We have blogged countless times about a payor spouse’s efforts to modify his alimony obligation post-divorce by claiming that he has suffered a substantial and continuing change in his financial circumstances. When a court concludes that a change has occurred meriting modification, and implements a new modified support obligation, at what point should the modification become effective? When the payor spouse first filed for a modification? When a plenary hearing is held? At the conclusion of the entire matter?
Oftentimes, the payor spouse will claim that he has established a change in circumstances and, if the Court determines a plenary hearing is necessary and an intervening period of discovery, that a reduction be made in the interim pending the outcome of the hearing. Why is such a request appropriate? First, if the payor has established his initial burden of proving a change in circumstances, requiring him to continue paying at the current amount until completion of a hearing will likely ensure the ongoing accrual of arrears at the higher number. A Court’s refusal to grant such relief also incentivizes the payee spouse to drag out the matter indefinitely, since only the payor suffers without some form of interim relief. To that end, we recently had a matter where the Court declined our payor client’s request for interim relief pending the plenary hearing but later granted such relief because the payee spouse had deliberately dragged on the matter for months beyond that envisioned by the Court.
This issue was also recently addressed by the Appellate Division in its unpublished (not precedential) decision in Baker v. Baker. There, the payor spouse argued that the trial court erred by only retroactively reducing his alimony by one month – to August 1, 2010 – as opposed to either March 25, 2008 when payor filed his original motion to reduce alimony, or May 2, 2005 when he was involuntarily terminated from his position of employment precipitating his economic downward spiral.
The Appellate Division noted that trial judges have discretion to apply an alimony reduction retroactively. Finding that the trial court erred in its decision, the Appellate Division noted that the reduction should be retroactively applied to the original date of payor’s motion in March 2008 because the resulting delay from the date of his motion to the final decision was not his fault. Rather, fault was attributed to delay following payor’s successful appeal of the original March 2008 Order, pre-hearing discovery and mediation, and a reassignment of the trial judge originally designated to hear the matter.
Implementing a system to alleviate the trial court’s concern that the payee spouse would be deprived of alimony for more than a year if the reduction were retroactive to March 2008, the Appellate Division decided that the payor spouse would receive an additional $1,000 monthly credit for his prior overpayment dating back to March 2008. The solution allowed payor spouse to obtain the full benefit of his reduction, while also not depriving the payee wife of the entirety of her support for the foreseeable future.
Ultimately, retroactive application of a reduction comes down to the Court’s equitable considerations as to both spouses and, essentially, a balancing of interests to ensure that both parties’ needs are appropriately met.