This is another high-income child support cases in NJ where I don’t think the right result was achieved. I hate to Monday morning quarterback another lawyer, especially when I don’t have all the facts, but it seems like there is a lot of missing information here. Clearly, the father challenged the mother’s CIS but it doesn’t seem like there was any other discovery here? Where was the records to back up these figures? What about bank record, credit card statements or even a deposition? While the parties had accountants and there was testimony, the case reads as if everyone just went with the CIS from each party without the records to back it up. If you are facing a high-income child support case in New Jersey, call our team of tough, smart lawyers and have us to do it the right way. We will make sure your high-income case has the records to back up your position and likewise, we will get the records that will defeat the other side’s demands when they are ridiculous and unsupported.
SUPERIOR COURT OF NEW JERSEY
OLGA CADAVID, f/k/a OLGA NIETO,
Argued March 23, 2009 – Decided
Before Judges Carchman and Sabatino.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-2182-00.
Francine Del Vescovo argued the cause for appellant (Lomberg & Del Vescovo, LLC, attorneys; Ms. Del Vescovo and Janet S. Del Gaizo, on the brief).
Patricia A. Ferraro argued the cause for respondent (Rose & DeFuccio, attorneys; Ms. Ferraro, on the brief).
Defendant Zoilo Nieto (“the father”) appeals a March 25, 2008 order of the Family Part requiring him to pay plaintiff Olga Cadavid, formerly known as Olga Nieto (“the mother”), the sum of $8,839 in monthly child support for the parties’ three minor children. We affirm that order, with modifications that are mainly arithmetic in nature.
The parties are both immigrants from Colombia. The father, who came to the United States in 1982, is the successful founder and president of eight schools that teach English as a second language. The schools are located in New Jersey, New York, Florida, and Canada. Through limited liability companies unrelated to the schools, the father also owns interests in several commercial properties in New Jersey and Florida. In a June 2007 loan application, the father valued his various business interests at $8 million and the fair market value of his real estate holdings at $5.2 million. The Family Part calculated the father’s annual income for purposes of child support at approximately $2 million annually, a figure which is uncontested on appeal.
The father presently owns four residences: a four-bedroom home in Demarest; a two-bedroom condominium in Edgewater; the former marital home in Ridgefield; and a condominium in Miami Beach, Florida. The Demarest home, where the father currently resides and where he enjoys parenting time with the children, includes seven bathrooms, a $15,000 tree house, and a private movie theater.
The mother emigrated to the United States in January 1997. Soon thereafter, she married the father on March 25, 1997. A full-time homemaker, the mother obtained an associate’s degree from Bergen County Community College in 2006, where she majored in early childhood development.
The parties are the parents of three sons: an eldest son born in January 1998; a middle son born in February 1999; and a youngest son, who was born in May 2001 after the parties had already divorced. The parties have no children from other relationships.
The parties were divorced on May 10, 2000, entering into a Property Settlement Agreement (“PSA”). Among other things, the PSA provided that the mother would have primary residential custody of the three children, with substantial parenting time awarded to the father. The PSA also provided that the father would pay the mother $100,000 annually in combined support. That figure included $20,000 in limited-duration alimony payable for seven years; child support; certain educational expenses of the mother; and various roof expenses related to the marital home, where the mother and the sons then continued to reside. The father also paid for medical insurance, private school tuition, and other expenses of the children. After the third son was born, the parties amended the PSA in December 2003 that, among other things, increased the monthly child support amount by $300.
Prior to the scheduled May 2007 expiration of her alimony, the mother filed in March 2007, a motion to modify child support. As part of her motion papers, the mother stated her intention to move with the three sons out of the marital home in Ridgefield into a house in Warren owned by her present fiancé. The father unsuccessfully opposed the sons’ relocation in proceedings in the Family Part and an ensuing emergent application to this court.1 Consequently, the mother and the three sons moved to Warren in August 2007, where they continue to reside in a four-bedroom home along with the mother’s fiancé and his own teenage son.
Meanwhile, the parties’ child support dispute was litigated in the Family Part. The court conducted five intermittent days of plenary hearings in November 2007, December 2007, and January 2008. The court heard the testimony of both parties and from expert accountants for each side. The court also considered numerous financial exhibits, including the parties’ respective case information statements (“CIS forms”) listing their financial resources and expenses.
After considering the proofs, the motion judge rendered a detailed oral decision on March 25, 2008. In her decision, the judge estimated the husband’s annual income at about $2 million. Given that high level of income, the judge recognized that the case was outside of the published child support guidelines in Appendix IX-A of the Court Rules. The judge declined to impute any net earnings to the mother, in light of the mother’s limited earnings capacity and her homemaker responsibilities as the parent of primary residence. The judge acknowledged the father’s substantial parenting time, which is about thirty-six percent of the children’s overnights. The judge also made numerous discrete reductions to the itemized personal living expenses for the children presented on Schedule C of the mother’s CIS form, decreasing the total of those claimed sums by more than half.
Based upon that analysis, the trial court awarded the mother $8,839 per month in child support for the three children. The court also required the father to pay for the boys’ summer camp costs and counseling expenses, but rejected the mother’s request that he also pay for their other extracurricular expenses. The court further ordered the father to obtain a $2 million life insurance policy for the benefit of the children, and fixed arrears in the amount of $7,716. Lastly, the court awarded the mother $40,000 in counsel fees that she incurred in connection with the child support dispute and multi-day hearings.
The father now appeals, contending that both the child support award and the counsel fee award are excessive and inconsistent with applicable legal principles. The mother has not cross-appealed.
By statute, parents are presumptively required to provide for the financial support of their unemancipated children. N.J.S.A. 2A:34-23(a). The statute enumerates several factors to consider in calibrating support, including: (1) the “[n]eeds of the child”; (2) the “[s]tandard of living and economic circumstances of each parent”; (3) “[a]ll sources of income and assets of each parent”; (4) the “[e]arning ability of each parent”; (5) the “[n]eed and capacity of the child for education”; (6) the “[a]ge and health of [each] child and each parent”; (7) the “[i]ncome, assets and earning ability of the child”; (8) the “[r]esponsibility of the parents for the court-ordered support of others”; (9) the “[r]easonable debts and liabilities of each child and parent”; and (10) “[a]ny other factors the court may deem relevant.” Ibid.; see also Gac v. Gac, 186 N.J. 535, 548 (2006) (applying the statutory factors); Strahan v. Strahan, 402 N.J. Super. 298, 306-09 (App. Div. 2008) (same).
As a threshold issue, we recognize, as did the motion judge, that the guidelines published in Appendix IX-A of the Court Rules do not strictly control the determination of child support in this case because the parents’ total income far exceeds $187,200 per year. Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A, Item 20(b) at 2334 (2009); see also Strahan, supra, 402 N.J. Super. at 307. In such high-earner contexts where parental ability to meet the children’s basic needs is not an issue, “the dominant guideline for consideration is the reasonable needs of the children, which must be addressed in the context of the standard of living of the parties.” Isaacson v. Isaacson, 348 N.J. Super. 560, 581 (App. Div.), certif. denied, 174 N.J. 364 (2002); see also Strahan, supra, 402 N.J. Super. at 307. Children from wealthier households “are entitled to not only bare necessities, but a supporting parent [with high earnings] has the obligation to share with his children the benefit of his financial achievement.” Isaacson, supra, 348 N.J. Super. at 580.
On the other hand, assessing the needs of the children in high-income cases must be “consistent with lifestyle without overindulgence.” Id. at 583. For example, “‘no child, no matter how wealthy the parents, needs to be provided [with] more than three ponies.'” Ibid. (quoting In re Patterson, 920 P.2d 450, 455 (Kan. Ct. App. 1996)). Even in wealthier families, the court must still determine the needs of a child “in a sensible manner consistent with the best interests of a child.” Ibid.; see also Strahan, supra, 402 N.J. Super. at 308; Caplan v. Caplan, 364 N.J. Super. 68, 86-90 (App. Div. 2003), aff’d, 182 N.J. 250 (2005).
Our appellate courts are customarily and rightly deferential in reviewing a trial court’s award of child support, particularly in an above-the-guidelines case such as this one, which was adjudicated after several days of plenary hearings. When determining child support awards, “the trial court has substantial discretion.” Gotlib v. Gotlib, 399 N.J. Super. 295, 308 (App. Div. 2008); see also Pascale v. Pascale, 140 N.J. 583, 594 (1995). A child support award that is consistent with the applicable law “‘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.'” Gotlib, supra, 399 N.J. Super. at 309 (quoting Foust v. Glaser, 340 N.J. Super. 312, 315-16 (App. Div. 2001)).
Moreover, we must give due regard to the Family Part judge’s credibility determinations and “feel for the case,” based upon the opportunity of the judge to see and hear the witnesses. Cesare v. Cesare, 154 N.J. 394, 411-12 (1998); see also Pascale v. Pascale, 113 N.J. 20, 33 (1988). Given the Family Part’s special expertise, we accord particular deference to fact-finding in family cases, and to the conclusions that logically flow from those findings. Cesare, supra, 154 N.J. at 412-13. Of course, no such deference is warranted if the trial court “ignores applicable [legal] standards.” Gotlib, supra, 399 N.J. Super. at 309.
Here, with respect to income considerations, the father argues that the trial court unreasonably declined to impute income to the mother and instead was obligated to allocate to the mother a defined portion of the children’s financial needs. We disagree.
When determining whether to impute income, the child support guidelines instruct “that the trial court must first determine whether the parent has just cause to be voluntarily unemployed.” Caplan, supra, 182 N.J. at 268. In making that decision, the trial court should consider the following factors:
(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.
[Considerations in Use of Child Support Guidelines, Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A at 2324 (2009) (item 12).]
Additionally, “[w]hen 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.” Ibid.
We are satisfied that the motion judge did not abuse her discretion in declining to impute net positive earnings to the mother as of the time of the plenary hearings. The mother was nineteen years old when she emigrated to the United States in 1997. At that time she enrolled in one of the father’s schools to learn English. Approximately two months later, she married him. She then gave birth to three children in the short span of three years. The youngest of those children was six years old at the time of the hearings in this case. Throughout the marriage, the mother never obtained employment but cared for the children. She obtained an associate’s degree from a community college only two years before the hearings began in this case. The mother drives the children to school, their extracurricular activities, their sporting events, and medical appointments. She also frequently drives the boys to meet their father for his parenting time.
At the time of the hearings, the mother was seeking employment as a daycare worker or as a teacher’s assistant, positions for which she could expect to be paid only about ten to twelve dollars per hour. However, she apparently had yet to receive an offer of employment.
Given the mother’s limited potential earning capacity and lack of prior work experience, as well as the benefits of the mother personally attending to the boys’ transportation and other after-school needs, there are reasonable grounds for the judge’s decision not to impute net positive earnings to the mother. The judge essentially determined that the child-care and other expenses that the mother would incur if she were employed would substantially eviscerate her potential income. The judge observed that the mother drives the children “wherever they have to be when they have to be there on all of the extracurricular activities,” and that her efforts in that regard “lessens the financial burden on [the father].” As the judge noted, the mother is “putting in the time, the energy, and many other things in order to take care of these children, [services] that otherwise someone else would have to be paid to do.” The judge’s reasoning is neither arbitrary nor an abuse of discretion, although we note that the father remains free to seek prospective relief on the imputation issue if circumstances materially change. See Lepis v. Lepis, 83 N.J. 139 (1980).2
The father additionally contends that the motion judge did not correctly assess the reasonable needs of the children. He maintains that the judge relied too much on a “wish list” of expenses presented by the mother; that the shelter costs derived from Schedule A of the mother’s CIS form were miscalculated; that the court-approved shelter expenses improperly benefited the mother’s fiancé and his son; and that some of the other approved expenses were against the weight of the evidence and unreasonable. Although we have concluded from our own detailed review of the record that certain of the court’s expense calculations warrant adjustment, its determinations were generally sound.
As to the shelter expenses reflected on her Schedule A, the mother recognized that the Warren house is the primary residence of six persons: herself, her three boys, her fiancé and his own son. Endeavoring to remove the incidental benefit to the fiancé and his son for these shelter expenses, the mother generally applied a two-thirds (or four-sixths) fraction to the household costs for utilities, snow removal, cable access, and other shelter items.3 The mother also acknowledged, both on her CIS form and in her testimony, that the two-thirds fractional share for these items should be further reduced by applying a multiplier of three-fourths, so as to segregate out the children’s portion from her own portion. The motion judge considered this allocation to be reasonable, and so do we.
The mother’s Schedule A further indicates that her household incurs a combined monthly expense of $7,577 for a first mortgage, a second mortgage, and real estate taxes. The mother requested to be allocated $3,000 of that monthly sum for her and her children. The motion judge found that allocation to be fair, noting that “[i]f the mother went out to rent an apartment for the three boys and herself and spent three thousand dollars a month on rent, it would not be unreasonable, given the father’s ability to pay.”
The father contends that the shelter allocation is excessive because, as of the time of the hearings, the three sons were all sleeping in the same bedroom at the Warren residence. However, nothing in the record indicates that the boys were excluded from use of the entire house during waking hours. The record also reflects plans by the mother and her fiancé to build an addition on the house that would give them and the children more space. The motion judge was not required because of the boys’ sleeping arrangements to make a further reduction of the shelter costs. In addition, “the law is not offended if there is some incidental benefit to the custodial parent” from a child support calculation, provided that the benefit is not “overreaching.” Isaacson, supra, 348 N.J. Super. at 584-85; Strahan, supra, 402 N.J. Super. at 308. No such overreaching is demonstrated here.
We are persuaded, however, that the trial court’s calculations of the Schedule A costs for the children require some discrete adjustments. With respect to the monthly costs (reduced on the CIS by two thirds) for heat ($486), water and sewer ($107), snow removal ($189), cable ($113) and miscellaneous “other” expenses ($40), the court failed to apply the additional three-fourths multiplier to eliminate the mother’s share. The court also should have reduced the monthly telephone charges ($130) to the ten percent share that the mother herself had attributed to the children. These adjustments collectively would reduce the children’s monthly shelter budget by $350.75.
In addition, we are persuaded that the calculation of the mortgage expenses should be reduced to eliminate the payment on the second mortgage, as the record is devoid of proof that the proceeds of the second mortgage loan were used for the benefit of the parties’ sons. See Pressler, Current N.J. Court Rules, Appendix IX-A to R. 5:6A, supra, at 2321 (2009) (item 8). The record does reflect that the monthly payment on the first mortgage, inclusive of an escrow amount for real estate taxes, is $4,638.31.4 Two-thirds of that sum is $3,092.21. Applying three-fourths to that amount to take out the mother’s portion yields $2,319.15.5 The difference between that $2,319.15 sum and the $3,000 (four-person) figure used by the motion judge is $680.85. Accordingly, the Schedule A budget for the children logically should have been further reduced by that amount. Combining that with the $350.75 adjustment mentioned above, the total reduction in Schedule A expenses should have been $1,031.60.
As to Schedule B for transportation expenses, we generally adopt the motion judge’s analysis, and reject the father’s claims that the expenses claimed were excessive. Again, however, the court overlooked the need to discount these expenses to take out the mother’s one-quarter share. Consequently, the entries on Schedule B for the car payment ($450), auto insurance ($217), registration and license ($80), maintenance ($75), fuel and oil ($430), and EZ PASS ($25), need to be multiplied by three-quarters, consistent with the mother’s own testimony and CIS footnotes. These adjustments yield a reduction of Schedule B expenses from $1,277 to $957.75, a difference of $319.25.
Lastly, we discern no basis for any further adjustments of the Schedule C personal expenses for the three children. Unlike her reporting of Schedule A and B expenses, the mother did not apply fractional shares to the Schedule C expenses but instead claimed sums that were allegedly spent directly for the children, such as clothing and food. The motion judge meticulously reviewed those items, and made substantial reductions of most of them. The judge’s determinations were reasonable.
Although the necessary adjustments that we have identified could be addressed by remanding this matter to the Family Part for further proceedings, we have accepted the representations of both counsel that they have no objection to our exercising original jurisdiction to re-calculate the award where we have found it appropriate to do so in light of the points raised on appeal and the applicable law. Accardi v. Accardi, 369 N.J. Super. 75, 91 (App. Div. 2004) (noting the propriety of the exercise of original appellate jurisdiction to avoid “perpetual litigation”). The parties and the trial court have already consumed substantial time and effort in five days of hearings with competing experts. We see no reason to require further proceedings to correct the award, at least as to the straightforward adjustments that we have identified.
For all of these reasons, the monthly child support award of $8,839 is accordingly reduced by $1,350.85 ($1,031.60 for Schedule A plus $319.25 for Schedule B), to a corrected sum of $7,488.15, effective as of the date of the Family Part’s March 25, 2008 order. No further retroactive adjustment is warranted. The parties and the Probation Department shall assist the trial court in computing appropriate credits or arrears.
We briefly comment on the father’s challenge to the counsel fee award. Although the motion judge awarded virtually the entire fee claimed by the mother, we are satisfied that the award was reasonable and consistent with the precepts of Rule 5:3-5(c). The judge specifically noted in her detailed analysis of the Rule 5:3-5 factors that neither party litigated this matter in bad faith or unreasonably, and that, indeed, “both lawyers were very helpful in minimizing the litigation.” The father acknowledges that the mother’s counsel’s hours and hourly rates were not excessive. Given the disparity of the parties’ financial resources, the court was satisfied that the mother was unable to shoulder her own counsel fees. We discern no abuse of discretion in the judge’s fee analysis. See Gotlib, supra, 399 N.J. Super. at 314-15 (noting that counsel fee awards are committed to the Family Part’s “sound discretion”); see also Loro v. Colliano, 354 N.J. Super. 212 (App. Div.), certif. denied, 174 N.J. 544 (2002).
We have fully considered the balance of the arguments raised on appeal and conclude that they lack sufficient merit to require comment. R. 2:11-3(e)(1)(E).
Affirmed, as modified. The motion judge will issue a modified order consistent with this opinion within twenty days. We do not retain jurisdiction.
1 The relocation issues were not pursued further on appeal. The present appeal does not challenge the amount of the father’s parenting time.
2 This disposition makes it unnecessary to consider the mother’s potential guidelines-based share of support relating to the first $187,200 in combined income, given that she has no earnings.
3 A one-tenth fraction was applied as to the monthly telephone bill, an allocation for the children that the father does not contest as unreasonable.
4 Because the mortgage statement in the record does not segregate principal from interest, we do not reduce the monthly figure for principal, which we suspect, in any event, is substantially exceeded by the interest portion. The removal of principal may be considered, however, in any future prospective application to adjust child support, with appropriate documentation. See Pressler, supra, Appendix IX-A to R. 5:6A, supra, at 2321 (2009) (item 8).
5 We note this figure is very close to three-quarters of $3,000, or $2,250.
April 13, 2009