DENISE R. CARNEVALE, Plaintiff–Respondent, v. SEBASTIANO N. CARNEVALE, Defendant–Appellant.
In this post-judgment matrimonial matter, defendant appeals from the November 16, 2012 order of the Family Part denying his motion for a reduction of his alimony and equitable distribution obligations. We affirm.
The parties were married in May 1980, separated in May 2009, and divorced in April 2011. They have four children, all of whom are emancipated.
The basis for defendant's alimony obligation was extensively detailed in the parties' Property Settlement Agreement (PSA). Shortly after their marriage, plaintiff “stopped working to raise the parties' four children.” She returned to work in 2007 “as an insurance claims representative” and earned $32,800 per year.
Throughout the marriage, defendant worked in the “photo copy and print reproduction industry.” In 1984, he purchased his own printing business, which he operated under the corporate name Darosa, Inc. (Darosa). As explained in Section 2.a of the PSA, “[a]lthough profitable earlier in the marriage, Darosa ha[d] declined” in the years leading up to the parties' divorce. The PSA also states that defendant “filed for Chapter 7 bankruptcy” in 2010. According to the PSA, defendant “had gross W–2 equivalent income of $60,000 in 2009 and $152,751 in 2010. [Defendant] received a personal salary of $8,000 in 2010. He took Officer Loans of $144,751, which his CPA ․ denominated as taxable income.” Defendant agreed to pay plaintiff $665 per week in permanent alimony.
With regard to the equitable distribution at issue in this appeal, the parties agreed in their PSA that plaintiff would receive “a one-half equitable interest in [Darosa]” and, “after considering their respective forensic CPA's reports, that [plaintiff's] share shall be fixed at $60,000.” The PSA required defendant to pay this obligation to plaintiff in eighty-five monthly payments of $700, and one additional, final payment of $500. In exchange, defendant was entitled to “keep and own [Darosa] free and clear of any claims by” plaintiff.
The parties acknowledged “that the equitable distribution and alimony support payments contained in the [PSA would] not permit either party to reasonably maintain the marital lifestyle. However, the terms of [the PSA] shall permit the parties, post-divorce, to live a lifestyle that is reasonably comparable one to the other.”
On September 27, 2012, seventeen months after the entry of the final judgment of divorce, defendant filed a motion to reduce his alimony and equitable distribution obligations. Defendant alleged that Darosa's profits had been declining since 2001. He attributed this decline to “technology” and asserted that “[b]usinesses that used to maintain paper files now store everything electronically.” Defendant stated that the business had gross sales of $749,010 in 2006; $762,658 in 2007; $654,633 in 2008; $505,530 in 2009; $563,368 in 2010; and $354,326 in 2011. Defendant asserted that his income was $113,000 in 2008; $156,000 in 2009; $143,000 in 2010; and $64,953 in 2011. Defendant stated that his bankruptcy petition was discharged in June 2011 and he did not have to repay $476,423 in loans he had taken from Darosa over the years.
In the first six months of 2012, Darosa grossed $141,917. Defendant asserted that due to “increasing debt” he was “forced to close the business as of August 31, 2012.” Defendant stated that he had been looking for other employment before the divorce and had continued to do so throughout 2012. In September 2012, defendant began working “in maintenance for The College of New Jersey” at a salary of $28,094 per year.
In his motion, defendant argued that Darosa's decline and closure was a change of circumstances requiring a reduction in his alimony and equitable distribution obligations. Plaintiff opposed the motion and filed a cross-motion seeking an increase in alimony and various other relief. Following oral argument, Judge Lawrence P. DeBello issued a five-page order, including his findings of fact and conclusions of law, denying defendant's motion. The judge stated:
As evidenced by Defendant's employment applications prior to the Judgment of Divorce, the Defendant contemplated a career change and possible closing of the business. These are not a change of circumstances. The factors Defendant attributes to a decline in business ․ had been known by him since 2001. Defendant's business expert opined that the business was worth only $82,000 with [zero percent] long term annual growth. The fact [that] he would try to keep the business going and failed is not a change of circumstance. Defendant has also failed to demonstrate how he attempted to improve diminishing circumstances[ ] prevalent before the final judgment was entered, and thereafter, beyond his statement that he attempted to re-tool the business․ Effectively, by entering into the PSA with knowledge of his financial difficulties, an alleged substantial decline in the industry and projected [zero percent] growth of his business, the defendant cannot now say the demise of his business was unforeseen․ Thus the Court does not feel that the decline in Defendant's business was an unforeseen circumstance or that his belief that he could sustain the business in the face of his assertions about the industry and his own personal financial circumstance was reasonable such that, at this time, he should be relieved of his obligations.
The judge therefore denied the relief sought by defendant, as well as the relief sought by plaintiff in her cross-motion. This appeal followed.
On appeal, defendant argues that “the failure of [his] business was a prima facie showing of changed circumstances warranting a plenary hearing.” We disagree.
The scope of our review of the Family Part's order is limited. Cesare v. Cesare, 154 N.J. 394, 411 (1998). We owe substantial deference to the Family Part's findings of fact because of that court's special expertise in family matters. Id. at 413. Thus, “ ‘[a] reviewing court should uphold the factual findings undergirding the trial court's decision if they are supported by adequate, substantial and credible evidence on the record.’ ” MacKinnon v. MacKinnon, 191 N.J. 240, 253–54 (2007) (alteration in original) (quoting N.J. Div. of Youth & Family Servs. v. M.M., 189 N.J. 261, 279 (2007)).
While we owe no special deference to the judge's legal conclusions, Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995), “we ‘should not disturb the factual findings and legal conclusions of the trial judge unless ․ convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice’ or when we determine the court has palpably abused its discretion.” Parish v. Parish, 412 N.J.Super. 39, 47 (App.Div.2010) (quoting Cesare, supra, 154 N.J. at 412). We will only reverse the judge's decision when it is necessary to “ ‘ensure that there is not a denial of justice’ because the family court's ‘conclusions are [ ] “clearly mistaken” or “wide of the mark.” ’ ” Id. at 48 (alteration in original) (quoting N.J. Div. of Youth & Family Servs. v. E.P., 196 N.J. 88, 104 (2008)).
We have carefully reviewed the record and have determined that Judge DeBello did not abuse his discretion in denying defendant's motion. We affirm substantially for the reasons expressed by the judge in his written decision. We add the following comments.
Support obligations, whether in a “consensual agreement[ ]” or in a final judgment, can be modified to reflect “changed circumstances.” Lepis v. Lepis, 83 N.J. 139, 148 (1980). “[T]he general considerations 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.” Id. at 152. While the “ ‘changed circumstances' are not limited in scope to events that were unforeseeable at the time of divorce[,]” they must be “continuing,” as well as unanticipated and unaddressed by the agreement or judgment. Id. at 152–53. “The proper criteria are whether the change in circumstance is continuing and whether the [PSA] has made explicit provision for the change.” Id. at 152. If the PSA makes such an “explicit provision,” modification based on the alleged change “would not ordinarily be ‘equitable and fair[.]’ ” Id. at 152–53 (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)).
“Although equity demands that spouses be afforded an opportunity to seek modification, the opportunity need not include a hearing when the material facts are not in genuine dispute.” Id. at 159. “[A] party must clearly demonstrate the existence of a genuine issue as to a material fact before a hearing is necessary.” Ibid. This standard is intended to alleviate a court's obligation from holding a hearing in every modification application. Ibid.
Here, Judge DeBello properly found that no change of circumstances had occurred that would require a modification of defendant's support and equitable distribution obligations. All of the alleged “changed circumstances” raised by defendant in his motion existed at the time the parties signed their PSA in April 2011. Indeed, defendant acknowledged that Darosa had been a “failing business” since 2001, ten years prior to the divorce. He had been searching for other employment prior to April 2011 and he had filed for bankruptcy in 2010. Because these circumstances were expressly acknowledged in, and factored into, the PSA, a modification of defendant's obligations based on them, especially just seventeen months after the agreement was reached, would not be “equitable and fair.” Lepis, supra, 83 N.J. at 152–53.
Finally, a plenary hearing to review defendant's claims was not required. He failed to show a change of circumstances since the divorce and did not identify any factual disputes that needed to be resolved through testimony. Id. at 159.