABETH A. ZUPPICHINI v. MARK A. ZUPPICHINI

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1716-07T31716-07T3

ELIZABETH A. ZUPPICHINI,

Plaintiff-Respondent,

v.

MARK A. ZUPPICHINI,

Defendant-Appellant.

_____________________________________________________________

 

Argued January 27, 2009 - Decided

Before Judges Graves and Grall.

On appeal from Superior Court of New Jersey,

Chancery Division, Family Part, Monmouth

County, Docket No. FM-13-808-05.

John P. Paone, Jr., argued the cause for

appellant (Law Offices of Paone & Zaleski,

attorneys; Mr. Paone, of counsel; Mr. Paone

and Megan S. Murray, on the brief).

William J. Rudnik argued the cause for

respondent (Gebhardt & Kiefer, P.C., attorneys;

Mr. Rudnik, on the brief).

PER CURIAM

The parties were married in May 1985 and have two children. The older child, a daughter, is twenty-one years old and the younger child, a son, is eighteen. Plaintiff Elizabeth Zuppichini filed for divorce in November 2004. Defendant Mark Zuppichini appeals from a judgment of divorce entered on November 1, 2007, following a twelve-day trial. After reviewing the record and applicable law, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

Plaintiff is forty-seven years old. She completed high school and attended college for one semester. During the marriage, plaintiff was a stay-at-home housewife and mother. Based in part upon an employment evaluation, the parties stipulated that plaintiff can earn $20,000 per year.

Defendant is forty-nine years old. He graduated from Fairleigh Dickinson University with a business degree and took some graduate courses but did not obtain a graduate degree. At the time of the marriage, defendant was employed by General Foods, earning an annual salary of $28,000. General Foods is a producer and distributor of food products, and defendant was involved in the sale of those products.

In 1986 or 1987, defendant left General Foods to become an account executive for Food Associates, which he described as "a food brokerage company." According to defendant, Food Associates was "a pure sales organization" that acted as an intermediary between food manufacturers and retail stores. The owners of Food Associates were Fred D'Agostino and Owen McKeever.

In 1996, Food Associates merged with a much larger food brokerage company known as Marketing Specialists. Prior to the merger, defendant was earning approximately $70,000 per year. Following the merger, the parties' joint tax returns show that defendant earned $369,232 in 1998, $344,993 in 1999, $428,925 in 2000, $322,232 in 2001, and $531,832 in 2002.

In 1998, the parties purchased a six-bedroom house in Colts Neck, New Jersey, and they also owned a three-story "summer home" located on a lagoon in Toms River. The summer home had a swimming pool and a dock where they kept their boat. On December 7, 2006, when the parties finalized their equitable distribution agreement, they agreed that their former marital residence in Colts Neck was "worth approximately $1.5 million" and their net equity was approximately $990,000. They further agreed that the summer home in Toms River had a value of $850,000 for purposes of equitable distribution.

The parties also owned or leased various automobiles, including a Mercedes Benz, a Porsche, a BMW, and a Ferrari. Moreover, the trial court found "[t]he family took regular and frequent vacations to Mexico, the Caribbean, Florida, and the West. They entertained frequently, often to further the defendant's business prospects. Food for parties they hosted was catered. They dined out often." Thus, the parties were financially secure and enjoyed a very comfortable lifestyle.

When Marketing Specialists went out of business in 2001 or 2002, defendant began working for a food-brokerage business known as World Wide Sales, Inc. (World) that was equally owned by D'Agostino and McKeever. Defendant testified he wanted to obtain an ownership interest in World and worked "a lot of hours" to provide superior services to World's top three customers, who accounted for approximately eighty percent of World's business. In June 2002, McKeever sold ten percent of his one-half interest in World to D'Agostino and the remaining forty percent to defendant. Consequently, D'Agostino owns sixty percent and defendant owns forty percent of the company.

Despite his ownership interest, defendant testified his compensation is determined solely by D'Agostino: "Based on the amount of work, the travel, the pressure I took off of him. He determined it. It was his determination." According to the parties' joint tax returns, defendant earned $784,709 in 2003, and $1,309,447 in 2004.

Defendant acknowledged he also receives "pension money or retirement money" from World Wide Sales II, Inc. (World II) although he has no ownership interest in the company. Defendant testified World II had been previously incorporated by D'Agostino and his son for "tax and [pension] benefit purposes."

In addition, defendant acknowledged he receives income from Sand Dollar Tours, Inc. (Sand), a company he wholly owns. Defendant explained that Sand is a "perk company" used "to promote our business and build up business. We use it for a lot of different reasons. . . . We run a lot of expenses through it." Those expenses include buying tickets or "something of that nature" to promote business. Defendant further testified his father and plaintiff both received a salary from Sand, although they did not actually perform any services for the company on a regular basis.

After plaintiff filed for divorce in November 2004, defendant moved to the parties' summer home in Toms River. The parties' son began living with defendant in December 2004, and in September 2005, the parties' daughter joined them.

On his 2005 federal tax return, defendant reported he earned $530,548, a significant reduction from his earnings of $1,309,447 in 2004. Defendant primarily attributed the reduction in his earnings to his increased responsibilities as the children's custodial parent. Defendant testified he was "taking care of the kids a hundred percent of the time," and D'Agostino decided to reduce his salary because he was no longer able to devote as much time to his work.

When he testified on February 14, 2007, defendant was asked how he was paid, and he explained:

Well, my salary is 520,000, and the structure that was set up was based on 520,000, and there were two $30,000 bonuses, that depending on if we made the numbers, the six numbers for the company, it's all based on the company. Everybody would win out if we made the bonus. And if we didn't, nobody had a bonus. So, that's pretty much how it's been structured, it hasn't changed. And I haven't really been able to ask to make any changes in the last two years.

During the trial, the parties agreed defendant would be the parent of primary residence, plaintiff would have visitation with the children, and the parties would share joint legal custody. The parties also reached an agreement regarding equitable distribution, which the trial court summarized as follows:

The plaintiff received the following as a result of the parties' agreement as to equitable distribution: the Colts Neck home valued at $1.5 million dollars; a cash payment of $600,000; complete access to the following savings and retirement plans: World Wide Savings Plan in the amount of $50,305 and World Wide Sales Two pension plan in the amount of $45,255; a guardian IRA account in the amount of $115,955; a second IRA account in the amount of $91,841.16 and a third IRA account in the amount of $202,982.

The defendant received the following in terms of equitable distribution: the Toms River home with the value of $850,000; the family Ferrari which is estimated to be worth at [least] $70,000; the family boat and jet skis valued at $10,000; a cash surrender value on a life insurance policy in the amount of $58,000; interest in World Wide Sales I and Sand Dollar Tours which has been previously estimated at $2.7 million; the remains of the parties['] mutual fund in the amount of $211,000; and interest in a World Wide Sales Two Defined Benefit Retirement Plan valued at $129,785.

For the reasons set forth in a comprehensive written decision dated November 1, 2007, the trial court awarded plaintiff permanent alimony in the amount of $32,947 per month; ordered plaintiff to pay defendant child support in the amount of $257 per week for one child; and denied defendant's request for pendente lite credits. On appeal defendant presents the following arguments:

POINT I

THE TRIAL COURT ABUSED ITS DISCRETION, MISAPPLIED THE LAW, AND RULED AGAINST THE WEIGHT OF THE EVIDENCE BY COMPELLING THE HUSBAND TO PAY PERMANENT ALIMONY OF $395,364.00 PER YEAR TO THE WIFE.

A. THE TRIAL COURT ERRED BY DETERMINING THE HUSBAND'S ABILITY TO PAY SOLELY ON HIS SINGLE HIGHEST YEAR OF INCOME, WITHOUT REGARD TO THE HUSBAND'S CURRENT INCOME AND HIS INCOME IN ANY OTHER YEAR OF THIS 19 YEAR MARRIAGE.

B. THE TRIAL COURT ERRED BY IMPROPERLY CALCULATING THE WIFE'S NEEDS FOR PURPOSES OF FIXING AN ALIMONY AWARD.

i. SHELTER EXPENSES

ii. SAVINGS

iii. STANDARD OF LIVING

C. THE TRIAL COURT ERRED BY FAILING TO PROPERLY ASSESS THE WIFE'S ABILITY TO CONTRIBUTE TO HER OWN NEEDS.

D. THE TRIAL COURT ERRED AS ITS DECISION WILL ALLOW THE WIFE TO ENJOY A FAR GREATER STANDARD OF LIVING THAN THE HUSBAND AND THE UNEMANCIPATED CHILDREN.

POINT II

THE TRIAL COURT ERRED IN FAILING TO AWARD THE HUSBAND ANY CREDITS FOR OVERPAYMENT OF PENDENTE LITE SUPPORT.

POINT III

THE TRIAL COURT ERRED IN FIXING THE WIFE'S CHILD SUPPORT OBLIGATION BY IMPROPERLY EMANCIPATING THE ELDEST CHILD OF THE MARRIAGE AND BY FAILING TO PROPERLY CONSIDER THE STATUTORY FACTORS FOR DETERMINING CHILD SUPPORT WHEN THE INCOME OF THE PARTIES IS IN EXCESS OF THE CHILD SUPPORT GUIDELINES.

A. THE ELDEST CHILD OF THE MARRIAGE IS A FULL-TIME STUDENT WHO REMAINS WITHIN THE SPHERE OF INFLUENCE OF HER FATHER AND IS NOT EMANCIPATED.

B. THE TRIAL COURT ERRED IN FAILING TO APPROPRIATELY CONSIDER THE FACTORS UNDER N.J.S.A. 2A:34-23(a), FOR DETERMINING CHILD SUPPORT AS THE PARTIES' NET INCOME EXCEEDS THE MAXIMUM AMOUNT UNDER THE CHILD SUPPORT GUIDELINES.

In its written decision, the trial court noted the parties initially agreed that Joan D'Uva (D'Uva), a certified public accountant with a Master's degree in Business Administration, would be a joint expert to determine the value of defendant's forty percent interest in World. However, plaintiff eventually retained another certified public accountant, Robert Zak (Zak), to value defendant's interest in the company. Based on testimony from both experts, the court concluded that defendant received "various perks" and payments which "should be added to the defendant's 2004 income." As a result of those adjustments, the court determined that defendant's gross income in 2004 was actually $1,557,927 and "his net annual income would be $876,067." The court also stated that these were conservative figures. Indeed, defendant acknowledged his total compensation package from World and Sand exceeded 1.6 million dollars in 2004:

Q. You received a retirement plan in 2004 for [World] of $189,467, correct?

A. Yes.

Q. You also received that same year, a pension plan for [World] of $97,741, correct?

A. Yes.

Q. So the total amount, as indicated in this statement is $287,208, correct?

A. Correct.

Q. That amount is in addition to the income received above that amount, meaning $1,335,000, correct?

A. Yes.

Q. So is it fair to say that in 2004 your total compensation package from [World] and Sand Dollar Tours was in excess of $1.6 million?

A. Yes, that's pretty -- yeah.

Q. On your tax return, however, you only state for federal wages $1,309,000, correct?

A. Yes.

Q. Okay. Now in 2004 . . . the tax return doesn't include perks that [were] enjoyed through the business, isn't that correct?

A. It depends on what perks you're talking about.

In his first point, defendant does not dispute "the income figure imputed to him for 2004." Rather, defendant contends the court's decision to determine alimony "by looking only at the husband's 2004 income was an error of great consequence." We do not agree.

The trial court recognized that D'Uva and Zak both averaged defendant's income to arrive at an estimate for alimony purposes. But the court rejected that approach, because "defendant was underreporting his income" in the years prior to the divorce action by "failing to report the amount he actually was paid" and by "failing to report the extensive perks he was receiving."

In addition, the court concluded that defendant's salary was "being artificially suppressed for the benefit of this litigation." In rejecting defendant's claim that his salary was reduced in 2005 because he was spending more time at home with the children, the court reasoned as follows:

Beyond simply having an instinctive doubt based on its all too common encounters with sudden income deficiency after the filing of a divorce action, the [c]ourt is satisfied on the basis of both what it has heard and not heard that the defendant's claims of a loss of income are unfounded. . . .

There is now no need to care for or supervise the oldest child at all. She is emancipated. The younger son, as a junior in high school, needs little personal supervision. What personal time is required, be it rides to and from school or at-home supervision, is now most likely provided by the defendant's fiancé who now lives with him full time along with her own son and daughter. . . . There is thus no need for the defendant to assume anything like the almost stay-at-home dad role that he has tried to portray for the [c]ourt.

The court also noted that World had a "dramatic increase in business from 2000 to 2004"; the company's business continued to increase in 2005; and defendant purchased a newly constructed home for 1.5 million dollars in 2006 while the divorce action was pending. Thus, the court found that defendant's actions "belie[d] his claim of recent relative poverty." And the court concluded that defendant's "sudden income deficiency was only temporary."

We are satisfied these findings by the trial court are supported by sufficient credible evidence in the record, Cesare v. Cesare, 154 N.J. 394, 411-12 (1998), and the court's rationale for relying on defendant's 2004 income in determining alimony is sound. Accordingly, the trial court did not err when it calculated defendant's ability to pay alimony based only on his income in 2004.

Defendant also contends the trial court erred by computing the wife's shelter expenses based on her remaining in the former marital home, and by adding a savings component of $5000 per month to her budget. With respect to plaintiff's shelter expenses, the court noted the monthly mortgage payment was $6940 and plaintiff was "equivocal as to her desire to remain in the home." Nevertheless, the court observed that defendant had "recently purchased a similarly large home" in Colts Neck and reasoned as follows:

While [defendant] can argue that the children are with him, this will only be for a short time and he will then be left in this house with his new wife. The [c]ourt will, accordingly, accept that each party can be expected to stay in an overly large house, the plaintiff in hers, the defendant in his.

Given the circumstances present in this case, we conclude that the trial court's decision was entirely appropriate because it allowed plaintiff to maintain the lifestyle she enjoyed during the marriage. See Crews v. Crews, 164 N.J. 11, 16 (2000) ("[T]he 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 supporting spouse during the marriage.").

Defendant also argues the trial court "overstated the wife's needs" and, in our view, this contention has merit. Initially, we note an apparent mathematical error. After determining that plaintiff's "annual pre-tax needs" were $388,942, the court ordered defendant to pay permanent alimony in monthly installments of $32,947. However, when $388,942 is divided by twelve, it results in a monthly payment of $32,411.83. Thus, the amount ordered by the court ($32,947) results in a monthly overpayment of $535.17.

Defendant also contends the trial court erred by adding a savings component in the amount of $5000 per month to plaintiff's budget. Defendant argues there was no evidentiary basis for the inclusion of such a substantial savings component, and claims there is no need for such savings because he must maintain a decreasing term life insurance policy in the amount of two million dollars to protect plaintiff's alimony award. In addition, defendant asserts plaintiff is further protected by the retirement accounts she received as equitable distribution in the amount of approximately $500,000.

New Jersey case law recognizes that a trial court may award sufficient alimony to enable the supported spouse to "accumulate reasonable savings to protect herself against the day when alimony payments may cease because of her husband's death or other change in circumstances." Khalaf v. Khalaf, 58 N.J. 63, 70 (1971). However, as defendant points out, in this case plaintiff's alimony award is already secured by a sizable life insurance policy and retirement accounts, which provide plaintiff with additional financial security.

Moreover, as the trial court recognized, plaintiff failed to establish how much money the parties actually saved on an annual basis. Nevertheless, based on various assumptions that were not supported by the evidence, the court ultimately added a savings component of $5000 a month to plaintiff's alimony award. The court's analysis included the following:

We do know that the summer home in Toms River was acquired in 2002, at least in part as an investment. As of the filing of the divorce, it was debt free. We do not know how much it cost to purchase or when the final payment was made. We do not know the down payment amount, its source or when it could have been saved. The defendant has had several retirement accounts through his work though we do not know when they began and what percentage of the accounts are employer, as opposed to employee, contributions. We know that there was a mutual fund containing over $407,000, and checking and money market accounts totaling about $104,000; but we do not know when they were started or at what rate the payments into them were made.

With the above in mind, the [c]ourt is left unfortunately with the need to make a general assessment of the funds set aside over a period. First, it will assume that the money saved was acquired over a three-year period since 2002. It will assume a $500,000 purchase price for the home and an overall retirement account contribution by the parties at $369,242, based on an assumption of total contributions to the IRA's but none for the other retirement accounts. It will assume all of the mutual funds and bank accounts were acquired during this period as well. Thus, over a four-year period, the parties have managed to save $1,503,869.

[(Emphasis added).]

Because the trial court's findings regarding the parties' savings are not supported by sufficient credible evidence in the record, Cesare, supra, 154 N.J. at 411-12, the savings component portion of the alimony award is reversed and remanded to the trial court for reconsideration.

Defendant also argues the trial court erred in refusing to award him "any credits for overpayment of pendente lite support." In denying defendant's request for credits, the court stated that defendant was required to pay "either $21,252 or $21,079 per month" over the pendente lite period and, following the trial, the court determined plaintiff would receive $22,862 per month after taxes when defendant commenced paying alimony in the amount of $32,947 per month. Thus, the court refused to award defendant any credits for his pendente lite payments because there was "almost no practical distinction between the pendente lite award and the ultimate decision as to alimony." However, if the $5000 per month savings component of the alimony award is eliminated or reduced when the court reconsiders the matter, then the court may also determine whether defendant should receive any credits for overpayment of pendente lite support. We note, however, that retroactive modification of pendente lite support is a discretionary determination "not . . . appropriate in every case." Jacobitti v. Jacobitti, 263 N.J. Super. 608, 618 (App. Div. 1993), aff'd, 135 N.J. 571 (1994).

In Point III, defendant argues the court erred when it determined that the parties' daughter was emancipated "on or about June 1, 2006, when she effectively ended any meaningful attempts at post-secondary education." In determining whether a child has become emancipated, "the essential inquiry is whether the child has moved 'beyond the sphere of influence and responsibility exercised by a parent and obtains an independent status of his or her own.'" Filippone v. Lee, 304 N.J. Super. 301, 308 (App. Div. 1997) (quoting Bishop v. Bishop, 287 N.J. Super. 593, 598 (Ch. Div. 1995)). This issue "is always fact-sensitive." Filippone, supra, 304 N.J. Super. at 308.

In this case, the parties' daughter was seventeen years old and living with her father when she graduated from high school in June 2006. In addition, it was established she would continue to reside with her father while she attended Brookdale Community College on a full-time basis commencing February 21, 2007. Under these circumstances, the record does not support the trial court's emancipation determination. Accordingly, the emancipation issue is remanded to the trial court for further consideration. See, e.g., Keegan v. Keegan, 326 N.J. Super. 289, 295 (App. Div. 1999) (noting that a brief hiatus between high school and college is commonplace and does not necessarily move a child beyond the sphere of influence and responsibility exercised by a parent).

Defendant also contends the trial court erred in computing plaintiff's child support obligation for the younger child, who was sixteen at the time, because the court understated plaintiff's income and failed to take into account the child's additional needs based on his age. Our review of the child support worksheets confirms plaintiff's income is understated because it does not include her imputed earnings in the amount of $20,000 per year or her imputed interest income based on the $600,000 payment she received as equitable distribution. In addition, there is no indication that the court increased the basic child support award based on the child's age as required by Appendix IX-A, Paragraph 17. Child Support Guidelines, Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2400-01 (2010). Accordingly, plaintiff's child support obligation is reversed and remanded to the trial court for further consideration.

 
We conclude from our examination of the record that defendant's remaining arguments are without sufficient merit to warrant further discussion. R. 2:11-3(e)(1)(A) and (E). Accordingly, we affirm in part, reverse in part, and remand for further proceedings in conformity with this opinion. We do not retain jurisdiction.

(continued)

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A-1716-07T3

December 31, 2009