In this economy, you would be surprised to see how many judges are jaded by applications brought by supporting spouses to reduce their support obligations based upon a reduction in income. After all, some judges entertain these applications on their daily docket and oftentimes see supporting spouses who are simply attempting to capitalize on the down economy and lack any actual merit to their cases. This blog post will explore one of the reactions by judges to this type of application; namely, denying the request of the supporting spouse outright without even holding a hearing, taking testimony, and making credibility findings.
Support obligations are always modifiable by the family court upon application of the supporting spouse. Typically, this type of application requires the supporting spouse to make a threshold prima facie showing that “changed circumstances have substantially impaired the ability to support himself or herself.” Lepis v. Lepis, 83 N.J. 139, 157 (1980). When such a showing is made, the Court must next determine if a plenary hearing is warranted. This is sometimes referred to as the two-step Lepis analysis.
New Jersey Court have recognized various events that satisfactorily demonstrate a prima facie showing of “changed circumstances,” including, but not limited to:
(1) an increase in the cost of living, Martindell v. Martindell, 21 N.J. 341, 353 (1956);
(2) increase or decrease in the supporting spouse's income, Martindell, supra, 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. Div. 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); and
(4) 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.1 978).
[Lepis, supra, 83 N.J. at 151]
While many cases cite this prima facie standard to either deny or grant an initial motion and schedule a hearing, it has become almost an elusive concept to both lawyers and judges, alike. In fact, hardly any New Jersey cases actually define the term. Prima facie is defined in Black’s Law Dictionary as follows: “At first sight; on the first appearance; on the face of it; so far as can be judged from the first disclosure; presumably; a fact presumed to be true unless disproved by some evidence to the contrary.” In Re: Napp Technologies, Inc. Litigation Application Of Holt & Ross, Inc. To Quash Subpoena 338 N.J. Super. 176 (Law Div. 2000). The concept has never been clearly defined in a case under Lepis, however. This may be the reason that the case law is so widely divergent as to what type of factual scenario would constitute a prima facie change in circumstances.
Once the trial judge determines that prima facie threshold has been met (step one), appropriate discovery of the other party’s financial condition is justified and, eventually, a plenary hearing may be necessary if material facts are clearly shown to be in dispute (step two). The scheduling of a plenary hearing requires that the supporting spouse clearly demonstrate the existence of a genuine issue as to material fact.
During the plenary hearing, the Courts are to weigh several factors dependent on the nature of each case. These factors include whether the change in circumstance is temporary or permanent; whether the change was voluntary; whether it was motivated by bad faith or a desire to avoid payment; and whether the change in circumstance renders the payor former spouse unable to pay. Courts cannot fairly undertake this balancing of equities when they lack sufficient evidence in the record to do so.
Despite that clear mandate, it is amazing how many judges will deny an application outright, preventing a case from moving past step one, and make findings as to voluntariness, permanency, bad faith and ability to pay without sufficient evidence to do so – i.e. without the necessary discovery and testimony of the parties.
Below are some cases where the trial judges did just that, but the Appellate Division put the brakes on and held those trial judges to the two-step Lepis procedure.
First, recently, in Skoblar v. Skoblar, 2012 WL 996653 (App. Div. 2012), the trial judge, without a plenary hearing, found that the defendant-obligor had not adequately shown changed circumstances under Lepis necessary to obtain relief. In denying the defendant’s application, the judge stated: “There is not enough evidence for the Plaintiff to determine that there is a prima facie case with what The Plaintiff have before the Plaintiff.” Ibid. This despite the fact that the defendant’s motion had appended to it a certification, CIS, tax returns and an analysis of his business income prepared by a certified public accountant. Ibid.
The Appellate Division disagreed with the trial court and remanded the matter for a plenary hearing. In doing so, the Court stated:
Although the matter is not free from doubt, we are persuaded that defendant has advanced a prima facie showing of changed circumstances here to trigger a plenary hearing. His certification asserts no reduction in hours worked at his law practice or diversion of his time to other endeavors and does not appear in bad faith…
We cannot conclusively determine from the record whether defendant is voluntarily underemployed by virtue of his diminution in income from his law practice. We also note that if the figures recited in defendant’s CIS and certification are accepted as true, they suggest “changed circumstances have substantially impaired [his] ability to support himself.”
The Court concluded “[g]iven the nature of this record, any dispute as to defendant’s changed circumstances are best determined in a plenary hearing. In such a proceeding, the judge will have a chance to assess the credibility of defendant’s assertions, as tested through the rigors of cross examination.” On those findings, the Appellate Division reversed and remanded the case for a full hearing in which the facts and equities could be developed an evaluated. The Court further ordered that prior to the plenary hearing, the parties were to exchange updated CIS forms, including tax returns and any necessary discovery counsel wished to pursue.
Similarly, the Appellate Division in Smoley v. Smoley, 2008 WL 2310065, reversed and remanded a case for a plenary hearing on a finding that the supporting spouse had presented a prima facie case that the parties’ financial situations had changed since the time of the divorce. The plaintiff-obligor in Smoley was ordered at the time of the parties’ 2004 divorce to pay $6,583.35 per month in spousal support on the basis of his then-earnings of $300,000 per year and his former wife’s imputed earnings of $30,000 per year. In 2007, the plaintiff-obligor filed a motion to terminate alimony based upon his changed circumstances. In support of his motion, he provided the Court with a certification and tax information which reflected a reduction in his earnings from $300,000 at the time of the divorce, to $130,000, which he attributed to a decline in his company’s earnings, as well as to his declining health. His former wife opposed the motion, arguing that his claim of a reduction in income was manufactured and that the reported business earnings are specious or exaggerated. She also maintained that despite the plaintiff-obligor’s claim of financial hardship, he still maintained a high lifestyle. She also disputed the plaintiff-obligor’s assertion that his deteriorating health rendered him unable to work in the same capacity as at the time of the divorce.
In reversing and remanding the case for a plenary hearing, the Appellate Division found as follows:
The motion judge held that Paul had not presented a prima facie case of changed circumstances under Lepis and that a plenary hearing was not warranted. We disagree. Paul has demonstrated a substantial decrease in income from the time of the property settlement agreement as well as letters from physicians, albeit uncertified, which indicate Paul should reduce his work hours in APS. On the other hand, Frances disputes all of these factual assertions. Moreover, we are unable to ascertain whether Frances’ financial condition has changed since she did not supply a case information statement.
While the above examples are of unreported and non-precedential decisions, it is interesting to see the Appellate Division’s response to cases where trial judges simply deny motions outright, without a second glance and an opportunity to develop evidence during a plenary hearing. Of course, success on these types of applications will depend on the merits of each case. However, simply because a trial judge sees these applications as a matter of course, does not mean that an analysis of the individual facts of each supporting spouse should not be fully examined. Considering the Appellate Division's reactions to these types of cases, appealing these types of decisions by the trial court might be the best way to obtain the relief you are seeking.