If Standard of Living is Not Calculated at the Time of the Divorce, Courts Have to Calculate it Before Deciding a Modification Request – Who Knew?
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Trial courts deny modification requests all of the time for a whole myriad of reasons and quite often, the decision is affirmed even when it appears that the moving party has a made a prima facie (initial) showing of changed circumstances. After all, in the Cardalli case and others, the Supreme Court and the Appellate Division held that the bar to show changed circumstances is not a high one.
What is also interesting about this case is that husband did not seek a modification because his income went down, but rather, because wife’s income went up from approx. $65,000 at the time of the divorce to more than $95,000 – or by 46% percent.
Now, most of the time, the payor never knows what the payee is earning after the divorce. In this case, because the wife was a teacher, her salary was a public record.
In this case, the trial court found defendant did not establish a prima facie case of changed circumstances because wife’s “income increase has spanned a six-year period and falls below the cost-of-living; thus her increase in income does not meet the threshold of a significant change in circumstances.” That finding is curious but is that the law, and if so, wouldn’t a plenary hearing be required?
Moreover, the court determined “the increase in the dependent spouse’s sole income is not a changed circumstance warranting modification.” That certainly is not the law.
In reversing, the Appellate Division held that:
The trial court erred in concluding plaintiff’s increased income was not a changed circumstance warranting a modification without first considering the marital standard of living, which “is an essential component in the changed-circumstances analysis when reviewing an application for modification of alimony.” Crews v. Crews, 164 N.J. 11, 25 (2000). An increase in the dependent spouse’s income may constitute a changed circumstance. See Quinn, 225 N.J. at 49 (citing J.B., 215 N.J. at 327); Stamberg v. Stamberg, 302 N.J. Super. 35, 42 (App. Div. 1997) (“A change in circumstances warranting modification of support may thus result from an alteration in the fortunes of either party.”); N.J.S.A. 2A:34-23(k)(4), (7) (listing “[t]he income of the obligee” and “[a]ny changes in the respective financial circumstances of the parties” as factors to consider in modification inquiry).
The analysis then turned to the marital standard of living which was not quantified at the time of the divorce. As to that issue, the Appellate Division noted:
Where, as in this case, the marital standard was not previously established, the trial court is required to establish the standard when considering the modification motion. Glass v. Glass, 366 N.J. Super. 357, 371 (App. Div. 2004). We have previously remanded cases for a determination of the marital standard when the trial court failed to make that finding. See id. at 371-72; S.W., 462 N.J. Super. at 534; Murphy v. Murphy, 313 N.J. Super. 575, 581 (App. Div. 1998). Indeed,
the importance of establishing the standard of living experienced during the marriage cannot be overstated. It serves as the touchstone for the initial alimony award and for adjudicating later motions for modification of alimony award when “changed circumstances” are asserted. [Crews, 164 N.J. at 16.]
Accordingly, the matter was remanded for a determination of the marital standard of living and an analysis of whether the wife’s increase in income, when tax considerations are taken into account, represents a changed circumstance warranting a downward modification of alimony.
It seems that this case went sideways from the start both because of the incorrect decision that only the payor’s income matter. In addition, there is a suggestion that the payor’s failure to comply with another part of the agreement regarding bonus alimony and his own increase in income played a part in the decision. That said, logic would dictate that given the reason in the law for alimony in the first place, which was discussed in this opinion, if the obligor no longer has the need or the same need, their increase in income, if known, cannot be ignored.
In fact, any other changes in financial circumstances, if known, must be considered. I had a matter where the ex-wife inherited more than $2 million. Clearly, this was relevant and part of the court’s finding of a prima facie change of circumstances. The trick for the payors in most of these cases is actually finding out about the change of circumstances.
In some ways, this seems unfair. On the other hand, she/he usually does not have to voluntarily divulge post-divorce increases in income or good fortune either.
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Eric Solotoff is the editor of the New Jersey Family Legal Blog. He is also the former and founding Co-Chair of the Family Law Department of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.
