Opinion
DOCKET NO. A-4988-10T4
02-15-2013
MARK G. RETIK, Plaintiff-Respondent, v. MICHELLE RETIK, Defendant-Appellant.
William A. Teltser argued the cause for appellant. Joshua P. Cohn argued the cause for respondent (Cohn Lifland Pearlman Herrmann & Knopf LLP, attorneys; Mr. Cohn, of counsel and on the brief; Julie L. Kim, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Graves and Espinosa.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-0008-08.
William A. Teltser argued the cause for appellant.
Joshua P. Cohn argued the cause for respondent (Cohn Lifland Pearlman Herrmann & Knopf LLP, attorneys; Mr. Cohn, of counsel and on the brief; Julie L. Kim, on the brief). PER CURIAM
Defendant appeals from two post-judgment orders. The first order, dated January 27, 2011, granted plaintiff's motion for reconsideration and denied defendant's motion to increase child support and for counsel fees. The second order, dated May 17, 2011, denied defendant's motion for reconsideration. For the reasons that follow, we affirm both orders.
The parties were married in 1995 and had four children who were born in 1997, 2000, 2003, and 2005. The parties entered into a marital settlement agreement (MSA) that was incorporated into their amended dual final judgment of divorce (JOD) in September 2008.
At the time of their divorce, plaintiff was employed by Goldman Sachs & Co. (Goldman). He reported his salary for 2007 was $2,721,730 on his case information statement (CIS). According to her CIS, defendant made no earned income, and resided in the marital home in Short Hills with the four children.
The provisions of the MSA regarding spousal support required plaintiff to pay defendant limited duration alimony of $14,000 per month for a period of eight years and rehabilitative alimony of $1000 per month for a period of four years. The MSA also provided that, in the years in which alimony was payable to defendant, she would also be entitled to "bonus alimony" if plaintiff's "cash compensation," as defined in the MSA, exceeded $750,000.
Plaintiff's child support obligations were addressed in paragraphs 23 to 31 of the MSA. Plaintiff was required to pay monthly support of $1500 for each child under the age of eight, $2500 for each child from the age of eight until college entry, and $1500 for each child in college.
The MSA set forth the basis for the support obligations agreed upon by the parties. Paragraph 32 provides:
The alimony and child support payments . . . [are] based upon a base salary and year end discretionary cash bonus equal to at least $800,000 and ongoing employment for [plaintiff], and is not based upon "cash compensation" as defined in paragraph 18 above. Moreover, the alimony and child support provisions . . . presume[] no income for [defendant].
Paragraph 33 reflected the parties' agreement in the event plaintiff's income fell below the $800,000 level. It provides, in pertinent part:
In the event [plaintiff's] base salary and year end discretionary cash bonus is less than $800,000 in any year, . . . the parties shall review [plaintiff's] child support and alimony obligation[s] for a downward modification. The parties acknowledge said review process could take place as early as January 2009. . . . The required proof for the review of [plaintiff's] support obligation shall be a copy of [his] year end compensation summary provided by his employer or [his] year end discretionary cash bonus pay stub, or the equivalents of these. Nothing else shall be required.
In December 2008, plaintiff's counsel wrote to defendant's attorney, providing notice that plaintiff would seek a reduction in his support obligations because plaintiff's total compensation for 2008 would be $300,000 and would not include a discretionary cash bonus. After motion practice and mediation, the parties entered into a Supplemental Marital Settlement Agreement (SMSA), dated June 24, 2009, which was incorporated into a court order dated July 1, 2009.
Defendant's year-end compensation summary reflects that he earned $300,000 in 2008.
The SMSA provided for a buy-out and termination of defendant's limited duration and rehabilitative alimony. In return for terminating her alimony, defendant received plaintiff's 401(k) totaling $266,000 and plaintiff's interest in 4681 unvested Goldman Restricted Stock Units (RSUs). The parties did not alter Paragraphs 32 and 33 of the MSA and plaintiff's child support obligation remained unchanged.
In October 2010, defendant filed a motion for increased child support based on changed circumstances, seeking an increase from $8000 to $16,000 a month in support payments. In support of her motion, defendant certified that plaintiff's compensation package for 2009 was $3,250,000. Plaintiff filed opposition and a cross-motion seeking counsel fees. In support of his opposition, plaintiff certified that although his compensation package may have totaled $3,250,000 in 2009, his cash compensation (salary and year-end bonus) was $2,130,000 and the remainder consisted of RSUs.
At oral argument, defendant's counsel contended that the change in plaintiff's salary from the "$800,000 threshold" in the MSA to over $2 million in 2009 created changed circumstances that required a modification of plaintiff's support obligations. There was no question the children's needs were being met. The court determined that, in 2009, plaintiff had a cash compensation of $2,130,000 and approximately one million dollars worth of RSUs. The court noted that the value of the RSUs was undeterminable and not accessible to use for support due to their nature. After comparing plaintiff's 2009 cash compensation of $2,130,000 to his average cash compensation in the three years preceding the divorce, the court determined there was no "increased financial success of the parent."
However, defendant's attorney raised an issue regarding the interpretation of the $800,000 reference in the MSA, arguing that the $800,000 amount served as "an automatic change of circumstance" that warranted relief. The judge then withheld ruling on defendant's motion for increased child support and entered an order that provided for a limited hearing "as to the issue of the meaning and significance of the sum of $800,000 set forth in paragraphs 32 and 33 of the [MSA] relating to child support."
Plaintiff filed a motion for reconsideration of that part of the court's order that required a hearing. On the return date of the motion, plaintiff's counsel argued a hearing was unnecessary regarding the meaning of the $800,000 figure because: (1) it only triggered a downward modification, (2) if plaintiff's salary is higher, there is a built-in increase in alimony, and (3) if there is maturation of a child, there is a 75% increase at the age of eight. As to an upward modification, counsel argued that the issue is not one of fairness or of an automatic entitlement to a modification, but one of changed circumstances, and that "[t]here are no needs of the children that are being unmet." In opposition, defendant's counsel argued that a hearing was necessary to determine what the parties agreed upon as the "threshold funding" against which a change in circumstances could be measured.
The motion judge held that the $800,000 figure in Paragraphs 32 and 33 of the MSA was intended to act only as a downward modification, and was silent as to its effect if plaintiff's salary was above the figure. Consequently, the judge determined that defendant's application was "clearly controlled by the Lepis principle" of changed circumstances. He held that there was no indication that the children's needs were not being met and that there was no change in plaintiff's income, and therefore no changed circumstances. Based on his findings, the motion judge granted the motion for reconsideration and denied defendant's initial motion to modify child support in an order dated January 27, 2011.
Lepis v. Lepis, 83 N.J. 139 (1980).
--------
Defendant filed a motion for reconsideration of the January order, seeking to reinstate the originally contemplated hearing. At oral argument, new counsel for defendant argued that discovery of plaintiff's tax returns was necessary to determine the amount of plaintiff's income, including the RSUs. Defendant's motion was denied by order dated May 17, 2011.
Defendant raises the following issues in this appeal:
POINT I
THE MEANING AND SIGNIFICANCE OF THE $800,000 WAS AMBIGUOUS WARRANTING A HEARING TO DETERMINE ITS IMPORT
POINT II
PLAINTIFF'S MOTION FOR RECONSIDERATION WAS IMPROVIDENTLY GRANTED AND THE COURT BELOW ERRED IN VACATING THE DECEMBER 13, 2010 ORDER AND DENYING DEFENDANT'S MOTION FOR AN INCREASE IN CHILD SUPPORT
POINT III
DEFENDANT'S MOTION FOR RECONSIDERATION SHOULD HAVE BEEN GRANTED AND THE ORIGINALLY CONTEMPLATED HEARING SHOULD HAVE BEEN SCHEDULED AND EXPANDED
After reviewing these arguments in light of the record and applicable legal principles, we are satisfied that none of these arguments have merit.
In reviewing a decision of a family court, we "defer to the factual findings of the trial court[,]" N.J. Div. of Youth & Family Servs. v. E.P., 196 N.J. 88, 104 (2008), in recognition of the "family courts' special jurisdiction and expertise in family matters . . . ." N.J. Div. of Youth & Family Servs. v. M.C. III, 201 N.J. 328, 343 (2010); Cesare v. Cesare, 154 N.J. 394, 413 (1998). However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
In Point I, defendant argues that a hearing is necessary to determine the meaning and significance of the reference to $800,000 in the MSA. She argues that the agreement is ambiguous because "it establishes a threshold of $800,000 to trigger a downward child support modification, but is silent as to what might trigger an upward modification." We disagree.
"[M]atrimonial agreements between spouses relating to alimony and support, which are fair and just, fall within the category of contracts enforceable in equity." Petersen v. Petersen, 85 N.J. 638, 642 (1981). In Pacifico v. Pacifico, 190 N.J. 258 (2007), the Court acknowledged that "the law grants particular leniency to agreements made in the domestic arena," allowing "judges greater discretion when interpreting such agreements." Id. at 266. However, the Court stressed that, "[a]s a general rule, courts should enforce contracts as the parties intended." Ibid. The Court stated the judicial role is "to consider what is written in the context of the circumstances at the time of drafting and to apply a rational meaning in keeping with the expressed general purpose." Ibid. (internal quotation marks omitted).
The provisions of the MSA reflect the parties' firm understanding of the details regarding how plaintiff is compensated. By way of example, the MSA includes an extensive definition of "cash compensation" to be employed in the calculation of defendant's "bonus alimony," which changed when defendant was no longer entitled to a share of the RSUs as part of equitable distribution. The MSA also reflects the parties' understanding that plaintiff's earnings were subject to a measure of unpredictable fluctuation. At the time the parties entered into the MSA, they knew that plaintiff's actual income for 2007 was $2,721,730. Yet, the $800,000 trigger reflects an apparent agreement that his support obligations would not be subject to modification unless his income fell to less than one-third of his income in 2007. Paragraph 17C of the MSA states, "[plaintiff's] historical cash compensation is not indicative of his future cash compensation." Indeed, when the parties reached their agreement in September 2008, they acknowledged that a review of plaintiff's support obligations for a downward modification "could take place as early as January 2009." (Paragraph 33, MSA, supra).
Placed within this context, the meaning of the $800,000 reference figure is unambiguous. As defendant acknowledges, it is included in Paragraphs 32 and 33 to define the minimal level of plaintiff's "base salary and year end discretionary cash bonus" that was the basis for the amount of child support agreed upon, as well as the parties' recognition that, in the event plaintiff's "base salary and year end discretionary cash bonus" fell below that amount, the parties agreed they would "review [his] child support and alimony obligation[s] for a downward modification." Defendant's assertion that the MSA does not identify a threshold for an upward modification review is correct. However, that does not render the clear language of the MSA ambiguous or unfair.
When parties to a contract "have not agreed with respect to a term which is essential to a determination of their rights and duties, a term which is reasonable in the circumstances is supplied by the court." Pacifico, supra, 190 N.J. at 266 (quoting Restatement Second of Contracts § 204 (1981)). The Court explained that this principle "is intended to be applied in cases in which the parties failed to agree regarding an issue, generally because they did not anticipate that it would arise or merely overlooked it." Ibid.
Here, there was no missing term essential to a determination of the parties' rights. The $800,000 level did not mandate a reduction in plaintiff's child support obligation; it merely called for a review of his child support and alimony obligations. And, indeed, when a review was triggered, the child support obligation remained unchanged. In the absence of the parties' explicit agreement, there are established legal principles that control when plaintiff's support obligation is subject to review for an upward modification. See Petersen, supra, 85 N.J. at 644; Isaacson v. Isaacson, 348 N.J. Super. 560, 579 (App. Div.), certif. denied, 174 N.J. 364 (2002). See also Lepis, supra, 83 N.J. at 148-49; Brawer v. Brawer, 329 N.J. Super. 273, 284 (App. Div.), certif. denied, 165 N.J. 138 (2000) (stating a property settlement agreement is "subject to amendment by the court when changed circumstances make its enforcement inequitable").
We are therefore satisfied that the terms of the MSA are unambiguous and should be enforced as written. Larbig v. Larbig, 384 N.J. Super. 17, 26 (App. Div. 2006). Accordingly, no hearing was necessary.
Defendant also argues that the trial court erred in granting plaintiff's motion for reconsideration and in denying her motion for reconsideration. These arguments lack sufficient merit to warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), beyond the following brief comments. These motions were governed by Rule 4:49-2 and were matters to be exercised in the trial court's sound discretion. Capital Fin. Co. of Del. Valley, Inc. v. Asterbadi, 398 N.J. Super. 299, 310 (App. Div.) (citing Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 257 (App. Div. 1987), certif. denied, 110 N.J. 196 (1988)), certif. denied, 195 N.J. 521 (2008). We discern no abuse of discretion in the trial court's decisions on these motions.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION