The opinion of the Court was delivered by
Lоng after the bonds of matrimony are dissolved, courts of equity are frequently called upon to reassess the persisting
The parties were married in 1961 and had three children. After a period of marital discord, on January 8, 1974, the wife obtained from the Superior Court, Chancery Division, a judgment of divorce on grounds of desertion. The court incorporated as part of the judgment a detailed agreement governing property distribution, alimony, child custody and support.
Under the terms of the agreement, the wife retained all the household items and “any and all other tangible personal property” located at the marital home. She received title to the marital home and the husband’s two-year old automobile. Upon entry of a final judgment of divorce and judicial ratification of the agreement, the husband would make a single payment of $22,000 “in settlement of the Wife’s claim to her right for equitable distribution and any other support claims of the Wife now or at any time in the future except as provided herein.”
The agreement permitted the wife to retain custody of the children and provided flexible visitation provisions. The husband agreed to pay $120 per week for alimony and $210 per week for child supрort—$70 per week for each unemancipated child. A child’s attendance at college, business or trade school would not terminate support payments. The husband was obligated to maintain health insurance for the wife until her death or remarriage and for each child until emancipated. He was also responsible for all necessary medical, dental and prescription drug expenses of the children and for the wife’s medical, dental and prescription drug expenses in excess of $50 per illness. The husband promised to pay all expenses for four years of college or professional education for each child. If a child lived away at school, child support would be reduced by some “appropriate” amount.
This Agreement shall not be varied, modified or annulled by the Husband or the Wife except by written instrument voluntarily executed and acknowledged by both.
On February 1, 1978, plaintiff moved to modify the support and alimony provisions of the agreement. She sought increased support for herself and the three children, a single, additional payment of $1,500 for household repairs and furniture, and counsel fees. Plaintiff also sought production of defendant’s 1976 and 1977 income tax returns before a hearing on the modification motion. The trial court denied the motion without requiring defendant to disclose actual earnings. Plaintiff’s request for counsel fees was also denied.
Plaintiff appealed from these rulings to the Appellate Division on April 19, 1978. On the following day she filed a notice of motion for rehearing of her motion for modification. Defendant responded by filing a notice of cross-motion for counsel fees and costs on the ground that plaintiff’s motion for rehearing was frivolous. The trial court denied a rehearing, noting that by virtue of the pending appeal the court lacked jurisdiction to grant it. Because the application for a rehearing was clearly without merit, the court granted defendant’s cross-motion for counsel fees. Plaintiff sought review in the Appellate Division of this second determination which was consolidated with her earlier appeal.
In an unreported opinion, the Appellate Division reversed the trial court’s dispositions. The court held that “[ojnly after the discovery process is complete should the former wife’s application for increased alimony and child support be determined.”
This Court granted defendant’s petition for certification. 81 N.J. 281 (1979). We now affirm. Before addressing whether the summary rejection of plaintiff’s claims was proper, wе first discuss the effect of a consensual agreement upon the court’s power to modify obligations of support and maintenance. Secondly, we examine generally what constitutes “changed circumstances” so as to warrant a modification of those obligations. We then consider the procedures that a court should employ when passing upon a modification petition—particularly the allocation of the burdens of proof and the conditions for compelling production of tax returns. Finally, we apply the results of this analysis to the facts of the present case.
I
Modification of Spousai Agreements
The equitable power of the courts to modify alimony and support orders at any time is sрecifically recognized by N.J.S.A. 2A:34-23:
Pending any matrimonial action brought in this State or elsewhere, or after judgment of divorce or maintenance, whether obtained in this State or elsewhere, the court may make such order as to the alimony or maintenance of the parties, and also as to the care, custody, education and maintenance of the children, or any of them, as the circumstances of the parties and the nature of the case shall render fit, reasonable and just, and require reasonable security for the due observance of such orders. * * * Orders so made may be revised and altered by the court from time to time as circumstances may require.
Divorcing spouses have often attempted to temper the flexibility of the court’s power to modify with greater predictability by entering into separation agreements. In the past, such agreements have had significant and varying impact on the availability of post-judgment modification. Specific performance of spousal support agreements was once thought to be barred by the flexible approach to modification embodied in N.J.S.A. 2A:34-23. Apfelbaum v. Apfelbaum, 111 N.J.Eq. 529 (E & A 1932). Although not specifically enforceable, such agreements could be regarded by the court as relevant to the issue of support, and could be incorporated in a divorce decree. “The fact that [a] court took over the terms of the contract did not impair the power of the court to alter such provisions to accord with the equity of unfolding circumstance.” Corbin v. Mathews, 129 N.J.Eq. 549, 554 (E & A 1941). The agreement was said to merge into the divorce decree, thereby losing its contractual nature. Id. at 553; Schluter v. Schluter, 23 N.J.Super. 409, 416 (App.Div.1952), certif. den., 11 N.J. 583 (1953).
The rule against specific enforcement was later rejected by this Court in
Schlemm v. Schlemm,
31
N.J.
557 (1960). That decision recognized that apart from its statutory authority, the Superior Court may exercise its “highly flexible” remedial powers to enforce the terms of interspousal support agreements “to the extent that they are just and equitable.”
Id.
at 581-582. Later decisions continued to recognize the courts’ power to modify such agreements “upon a showing of changed circumstances.”
Berkowitz v. Berkowitz,
55
N.J.
564, 569 (1970); see
In Smith v. Smith, 72 N.J. 350 (1977), this Court considered whether the Schiff standard applied when the trial court was effecting equitable distribution of marital property pursuant to N.J.S.A. 2A:34-23. Noting that “support payments are intimately related to equitable distribution” and that “trial judges should have the utmost leeway and flexibility in determining what is just and equitable in making allocations of marital assets,” we disapproved of the Schiff rule:
Henceforth the extent of the change in circumstances, whether urged by plaintiff or defendant, shall be the same, regardless of whether the supportpayments being questioned were determined consensually or by judicial decree. In each case the court must determine what, in the light of all the facts presented to it, is equitable and fair, giving due weight to the strong public policy favoring stability of arrangements. [72 N.J. at 360]
The rule announced in Smith is fully applicable when considering post-judgment modification. Consensual agreements and judicial decrees should be subject to the same standard of “changed cirсumstances.” Initially it might appear that this rule would diminish the advantages of separation and property settlement agreements, since they would provide no greater certainty or stability than a judicial determination. However, granting a greater degree of permanence to negotiated agreements would tend to make them a riskier arrangement for spouses who are likely to be harmed by changed circumstances. Typically, they have been spouses who are economically dependent; they generally have been wives with custody of children. Often consensual agreements would not be in their best interests if only “unconscionable” circumstances would warrant modification. 2 As we recognized in rejecting Schiff, contract principles have little place in the law of domestic relations. See Smith, 72 N.J. at 360.
When we first upheld the specific enforceability of spousal agreements in
Schlemm,
we relied on the flexible power of equity to enforce such agreements only to the extent that they were fair and equitable. Similarly, the terms of such agree
II
“Changed Circumstances”
The parties here disagree over what constitutes “changed circumstances” sufficient to justify modification of alimony and child support. Plaintiff claims that her detailed demonstration of the increased needs resulting from maturation of the children and severe inflation justifies discovery of defendant’s tax returns. Such increased needs and her husband’s substantiated ability to pay would, according to plaintiff, constitute “changed circumstances” warranting upward modification of alimony and child support. Defendant responds that an increase in the cost of living and the “normal wear аnd tear” alleged here does not even entitle plaintiff to discovery of his present earnings. He argues that the increase in need alleged, even if coupled with proof of his increased ability to pay, would not constitute “changed circumstances.” According to defendant, plaintiff’s position and the Appellate Division disposition are contrary to prior caselaw and will result in an avalanche of unwarranted petitions for modification.
The frequency with which courts are called upon to make or modify support awards needs no documentation. The lack of uniformity in their approaches and predictability in their decisions is similarly widely recognized. See generally Note, “Modi
A
The Elements of “Changed Circumstances”
The supporting spouse’s obligation is mainly determined by the quality of economic life during the marriage, not bare survival. The needs of the dependent spouse and children “contemplate their continued maintenance at the standard of living they had become accustomed to prior to the separation.” Khalaf v. Khalaf, 58 N.J. 63, 69 (1971); see Bonanno v. Bonanno, 4 N.J. 268, 274 (1950). 3
The amount is not fixed solely with regard, on the one hand, to the actual needs of the wife, nor, on the other, to the husband’s actual means. There should be taken into account the physical condition and social position of the parties, the husband’s property and income (including what he could derive from personal attention to business), and also the separate property and income of the wife. Considering all these and any other factors bearing upon the question, the sum is to be fixed at what the wife would have the right to expect as support if living with her husband. [Bonanno, 4 N.J. at 274 (quoting Dietrick v. Dietrick, 88 N.J.Eq. 560, 561-562 (E & A 1917)]
(1) an increase in the cost of living, see Martindell, 21 N.J. at 353;
(2) increase or decrease in the supporting spouse’s income, Martindell, 21 N.J. at 355; Traudt v. Traudt, 116 N.J.Eq. 75 (E & A 1934); Acheson v. Acheson, 24 N.J.Misc. 133 (Ch.1946);
(3) illness, disability or infirmity arising after the original judgment, e. g., Kirshbaum v. Kirshbaum, 129 N.J.Eq. 429 (E & A 1941); Limpert v. Limpert, 119 N.J.Super. 438 (App.Div.1972); see Ostrow v. Ostrow, 59 N.J.Super. 299, 305-306 (App.Div.1960);
(4) the dependent spouse’s loss of a house or apartment, Jackson v. Jackson, 140 N.J.Eq. 124 (E & A 1947); McLeod v. McLeod, 131 N.J.Eq. 44 (E & A 1942);
(5) the dependent spouse’s cohabitation with another, 4 Wertlake v. Wertlake, 137 N.J.Super. 476 (App.Div.1975); Garlinger v. Garlinger, 137 N.J.Super. 56 (App.Div.1975); Eames v. Eames, 153 N.J.Super. 99 (Ch.Div.1976); Grossman v. Grossman, 128 N.J.Super. 193 (Ch.Div.1974);
(6) subsequent employment by the dependent spouse, Ramhorst v. Ramhorst, 138 N.J.Eq. 523 (E & A 1946); Kavanagh v. Kavanagh, 134 N.J.Eq. 358 (E & A 1944), see also Lavene v. Lavene, 162 N.J.Super. 187, 203 (Ch.Div.1978); and
(7) changes in federal income tax law, Acheson, supra.
Courts have consistently rejected requests for modification based on circumstances which are only temporary or which are expected but have not yet occurred. Bonanno, supra; McDonald v. McDonald, 6 N.J.Super. 11 (App.Div.1949); Sassman v. Sassman, 1 N.J.Super. 306 (App.Div.1949).
When children are involved, an increase in thеir needs— whether occasioned by maturation, the rising cost of living or more unusual events—has been held to justify an increase in support by a financially able parent, see
Shaw v. Shaw,
138
N.J.Super.
436 (App.Div.1976);
Testut v. Testut,
34
N.J.Super.
This review of New Jersey decisions 5 reveals the factors that a court of equity must assess when determining whether the former marital standard of living is being maintained. When support of an economically dependent spouse is at issue, the 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. Thе decision to modify child support requires a similar examination of the child’s needs and the relative abilities of the spouses to supply them.
Our analysis makes clear that “changed circumstances” are not limited in scope to events that were unforeseeable at the time of divorce. This is particularly obvious in cases involving modification of child support orders, where maturation is cited as justifying an increase in support by a financially able parent. See, e.
g., Shaw v. Shaw, supra.
The supporting spouse has a continuing obligation to contribute to the maintenance of the dependent spouse at the standard of living formerly shared. So long as this duty continues, objective notions of foreseeability— what the parties or the court could or should have foreseen—are all but irrelevant. The proper criteria are whether the change in circumstance is continuing and whether the agreement or decree has made explicit provision for the change. An increase in support becomes necessary whenever changed circumstances
If the existing support arrangement has in fact provided for the circumstances alleged as “changed,” it would not ordinarily be “equitable and fair,” Smith, 72 N.J. at 360, to grant modification. For example, although a spouse cannot maintain the marital standard of living on the support payments received, this would not ordinarily warrant modification if it were shown that a single large cash payment made at the time of divorce was included with the express intention of meeting the rising cost of living. 6 In other cases, the equitable distribution award—which we have recognized is intimately related to support, id.—might have been devised to provide a hedge against inflation. The same might be true with respect to child support. A lump sum payment or a trust established for the benefit of the children could be shown to have been designed to cover the certain eventuality of increasing needs-.
B
Judicial Provision for Changed Circumstances
As a practical matter, spousal agreements have great potential for ensuring the desired degree of stability in support arrangements. See, e.
g., Petersen v. Petersen, 172 N.J.Super.
304 (App.Div.1980);
DeGraaff v. DeGraaff,
163
N.J.Super.
578
Not only the realities of the marketplace, but also the consti
Careful consideration of all these factors at the time of divorce and at the time modifiсation is sought will eventually reduce the necessity for otherwise well-founded postjudgment applications. It may also lessen the need for plenary hearings on modification motions. We are confident that any increased expenditure of judicial time necessitated by this expanded inquiry will be more than offset by savings from a reduced need for modification hearings.
Procedural Guidelines
The parties here disagree on the proper procedure for courts to follow on modification motions. In particular they dispute both the necessity and the elements of a prima facie showing of changed circumstances prior to discovery of the respondent’s financial status. We therefore think it appropriate to explain procedures to be followed in the postjudgment setting.
The party seeking modification has the burden of showing such “changed circumstances” as would warrant relief from the support or maintenance provisions involved. Martindell, 21 N.J. at 353. A prima facie showing of changed circumstances must be made before a court will order discovery of an ex-spouse’s financial status. When the movant is seeking modification of an alimony award, that party must demonstrate that changed circumstances have substantially impaired the ability to support himself or herself. This requires full disclosure of the dependent spouse’s financial status, including tax returns. When the movant is seeking modification of child support, the guiding principle is the “best interests of the children.” See Hallberg v. Hallberg, 113 N.J.Super. 205, 209 (App.Div.1971); Clayton v. Muth, 144 N.J.Super. at 493. A prima facie showing would then require a demonstration that the child’s needs have increased to an extent for which the original arrangement does not provide.
Only after the movant has made this
prima facie
showing should the respondent’s ability to pay become a factor for the court to consider. Therefore, once a
prima facie
case is established, tax returns or other financial information should be ordered. 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
In determining whether a material fact is in dispute, a court should rely on the supporting documents and affidavits of the parties. Conclusory allegations would, of course, be disregarded. Only statements to which a party could testify should be considered. Thus, if the sole disрute centered around the supporting spouse’s earnings, the disclosure of income tax returns might render a hearing unnecessary.
IV
The Present Motion for Modification
Applying the foregoing standards and guidelines to the facts of this case, we conclude that the Appellate Division was correct in reversing the trial court’s denial of plaintiff’s motion and directing production of defendant’s tax returns. Plaintiff has alleged with specificity the increases in her own and her children’s needs caused by substantial inflation and the rising cost of supporting growing children. These changes in circum
By reason of plaintiff’s prima facie showing, dеfendant should be required to disclose the requested evidence of his income, subject to the protections outlined above. See supra at 55. On remand, the trial court must then determine, among other things, whether the earlier agreement, as incorporated in the divorce judgment, provided for the present circumstances. Since the record clearly discloses genuine disputes as to material facts other than defendant’s earnings, a hearing will be necessary.
As defendant points out, the agreement provided that the increased income of either spouse “shall not be a consideration to change or modify the support and maintenance payments for the Wife or thе Wife and children.” This might appear to be a valid accommodation of contingencies which otherwise would support modification based on “changed circumstances”—the wife’s post-divorce employment or an increase in the husband’s earnings. But as we have stated, the court is not bound by such provisions. It should scrutinize carefully the dependent spouse’s ability to contribute to her own and her children’s maintenance. The court must determine whether there has been substantial impairment of their ability to maintain the standard of living to which they are entitled.
Plaintiff, who was a teacher before her marriage, holds a Master’s degree in Speech Communication and is continuing her education towards earning a Ph.D. She contends, however, that she has been unable to find substantial employment to bridge the gap between needs and expenses, and that employment in positions for which she is substantially overqualified would diminish her self image or esteem. Defendant asserts that plaintiff has unreasonably restricted her choice of employment fields. He points out that plaintiff’s background and age and the children’s maturity and attendance in school make her
Defendant alleges that a $22,000 lump sum payment to plaintiff incorporated in their agreement should bе recognized as the agreed means for covering the increased needs which plaintiff alleges—especially with respect to repairs to her present home. Whether this amount should be so considered is a question of fact for the court. While the supported spouse need not completely deplete savings to qualify for increased support, see Capodanno v. Capodanno, 58 N.J. 113, 118 (1971); Khalaf, 58 N.J. at 70; Martindell, 21 N.J. at 354, neither can that spouse be permitted unilaterally to designate her funds, as plaintiff attempts to do here, for the children’s college education. This is so particularly in light of defendant’s obligation under the agreement to pay for the expense of higher education. Any contention that the defendant will not perform this duty must be rejected as premature. When and if such college expenses arise and defendant fails to fulfill his obligation, a court is free to order defendant to make the required payments. 12
It appears that no provision has been made for any increase in the support necessary for growing children. On remand, the court therefore must determine whether the best interests of the children require greater support, to what extent the defendant is obligated to provide for their increased needs and whether he has the financial ability to do so. While the children are entitled to a determination based on their best interests, both parents have a duty to support them.
Ionno v. Ionno,
148
N.J.Super.
259, 261-262 (App.Div.1977);
Shanley v. Nuzzo,
160
N.J.Super.
436, 441-442 (J&D R.Ct.1978). Accordingly, the en
Finally, we agree with the Appellate Division that a determination regarding an award of counsel fees should await resolution of these issues on remand.
For the foregoing reasons, the judgment of the Appellate Division is affirmed. The matter is remanded for further proceedings in accordance with this opinion.
For affirmance —Chief Justice WILENTZ and Justices SULLIVAN, PASHMAN, CLIFFORD, SCHREIBER and POLLOCK —6.
For reversal —None.
Notes
The Schiff rule, however, was not extended to modification of child support provisions. See Clayton v. Muth, 144 N.J.Super. 491 (Ch.Div.1976).
Commentators have addressed similar arguments to the Schiff rule of unconscionability. See Skoloff, "Schiff-Unconscionable Obstacle to Matrimonial Settlements,” 99 N.J.L.J. 553 (1976) (“The undue burden placed on counsel as well as the parties by this Schiff requirement is itself unconscionable. * * * The result: * * *.” Id. at 553-566); Meth, “Matrimonial Arbitration,” 99 N.J.L.J. 409 (1976) (noting that the impossibility of providing for every future contingency made “Schiff seem like a voice from a very ivory tower.” Id.).
These cases actually phrased this entitlement in terms of what a husband owes a wife. As we will discuss below, this is no longer a sound statement of contemporary domestic relations law. See infra at 156.
If the dependent spouse remarries, the court must modify any order or judgment to eliminate the alimony obligation on application by the supporting spouse, N.J.S.A. 2A-.34-25; see Sharpe v. Sharpe, 109 N.J.Super. 410 (Ch.Div. 1970).
Caselaw in other jurisdictions is in substantial accord. See 24 Am.Jur.2d, Divorce and Separation, §§ 665-690, 844-850 (1966); Annot.,
Of course under the standard for modification stated in Smith, should such a provision later prove inadequate, the court is free to require greater support if it is warranted in the light of prevailing circumstances. See 72 N.J. at 360.
For examples of separation and property settlement agreements, see G. Skoloff, Family Law Practice 330-349 (1976 ed.); 11 D. Herr, New Jersey Practice—Marriage, Divorce and Separation § 789 (3d ed. 1963) and § 793.7 (Supp.1978). See also Berkowitz, 55 N.J. at 569-570. In that case the parties provided that on the wife’s remarriage the husband would convey his interest in the residence to the wife in return for cancellation of his obligations regarding it. They also made financial arrangements for the children’s attendance at college away from home and a consequent reduction in child support. The court therefore denied the husband’s motion for reduction of child support on grounds of the wife’s remarriage: “[A]ll of the alleged ‘changed circumstancеs’ were envisioned by the parties and dealt with specifically in the Agreement.” Id. at 570 (emphasis supplied).
At times courts have found it necessary to assess the supporting spouse’s ability to pay without regard to current earnings to determine fair and equitable support. See, e. g., Hess v. Hess, 134 N.J.Eq. 360 (E & A 1944). The same should be done when the supported spouse’s earning potential is an issue.
In Arnold v. Arnold, 167 N.J.Super. 478 (App.Div.1979), the Appellate Division concluded that in the absence of unusual facts, automatic cutoff dates for alimony should be avoided. While we disapprove of the general approach in Arnold, the trial court in that case made no investigation of the nature of the wife’s employment potential, and for this reason the 30-month limitation was justifiably seen as arbitrary. Careful and explicit factfinding on the earning ability of the dependent spouse is of paramount importance in such cases.
We do not share the view that only unusual cases will warrant the “rehabilitative alimony” approach. We note that other states permit such awards. See, e. g., Fla.Stat.Ann. § 61.08 (West Supp.1979); Haw.Rev.Stat. Ann. § 580-47 (Supp.1979). See also Cal.Civ.Code § 4806 (Supp.1980) (court may withhold support allowance to a party who is “earning his or her own livelihood”); Ind.Code Ann. § 31-1-11.5-9 (Bums 1979) (prohibiting maintenance of party unless he or she is physically or mentally incapable of supporting himself or herself).
R. 4:79-5 provides:
Interrogatories as to all issues in all matrimonial actions may be served by any party as of course pursuant to R. 4:17. All other discovery in matrimonial actions shall be permitted only by leave of court for good cause shown.
On its face this rule would appear to require good cause for the production of tax returns. However, R. 4:17 provides that the intеrrogatories may include a request for a copy of any paper. As the Comment to that rule observes, income tax returns, although pieces of paper, are not routinely discoverable. See Pressler, Current N.J. Court Rules, Comment R. 4:17 at 703 (1980). The Comment to R. 4:79-5 also notes that in the context of a matrimonial dispute, discovery can easily be subject to “abuse as a device by which one spouse harasses the other.” Id. at 982. For these reasons we agree that discovery of income tax returns on motions for modification of support is not desirable without a prima facie showing of changed circumstances.
If circumstances have changed in such a way that requiring defendant to pay for college would no longer be equitable and fair, the court also remains free to alter the prior arrangement. See Rufner v. Rufner, 131 N.J.Eq. at 196; see also Khalaf, 58 N.J. at 71-72.