Opinion
DOCKET NO. A-5746-13T1
05-16-2016
ABBE FLEMING, Plaintiff-Respondent/Cross-Appellant, v. JOSEPH FLEMING, Defendant-Appellant/Cross-Respondent.
Annette Verdesco argued the cause for appellant/cross-respondent (The Anthony Pope Law Firm, P.C., attorneys; Ms. Verdesco, on the brief). Paul N. Mirabelli argued the cause for respondent/cross-appellant.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Lihotz and Fasciale. On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-2364-11. Annette Verdesco argued the cause for appellant/cross-respondent (The Anthony Pope Law Firm, P.C., attorneys; Ms. Verdesco, on the brief). Paul N. Mirabelli argued the cause for respondent/cross-appellant. PER CURIAM
In this highly contentions matrimonial matter, defendant Joseph Fleming appeals from a July 15, 2014 post-judgment order denying reconsideration of a May 23, 2014 order. The latter order compelled defendant to transfer to plaintiff Abbe Fleming thirty-two percent of certain gross non-salary compensation. The Family Part judge found sums received by defendant represented "bonuses," and were subject to provisions of the parties' Property Settlement Agreement (PSA) requiring payment of supplemental alimony and child support. Defendant challenges the finding as unsupported and also appeals from provisions in the same order requiring him to repay a loan incurred for college costs for the parties' oldest child and to contribute 60% toward ongoing college expenses for the younger children. Defendant maintains this order was erroneous because it is the children's obligation to repay student loans and he was not consulted regarding the second child's college choice, in contravention to the PSA.
Plaintiff cross-appealed from the same order. She argues the judge excluded other compensation defendant received by mistakenly finding these sums fell outside the category of "bonuses." She also challenges the denial of her request to modify child support to require defendant to share in the newly imposed cost of her employer provided health insurance for the children.
We have considered the arguments presented in light of the record and applicable law. Following our review, we affirm in part and reverse and remand in part.
I.
The parties were married for nineteen years and have four children, who are now ages twenty-two, twenty-one, nineteen and eighteen. The parties resolved all collateral issues incident to the dissolution of their marriage addressed in the PSA, which was incorporated into the March 21, 2012 final judgment of divorce (JOD).
We recite the PSA provisions regarding alimony, child support, health care costs and college expenses relevant to the issues presented in the appeal and cross-appeal.
Defendant agreed to pay alimony to plaintiff for a term of fourteen years. Additionally, he consented to transfer "thirty percent (30%) of any gross bonuses actually received" as supplemental alimony. In the event the payment was not timely, a five percent penalty was imposed. Defendant also agreed to pay child support for the four children until each child's emancipation. From his gross bonus he would transfer two-percent as additional child support.
The PSA further addressed the parties' agreement regarding payment of the children's health insurance and college costs. The specific provisions state:
6. HEALTH INSURANCE COVERAGE FOR THE MINOR CHILDREN: The Wife shall continue to be responsible, so long as said coverage is still available through his (sic)
employment, for medical insurance coverage for the minor children until said children graduate from college: the coverage includes major medical, hospitalization, prescription, eye and dental coverage. Wife shall continue coverage so long as it is available through her employment and until the children are emancipated.
The parties shall be responsible for un-reimbursed medical expenses, including but not limited to medical, hospitalization, prescription, eye, dental, and mental health counseling, of the children as follows: the Husband shall be responsible for 60% and the Wife responsible for 40% of the children's un-reimbursed medical expenses, after the Wife satisfies the $250.00 deductible, for each child. Husband shall make payment to the Wife within 10 days of notice.
7. COLLEGE TUITION: The parties will encourage their children to obtain a college degree and in that regard recognize a responsibility to assist the children in obtaining that higher education subject to the child's ability and the reasonable school selection. Each child's college education, which consists of application fees, SAT and ACT preparation courses (mutual consent for said courses must be obtained prior to enrollment), tuition, books, dorm fees, food and parking/transportation expenses, shall be funded in the following order, in accordance with Newburgh v. Arrigo:
A. Any awarded college scholarship and/or grant;
B. Student Loan programs; and then.
C. The remaining balance to be paid by the parties, in proportion with their individual incomes at that time, with
payment rendered prior to the Tuition Due Date.
D. The application of the 529 Accounts for the children, held by the Wife and to be funded solely toward Wife's obligation for her share of college expense, prior to her being individually responsible for her proportionate share, under provision 7[C] herein. The monies held in the 529 Accounts are the product of inheritance monies received by the Wife during the marriage.
Both parties must consent and agree to the cost and selection of the choice of the child's college, in light of the fact that the parties have 4 children. The consent shall not be unreasonably withheld by either party.
Shortly after the divorce was finalized, plaintiff moved for enforcement of litigant's rights, which was opposed by defendant, who filed a cross-motion. Among the issues determined by the Family Part judge was the nature of defendant's college cost obligation for the parties' oldest child. At issue was the scope of the PSA phrase "Student Loan programs," which along with awarded college scholarships and grants were to be obtained by the child to reduce total college costs. Any remaining balance would then be "paid by the parties, in proportion with their individual incomes at that time."
In the statement of reasons accompanying the January 11, 2013 order, the Family Part judge reviewed the provisions of the PSA and noted other documents showed the child obtained $5,500 in subsidized and unsubsidized federal loans along with an $800 grant. After applying these sums, the judge required defendant to pay sixty percent of the balance. The judge specifically rejected defendant's argument to deduct a private loan obtained by the child because it did not fall within the designation of "Student Loan programs" in paragraph 6B. Rather she determined the PSA's provision was limited to subsidized loans granted through financial aid awarded pursuant to the Free Application for Federal Student Aid (FAFSA) program, which did not include loans obtained through a private financial institution. The judge concluded defendant's interpretation to include the private loan as well as the subsidized loans would ultimately relieve the parties of any obligation, defeating the PSA's provision to the contrary. The judge found the child incurred the private loan only because defendant did not satisfy his allocated share of college expenses, and therefore, he had sole responsibility to repay the sums borrowed, in accordance with the loan's terms.
The record suggests defendant co-signed for the private loans.
On March 8, 2013, the court denied defendant's request to reconsider the January 11, 2013 order. Defendant did not appeal from this order.
When the parties' next child embarked for college further disagreement regarding satisfying college costs arose. At the time of the motion, plaintiff sought reimbursement for defendant's share of college costs for the second child. She noted defendant had paid his share of the first semester costs but not the second, and only recently objected to the college choice because of the costs. Plaintiff also sought repayment of a second loan incurred by the older child, which she asserted was incurred because defendant did not satisfy his share of the expenses.
Defendant opposed the motion. He maintained he had not consented to the cost or selection of the second child's college choice because it was too expensive "in light of the reality the family had three children attending college at the same time." He noted plaintiff's share of college costs was not funded by her current income, but through a college savings account funded by monies she received from her parents. He voluntarily agreed to contribute $10,000 per year to the second child's college costs, which he paid. As to the new loan incurred by the oldest child, he renewed his argument that the PSA mandated the loan reduced the parental obligation and he would satisfy sixty-percent of the balance after its application.
Plaintiff's motion also sought allocation of sums from defendant's compensation. Plaintiff obtained defendant's payroll records, which recorded individually identified payments, other than salary, which she asserted encompassed "bonuses' to which she claimed an entitlement to thirty percent. She also sought transfer of the two percent for supplemental child support.
Defendant opposed her request, asserting he paid plaintiff the designated portion of his bonus pay. Defendant's employment was terminated in November 2013. He rejected plaintiff's claim to additional compensation he received, arguing the monies were not bonuses, but other excluded payments paid upon separation from employment, stock units and options. He attached documentation from his employer verifying the one item as a bonus and describing the other compensation. Defendant identified the items paid in cash, asserting all but one was short and long term incentives paid as severance. The company's documents specify the one item as a bonus.
Without oral argument, the judge entered an order on May 23, 2014. Even though she found no evidence "[d]efendant was involved in choosing [the second child]'s school," as it did show he was involved in the third child's college selection, she determined "[d]efendant [wa]s unreasonably withholding his consent in this instance" and ordered he reimburse plaintiff for his sixty-percent share of the second child's tuition and timely pay his share of future college expenses the child. Also, he was to satisfy sixty percent of the third child's future tuition costs. Finally, defendant was also ordered to assume responsibility for repayment of the non-subsidized loan incurred by the older child, up to his sixty-percent share of the child's college costs.
She denied plaintiff's request for contribution to the children's medical insurance. Citing the PSA's allocation of responsibility to plaintiff, the judge noted the only condition was the availability of insurance, not that she might be required to contribute to its cost.
Regarding supplemental support, the judge included three additional sums received by defendant as "bonuses" to which plaintiff was entitled to thirty percent of the gross. Without explanation, the judge found in addition to the bonus identified by defendant, payments of the "Visionary Award," "Shining Performance," and "Dividend Equivalent" were also bonuses. All other sums were found contingent upon employment and excluded, including the AIP in Lieu, which plaintiff urged was additional bonus income. Defendant also was ordered to pay a 5% penalty as a sanction for late payment as stipulated in the PSA.
On July 15, 2014, following oral argument, the court generally denied without prejudice the cross-motions for reconsideration of the ordered payments. However, the judge agreed application of the 5% penalty sanction was inappropriate after finding defendant did not act in bad faith. The judge also ordered the parties attend a minimum of four hours of "mediation before any application is filed with the [c]ourt." The parties each filed an appeal from this order.
Here, the judge was requested to decide issues as presented on reconsideration. She apparently did so, but added the phrase "without prejudice" to eleven of the fifteen paragraphs in the order. Although the order also suggests this addition would be expounded upon in a statement of reasons accompanying the order, the rationale is not clear. Further, we recognize future disputes were ordered to be preceded by mediation, which neither party challenges on appeal. However, this too fails to illuminate why certain provisions remain unresolved as is suggested by the insertion of "without prejudice."
II.
We defer to a judge's factual findings unless they are demonstrated to lack support in the record or are inconsistent with the substantial, credible evidence. Rova Farms Resort, Inc. v. Inv'rs Ins. Co., 65 N.J. 474, 483-84 (1974). Although this court does not defer to a judge's legal conclusions, "we do not second-guess . . . findings and the exercise of . . . sound discretion" by our Family Part judges. Hand v. Hand, 391 N.J. Super. 102, 111 (App. Div. 2007).
The questions presented by both parties require examination of the provisions of their PSA.
It is well established that matrimonial agreements are basically contractual in nature. Pacifico v. Pacifico, 190 N.J. 258, 265 (2007). . . . [A] question regarding the interpretation or construction of a contract is a legal one and our review is plenary, with no special deference to the trial judge's interpretation of the law and the legal consequences that flow from the established facts. Zabilowicz v. Kelsey, 200 N.J. 507, 512-13 (2009); Manalapan Realty, L.P. v. [Twp.] Comm., 140 N.J. 366, 378 (1995).
In interpreting a contract we are guided by established principles. "A basic principle of contract interpretation is to read the document as a whole in a fair and common sense manner." Hardy ex. rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 103 (2009). "We do not supply terms to contracts that are plain and unambiguous, nor do we make a better contract for either of the parties than the one which the parties themselves have created." Maglies v. Estate of Guy, 193 N.J. 108, 143 (2007); Graziano v. Grant, 326 N.J. Super. 328, 342 (App. Div. 1999).
So too, we enforce the contract as written. Pacifico, supra, 190 N.J. at 266 (internal citations omitted). The parties are bound by the contracts they make for themselves, with the understanding that "a meeting of the minds is an essential element to the valid consummation" of any agreement. Center 48 Ltd. P'ship v. May Dept. Stores Co., 355 N.J. Super. 390, 406 (App. Div.
2002). Accordingly, in interpreting an agreement, we "must try to ascertain the intention of the parties as revealed by the language used, the situation of the parties, the attendant circumstances, and the objects the parties were striving to attain." Celanese Ltd. v. Essex Cnty. Imp. Auth., 404 N.J. Super. 514, 528 (App. Div. 2009) (citing Onderdonk v. Presbyterian Homes of [N.J.], 85 N.J. 171, 183-84 (1981)).
In our examination, if we find "the terms . . . are clear and unambiguous, there is no room for construction and the court must enforce those terms as written," Watson v. City of E. Orange, 175 N.J. 442, 447 (2003), giving them "their plain, ordinary meaning." Pizzullo v. [N.J.] Mfrs. Ins. Co., 196 N.J. 251, 270 (2008). See also Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001). However, "[i]f the terms of the contract are susceptible to at least two reasonable alternative interpretations, an ambiguity exists. In that case, a court may look to extrinsic evidence as an aid to interpretation." Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008) (internal citations omitted).
[Barr v. Barr, 418 N.J. Super. 18, 31-32 (App. Div. 2011) (third and fifth alteration in original).]
III.
Guided by the applicable legal standards, we examine the issues raised in this matter. The parties' claims are divided into two areas: (1) college costs and other items of child support; and (2) allocation of defendant's compensation as supplemental support.
On appeal, defendant argues the PSA is ambiguous as it does not define "student loans" as subsidized borrowings as determined by the judge. He urges the terms broadly includes any borrowings, which must be incurred by the child before triggering either parent's college cost obligation.
The "law-of-the-case" doctrine is a non-binding rule intended "to prevent relitigation of a previously resolved issue." Little v. KIA Motors America, Inc., 425 N.J. Super. 82, 92 (App. Div. 2012) (quoting In re Estate of Stockdale, 196 N.J. 275, 311 (2008)). Absent good cause directing a contrary result, the rule avoids parties from attempting to seek review of the same controversy.
Here, the exact issues, involving the same parties, was squarely before the court and determined on January 11, 2013. Defendant did not exercise his opportunity to appeal from this order. Further, he fails to offer any new facts, additional evidence, or new legal authority require a second look at the determination. Moreover, we cannot agree the initial determination was "clearly erroneous." The PSA as a whole identifies a clear intention for the parties to undertake the obligation to provide their children with a college education, an opportunity that may be considered a legacy given to their children. We determine no basis is presented to revisit this settled issue.
Next, we consider the cost of the second child's spring semester expenses. Implied by the limited comments by the judge is the fact defendant fully funded the fall semester's costs, belatedly raising an objection when the second semester's bill was presented for payment. The issue of consent to the selection and payment of the college choice was set prior to the fall semester. An objection arising because he was not consulted should have been presented at that time. Thus, we find no flaw in the judge's finding defendant's "consent" was unreasonably withheld.
We reject reliance on the cited unpublished case, which lacks precedential authority. R. 1:36-3 ("No unpublished opinion shall constitute precedent or be binding upon any court."). --------
Plaintiff's cross-appeal seeks reversal of the denial of her request for modification of child support. She argues her employer's newly instituted requirement for employees to contribute to the cost of health insurance is a significant change in circumstances to reset child support. Examining her motion on this issue, plaintiff merely states:
26. With respect to the children's unreimbursed medical expenses, Article IV paragraph 6 provides in relevant part that I would continue medical for the children on
my medical insurance. At that time, my employer . . . did not require me to contribute towards the cost of my health insurance. The [d]efendant refuses to reimburse me for these contributions.On reconsideration, she included additional documentation. A support order is "always subject to review and modification on a showing of 'changed circumstances.'" Lepis v. Lepis, 83 N.J. 139, 146 (1980) (quoting Chalmers v. Chalmers, 65 N.J. 186, 192 (1974)); see also N.J.S.A. 2A:34-23 (stating orders setting child support "may be revised and altered by the court from time to time as circumstances may require"). A party seeking modification of a child support obligation has the burden to show material changed circumstances warranting relief from the current child support order. Ibrahim v. Aziz, 402 N.J. Super. 205, 213 n.2 (App. Div. 2008) (explaining defendant had the burden to show that a decrease in his income warranted a downward modification in his child support obligation); see also Larbig v. Larbig, 384 N.J. Super. 17, 23 (App. Div. 2006) (stating a movant must provide "sufficient evidence of a material changed circumstance" to warrant a modification of a support obligation).
Plaintiff's initial motion lacked such detail. On reconsideration she added documentation without explanation as to why she failed to include the information in her motion. In her order, the judge recited the standard guiding reconsideration motions, stating:
A party may not obtain reconsideration on the basis of information that [he or she] could have provided earlier[,] but overlooked. Fusco v. Bd. of Educ. of Newark, 349 N.J. Super. 455, 463 (App. Div. []) [certif. denied, 174 N.J. 544 (2002)]; Morey v. Borough of Wildwood Crest, 18 N.J. Tax 335, 341 (App. Div. 1999), certif. denied, 163 N.J. 80 (2000). In addition, "the magnitude of the error cited must be a game-changer for reconsideration to be appropriate." Palombi v. Palombi, 414 N.J. Super. 274, 289 (App. Div. 2010).
Plaintiff did not meet these standards. She identified her obligation to contribute to the cost of the children's health insurance, but this was not just recently imposed. Rather, the obligation appears to have commenced a year before her motion for reconsideration. More important, the attached documentation does not prove what plaintiff is actually paying but only presents various options and choices for an employee to make. Consequently, it is impossible to discern whether this expense represents a "game changer" invoking equitable consideration of the issue on reconsideration, despite flaws in the underlying motion. Viewed in this way, we disagree the judge abused her discretion in denying relief on reconsideration.
We do agree the parties' respective challenges to distribution of defendant's compensation, other than salary, was improperly decided on this record. First, the PSA does not define the term bonus, which is the predicate for supplemental alimony and child support. Defendant's documentation and assertions recite the sums were due as severance or were the equivalent of stock distributions and that, therefore, the payments are excluded. Interestingly, plaintiff does not assert the items she now seeks to share were regularly received by defendant during the marriage and intended to be included within the term "bonus"; however, we recognize this would not be determinative, but the information might aid review of the issue.
Also, understanding there are numerous payments in cash or in kind, each separately identified, made the in the year defendant separated from his employment raises questions regarding why these payments were made. Unfortunately, oral argument on the motion was not undertaken, and the judge's statement of reasons offers little to support the conclusion payments, which are part of defendant's total compensation plan, are bonuses, as opposed to part of his salary. The judge does not explain how she differentiated among the cash receipts when deciding what payments were bonus and what were something else.
The material factual disputes presented by the parties' pleadings bear directly on the legal conclusions required to be made and these disputes can only be resolved through
a plenary hearing. Hand, [supra,] 391 N.J. Super. [at 105]. . . . Importantly, "[t]he credibility of the parties' contentions may wither, or may be fortified, by exposure to cross-examination and through clarifying questions posed by the court[]" in a plenary hearing. Barblock v. Barblock, 383 N.J. Super. 114, 122 (App. Div.), cert[if]. denied, 187 N.J. 81 (2006).
[Spangenberg v. Kolakowski, 442 N.J. Super. 529, 540-41 (App. Div. 2015).]
To unwind this controversy and resolve the ambiguity regarding why defendant was paid each of these sums requires extrinsic evidence, such as testimony from the appropriate person working for defendant's former employer, subject to cross-examination. Accordingly, we reverse those provisions of the order designated "Visionary Award," "Shining Performance," and "Dividend Equivalent" as bonus compensation and the provision excluding the "AIP in Lieu."
In summary, for the reasons stated, we affirm those provisions of the challenged order relating to payment of the children's health insurance and college costs. We reverse the provisions allocating defendant's compensation as supplemental support and remand for a plenary hearing.
Affirmed in part and reversed and remanded in part.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION