In these uncertain economic times, someone obligated to pay maintenance may lose a job, experienced significant investment losses, or suffer other adverse financial events. Can something be done about maintenance under those circumstances? The answer, as I have often written, depends on the specific facts.
A party seeking the reduction of a maintenance obligation bears the burden of establishing a substantial change of circumstances. Klapper v. Klapper, 204 A.D.2d 518 (2d Dept. 1994). In Klapper, the Second Department held that, in determining whether there was a substantial change in circumstances sufficient to warrant downward modification, the change is to be measured by a comparison between the payor’s financial circumstances at the time of the motion for downward modification and at the time of divorce or, as the case may be, the time that the order of which modification is sought was made.” Id. at 519. The Appellate Division, Fourth Department utilized the same standard of review in Able v. Able, 245 A.D.2d 1026 (4th Dept. 1997).
In Simmons v. Simmons, 26 A.D.3d 883 (4th Dept. 2006), the defendant lost his job and subsequently moved for a downward modification of his maintenance obligation. The Appellate Division held that despite the defendant’ diligent job search, he had little prospect of finding employment at a salary comparable to his salary at the time of the divorce, the downward modification was warranted.
The party seeking to modify the maintenance provisions of a judgment of divorce in which the terms of a stipulation of the settlement have been incorporated but not merged must demonstrate that the continued enforcement of the party’s maintenance obligations would create an “extreme hardship”. Beard v. Beard, 300 A.D.2d 268 (2d Dept. 2002) (the proper amount of support payable is determined not by a parent’s current economic situation, but by a parent’s assets and earning powers). See also, Domestic Relations Law § 236(B)(9)(b).
A reduction in the payor’s income will not result in decreased maintenance where it is the result of voluntary action, such as self-imposed retirement. Fendsack v. Fendsack, 290 A.D.2d 682 (3d Dept. 2002); DiNovo v. Robinson, 250 A.D.2D 898 (3d Dept. 1998). In Dallin v. Dallin, 250 A.D.2d 847 (2d Dept. 1998), the Second Department held that Family Court properly rejected the father’s claims that his financial situation, prolonged unemployment, and illnesses warranted a drastic reduction of his maintenance and child support obligations. The father had failed to produce any competent evidence to support his claim that he used his best efforts to obtain employment commensurate with his qualifications and experience or that his medical conditions rendered him unemployable.
In Lenigan v. Lenigan, 146 Misc.2d 627 (Sup.Ct., Albany County 1990), the defendant sought to reduce his maintenance and child support obligations. The defendant claimed that, in the prior three months, his compensation as a stock broker had been reduced. It is well settled that the party seeking to obtain a reduction of support bears the burden of establishing a substantial change of circumstances. Id. A drastic change in income can constitute a substantial change of circumstances. Id. In Lenigan, the defendant was a stockbroker, and by the very nature of his business, his income would fluctuate throughout the year. The Supreme Court held that, adopting the defendant’s theory of allowing a modification based upon temporary fluctuations in income would lead to a ludicrous result. Although the defendant asserted a three-month lull in business, there was nothing to establish that sales would not pick up in the following months.
In conclusion, an experienced divorce lawyer faced with a significant change in a client’s economic situation must carefully construct an argument for the court that the change was not created by his/her client, that the change is significant, and that it is likely to last for some time, and that the client has exhausted all other alternatives.
In Watrous v. Watrous, 292 A.D.2d 691 (3d Dept. 2002), at age 55, the plaintiff voluntarily retired from State employment and, shortly thereafter, moved to terminate or, in the alternative, reduce his maintenance obligation. The plaintiff asserted as a substantial change in circumstances that he took early retirement due to his poor health and would be experiencing a significant reduction in income. A hearing was held and, at the close of the plaintiff’s proof, Supreme Court granted the defendant’s motion to dismiss, finding that plaintiff had failed to establish a sufficient change in circumstances. The Third Department affirmed on appeal, stating that a maintenance obligation established by a judgment of divorce will not be modified absent clear and convincing proof of a substantial change in circumstances. The record revealed that, at the time of the divorce, Supreme Court was aware of both the medical restrictions on the plaintiff’s employment and the possibility that his poor health might cause him to retire early. Accordingly, the circumstances existing at the time of the plaintiff’s application for downward modification were foreseeable and anticipated at the time of the parties’ divorce. Furthermore, the record was devoid of evidence that the reduction in the plaintiff’s income would substantially diminish his standard of living or his ability to satisfy his maintenance obligation. The Third Department, therefore, concluded that the plaintiff failed to establish a substantial change in circumstances.