NJ Family Legal Blog : New Jersey Divorce and Family Lawyer & Attorney : Fox Rothschild Law Firm : Domestic Violence, Prenuptial Agreements, Child Custody

We have blogged several times as to a former spouse's attempt to obtain an alimony or child support reduction based on the existence of substantial and continuing changed circumstances impacting the spouse's ability to pay, as set forth by the New Jersey Supreme Court in Lepis v. Lepis, 83 N.J. 139 (1980).  One of the so-called recognized changed circumstances set forth in Lepis is "illness, disability or infirmity" arising after a support Order was first entered. 

An interesting question might arise as to whether a payor spouse claiming an illness or disability as the basis for changed circumstances is really trying to engage in a bad faith form of early, voluntary retirement in order to avoid paying support.  Generally, a retirement when the spouse hits age 65 may justify a support reduction so long as it was made in good faith.  Where the retirement occurs before age 65, however, a Court will look even more closely at the facts to see to what degree the retiring spouse benefits from his retirement compared to the disadvantage suffered by the dependent spouse.

Further, while a temporary change in circumstances, such as through the loss of employment, is generally not enough to obtain a support reduction, what about the reduction of support for a specific, limited period of time?  For instance, New Jersey courts have granted this type of reduction where the payor spouse has been imprisoned or cohabitated with another for a specific period of time. 

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In a reported (precedential) trial court decision, Martin v. Martin, released on July 31, 2009, Judge Haas, in Burlington County ruled that there no longer is an automatic review of child support every three years.  Rather, for child support to be reviewed, the mere passage of time is not enough, and there has to be a showing of a change of circumstances.

The Court went on to point out that the three year review relates back to a prior version of a particular statute and has essentially been replaced by a Cost of Living Increase (COLA) every two years. 

While this is an interesting opinion and makes logical sense, since it is a trial court opinion, other trial court judges are not required to follow it.  Moreover, there is precedential decisional law that states that passage of time can be a change of circumstances as to child support because it is well known that as children get older, certain expenses increase.

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At the time of divorce proceedings, many of my clients ask if they can “lock” the other party to whatever support amount is rendered. If the person asking is going to be paying support, they are asking because they do not want to have to pay more in the future. If the person asking is going to be receiving the support, they are asking because they intend to rely upon the amount indefinitely. My response in most circumstances is that it can be done but it should only be done with great caution and only done by way of agreement. For example, while a litigant’s intent may be to “lock” the support amount because they are anticipating earning more in the future and do not wish to pay more in the future, once locked and the litigant is faced with unanticipated detrimental financial circumstances, they may be unable to obtain a decrease of their support obligation. In other words, it goes both ways - being bound to a specific number regardless of changed circumstances can be very beneficial in some circumstances and in other circumstances very disastrous.

N.J.S.A. 2A:34-23 recognizes the equitable power of the Courts of the State of New Jersey to modify alimony and support orders at any time. Specifically, N.J.S.A. 2A:34-23 states:

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 . . . 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. 

Based upon the mandates of the statute, “alimony and support orders define only the present obligations of the former spouses.” Lepis v. Lepis, 83 N.J. 139, 146 (1980). Alimony and support obligations are always subject to judicial review and modification upon a showing of a change in circumstances. Id.    A type of “‘changed circumstance” that warrants modification of a support order is an increase or decrease in the supporting spouse’s income.” Innes v. Innes, 117 N.J. 496, 504 (1990). However, what happens when the parties agree at the time of the divorce that the support provisions cannot be modified?

The Appellate Division decision discussed whether or not a non-modifiable clause (also called an “anti-Lepis” clause) is enforceable in the decision of Morris v. Morris, 263 N.J. Super. 237 (App.Div. 1993). The Morris Court did find that an anti-Lepis clause could be found unenforceable in some circumstances, although the particular anti-Lepis clause in Morriswas upheld. In Morris, the defendant husband sought a reduction in alimony payments despite an anti-Lepis clause in the alimony agreement stating that the agreement was not modifiable for any reason except for the husband's physical disability. The husband based his request for reduction on a claim that the his annual income was $49,000 while his annual alimony payment was $35,000. The wife argued that husband kept all of the assets pursuant to the parties agreement and in exchanged for non-modifiable alimony, she agreed to a support amount of much less than the amount needed to sustain the marital standard of living. In holding that the husband was not entitled to a reduction in alimony payments, the court addressed a conflict between two chancery court decisions. In Smith v. Smith, 261 N.J. Super. 198, 199-200 (Ch. Div. 1992), the court determined that “an ‘anti- Lepis’ clause, which seeks to preclude the exercise of [the] Court's equitable responsibility to review and, if warranted, to modify support obligations in response to changed circumstances, is contrary to the public policy of this State as reflected in its Legislative Acts and its judicial decisions.” In Finckin v. Finckin, 240 N.J. Super. 204, 206 (Ch. Div. 1990), the court concluded that public policy did not prohibit the use of an anti- Lepis clause.
 

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When a former spouse receiving alimony begins cohabiting with another person, what happens to the payor spouse's support obligation?  Does it terminate?  Is it reduced?  Many people often confront this question and the answer is not always as simple as one would think.  Simply put, merely cohabiting with another person does not automatically entitle the payor spouse to a termination or reduction of support.

As we have blogged about many times before, alimony may be modified upon a showing of "changed circumstances" pursuant to the New Jersey Supreme Court's decision in Lepis v. Lepis, 83 N.J. 139 (1980).  A supported, or dependent, spouse's cohabitation with another person could constitute such a change, which can actually be rendered effective retroactive to the date of the cohabitation itself, rather than the date of the motion filed with the Court.  According to the Supreme Court, cohabitation should lead to a modification where  "1) the third party contributes to the dependent spouse's support, or 2) the third party resides in the dependent spouse's home without contributing anything toward the household expenses."  As explained by the Supreme Court, a modification or termination may occur only if one cohabitant "supports or subsidizes the other [cohabitant] under circumstances sufficient to entitle the supporting spouse to relief."

It was the second scenario that was recently at issue in the Appellate Division's unreported decision, Duarte v. Duarte, where the new person with whom the dependent wife cohabited made no contribution towards household expenses.  Even though the wife was still dependent on the former husband's alimony payments, the Appellate Division concluded that the wife's dependency may have been self-created since it was clear that, to a degree, she supported the person with whom she cohabited without seeking contribution from him for household expenses.  Ultimately, the matter was remanded to the trial court so that it could determine an amount to impute to the wife as her support for the third party, which would then be utilized to reduce the ex-husband's alimony payments.

Thus, while the standard for when cohabitation could constitute "changed circumstances" is clear, it is also clear that each case will be decided on its own facts to determine whether the standard is fulfilled.

EDITOR'S NOTE:  THOUGH PEOPLE SOMETIMES FORGET, THE LAW IS PRETTY CLEAR. WHEN LOOKING AT THE IMPACT OF COHABITATION, THE INQUIRY IS NOT ONLY WHETHER THE ALIMONY RECIPIENT IS BEING SUPPORTED BY THE COHABITANT BUT WHETHER THEY ARE SUPPORTING THE COHABITANT.  PUT ANOTHER WAY, THE INQUIRY OF ECONOMIC IMPACT FLOWS BOTH WAYS.  TOO OFTEN, THE SECOND POSSIBILITY IS IGNORED.  ERIC S. SOLOTOFF

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One issue often looming over the preparation of a Property Settlement Agreement is whether or not the parties agree to waive statutory rights to seek a modification of support.  Otherwise known as an "anti-Lepis" clause, such language seeks to essentially overcome the courts' "equitable power . . . to modify alimony and support orders at any time," under N.J.S.A. 2A:34-23 and the New Jersey Supreme Court's seminal decision in Lepis v. Lepis, 83 N.J. 139, 145 (1980).  Drafting such an enforceable anti-Lepis clause is not as easy as it sounds, as found by the Appellate Division in Stefanacci v. Stefanacci.  

The facts of the case are relatively straightforward, as it was the language of the Property Settlement Agreement at issue that formed the basis of the dispute.  After a 20-year marriage, the parties filed for divorce.  The parties ultimately resolved the matter, memorialized in an oral settlement stated on the record.  Included in the oral stipulation was Joseph's agreement to pay Marcia limited duration alimony for 13.5 years or until Marcia's cohabitation with another person unrelated by blood or marriage for 120 days; Marcia's remarriage; Joseph's death; or Marcia's death.  Provision was also made for the commencement of payments and Marcia's ability to seek child support should alimony cease and the children are unemancipated.

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An opinion issued by Judge McGann in Monmouth County in December 2008 was released for publication in June 8, 2009.   In the case of Centanni v. Centanni, the Court held again that child support could be modified retroactively in limited circumstances.

In this tragic case, one of the parties' children died in a car accident in October 2007.  The father did not file a motion to modify his child support per the parties' 2004 Property Settlement Agreement until January 2008. 

While typically the law is that child support cannot be retroactively modified, there are limited circumstances where it is possible.  However, prior to this case, there were no reported decisions dealing with the death of a child.  Judge McGann held that:

Upon the tragic death of the parties’ daughter, the duty to pay support for her ceased. Nothing within the four corners of the statute evinces an intent on the part of the legislature to bar retroactive modification upon such an occurrence. Moreover, there are other equities at work here. To bar retroactive modification would be to punish financially an obligor who has thoughtfully, and in good faith, allowed an appropriate period of grieving and healing to take place before seeking redress in court. Consequently, a bar on retroactive modifications would encourage an inopportunely-timed filing while families are still in the midst of coping with the tragedy.

Given the previous reported decisions allowing retroactive modification in certain circumstances, for instance, upon emancipation, one has to wonder why the mother fought the retroactive termination of support. Certainly, the legal fees that she expended were going to substantially cut into if not exceed the support at issue. 

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In an interesting unreported Appellate Division decision released on May 20, 2009, in the case of Williams v. Williams the appellate court affirmed a finding by the trial court that the former husband had not shown a change of circumstances and therefore was not entitled to eliminate his alimony obligation.  The case is also a primer of what not to do when seeking a reduction.

In this case, the husband was a long time employee at JP Morgan Chase making $185,000 per year.  His alimony obligation was $1,000 per month.  When he lost his job in August 2006, he immediately stopped paying alimony despite receiving one year of severance pay.

The husband asserted that he had tried but failed to find comparable work.  The opinion was not clear but given the final outcome, one can surmise that overwhelming proof of an unsuccessful job search was not supplied to the Court.  The husband further alleged that he had attempted unsuccessfully to establish a consultant business focusing on information technology. He claimed, however, that the only employment he could obtain was a position in a florist shop. It was not disputed that the florist shop was operated by his girlfriend.  Though the issue was ultimately decided for other reasons, these facts could also lead to a conclusion the he had not made an initial showing of a change of circumstances.

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Though we have blogged about this issue in the past, as it is particularly topical given the article in today's NJ Biz that New Jersey area (including the New York Metropolitan area) job losses are outpacing the national addresses. 

As noted on prior job posts. the standard for modifying support is that there has to be a substantial and continuing change of circumstances.  Moreover, in order to get relief, you must document your job search efforts to show the court that you have made a good faith effort to find a new job.

When a client loses their job, the following things should be done:

1. Retain all documentation from the employer showing that the job loss was involuntary.  If there is a severance agreement and any other documentation, that should be maintained as well as the final paycheck showing the severance received (if paid in a lump sum).
2. Keep a detailed log of all efforts made to find new employment with as much information as possible (who you contacted, when you contacted them, what they said, etc.)  If the communications were in writing, keep copies of all emails, resume's, cover letters, rejection letters, if you applied for a job on lie (i.e. Monster.com), confirmation that you applied for work.
3. If the problem is industry wide, any newspaper, trade or other articles or documentation showing that the industry has contracted or is having problems.

The question arises regarding what you do when offered a job that is not consistent with your prior earnings.  If you have been out or work for a short time, this creates a tough decision about whether to take this job or wait.  If you do take this job, my suggestion early after losing a job, my suggestion would be to continue your job search if at all possible.

If you have been out or work for some time and you have made a good faith job search, while possible, I find it hard to believe that a court would penalize someone for taking work - especially in this economy.

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When most parties enter into what is commonly referred to as a Property Settlement or Marital Settlement Agreement, they do so with the intention that this is a comprehensive agreement, resolving all the issues and a document that will govern their dealings with an ex-spouse going forward.

Oftentimes people are shocked to learn that some provisions in those agreements can be subject to modifications by a court.  Such is the case of the recent unpublished appellate division matter of Anello v. Anello, Decided March 23, 2009, A-2405-07T3. 

These parties were married in 1982 and divorced in 2002 by way of a dual final judgment of divorce incorporating the terms of their Property Settlement Agreement. ("PSA")  Two children were born of this marriage.  In the PSA entered into by the parties, the husband was entitled to alimony, to which there was a specific and detailed waiver of this right.  Husband waived the right to receive permanent alimony and gave wife a greater share of equitable distribution in exchange for a total and permanent waiver of a child support obligation for both children.  Husband did agree to contribute to college expenses and non-recurring extraordinary events for the children.  Husband's waiver of permanent alimony was expressly conditioned upon his non-payment of child support.

Some four years after the agreement was entered into, husband filed a motion seeking custody of the son, child support, alimony and counsel fees.  The parties entered into a Consent Order resolving this motion, which reserved the issues of child support and alimony pending discovery.

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Given the current economy, a major issue being discussed by family law attorneys and judges is how to handle the issue of support modification where due to the current economy, someones income is eliminated or greatly decreased.  The standard for modification of support is that there has to be a showing of a substantial and continuing change of circumstances.  One of the major issues being discussed is how long does one have to be out of work before making an application to the Court. 

The second issue is even if the change is temporary - whatever that now means - should there still not be some temporary relief because if the existing Order or Agreement is not fair.  A general proposition of law is that Agreements can only be enforced to the extent that they are fair.

Earlier this week, the Appellate Division decided the case of Baker v. Baker which leads me to believe that help may be on the way. To view the case, click here.

In Baker, the parties were divorced in 1998.  At the time, the husband worked was a Managing Director at Pershing Trading Company and earning nearly $800,000 per year, the great
bulk of which came in the form of an annual bonus.  The parties agreed that he would pay alimony in the amount of $10,000 per month.

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For many, litigation after a final judgment of divorce is a well known reality.  Oftentimes, especially when children are involved, issues arise regarding child support, other expenses for the children, enforcing terms of a judgment or agreement. 

In the matter of Warmke v. Warmke, Appellate Division, decided January 26, 2009, the Court faced such issues as noted above in what stemmed from post judgment motion practice.  Ms. Warmke filed an application with the trial court seeking to fix the amount of childcare arrears owed by Mr. Warmke, modify and enforce child support payments, modify parenting time, modify the amount of life insurance required by their agreement and for counsel fees.  Mr. Warmke filed a cross application requesting that Ms. Warmke contribute to summer camp expenses, a hearing aid for the older child, medical expenses, requiring her to share the transportation reimbursement from the public school and for counsel fees.

The Warmke's had been divorced since 1996 and had entered into an Agreement resolving the outstanding issues in their marriage.  They had two children, the eldest of which suffers from Down Syndrome, Pervasive Developmental Disorder, anxiety disorder, seizures, and hearing and vision impairments.

The parties' agreement provides for joint legal custody. Ms. Warmke has primary physical custody and Mr. Warmke receives liberal parenting time.  At some point after the agreement was entered into, the parties modified their parenting time arrangement, allowing Mr. Warmke primary physical custody during the school summer holiday.

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On February 13, 2009, the Appellate Division issued an interesting unreported decision in the case of Chopoorian v. Chopoorian dealing with a topic that we have blogged about frequently as of late - modification of support obligations. To review the full text of the opinion, click here.

The parties were divorced in 2005.  During the marriage, the husband operated a highly  successful advertising business which provided him with an annual income of over $900,000 in 2003. The parties also owned several valuable pieces of real estate.  The divorce agreement required the husband to pay $187,500 per year in permanent alimony and $50,000 per year in child support.  Of note, the Agreement stated:

Husband’s earned income as defined herein may increase to $650,000 gross per year (before taxes) before Wife is entitled to file a Motion to modify/increase alimony
based on an increase in Husband’s earned income. Husband’s earned income must decline to $400,000 gross per year (before taxes) or below before he is entitled to file a Motion to modify/decrease alimony based on a decrease in earned income.

The husband was also supposed to pay the wife $1.3 million over time for her share of the business interests.

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Last week, I published a blog post entitled "No Hearing Required for Serial Modification Motions." To view that post, click here.  However, released on February 9th was the unreported decision in the case of Cordero v. Mora with a different result. To view the full text of the case, click here.

This case involves the former Major League baseball player, Will Cordero, who was seeking, once again, to reduce his child support obligation for the child of his first marriage.  He played with the Boston Red Sox, Cleveland Indians, Pittsburgh Pirates, Montreal Expos, Florida Marlins and Washington Nationals in the major league for fourteen years. He made a substantial amount
of money during his career. In some seasons he made as much as $6,000,000.  He now claims to be out of baseball, having last played in the Major Leagues in 2005.  He participated in spring training in 2007 with the Mets in their minor league camp but was cut.

Over the years, Mr. Cordero has filed many application to reduce his support. In 2005 resulted in a reduction of child support from $1300 to $800 weekly. The  following year, he sought and obtained another reduction based on a substantial salary reduction.  from $800 to $500 weekly. On appeal,
he argued he should have received a greater reduction.  In June 2007, that argument was rejected by the Appellate DIvision.  However, just prior thereto, the ex-wife filed an enforcement motion and Mr. Cordero filed another motion seeking a reduction.  The judge granted the motion to enforce the existing order. In addition, the judge ordered him to pay $11,999 in arrears within thirty days and denied his motion for a further reduction. The judge noted that plaintiff provided limited and spotty financial information. Based on the information before the court, the judge concluded that plaintiff had the ability to pay the arrears. He also found that plaintiff produced extremely limited information about his efforts to obtain employment and incomplete information about assets that may generate unearned income or can be liquidated to meet his on-going child support obligation. The judge was particularly concerned that plaintiff had not provided an accounting of the millions of dollars he had earned during his professional baseball career.

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On February 2, 2009, the Appellate Division released a reported (precedential) decision that affirmed a decision of the trial court denying the former husband's motion for a downward modification of his alimony and child support obligations.  The Appellate Division found that the trial judge properly exercised his discretion particularly when viewed against his findings from a multi-day plenary hearing (trial) that occurred less than one year prior. To see the full text of this case, click here.

The parties were divorced in 2003 and entered a Property Settlement Agreement (PSA) where he agreed to pay $1,000 per week in alimony and $350 per week in child support for the parties' 3 children.  In addition, based upon the joint accountant's finding of the five year average of the husband's income, he agreed that support was based upon $185,000 for him. 

In 2005, the husband moved for a reduction in his support obligation claiming a downturn in his law practice.  The plenary hearing on this motion was held over several days in December 2006.  After the hearing, the judge denied the husband's motion finding that during the time that the husband's income had supposedly decreased, he obtained a new $58,000 Lexus and bought a home for $785,000 with a $600,000 mortgage.  The judge also found that based upon the evidence at trial and his CIS, that the husband's income was more in the $140,000 range and not $100,000.  The judge also rejected the husband's claim that he was indebted to the Internal Revenue Service in the amount of $55,000 because Gregory failed to provide any documentation to
support that assertion.

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I was reading an unreported Appellate Division case released today and gasped when I read the following sentence, " ...Moreover, the permanent alimony figure was negotiated and presumably contemplated defendant's retirement since he was fifty-three years old when he appeared before Judge Piscal on September 19, 2000."  To read the full case, click here.

While the facts in this case may have justified the denial of the former husband's motion to modify alimony, that statement struck a chord.  In this case, the parties were married for 32 years, a long term marriage by any standards.  However, by current standards, we often start talking about long term marriages being 15 years or more and if alimony is appropriate, the discussion is about permanent alimony begins.  Moreover, although there is a well known Appellate Division case authored by Judge (now Supreme Court Justice) Long suggesting that it is better practice to negotiate the issue of retirement, the reality in practice is that it is rare that the party receiving alimony will concede the issue of retirement in the agreement.  Often it is just too speculative.  At best, you may get a recognition that there can be an application for a review upon retirement.

Given that you typically cannot get any concession about retirement and there is no doubt that this was a permanent alimony case, is the above quoted statement a fair or a realistic view?  I don't think so. 

Assume a long term marriage where all assets, including retirement assets are equally divided.  The law is clear that you cannot look to assets divided in equitable distribution for support.  Post-divorce assets can be considered.  If in the 8 or 10 or 12 years after the divorce, after paying alimony and perhaps child support, the payor does not accumulate substantial assets, then what.  What if he bought a new house with his equitable distribution and did contribute the max to his 401k during the post divorce years.  In this economy , the value of the home and the 401k could be down substantially.

More importantly, one would think by this sentence that someone who agrees to permanent alimony can never retire.  This, however, is wrong as a matter of law.  Thus, for a court to determine that a retirement by a person who was age 53 when he agreed to permanent alimony was contemplated in the agreement, is both practically unrealistic and legally incorrect in my opinion. 

That said, as noted above, the denial of the motion to modify under the specific facts in that case made perfect sense.

However, I think it is essential, if possible, to at least get recognition in a Marital Settlement Agreement, that, if nothing else, the issue of retirement was discussed but unresolved to best preserve the issue for another day.

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As previously reported in this Blog here and here, New Jersey has taken the initiative on penalizing individuals who fail to pay their court-ordered child support or who have failed to show up for court hearings.  In just one week in December 2008, nearly 1,000 delinquent individuals were rounded up as part of the state Sheriff's Association biannual child support warrant sweep.  Nearly $300,000 was collected statewide, with the most warrants served in Monmouth County and by far the most monies collected in Bergen County.

EDITOR'S NOTE:  As noted in prior posts, on wonders whether there will more more support arrears caused by the current economy, whether there will be more motions for modification and/or more motions for enforcement.  The longer the economy suffers, it will be interesting to see whether the law of imputation of income, changes of circumstances and enforcement changes.      Eric S. Solotoff

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While state courts in matrimonial actions are often asked by an ex-spouse to modify an existing child support obligation under Lepis v. Lepis, 83 N.J. 139 (1980), based on the existence of "changed circumstances" and an inability to pay the ordered support, it is not often that a decision so thoroughly recaps situations in which courts have previously found such changed circumstances.  The Appellate Division recently accomplished detailed same in Ferraro v. Ferraro, wherein the facts of the case themselves are noteworthy unto themselves and detailed below.

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On December 12, 2008, the Appellate Division released a reported decision in the case of Rogers v. Gordon which addressed the enforceability of a pre-statute prenuptial agreement.  To review the full text of the case, click here.  The case is interesting because it addresses again the standards to be applied to an agreement signed before the enactment of the Uniform Premarital Agreement Act in NJ.

In this case, the parties entered into a prenuptial agreement as a young couple.  The wife was a graduate of the Wharton School of Business and came from a wealthy family.  The husband was a high school graduate working for the Postal Service.

The parties married in 1981, had four children and were married for more than 24 years before the wife sought a divorce.  During the marriage, the wife went to work for her father's business, which she eventually purchased from him during the marriage.  In 1990, the husband left the Postal Service to work as a machine operator for the business.  In 2002, he was promoted to plant supervisor.  Not surprisingly, when the divorce commenced, he was demoted to a machine operator again.  The trial court made a finding that at the end of the divorce, there was not a "snowball's chance" that he was going to keep the job given the wife's intense animosity for him evidence during the trial.  In fact, the judge found her to be totally incredible regarding this topic.

At the time of the divorce, the husband's income was $63,000 - the wife's was more the $600,000.

The Uniform Premarital Agreement Act was enacted in NJ in 1998 and applies to all agreements entered into after its enactment.  As such, because the agreement in this case was entered into prior to the Act, the Court had to apply the case law from prior to the act.

In citing the Marschall case, the court noted that there was a three prong test for enforceability, as follows:  1) there was full financial disclosure; 2) that the party sought to be bound knew and understood the terms and conditions and 3) that the agreement, be fair and not unconscionable, ie. that it not leave a spouse a public charge or close to it, or with a lifestyle far below what was enjoyed before or during the marriage.

The court also cited the D'Onofrio case which said that the alimony provisions in the agreement need not cover all contingencies because the Lepis or change of circumstances standard would apply.

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Can a prior judicial determination regarding an ex-spouse’s employment situation preclude the other party from subsequently making an issue out of it when faced with a motion to modify child support? That was the unique issue taken on by the Appellate Division in Simon v. Simon, where the Appellate Division gave preclusive effect to a prior judicial holding regarding the reason why the ex-spouse husband left his job and his resulting subsequent income in deciding a motion to reduce child support.

The parties entered into a Property Settlement Agreement in 2001, wherein the husband agreed to pay child support for their three children at a set amount through the end of 2005, at which point his support obligation would be reevaluated pursuant to the Child Support Guidelines. In 2006, the husband left his employer and obtained a job in Florida because he was allegedly unable to find suitable work in the Princeton, New Jersey area where he lived. As his new job was in Florida, the husband initially lived there with his father, thereby substantially reducing his parenting time with his biological children. 

In spring 2006, the wife moved for a child support increase, alleging that the husband provided no justification for his relocation to Florida, that her parenting time and related expenses increased due to the husband’s reduced parenting time attributable to the move, and because such expenses would only increase as her alimony was ending. The husband cross-moved to modify his support obligation, arguing that he involuntarily left his employer and was forced to take a substantial salary reduction in Florida because he was unable to obtain a position in New Jersey at a salary higher than that he received from his Florida employer. Responding to the husband’s claims, the wife asserted that he left his employment voluntarily so that he could commence his retirement in Florida and, as a result, the Court should use his 2004 and 2005 income to determine support. She submitted no evidence, however, of the husband’s ability to earn a higher salary in the metropolitan area. Ultimately, the Court found that the husband’s 2006 income should apply.

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Pursuant to the statute, the general rule is that the tern of limited duration alimony cannot be extended without unusual circumstances.  A recent Appellate Division decision shed some light on what those circumstances could be.

Jane and Samuel had been married for less than seven years when they got divorced.  They had two children, ages 6 and 4 at the time of the divorce.  Both parties were attorneys although Jane stopped practicing law after the birth of their first child, within the first year of the marriage.  The parties negotiated and entered into an agreement designating Jane with residential custody of the minor children subject to Samuel's visitation and limited duration alimony in the amount of $500 per week for a period of four (4) years.  In addition, Samuel paid $500 per week in child support and child care related expenses to be paid 80% by Samuel, 20% by Jane.

At the time the parties negotiated their agreement, it was assumed that Jane would be able to obtain per diem employment in the law field.  Also, at that time, the oldest child was having difficulties with school and may have had ADD.  Since the time of the divorce, he has been diagnosed with ADD, Asperger's, Obsessive Compulsive disorder and Bi-Polar disorder.  As a result of these diagnosis, Jane argued that she was unable to obtain significant employment such that was contemplated at the time of the divorce.  Jane filed a motion seeking a continuation of her limited duration alimony, an increase in the amount of alimony, the production of financial information or in the alternative an increase in child support, and to establish a fund for their son's medical care.

The trial court denied Jane's application in its entirety.  She appealed and the Appellate Division reversed and remanded. the matter back to the trial court.  The Appellate Court held that an award of limited duration alimony may be modified based either upon changed circumstances or upon the non-occurrence of circumstances that the court found would occur at the time of the award.  A court may modify the amount of such an award but shall not modify the length of the terms except in unusual circumstances.  N.J.S.A. 2A:34-23(c).

In this case, the Court found that Jane had established a change of circumstance for an increase in the amount of the limited duration alimony as well as an increase in the term based upon unusual circumstances, i.e. the health of the parties' eldest child.

The court was careful to explain in it's unpublished opinion that a modification to the time for payment of limited duration alimony as well as the amount would only be based upon an ability to prove changed circumstances or upon the non-occurrence of circumstances that the court found would occur at the time of the award.  Thus, the burden is upon the party making the application (i.e. the recipient spouse) that circumstances have changed such that a modification is necessary and just.  Here, the child's condition was far worse than anyone anticipated at the time of the divorce and Jane simply could not work as contemplated when the matter was settled. 

To read the entire case, click here.

EDITOR'S NOTE:  This case in interesting because there is little law on extending limited duration alimony.  What  is also interesting is that the Appellate Division applied a similar analysis that is used when someone seeks to either extend rehabilitative alimony or convert it to permanent alimony.  Rehabilitative alimony is meant to provide a person with the opportunity to improve their earning ability in order to become self-sufficient, without the need for alimony.                                       Eric S. Solotoff

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One need only pick up any newspaper, turn on any radio or television or even have water cooler conversation, even with those who never used to speak about the economy, to know of the serious economic crisis that this country and the world appear to be facing.  Even today, we read that the stock markets took yet another tumble based upon the news of increased jobless rates.

These realities will no doubt start hitting the family court system if they have not already begun to hit. Specifically, there will be motions by people paying alimony and child support to reduce their support because they have lost their job or have suffered a significant decrease in income.

In the seminal NJ Supreme Court case of Lepis v. Lepis, the historical standard for a modification of support is the showing of a substantial and continuing change of circumstances.  We also know that temporary changes do not form the basis for a modification. 

In fact, in order to get relief, a litigant usually had to show that they have made a significant, diligent job search and despite their best efforts, they could not obtain comparable employment.  How long this had to be depended on the circumstances, but it was probably more than 90 days, or even more than 6 months. 

The question during these times is have we entered a brave new world.  Will someone who worked on Wall Street earning $500,000 per year who has lost their job be expected to get comparable employment?  Should they?  What about the financial professional whose income is based in large part on either commissions or a large yearly bonus that they always used to carry them for the entire year who wont be getting a bonus this year or their commissions are 50% less than last year? 

In the past, when someones income was sporadic, the case law and Child Support Guidelines require that you take an average of 3 or maybe 5 years.  Is that fair now when doom and gloom about the economy is being predicted?  Put another way, is the 3 or 5 year average indicative of what the payor can really earn in this economy? Will the earn at historical levels during the foreseeable future? 

If we use an average now, or impute the last income earned, is that fair?  Is only the payor being forced to sacrifice in that case (assuming for the moment that they even have the ability to pay the prior support which may be unlikely)? If they are forced to pay support based upon passed income, will they ever get the money back when then show in a year or two or three that their income has not and may never be the same> The answer is that this is doubtful. Is this fair?

While representing the recipient, what choice will attorneys have to argue that the laws of imputation and averaging, as the case may be, must be followed by the Courts?  I do not think that we can argue a deviation from the law, to the detriment of our clients.

On the other hand, attorneys for the payor's have to be bold in their arguments that the existing law is distinguishable based upon the current circumstances.  I also think that Judge's must be courageous in their decisions so that the reflect the economic realities.

If the current economic circumstances are ignored, then I foresee a lot more enforcement proceedings, if not a lot more arrest warrants issue for failure to pay support.  In the end, if things continue as they are economically, attorneys and judges should try to work together, creatively, to strive for fairness for all of the parties based upon the economic realities of today.

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Retiring from the workforce does not necessarily mean retiring from your child support obligations.  Rather, the circumstances of each case will dictate whether a person retiring in good faith can successfully obtain a child support modification.  

The Appellate Division recently addressed this issue in Kassin v. Kassin, affirming a trial court’s decision denying a defendant father’s motion to modify his child support obligation after he was terminated from his job at age 65 due to a heart-related condition. The parties were married for 25 years and 6 children were born of the marriage prior to the parties’ divorce in 1998. At the time of the divorce, the father was employed and earning approximately $23,000 annually. At the time of his motion for a support modification, 1 of the 6 children, age 15, was still unemancipated. In March 2007, at age 65, the father was terminated from his job. He claimed in his motion that the termination was caused by his inability to perform his job duties due to a heart-related medical condition and that he was unable to secure other employment for the same reasons. He also asserted that, as a result, his only income came in the form of social security benefits and charitable assistance from private agencies, thus providing him with an annual income of approximately $20,000. It was upon these facts that the father claimed the existence of changed circumstances justifying a modification pursuant to Lepis v. Lepis, 83 N.J. 139 (1980).

Citing to Silvan v. Sylvan, 267 N.J. Super. 578 (App. Div. 1993), the Appellate Division based its decision on the following non-exhaustive list of factors to consider when a party retires at age 65 and subsists on social security benefits: 

• the age gap between the parties;
• whether at the time of the initial alimony award any attention was given by the parties to the possibility of future retirement;
• whether the particular retirement was mandatory or voluntary;
• whether the particular retirement occurred earlier than might have been anticipated at the time alimony was awarded;
• the financial impact of that retirement upon the respective financial positions of the parties; and
• the motivation which led to the decision to retire, i.e., was it reasonable under all the circumstances or motivated primarily by a desire to reduce the alimony of a former spouse. 

In denying the father’s motion, the Court concluded that the father failed to submit evidence sufficiently linking his medical condition to his inability to work and of his search for other employment, as well as the fact that the income differential pre- and post-job termination was too insubstantial to constitute a changed circumstance. Notably, the Court reminded the father that, as a so-called "late in life" parent who, at age 65, still had an unemancipated child, he was responsible for working and saving for this child beyond an otherwise expected age.

Also of note was that, despite denying the father’s motion, the Court nevertheless remanded the case for a credit to be calculated on the father’s child support obligation pursuant to New Jersey’s Child Support Guidelines because the mother was receiving social security benefits for the unemancipated child.

This case highlights how simply wanting to retire early in good faith (rather than retiring to simply avoid a support obligation) is not as easy as it seems when the potential retiree has existing child support (similar issues arise in the context of alimony) obligations. 

EDITOR'S NOTE:  It seems unlikely as a matter of public policy that someone will ever be allowed to "retire" under any circumstances to avoid a child support obligation.  If there is a bona fide disability, that is another story however as that is usually beyond the obligor's control.  Absent disability, late in life parents will more likely than not be required to keep working and/or otherwise be required to pay support until all of their children are emancipated. - Eric S. Solotoff

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