Opinion
DOCKET NO. A-4368-12T3
07-15-2014
SEBASTIAN RUGGIERO, Plaintiff-Appellant, v. ELIELLEN RUGGIERO, Defendant-Respondent.
Morris County, Docket No. FM-14-0670-99. Maynard & Sumner, LLC, attorneys for appellant (Matthew A. Sumner, on the brief). Respondent has not filed a brief.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo and Alvarez.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-14-0670-99.
Maynard & Sumner, LLC, attorneys for appellant (Matthew A. Sumner, on the brief).
Respondent has not filed a brief. PER CURIAM
Plaintiff Sebastian Ruggiero appeals orders of the Family Part that modified his monthly alimony obligation and denied his motion for reconsideration. For the following reasons, we remand the matter for further proceedings consistent with this opinion.
Plaintiff and defendant Eliellen Ruggiero were married on March 17, 1973, and had two children, who are now thirty and thirty-five years old. On September 18, 2000, the parties entered into a Property Settlement Agreement (PSA) and were divorced by way of a Dual Final Judgment of Divorce (JOD) on October 6, 2000, which incorporated the PSA. Pursuant to the PSA, plaintiff's initial alimony obligation to defendant was $1,200 per month. From May 31, 2002 through May 31, 2004, it was reduced to $1,100 per month and ultimately fixed at $1,125 per month starting on June 1, 2004.
According to plaintiff, he worked for Exxon Mobil Corporation as an accountant for thirty years, until he lost his job when he was fifty-seven years old. Plaintiff thereafter collected unemployment benefits for eight months until he obtained employment with Chilton Memorial Hospital in Wayne, New Jersey. Plaintiff earned an annual salary of $62,000 in this new position, in which he remained for seven years, until he was forced to involuntarily retire.
Around 2007, plaintiff developed diplopia, in both eyes, which causes "double vision." This condition prevented plaintiff from performing the tasks necessary to maintain employment in his profession. Specifically, he had difficulty performing detailed accounting work on a computer because the numbers would appear blurry and he also suffered headaches as a result of his eye condition. Plaintiff underwent treatment with several doctors and had two eye operations, including a cataract removal procedure. On April 8, 2012, plaintiff was awarded Social Security retirement benefits of $1,975 per month as he was no longer able to find employment as an accountant and was forced to take an early retirement. Plaintiff ceased paying alimony in June 2012.
In May 2012, plaintiff filed a pro se motion to terminate alimony, which was unopposed. On July 26, 2012, the trial court denied this motion, without prejudice, because "[p]laintiff failed to attach a copy of his prior [1999] case information statement [CIS,]" pursuant to Rule 5:5-4(a). The court noted that the 1999 CIS and "other indicia of his prior financial circumstances when his alimony obligation was established[] . . . is required because it helps provide a full and accurate picture of the [plaintiff's] finances."
Plaintiff refiled his motion to terminate alimony on August 1, 2012, this time including his prior CIS, as well as tax returns, W-2 forms, and medical proof of his eye condition. In addition, plaintiff filed proof of service to defendant via certified mail, return receipt requested.
On November 26, 2012, plaintiff appeared before the Family Part judge and represented that defendant was in fact served with his motion to terminate alimony. During the hearing, plaintiff asserted that, although he has made all of his alimony payments since the inception of the PSA, that he stopped making these payments in June 2012 because he was no longer employed and was collecting social security. Plaintiff further explained that he believes defendant is not challenging his motion to terminate alimony because "she's probably making more income than [he is] now." After a brief discussion, the court explained:
I think what we're going to do is -- I suspect it is more likely than not that you're right. The other party essentially is not going to object to what you're seeking. I'm going to prepare an order. Send it to the address you gave me for her saying she hasn't responded. And unless there's a response, the order will be entered in 30 days. I just want to make sure she has notice. I don't doubt what you're saying at this juncture, so that's why I brought you in. I wanted to verify and I think we've succeeded.
. . . .
But I'm assuming she has notice, sounds like she does. There has not been an objection therefore generally we would accept what you submitted on its face. Now if she objects that would be a different issue. But we'll take it one step at a time. But I think we have -- I think we have figured out the notice part. All right, if -- I'll excuse
you, I'm going to mail out a proposed order to you and to the other party and we'll take it from there.
On December 5, 2012, the court issued an order, essentially denying plaintiff's request for termination of his alimony obligation, and instead reducing it to $500 per month effective August 3, 2012. In addition, the court ordered plaintiff to begin paying $200 per month towards arrears for the balance of the alimony payments accrued from June 2012, the date he stopped making these payments. The court also attached a statement of reasons with this order. Specifically, the court reasoned:
As a basis for his request for termination of alimony, [p]laintiff states that his income is reduced and his income is now limited to Social Security benefits and a pension. As a preliminary matter, none of the events specifically listed in paragraph 13 of the PSA have occurred — both parties are still living and plaintiff does not allege that defendant has remarried or is currently living with an unrelated adult in a relationship tantamount to marriage. Alternatively, [p]laintiff's claim in support of terminating his alimony is his reduced income. Plaintiff's limited income does not prevent his payment of alimony; however, [p]laintiff has demonstrated changed circumstances that may warrant modification of his alimony obligation. This [c]ourt finds it appropriate to reduce [p]laintiff's alimony obligation to $500.00 per month as his income has changed significantly in recent months. This alimony modification shall be effective August 3, 2012, the date [p]laintiff filed the present motion.
. . . .
This [c]ourt must call attention to [p]laintiff's significant arrears balance, which began to accrue in June[] 2012, when [p]laintiff stopped his alimony payments altogether. In addition to alimony, [p]laintiff shall begin paying $200.00 per month toward his alimony arrears.
Thereafter, on January 25, 2013, plaintiff filed a motion for reconsideration, arguing that the judge, at the hearing, stated that he would send defendant "a letter informing her that she has 30 days to oppose [plaintiff's] motion, and if she did not oppose it, [the judge] would grant [plaintiff's] . . . motion to terminate alimony based on change in circumstances." Within his supporting document, plaintiff also provided a financial breakdown, which demonstrated that defendant was receiving approximately $2,400 more income annually than plaintiff. Again, defendant did not oppose this subsequent motion.
On April 26, 2013, the original motion judge denied plaintiff's motion for reconsideration and determined that all previous orders shall remain in effect. In the court's statement of reasons, it explained:
Plaintiff's motion for reconsideration alleges that the [c]ourt improperly included his pension payments when reducing his alimony obligation. The December 5, 2012 Order reduced [p]laintiff's monthly alimony obligation by more than 50% from $1,125 to $500. Plaintiff cites [N.J.S.A.] [ ] 2A:34-The court, relying on its earlier reasoning in its December 2012 order, found that none of the conditions stated in the parties' PSA that would allow for termination of plaintiff's alimony obligations has occurred and that plaintiff's reduced income would allow him to make a modified alimony payment of $500 per month.
23(b), which states, "when a share of a retirement benefit is treated as an asset for purposes of equitable distribution, the court shall not consider income generated thereafter by that share for purposes of determining alimony." In calculating [p]laintiff's alimony obligation the [c]ourt considered the totality of circumstances and determined that $50 0 was a reasonable amount and that the: "Plaintiff's limited income does not prevent his payment of alimony; however, [p]laintiff has demonstrated changed circumstances that may warrant modification of his alimony obligation."
On appeal, plaintiff raises the following issues:
I. THE TRIAL JUDGE SHOULD HAVE GRANTED PLAINTIFF'S MOTION TO TERMINATE ALIMONY.
II. THE TRIAL JUDGE SHOULD HAVE ORDERED THE DEFENDANT TO SUBMIT A FAMILY CASE INFORMATION STATEMENT PURSUANT TO THE RULES OF COURT.
III. THE TRIAL JUDGE ERRED IN THAT HE DID NOT TAKE INTO CONSIDERATION PLAINTIFF'S UNOPPOSED FINANCIAL STATEMENT THAT DEFENDANT EARNED THE GREATER SHARE OF INCOME.
IV. THE TRIAL JUDGE ERRED BY INCLUDING PLAINTIFF'S PENSION AMOUNT IN
CALCULATING HIS PRESENT INCOME IN VIOLATION OF NEW JERSEY CASE LAW.
V. THE TRIAL JUDGE SHOULD HAVE GRANTED PLAINTIFF'S MOTION FOR RECONSIDERATION.
VI. THE TRIAL JUDGE SHOULD HAVE GIVEN GREATER WEIGHT TO THE FACT THAT DEFENDANT DID NOT OPPOSE ANY OF PLAINTIFF'S MOTIONS.
"The basic purpose of alimony is the continuation of the standard of living enjoyed by the parties prior to their separation." Innes v. Innes, 117 N.J. 496, 503 (1990). "After initial alimony awards have been made, courts may modify alimony orders 'as circumstances may require.'" Ibid. (quoting N.J.S.A. 2A:34-23). "The party moving for modification 'bears the burden of making a prima facie showing of changed circumstances.'" Glass v. Glass, 366 N.J. Super. 357, 370 (App. Div.) (quoting Miller v. Miller, 160 N.J. 408, 420 (1999)), certif. denied, 180 N.J. 354 (2004). Specifically, in order to modify or terminate alimony, the moving party must demonstrate: (1) "a prima facie showing of changed circumstances"; and (2) "that changed circumstances have substantially impaired the ability to support himself or herself[,]" which "requires full disclosure of the [movant's] financial status, including tax returns." Lepis v. Lepis, 83 N.J. 139, 157 (1980). In reviewing a prior alimony order, "the primary factors assessed to determine whether the former marital standard of living is being maintained are: 'the dependent spouse's needs, that spouse's ability to contribute to the fulfillment of those needs, and the supporting spouse's ability to maintain the dependent spouse at the former standard.'" Innes, supra, 117 N.J. at 504 (quoting Lepis, supra, 83 N.J. at 152). "Other criteria include whether the change in circumstance is likely to be continuing and whether the agreement or decree explicitly provided for the change." Ibid.
Only after the movant has established a prima facie showing of "changed circumstances" should "tax returns or other financial information . . . be ordered." Lepis, supra, 83 N.J. at 157. In so finding, the Court in Lepis explained the importance of reviewing both spouses' financial information in determining whether modification or termination of alimony is appropriate:
We recognize that individuals have a legitimate interest in the confidentiality of their income tax returns. However, without access to such reliable indicia of the supporting spouse's financial ability, the movant may be unable to prove that modification is warranted. Similarly, without knowledge of the financial status of both parties, the court will be unable to make an informed determination as to "what, in light of all the [circumstances] [. . .] is equitable and fair [. . . .]""Whether circumstances have really changed so as to warrant modification requires a court to study the parties' financial condition at the time of the divorce, as well as the time of the application." Deegan v. Deegan, 254 N.J. Super. 350, 355 (App. Div. 1992). However, when "the change is involuntary, all that is required is an analysis of the alterations in the parties' financial circumstances." Ibid.
[Id. at 157-58 (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)).]
In the context of a request to modify or terminate alimony, several factors must be considered when determining whether a party may retire, including "age, health of the [retiring] party, his motives in retiring, the timing of the retirement, his ability to pay maintenance even after retirement and the ability of the other spouse to provide for himself or herself[,]" in addition to the reasonableness of the early retirement. Id. at 355 (internal quotation marks omitted). A determination of this issue "will depend on the individual circumstances of a particular case." Id. at 358.
In the motion court's statement of reasons of December 5, 2012, modifying plaintiff's alimony obligation, the court determined that he had demonstrated changed circumstances. However, instead of terminating alimony, the court found that "[p]laintiff's limited income does not prevent his payment of alimony[,]" and ordered his alimony payments be reduced to $500 per month, in addition to $200 per month in alimony arrears to cover his nonpayment starting in June 2012. In a letter to the motion court in support of his reconsideration motion, plaintiff compared his current income with his estimate of defendant's income, which demonstrated that defendant was earning over two thousand dollars annually more than him. Plaintiff also claimed that his daughter, who earns between $80,000 and $90,000 as an analyst at AIG, currently lives with defendant and shares in their household expenses. Yet, the court did not mention defendant's financial status in rendering the December 5, 2012 order modifying alimony and the April 26, 2013 order denying plaintiff's motion for reconsideration.
We conclude that the motion court erred in failing to consider defendant's financial status in determining that a modification of plaintiff's monthly alimony obligation to $500 was equitable and fair. Since plaintiff successfully established a prima facie showing of changed circumstances, the court was required to analyze both plaintiff's ability to continue paying alimony as well as defendant's continuing need for spousal support. However, in order to make an appropriate determination on these issues, it was necessary for the motion court to consider the financial status of both parties. As the Court in Lepis reasoned, "without knowledge of the financial status of both parties, the court will be unable 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, supra, 72 N.J. at 360). It is clear the motion court only considered plaintiff's financial status in rendering both decisions. Thus, without knowledge of defendant's financial status, the motion court was unable to make an appropriate determination as to whether a further reduction or even termination of alimony payments was reasonable.
Pursuant to Rule 5:5-4(a), once "the party seeking the alimony . . . relief has demonstrated a prima facie showing of a substantial change of circumstances, then the court will order the other party to file a copy of a current case information statement." See also Donnelly v. Donnelly, 405 N.J. Super. 117, 131 (App. Div. 2009). Defendant's current CIS would have provided the motion court with sufficient information regarding her current financial status, including recent tax returns, W-2 forms, pay stubs and other sources of income. Yet, the motion court proceeded to resolution without this critical information, having failed to either order defendant to submit a CIS or, alternatively, draw an inference adverse to her from her lack of any response whatsoever.
Furthermore, the motion court also failed to address whether it considered plaintiff's pension income in modifying his alimony obligation. Specifically, plaintiff argues that the court must have considered his pension income when it ordered a continued alimony payment of $50 0 per month, with an additional $200 per month in arrears, because his only other source of income was his social security benefits, which would have been insufficient to continue this obligation. Even though the court, in its statement of reasons denying plaintiff's reconsideration motion, identified this argument, it merely reasoned that it "considered the totality of circumstances and determined that $500 was a reasonable" modification of the alimony obligation, without any further elaboration. Thus, instead of specifically addressing whether the pension income was or was not included in this determination, the motion court simply transcribed its reasoning from the prior motion of December 5, 2012.
As plaintiff correctly notes, if the trial court did consider his pension income, this would be contrary to N.J.S.A. 2A:34-23(b) and the Court's holding in Innes v. Innes, 117 N.J. 496 (1990). N.J.S.A. 2A:34-23(b) provides that "[w]hen a share of a retirement benefit is treated as an asset for purposes of equitable distribution, the court shall not consider income generated thereafter by that share for purposes of determining alimony." Pursuant to the parties' PSA, defendant was given "fifty percent of the marital portion of [plaintiff's] pension through his employment at Exxon . . . ." Defendant was also "entitled to all benefits available to [plaintiff] in connection with the pension[,]" including survivorship benefits. In Innes, supra, the Court held that when an entire pension is "treated as an asset for purposes of an immediate offset equitable-distribution award[,]" N.J.S.A. 2A:34-23(b) "immunizes plaintiff's pension from consideration in alimony-modification determinations." 117 N.J. at 506. Thus, based on the parties' PSA that included plaintiff's pension as an asset for equitable distribution, plaintiff's pension income should not have been considered in determining his ability to pay his spousal support obligation.
We thus remand this matter for a new hearing in order to provide plaintiff with an opportunity to present evidence and argument for the termination of his alimony obligation. At the original hearing of November 26, 2012, on plaintiff's motion to terminate alimony, the discussion was limited to determining whether defendant received notice and did not specifically address the issue of termination of alimony. As part of the remand proceeding, the motion court shall consider any deficits in defendant's proofs in determining whether any further reduction in, or termination of, plaintiff's alimony obligation is fair and equitable. Further, the motion court, in its statement of reasons, should specifically identify what sources of income and circumstances it relied on in making any such determination. Lastly, the court, pursuant to N.J.S.A. 2A:34-23(b), shall not consider plaintiff's pension income in deciding this matter.
Remanded for further proceedings consistent with this opinion.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION