Party To Small Business Divorce Seeks Post-Judgment Modification
- August 7, 2015
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In Fiorenza v. Fiorenza, the Defendant appealed from the denial of a post-judgment Motion to modify his alimony obligation following a divorce including a small business. The Family Court judge initially ruled that alimony is not modifiable based upon anti-Lepis language in a negotiated Consent Order which set an amount below which the Defendant’s alimony obligation could not be reduced. The parties in this case were married in 1986 and divorced in 2010. Three (3) children were born of the marriage. Only one child still remained at home at the time of the proceedings. During the marriage, the Defendant owned an MRI facility in addition to holding an interest in an accounting practice. The Defendant sold his interest in the MRI facility during the divorce because the business was failing. The marital settlement agreement (MSA) which was incorporated into the judgment of divorce directed that “the husband is self-employed and has average earnings of $250,000 per year” and the Plaintiff can reasonably earn “$25,000 per year.” The parties agreed that in 2011 the Defendant would pay to the Plaintiff permanent alimony of $100,000 per year in monthly installments of $8,333. Within a few months the Defendant stopped paying support based upon his business suffering some financial hardships. The Plaintiff then petitioned the court to enforce the parties’ agreement, resulting in Orders reducing the Defendant’s six months’ arrears and sending the parties to mediation. Mediation proved to be unsuccessful and the Defendant subsequently filed a Motion to reduce his support and the Plaintiff submitted a Cross-Motion to enforce litigant’s rights. These Motions were resolved by the Consent Order that was at issue in the appeal. The exact provision at issue stated that “No matter defendant’s annual gross income, at no time shall monthly support be lower than $5,000, except after the emancipation of [the parties’ youngest child] when the child support component may be reduced . . . .” The Defendant then made $5,000 monthly payments to the Plaintiff for one year until he unilaterally reduced his payment to $2,000 and then the following month he paid nothing. The Plaintiff immediately moved to enforce the Consent Order to reinstate the support to $8,333, the amount negotiated in the MSA. The Defendant cross moved to reduce his alimony in accordance with Lepis v. Lepis, 83 N.J. 139 (1980) or Morris v. Morris, 263 N.J. Super 237 (App. Div. 1993). After hearing oral argument, the Family Court judge enforced the Consent Order holding the critical clause to operate as an anti-Lepis provision in accordance with the Morris decision. The judge noted that the Defendant did not dispute that both parties bargained for the agreement and each party got the expected benefit and burden of the contract. Although enforcing the Consent Order the judge ordered a plenary hearing to determine his ability to pay both alimony and arrears. After the hearing, the judge ordered the Defendant to pay $2,500 in alimony and child support with the difference between that sum and the required $8,333 under the agreement to accrue. Then the court ordered a nominal arrears payment of $100 per month. The Appellate Division affirmed the decision of the Family Court finding that the trial court was correct in holding that the parties had anticipated the decline in the Defendant’s income when they negotiated the Consent Order and agreed that notwithstanding any such decline, his alimony obligation to the Plaintiff would never drop below $5,000 except upon the child’s emancipation. Crespo v. Crespo, 395 N.J. Super. 190, 194 (App. Div. 2007). No explicit reference to Lepis was required. Savarese v. Corcoran, 311 N.J. Super. 240, 243 (Ch. Div. 1997). Being that the laws governing alimony have recently been changed, it is very important that you seek out the advice of an attorney to protect your rights an entitlements. If you think that it may be beneficial for you to petition the court for a post-judgment modification of your alimony obligation or for any other reason it is imperative that you seek out the advice of an experienced attorney before moving forward. For more information about alimony, divorce, post-judgment modification, child support, or other family law matters in New Jersey visit the DarlingFirm.com. This blog is for informational purposes and in no way is intended to replace the advice of an attorney.