One of the most challenging issues facing this New Jersey divorce attorney is when a previous client comes back to our law firm to reduce alimony. The lawyers at our firm must then immediately examine whether or not the decrease in our client’s income (or compensation package) is permanent or temporary in nature. New Jersey alimony law is clear that any change must be permanent in nature (amongst other factors). Otherwise, a motion to a New Jersey Family court seeking to modify or terminate alimony shall not succeed if the situation is deemed to be temporary in nature. The recent New Jersey Appellate Division case of Grier v. Grier, illustrates that a court will require a showing of permanent changed circumstances before modifying any alimony obligation.
In Grier v. Grier, Theodore Grier appealed from a November 20, 2014 order of the Superior Court of New Jersey, Family Part of Sussex County, that denied his motion to modify his alimony obligation. Theodore and Wendy Grier divorced on July 15, 2012. A property settlement agreement was incorporated into their final judgement of divorce. The property settlement agreement stated that Theodore was required to pay alimony to Wendy, in the amount of $500 every week, as well as child support for one child. The property settlement agreement explained that the $ 500 a week amount was based on Theodore’s average income during the three-year period before the property settlement agreement was signed. This average income amounted to $ 100,000. $15,000 was also imputed on Theodore for the purpose of calculating alimony. Sometimes courts will impute income on one spouse when calculating a modification. Income imputation is a matter of discretion, and is not a precise or exact determination. Instead this inquiry requires a Family Part judge to analyze the individual’s capacity to earn income, and job availability.
Theodore filed a motion to modify his alimony, and legally emancipate his son on July 2, 2014. Emancipation is the conclusion of the dependent relationship between a parent and child. A parent is legally obligated to provide support for his or her child at least until that child reaches the age of eighteen. However, emancipation does not occur automatically simply because the dependent child has reached the age of eighteen. Actually, emancipation does not occur at any age in particular. The essential question is whether the child has passed “beyond the sphere of influence and responsibility exercised by a parent and obtains an independent status of his or her own.” On September 24, 2014, his motion was denied by the trial court because he did not properly serve his ex-wife with the motion papers. He then filed for reconsideration and submitted proof of service on October 3, 2014. On November 20, 2014, his motion to emancipate his child was granted by the motion judge, however, his motion to modify alimony payments was denied. Theodore went to the New Jersey Appellate Division for redress and appealed only the November 20, 2014 motion for reconsideration, and not the original order.
Because Theodore did not appeal the original order, just the motion for reconsideration, the New Jersey Appellate Division reviewed only for an abuse of discretion, and noted that motions for reconsideration are approved in very limited situations. Reconsideration is only used when the Court has made a decision based on an incorrect or irrational basis, or when it is clear that the Court failed to appreciate or consider the significance of relevant evidence. The New Jersey Appellate Division did not find any abuse of discretion by the trial judge. The trial judge was correct in explaining that when someone wants to modify a support obligation that arises from a property settlement agreement, he or she must prove the existence of changed circumstances warranting such a modification. A reduced income could potentially be one circumstance that could qualify as a valid change of circumstance. However, Family Part judges have broad discretion to determine if a particular change of circumstance warrants a modification to an alimony obligation. Family Part judges are afforded this discretion because of their special experience to all the circumstances at issue. Furthermore, the person who wants the modification has the burden of proving that the changed circumstances warranted a modification to his or her alimony obligation. When an ex-spouse files a motion to reduce his or her alimony obligation, the main consideration is that spouse’s ability to pay.
While the trial judge did note that Theodore’s income had been reduced, the reduction of income seemed to a temporary reduction rather than a permanent circumstance. To be a valid change of circumstance that warrants a reduction of alimony, the change of circumstance must be permanent. Thus, the trial judge’s judgment was not based on an incorrect basis. Originally, under the property settlement agreement, Theodore’s income was calculated by taking the average of the last three years of income. Theodore claimed that his current income is lower now than what was originally stated in the property settlement agreement due to the fact that he had lost a client. The New Jersey Appellate Division agreed that this was a temporary circumstance, and courts have denied requests for modifying alimony obligations due to circumstances that are merely temporary. For a change of circumstance to be enduring enough to warrant modification of an alimony obligation, the moving party, in this case Theodore, must show that the claimed decline in business not only restricts his ability to earn, but is also permanent.
Furthermore, even though Theodore claimed that he filed for bankruptcy and received a discharge in 2014, he also admitted that filing for bankruptcy actually helped him with his debts and finances. Therefore, the New Jersey Appellate Division found that the judge correctly determined that the facts of the case did not demonstrate a showing of permanent change of circumstances. Instead the appellate panel noted that Theodore’s income could actually increase again after a brief period of time. As such there was no need for the Family Part court to hold a plenary hearing. In cases of modifying alimony obligations, a court is required to hold a plenary hearing is the moving party has successfully made a prima facie case of changed circumstances.
Therefore, the New Jersey Appellate Division held that the Family Part court properly analyzed all of the relevant evidence. The trial court reviewed Theodore’s economic situation, and determined that his income did not substantially change on a permanent basis since the property settlement agreement was signed.
If you are facing an alimony issue, please contact my office today.