Sullivan v. Sullivan, A-2393-20

CourtNew Jersey Superior Court – Appellate Division
Writing for the CourtPER CURIAM
PartiesLISA SULLIVAN, Plaintiff-Respondent, v. MICHAEL SULLIVAN, Defendant-Appellant.
Docket NumberA-2393-20
Decision Date21 November 2022

LISA SULLIVAN, Plaintiff-Respondent,
v.

MICHAEL SULLIVAN, Defendant-Appellant.

No. A-2393-20

Superior Court of New Jersey, Appellate Division

November 21, 2022


This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

Submitted October 11, 2022

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Ocean County, Docket No. FM-15-1075-16.

Horn Law Group, LLC, attorneys for appellant (Jeff J. Horn, of counsel; Jessica R. Carosiello, on the brief).

Rehrer &Rehrer, attorneys for respondent (Victoria L. Rehrer, on the brief).

Before Judges Sumners and Berdote Byrne.

PER CURIAM

1

In this appeal of a post-judgment order, we are asked to consider whether the Family Part erred in declining to modify and reduce defendant's alimony and child support obligations and in compelling defendant to disclose information related to a particular business. We conclude the trial court did not abuse its discretion when it found defendant did not make a prima facie showing of changed circumstances because defendant Michael Sullivan's pleadings were deficient and any reduction in income, he experienced was temporarily caused by disruptions related to the pandemic; they did not affect his ability to earn income or seek alternative sources of income. Additionally, although the court found no prima facie showing of changed circumstances, it still had the authority to enforce its own orders and, on plaintiff Lisa Sullivan's cross-motion to enforce litigant's rights, appropriately ordered discovery of financial information defendant omitted from his Case Information Statement (CIS) relevant to his ability to comply.

The parties were divorced pursuant to a March 28, 2018 judgment of divorce (JOD) incorporating the parties' marital settlement agreement (MSA). The MSA addresses custody and child support for the two children born of the marriage, limited duration alimony, and equitable distribution. During the

2

marriage, Michael[1] started a business known as "Club Metro Franchising, LLC" (Club Metro), of which he is a fifty percent co-owner, with a business partner who is not a party to this litigation. Michael sold and franchised gyms through this venture, and at the time of divorce, Michael was receiving royalty distributions from approximately seventeen franchisees. Pursuant to the MSA, Michael retained all businesses established during the marriage, "including but not limited to Club Metro Financing, Club Source, Direct Impact, Union Club, Green Island Builders (a construction firm) and other ancillary businesses."

The MSA, provided that Michael shall pay alimony to Lisa for a limited duration of nine years: $7,000 per month in alimony for five years, and $6,000 per month for the final four years. The alimony payments were calculated based upon Michael's reported income of $250,000 per year, and Lisa's imputed income of $50,000. Michael is also obligated to pay child support in the amount of $309 per week, which was calculated using the Child Support Guidelines. Child Support Guidelines, Pressler &Verniero, Current N.J. Court Rules, Appendix IX-A to R. 5:6A, www.gannlaw.com (2023).

3

Michael's income was determined using an analysis conducted by a forensic accountant who served as a joint expert during the parties' divorce. He determined Michael's businesses were worth $1,500,000, and Michael's fiftypercent ownership was worth $750,000. He also conducted a cash flow analysis where he determined Michael's annual average income was $262,585 gross and $231,867 net.[2]

On August 9, 2019, upon Lisa's motion, the court found Michael violated litigant's rights by failing to comply with certain provisions in the MSA, regarding equitable distribution and real property. The court specifically found Michael had failed to make a lump sum equitable distribution as set forth in the MSA.

On July 16, 2020, Michael filed a motion seeking a reduction of his alimony and child support obligations. In his CIS, Michael asserted "Covid 19 has caused the closing of all my fitness franchise [locations] in NJ, 10 Locations." Michael reported his 2019 income on his CIS as $219,252 gross and $201,693 net. Michael also reported year-to-date unearned income of $49,000.

4

The trial court observed Michael listed only the following on his CIS: certified "Part D" monthly expenses were $375 for his phone and transportation, and "$0" for his shelter expenses; "Schedule C" personal expenses totaled $2,070.95, comprised mostly of food and medical insurance. "Part E" of the CIS did not disclose any bank accounts or real property owned. He certified his net worth, after liabilities, was "$384,600."

Lisa filed a cross-motion on October 1, 2020, seeking enforcement of the MSA, certain payments, and post-judgment discovery because, at the time, Michael was in arrears to her for $22,796.66. In response to defendant's crossmotion for discovery, Michael volunteered he would provide all documentation regarding his income. Lisa alleged Michael closed his construction business, Green Island Builders, and started a new venture, Blue Star Construction to hide income and seek reduction of his support obligations based upon changed circumstances. Lisa alleged Michael started Blue Star Construction with a significant other,[3] who was also an employee of Club Metro.

5

On November 23, 2020, the court denied defendant's motion to decrease alimony and child support payments, found him in violation of litigant's rights for certain violations of the MSA, and compelled him "to disclose any and all information related to his new business, Blue Star Construction. "The order noted: "Plaintiff states this business is owned by defendant and his wife. There is no information in defendant's CIS about Blue Star Construction." The order also required "[Michael] to disclose all information regarding any PPP loans . . . or other COVID related support/assistance received by his or any of his businesses." Michael was also ordered to bring arrears current within thirty days.

On December 14, 2020, Michael filed a motion for reconsideration of the November 23, 2020 order, disclosing with it for the first-time information about two Paycheck Protection Program (PPP) Loans he received in May 2020, totaling approximately $111,000. Michael also retained the former joint expert to conduct another "cash flow analysis" for calendar year 2020. The expert issued a report on March 17, 2021, estimating Michael's cash flow was $137,082 gross and $122,161 net income. The report qualified the "analysis was limited to the information provided us."

6

On March 26, 2021, after entertaining oral argument, the court denied reconsideration of the November 23, 2020 order. The court found Michael failed to meet the reconsideration standard envisioned by in Rule 4:49-2, specifically noting deficiencies in his...

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