Petition for Certificationby Hanan M. Isaacs, M.A., J.D. TABLE OF AUTHORITIES N.J. Ct. R. Hymerling, "Child Support in Upper Income Cases", Family Law Symposium Seminar Materials, NJ-ICLE (2002). . . . . . . . . . . 3 Louis, "The Inter-Relationship Between Development of Law and Public Policy", Financial Aspects of Divorce Seminar Materials, NJ-ICLE (2002) .. . . . . . . . . . . . . . . . . . . . . . . .ii INTRODUCTORY STATEMENT As New Jersey family law practitioner and commentator Frank Louis recently observed about developing legal principles: Public policy and [legal] analysis are certainly two . . . important criteria . . . on previously undecided [legal] questions. Yet, there is a broader [fairness] perspective . . . In the final analysis, if this third criterion is not met, then the legal principle might well be flawed. Louis, "The Inter-Relationship Between Development of Law and Public Policy", Financial Aspects of Divorce Seminar Materials, NJ-ICLE (2002), at page 21. The Appellate Division's published Opinion in this case charts new territory in the areas of child support calculation and scope of discovery in "above Guidelines" cases. As petitioner will demonstrate, while the Opinion does not want for either public policy or legal analysis, certain core principles are nevertheless fundamentally unfair and must be reversed. STATEMENT OF MATTERS INVOLVED After unfairly restricting the dependent mother's discovery rights; denying her request for the father's CIS; holding no fact hearings; and making no relevant findings of fact; the trial court awarded the dependent mother unreasonably low child support and denied her application for retroactivity of the award. The trial court's award was both legally and mathematically flawed. In so acting, the trial court ignored the clear dictates of the Child Support Guidelines; disregarded the Appellate Division's seminal and well-reasoned decision in Walton v. Visgil, 248 N.J. Super. 642 (App. Div. 1991); and then penalized the dependent mother with grossly inadequate counsel fees and costs. The Appellate Division has now sustained all of those trial court rulings in a published Opinion, attached. If not reversed in pertinent part, the Opinion poses a clear and present danger to New Jersey's entire child support jurisprudence, not just the"above Guidelines" cases. It also threatens related statutory interpretation of N.J.S.A. 2A:34-23(a) and all relevant discovery Rules of Court. Petitioner now seeks the Supreme Court's review, per R. 2:12-4 and for "special reasons", of key sections of the Appellate Division's final judgment entered and published in this matter on March 8, 2002. QUESTIONS PRESENTED 2. Does a dependent parent "overreach" by seeking a child support increase at the same time as her term alimony is set to end, thereby disqualifying her from a substantial and factually supported R. 4:42-9(a)(1) and R. 5:3-5(c) allowance of counsel fees and costs? The trial court said "Yes"; the Opinion affirmed. 3. If the dependent mother has lawfully preserved her claim for recalculated child support retroactivity, does the trial court have the discretion to cancel retroactivity? 4. Based on the trial court's clear commitment to its rulings and demonstrated hostility to the dependent mother in related parenting time proceedings, is the dependent mother entitled to a different judge on remand? The Opinion said "No". STATEMENT OF ERRORS BELOW STATEMENT OF REASONS AS TO WHY CERTIFICATION SHOULD BE ALLOWED IN THIS CASE Given the trial court's serious mistakes of both law and fact, now compounded by a published Appellate Division partial affirmance, this Court needs to set the record straight, not just for this case, but for all present and future cases raising similar issues. As one of the nation's leading High Courts in family law matters, the New Jersey Supreme Court's contribution to these issues will be a model for other jurisdictions. The Supreme Court need look no further than the results of this case to observe the mischief that will be created by the Appellate Division's decision (hereafter "Opinion). The trial court denied petitioner's request for her former spouse's CIS, despite the passage of four years, the trebling of his income, the maturation of the parties' two daughters, and the termination of her alimony. The Opinion declared the trial court's C.I.S. denial "harmless error" and affirmed its child support award notwithstanding (1) inadequate C.I.S. data from either side; (2) no separate financial information about the two daughters' financial needs; and (3) no independent verification of the former husband's earnings from his financial services company that grossed over $2 million in 1998, the last year that petitioner received data. As a result, the plaintiff's current child support obligation for two teenage daughters is significantly less than what he paid in 1995 in combined alimony and child support. Unless this Honorable Court reverses the Opinion in pertinent part, then Family Part judges in each "above Guidelines" case will be free to determine how much - if any - post-judgment discovery they will allow. Once discovery rules are deemed subject to judicial curtailment, judges could apply similar discovery restrictions to pendente lite support cases, trial matters, within Guidelines cases, in mixed alimony and child support matters, or in just plain alimony cases. The Opinion's error will be compounded when, as occurred in this case, a financially advantaged parent controls his or her own financial destiny, whether based on independent wealth, as a majority shareholder of a closely held company, or otherwise. This case also calls on the Supreme Court to guide trial courts' discretion in disqualifying financially dependent parents from counsel fee allowances. In this case, the trial court made an after-the-fact finding of petitioner's "overreaching", represented by nothing more than her request for a child support review coincident with her alimony termination. The Opinion approved the trial court's counsel fee ruling without comment. Petitioner was met at every turn by plaintiff's resistance and the trial court's complacency. She was forced to file repetitive requests for information; required to argue at three successive court appearances; and ultimately came away with a woefully inadequate child support award. Finally, this case requires the Supreme Court's guidance on remand to a different trial judge. Specifically, in a Family Part matter where a trial judge appears strongly committed to his or her findings and has made comments in the record that arbitrarily show support for one party over the other; and where the Opinion partially reverses and remands the matter; this Court should articulate a clear standard for remand to a different judge. SPECIFIC COMMENTS ON APPELLATE DIVISION OPINION Petitioner supports the Opinion's holding on the inherent role incompatibility of court-appointed mediators and guardians ad litem ("GAL"), raised in petitioner's consolidated appeal and discussed at pages 2 (overview), 3 to 6 (Part IA), and 13 to 21 (Part II) of the Opinion. Petitioner disagrees with the Opinion's remand to the same trial judge. Petitioner's Appendix, filed under Docket No. A-001861-00T1, demonstrates the trial court's four-year grant of plenary authority to Ms. Hartz to act on any and all issues, Da13 to Da14, at par. 2 (Order of 12/29/97). Ms. Hartz acted in all capacities simultaneously for three solid years. See, e.g., Ms. Hartz's report of 6/4/98, at Da81 to Da82. By October 12, 2000, Ms. Hartz retroactively categorized her own prior activities and fought to preserve her GAL role while giving up the "binding" mediator role. Da77 to Da80. The Opinion's fn. 1 on page 4, and text at pages 5 to 6, uncritically accepted Ms. Hartz's attempted role distinctions, while still disqualifying her from future service. The record below shows the harsh lengths to which Ms. Hartz and the trial court went to enforce Ms. Hartz's orders on custody and parenting time, including two orders to show cause in which petitioner was twice threatened with a change of custody and once with incarceration. See Da84 to Da86, at pars. 4 and 6 (Order of 7/30/98), and Da72 to 73, at pars. B and C (Order of 11/1/00). Petitioner does not want to go back before the same trial judge for the next round of GAL or other proceedings. At page 2, the Opinion frames the key economic issue as involving a "high income earner" who "does not dispute [his] ability to pay any reasonable amount of child support." In fact, never stipulated his ability to pay and petitioner sought court intervention for one reason only: her ex-husband refused to provide her with an updated C.I.S. or any documents more recent than a two-year-old personal tax return and a one-year-old W-2 from his majority owned company. The Opinion on page 7 notes only that "plaintiff, a CPA, was the CEO of a successful financial services . . . sub-chapter "S" corporation. There were four principals in the firm." The Opinion nowhere states that plaintiff held an 82% ownership interest and had only two partners as of 1998, the last year for which petitioner received financial documentation. See Da296-97, Docket No. A-3519-99T2. . . . that plaintiff's income was subject to scrutiny by governmental agencies obviating the necessity for further inquiry. (Emphasis added). In fact, the balance sheet audits were never submitted to the trial court, the trial judge never made such a finding, and petitioner and her expert did challenge plaintiff's financial disclosures as inadequate and misleading. This Court can take judicial notice that Enron and Global Crossing were annually "subject to" an SEC balance sheet audit by an "independent" CPA. That arrangement should not lead anyone to believe, let alone persuade a trial or appellate court, that plaintiff's income reporting was rendered accurate merely as a result of a balance sheet audit. A balance sheet audit sets forth a balance sheet of corporate assets and debts. It gives no information whatsoever about plaintiff's income, or even his corporation's income. It's [his] business . . . . It's not straightforward the way it is . . . for me [as a non-owner employee]. T21-15 to T22-12, k12/3/00) (emphasis added). The Opinion noted on page 8 that petitioner had retained forensic CPA Linda Schaeffer to review plaintiff's cash flow, but failed to note Ms. Schaeffer's Certification to the trial court, Da308 to Da316, especially at Da310, as follows: I have reviewed Mr. Isaacson's [financial disclosure]. Based on my review, I respectfully submit that the Court has insufficient data on which to base a child support recalculation at this time.(Emphasis added). In fact, Ms. Schaeffer wanted to see all Certified Audit Statements - both income and balance sheet - from 1997 to 1999, which would reflect plaintiff's true income and could be significantly different than cash basis reported income. For example, as she said, Mr. Isaacson may have planned a transfer of significant income to the next calendar year simply by timing his receipt of receivables. Ms. Schaeffer believed that plaintiff "may be on a . . . track of $600,000 [annual income] or more." (Da312)(emphasis added). The trial court and Appellate Division completely ignored Ms. Schaeffer's report. The Opinion at page 8 states the trial judge's observation "that [he] had been familiar with this litigation" for [four] years." The trial judge himself had observed on the first return date of petitioner's motion that he had prior experience with these people" and "I'm going to accept Mr. Isaacson's [financial] representation . . . that I don't believe I've got a hidden currency factor, I don't think he's . . . misreporting. Da318). Whatever the source of the trial court's purported knowledge of "these people", neither the trial court nor the Appellate Division focused on the fact that the parties had negotiated a Property Settlement Agreement in 1995, had only returned to court in the intervening four years on parenting time matters, and had never gone to a plenary hearing on any issue, financial or otherwise, in that time. The trial judge conceded as much at T34-20 to T35-5, 2/2/00 ("[It was the parties' parenting time issue] that was on the table for the most part and that I recall in dealing with the two of them"]. Therefore, both the trial court's and the Appellate Division's face-value acceptance of plaintiff's financial bona fides should be very troubling to this Court, as it is to petitioner. Since the entire thrust of petitioner's trial court motion was to get full financial disclosure prior to engaging in further negotiations or litigation, this Court should find the balance of the Appellate Division's factual and legal analyses similarly disturbing. On page 10, for example, the Opinion mentions "allusions . . . to the . . . relevance of the parties' present lifestyle" when in fact the trial court never let petitioner get that far. Rather than requiring the plaintiff to supply a standard updated C.I.S., which would have revealed plaintiff's then current lifestyle, the trial court determined there was no reason for plaintiff to supply one, unless petitioner could show that plaintiff could not afford to pay for something! Yet how could petitioner possibly show a disparity in lifestyles between plaintiff and his current family (including his infant son by his new wife) and plaintiff's children by petitioner, unless the trial court first required him to furnish a C.I.S.? The Opinion also stated on page 11 of its opinion, without justification, that "the trial judge rejected petitioner's argument that because plaintiff's income had tripled, his child support obligation should triple," and again at page 12, that the trial court had "reject[ed petitioner's] theory that she was entitled to support based on a percentage of plaintiff's Rather, petitioner believed that plaintiff's trebled income in the face of petitioner's more modest financial gains, together with the children's maturation and the termination of her alimony, should have produced a child support increase. The increase would be based on plaintiff's lifestyle when the children were with him, compared with what petitioner could do for them on her more modest resources. More baffling are the Appellate Division's unwarranted declarations that "the [trial] judge's denial of [petitioner's] request for plaintiff's C.I.S. [is] harmless error," that "neither [plaintiff's] ability to pay nor lifestyle was in significant or material dispute," and that "[petitioner] did not articulate in her motion the children's needs that were not being satisfied absent the increased child support." (Opinion, page 36)(emphasis added). In fact, the trial court persistently denied petitioner the very tools to find out those issues of supreme importance, as reflected in N.J.S.A. 2A:34-23(a) factors (2) (parents' standards of living and circumstances), (3) (parents' sources of income and assets), and (9) (children's and parents' reasonable liabilities). Yet, the trial judge repeatedly denied petitioner access to the most relevant information, and the Appellate panel upheld him! Opinion p. 36. In the least fair twist of all, both the trial court and the Appellate Division demanded that petitioner know and articulate in advance what she could not have known without standard discovery tools. Both courts used circular reasoning, but worse, they actually hampered petitioner's required tasks for the benefit of her dependent children, namely the prompt, efficient, and equitable processing of child support review. Plaintiff had conceded even before the initial return date of petitioner's motion that petitioner was entitled to a child support increase. Plaintiff's Brf. - App. Div., p.5, at fn. 1: On page 36, the Opinion faults the petitioner for having "failed to provide the requisite 'breakout' of the children's expenses as we urged in Walton. See 248 N.J. Super. at 650-51." While petitioner did not prepare the requisite dual analysis C.I.S. forms, nevertheless, the Opinion does not make clear why the parties' daughters should financially suffer as a consequence and why petitioner could not cure this defect now. This is especially true since the plaintiff provided the trial court with no C.I.S. whatsoever, and instead spent large amounts of time and energy attacking petitioner for her inaccurate pre-filed C.I.S. Petitioner filed her corrected version on October Based on the Appellate Division's opinion in this very case, therefore, the trial court had no valid information from either party on which to make its determinations about Rebecca's and Sara's actual financial needs. Indeed, based on the shortage of valid, relevant information before the trial court, and in the face CPA Linda Schaeffer's Certification to the trial court, it is a wonder that the Opinion could conclude "that the [monthly base child support award] was not an abuse of the judge's discretion." Opinion, page 36. When an award is based on neither party's C.I.S. information, neither child's properly stated financial needs, nor any other valid information, then it could only be described as "arbitrary, unreasonable, or contrary to the evidence." Opinion at page 36, citing Foust v. Glaser, 340 N.J. Super. 312, 315-16 (App. Div. 2001); Raynor v. Raynor, 319 N.J. Super. 591, 605 (App. Div. 1999). The trial court prevented petitioner from discovering plaintiff's investment information (Da323), an error the Opinion now compounds by stating that "investment income is revealed in any event" on plaintiff's personal tax returns. In fact, growth stocks may not show up on one's tax returns at all -- and how was petitioner supposed to glean that information unless the trial court or Appellate Division were to order plaintiff to produce it in discovery? Miller, 160 N.J. at 422 ("a supporting spouse cannot insulate his or her assets from [support] by investing th[em] in a non-income producing manner."). The trial judge advised petitioner on December 3, 1999, the initial return date on her motion, and without having heard or seen any evidence at all, that she wrongfully sought "an amount that fills the hole that the alimony loss has caused." (Da 323). He further opined: I'm sure plaintiff is viewing you as 'we're going to increase the child support as an alimony supplement. We're just going to move it over to the other side.'" (Da324). [Based on the "marital lifestyle" (TR26-11 to TR11-16, 12/3/99), the judge also told her she was facing a "cap" on her child support increase, represented by the combination of her previous alimony award net of taxes, plus her prior child support award. (DA325; TR33-8 to TR33-15, 12/3/99).] You're not going to get more than $42,000 [annually] out of this thing. (TR33-24 to TR33-25 (12/3/99). . . See, I'm not big on this forensic accountant for child support increases (TR15-8 to TR15-10, 12/3/99). . . In above-Guidelines cases, because there's no formula we're following in the supplemental income, this is pretty much - any [number] we pick we'd probably get affirmed in the Appellate Division. (TR30-16 to TR30-22, 12/3/99)(emphasis added). The trial judge also made a clear mathematical error in stating that, on an annualized basis, $1,800 of monthly tax effected alimony plus $2,400 in monthly child support equals $42,000, when $4,200 times 12 would have yielded $50,400. While the trial court was legally and factually wrong in each and every one of those statements, nevertheless, that is what the Appellate Division has now affirmed as an appropriate exercise of the trial court's discretion. The Opinion has just announced that all trial judges will now have discretion to decide how much discovery is due in these "above Guidelines" cases. The Opinion at page 13 also ascribes to the trial court a degree of fact-finding that it did not do. The trial court's comments about the maximum award under the Support Guidelines (TR49-10 to TR51-4, 2/2/00) merely rationalized its "generosity" to petitioner's household. In fact, the trial court's award was hardly generous. In her Reply Brief in Docket No. A-3519-99T2, at pages 12 to 14, petitioner showed that just before her alimony terminated in November of 1999, petitioner and the children lived on the combination of her $48,000 of gross income and $31,200 of alimony (both taxable), plus $28,800 of after tax child support, for total annual funds of $108,000 ($80,000 of it subject to tax). Without question, petitioner's child support increase was more than offset by her loss of alimony. By contrast, plaintiff's net income trebled from 1995 to 1999, while his combined alimony and child support payments dropped from $5,000 per month to $3,500 per month in child support alone. The final rulings involve completely new principles the Opinion has engrafted onto the Walton line of cases. Specifically, the Opinion seeks to "balance interests" reflecting a child's entitlement to share in parental good fortune and each parent's "right to participate in the development of an appropriate value system for a child." Opinion at 26-28. The court also worries about the possibility that a party could "overreach[] in the name of benefiting a child[.]" Opinion at 30. Applying these new factors here was deemed unnecessary, "as the difference in lifestyles between the plaintiff and [petitioner] is not so disparate as to crystallize the issue." Opinion at 31. The court's abstract statement of principles is unobjectionable, but its "finding" of no major lifestyle disparity between the parties is unsupported. The Opinion also focused, improperly, on the potential for discovery abuse in "high income" cases as a reason to curtail discovery. The opinion cited with favor California's "least beneficial assumption" test, discussed in Estevez v. Superior Court, 27 Cal. Rptr. 2d 470, 475-76 (Cal. Ct. App. 1994), and Johnson v. Superior Court, 77 Cal. Rptr. 2d 624, 628 (Cal. Ct. App. 1998). In both cases, a "high earner" resisted discovery, and the trial court was directed to make such assumptions regarding his or her financial circumstances as are "least beneficial" to that person. Opinion at pages 32 to 36. The Opinion then bootstraps the argument from a discovery "resisting" high earner to any high earner; now, a supporting parent should provide income tax returns . . . [and] a CIS, which will reflect additional sources of income. On receipt of that information, a judge is entitled to make 'least beneficial assumptions' as to the lifestyle of the responding parent. The lifestyle issue need not be the subject of expansive or expensive discovery. The judge need only consider that a parent at a certain level of income is assumed to live a lifestyle commensurate with that income. The Opinion mentions only in passing that "appropriate protective orders may be employed to protect against . . . [unfair] disclosure." Opinion at 35. Why should discovery be more circumscribed in "high earner" cases than in more "garden variety" cases? High-income cases will generally require specialized discovery, not wholesale elimination of discovery and use of a presumption. The child support statute spells out the factors legal counsel and the courts must address. The Opinion is potentially harmful to untold numbers of litigants. While the Opinion, at page 28, cited the Florida Supreme Court's decision in Miller v. Shou, 616 So. 2d 436 (Fla. 1993), it failed to mention the Miller court's rejection of the California rule. Miller held that without knowing the high earner's financial status, it would be impossible for any court to determine the reasonable needs of a child. Justice Grimes, speaking for the Florida Supreme Court, expressed it thus: [I]t is impossible to believe that any Court would award the same amount of child support where the paying spouse is a multi-millionaire as . . . where [he] makes a modest living. While . . . the child's basic survival needs would be the same, the determination of "need" in awarding child support takes into account more than just the basic necessities of survival. Morgan, Child Support Guidelines: Interpretation and Application, § 6.02, at 6-11 to 6-12.1 (2000), compares the two holdings as follows: Miller v. Shou makes more sense. The reasoning of Estevez makes sense only if one accepts the proposition that at some point, child support tops out. Morgan at 6-12. Petitioner respectfully disagrees with the Opinion's adoption of the Estevez doctrine here in New Jersey. The Florida Court's Miller decision is analytically more sound, makes better public policy and common sense, and passes the fundamental fairness test in a way the Estevez case does not. In fact, the Johnson case cited approvingly by the Appellate Division Opinion, at page 34, backed away from Estevez, stating: Simply because the extraordinarily high earning parent is not constrained by the guideline formula, there is no reason to ignore the reality that great income discrepancies exist within that class of persons whose income [is] extraordinarily high and that this discrepancy can affect the child's needs. Johnson, 77 Cal. Rptr. 2d at 628. Finally, while the Opinion expands the amount plaintiff is required to contribute to the children's costs, specifically for private school and future educational expenses, petitioner remains concerned about the child support baseline. The Opinion has made the "child perquisites" rulings fairer than before, it still leaves petitioner without access to data from which appropriate child support may be derived, in both absolute and relative terms. What petitioner lacks today is what she lacked two years ago: fair and reasonable access to plaintiff's updated financial figures. Extrapolating "least favorable assumptions" does not satisfy the Legislature's goal that trial courts make specific findings on child support statutory factors, whether parties are wealthy or impecunious. Moreover, creating exceptions for wealthy or even super-wealthy people invites discovery abuse of a different kind. Trial courts should have the ability to make exceptions to generally applicable rules, not wholesale exemptions from legislative and court rules that "protect" wealthy litigants. If anything, such "protection" will breed cynicism by financially dependent people, whether children or former spouses. This Honorable Court should so rule. CONCLUSION Respectfully submitted, BY: __________________________
I hereby certify that on April 8, 2002, I, the undersigned, filed and served a Petition for Certification upon the following persons at the following addresses, by depositing same in the United States Mail: Mark Sobel, Esq. __________________________ Dated: April 8, 2002 |
John Doe v. American Water Company | Giglio v. Roe, Superior Court of New Jersey, Law Division | State of New Jersey v. Carl Williams, 182 N.J. 426 (2004).
Petition for Certification
Friday, September 5, 2008
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