Edward R. Weinstein, Esq.

Payment of College-Expenses for a Divorced Child in New Jersey; Yet Another Controversial Case

As a divorce lawyer who owns a busy law firm, I am well aware that here in New Jersey a red hot topic has been the fact that divorced parents are obligated to contribute to their child’s college expenses, even though non-divorced parents do not share the same responsibility. Through of the course of over twenty years as a New Jersey divorce attorney, I have witnessed courts, time and time again, order divorced parents contribute to their child’s college attendance. Over the years New Jersey Family Part courts have begun favoring mediation and settlement agreements in divorce proceedings. While these agreements are not binding under contract law, the courts will honor them in the pursuit of equity, justice and the best interest of the child. The recent case of Moffitt v. Moffitt, shows that the Appellate Division will hold a parent responsible to agreement regarding college expense contributions that they had previously agreed to do by way of consent.

EDDIEONE

In Moffitt, Guy Moffitt appealed an order that required him to pay for 81% of his daughter’s Stafford and Perkins college loans. Guy and Laura Moffitt divorced in May 2003. In the final judgment of divorce both parents agreed to divide the cost of college. Guy was to contribute 80%, and Laura was to contribute only 20%. According to the agreement the child also had an obligation to apply to all available grants, scholarships, and financial. The agreement further stipulated that the child could not be enrolled in any school without prior notice to the other parent, who would be required to exercise good faith and not unreasonably withhold consent. A basis for reasonably withholding consent could be the cost of the institution. Also the parties agreed to consider the child’s wishes in enrolling in the selected school.

In the agreement the parents acknowledged the existence of certain Pilgrim funds. There was a fund of $8,000 for each child. It was agreed that these funds would be used for each child’s college cost before the 80/20 split would apply.

On April 2008 a supplemental order was entered that modified Guy’s college expense obligation based on his gross weekly income. Laura’s obligation was reduced to 19% and Guys raised to 81%. Even though it was not a huge modification Guy attempted to appeal the order. He was unsuccessful.

On September 2013, Laura filed a motion to compel her ex-husband to pay 81% of the Perkins and Stafford loans accrued by their daughter. To support her motion, Laura certified that the couple did not intend to pay for their daughter’s college by loans. But, after their daughter applied for financial aid at Fordham, she was informed that when no loans are taken out, a child cannot demonstrate financial need. The parties were told that if their daughter applied for Stafford and Perkins loans, it would show financial need, and they could file an annual appeal to request additional funding.

Laura further contended that she went to Guy’s house to talk about what to do regarding the financial aid situation. According to her, both parties stated to their daughter that they each would pay their share of these loans when the loans became due. Guy stated that he would pay his share in a lump sum to avoid interest. He also stated that it was a “win-win situation” because the school would give their child more money, and the loan amounts would amount a deferment anyway, as they would not need to be paid until after the child graduated. The Moffitt’s took the loans, and filed an appeal. The result of the appeal netted them an additional $ 4,100 in aid given by Fordham.

Taking out loans certainly benefitted the Moffitt’s, however, according to plaintiff, Guy refused to respond to his daughter’s requests when it was time for him to pay his portion of the loan. Guy owed $ 12,625 for his portion of the Stafford loan, and $ 4,500 for his portion of the Perkins loan.

While Guy did not deny Laura’s description of their agreement to pay for the loans, he argued that he had no legal obligation to pay for. Guy argued that Laura did not have any legal standing to sue him to for loan payments, because the loans and debt were his daughter’s, not his. A motion judge granted Laura’s motion on November 15, 2013. Guy’s response was completely denied, and the judge ordered a payment schedule for him. The judge stated that should Guy fail to comply with the order, a warrant for arrest would be issued in his name.

Guy appealed the order. His arguments were in the form of questions to the New Jersey Appellate Division. He asked four questions. First, Guys asked if New Jersey state law allowed a mother to commence an action against an ex-spouse to contribute to a debt taken by the child of the marriage. Next, he asked whether it was lawful under the New Jersey Court Rules for a court that has heard no testimony from the daughter, to allow a mother, who does not happen to legally responsible for her daughter’s debt, to bring a legal action against her ex-spouse. Third, Guy asked if New Jersey state law allowed a trial court to enter an order that modified a college expense obligation, without any evidence of change in circumstances, that effectively re-wrote the judgment of divorce. Finally, Guy asked the appellate panel if a trial court was permitted under New Jersey state law to accept a motion from a plaintiff that did not have a certification of mailing or any evidence or statement or offer from the student who had now become an emancipated adult. A Certificate of Mailing is a receipt that provides evidence of the date that your mail was presented to post office for mailing. It can only be purchased at the time of mailing. The certificate of mailing certifies that proper procedure was followed in the delivery of important communications. The court requires proof that a spouse is aware, or on notice of any family law proceeding. Therefore, courts will require proper documentation, such as a certification of mailing.

The Appellate Division stated that Guy’s arguments completely lacked merit. First, the order at issue did not re-write the original judgment of divorce. The order merely enforced a term already agreed upon by the parties. Both parents already agreed that their joint children would first apply for all available grants, scholarships, and financial aid, and then the parents would divide the remaining cost of attendance. Even though Guy argued that he did not sign any document that legally required him to make his contribution of college loans, he failed to dispute key facts in Laura’s certification, specifically that they were advised by Fordham that their daughter’s financial aid amount could potentially be increased if she obtained loans, and that Guy orally agreed to this “win-win” situation and also agreed to pay for his fair share in a lump sum when it became due.

Furthermore, both parents agreed to divide the cost of their children’s college expenses on a proportional basis in the Judgment of Divorce, and Guy did not challenge the mutual and voluntary nature of that provision. The court found that the college loans were part of the college expenses that Guy agreed to divide with Laura. Thus, Laura did indeed have standing to enforce that provision of the Judgment of Divorce for the benefit of their daughter. The court relied on Dolce v. Dolce, which held that a parent can legally bind him or herself by a voluntarily and knowingly negotiated consensual agreement, to support a child past majority. An agreement of this kind is legally enforceable as long as it is fair and equitable. The court remains free to alter a parental settlement agreement if circumstances change in a way that the provision would not be equitable and fair.

When parents voluntarily agree, courts strongly adhere to the public policy favoring the stability of consensual agreements. Because matrimonial settlement agreements are fundamentally consensual and voluntary in nature, they are considered valid and enforceable as long they are fair and just. Courts favor these types of agreements as they are a relatively peaceful means of terminating marital strife. Rather than being governed by contract law, these terms are valid if found to be fair and just.

The Appellate Division affirmed the trial courts order, and held Guy responsible for his voluntarily agreed contribution to his daughter’s student loans.

To learn more about this controversial aspect of New Jersey divorce law, please contact my office today.