Following on the heels of an earlier blog entry this week addressing "alimony escalators" in the context of proving a change in circumstances meriting a decreased alimony obligation, a new unreported (not precedential) decision from the Appellate Division in the matter of Eick v. Eick, found that the husband had fulfilled his initial "changed circumstances" burden meriting the matter being sent back to the trial court for a plenary hearing on the issue.
In Eick, the husband was a self-employed bookbinder who was obligated to pay permanent alimony to his former spouse pursuant to a February 2007 property settlement agreement in the amount of $1,500 per month, as well as $2,000 per month in child support for the parties’ two younger children (a number agreed upon that went beyond the child support guidelines calculation). Critically, the PSA established that such figures were based on an income of $117,000 for the husband and $29,000 for the defendant. As an important aside, it is important in any settlement agreement to note what incomes were utilized to determine support so that a baseline figure exists should the issue arise in the future.
In March 2009, the payor husband filed a motion to reduce his support obligations based on an alleged change in circumstances – a claim that his business had "declined dramatically" due to online research tools utilized by many clients that rendered the need for his services substantially diminished. He also claimed that his business had suffered due to the growth of imported bond printed material, as well as the general downturn in the economy.
Interestingly, the former husband supported his application by submitting the report of an employability expert, who concluded that, while he could learn new skills, changing careers was not a realistic possibility after 27 years in the bookbinding business. The report further concluded that his best option was to stay in his industry, anticipate a continued decrease in business volume, revenue and earnings, and consult with a career counselor or business consultant to determine available options.
In reversing and remanding the trial court’s decision denying the husband’s modification motion, the Appellate Division noted that not only had his income decreased, but that the wife’s income had "significantly increased" – an undisputed fact set forth in the wife’s Case Information Statement that the trial court failed to address. The Appellate Division also concluded that the trial court failed to make sufficient findings as to whether the husband’s decreased earning situation was of a permanent or temporary nature, since a temporary situation is not enough to merit a changed circumstances finding. Even though the trial court noted that the bookbinding industry had undergone difficult times when the PSA was entered, the judge also noted that the situation was further "complicated" by the downward economy. As a result, the trial court’s denial of the husband’s application was reversed and remanded for a plenary hearing.