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.
The point to be reiterated again is that when you make a motion to reduce support, give the judge as much information as possible regarding why you lost your job, whether you were the only one or whether there was a reduction in force, what efforts have you made to find a new job (including voluminous and painstaking records regarding each inquiry and response), if you took a new job for lower than your historical pay, why you did this as opposed to holding out, what you have done to reduce your own expenses, what your current finances are, etc?
In any event, our firm is keenly able to assist those seeking a reduction and those opposing it.
To see a recent blog post addressing this issue in greater detail click here.
In addition, the husband disclosed a savings account with a balance of $90,000, three vehicles valued at $33,000, and an Individual Retirement Account valued at approximately $676,000 and liabilities totaling $10,000.
The husband never distinguished which of these assets had been divided in the divorce, and therefore would be exempt from consideration now, and which were post divorce assets available to pay support.The Court relied upon this as the reason to deny the application, finding that he he had sufficient assets to continue to pay his support.
In affirming, the Appellate Division succinctly restated the law on support modification, as follows:
Orders for support "may be revised and altered by the court from time to time as circumstances may require." N.J.S.A. 2A:34-23. The moving party bears the burden to make a prima facie showing of changed circumstances. Isaacson v. Isaacson,
348 N.J. Super. 560, 579 (App. Div.), certif. denied, 174 N.J. 364 (2002). A decrease in the obligor’s income may be a changed circumstance warranting a revision of a support obligation. Lepis v. Lepis, 83 N.J. 139, 151 (1980). In Lepis, the Supreme Court addressed the changed circumstances standard. Id. at 157-59. Although expressed in the context of an application to reduce child support, the basic showing for a reduction in alimony is similar. The obligor must establish a diminution in income, earned and unearned, or a substantial increase in the financial circumstances of the former spouse or a combination of changes for both parties. Id. at 151; Stamberg v. Stamberg, 302 N.J. Super. 35, 42 (App. Div.
A reduction in salary has long been recognized as a change in circumstances. See, e.g., Martindell v. Martindell, 21 N.J. 341, 355 (1956) (a decrease in resources, standing alone, justifies a reduction in alimony). However, a reduction in salary, even the loss of a large income, may not warrant a reduction in a support obligation if the reduction is temporary. Larbig v. Larbig, 384 N.J. Super. 17, 22-23 (App. Div. 2006). If the obligor has assets that produce or have the potential to produce unearned income to meet on-going support obligations, the loss of earned income may not create a changed circumstance. See Connell v. Connell, 313 N.J. Super. 426, 432-33 (App. Div. 1998) (inherited assets and the income produced by such assets are factors to be considered in calculation of a support award).