Plaintiff and defendant were divorced in February 2016. The divorce judgment, entered in February 2016, required plaintiff to pay defendant $3,500 per month in spousal support until her death, remarriage, or further order of the court. The judgment additionally indicated that “[s]pousal support and any provision of spousal support are modifiable, except that, in the event Plaintiff receives Inheritance, this shall not be a change of circumstances or proper cause for Defendant to petition the court to increase spousal support.” Under the terms of the judgment of divorce, either party could petition the court for modification of spousal support when defendant reached the age of 62, notwithstanding anything in the judgment to the contrary. In December 2017, plaintiff moved in the trial court to modify his spousal support obligation because of the change in his income due to his companies going out of business. At the hearing on the motion, plaintiff argued that his income had decreased significantly and that he could no longer afford to make the full monthly payment of spousal support. Defendant responded by arguing that the financial instability of plaintiff’s companies was known to plaintiff at the time of divorce; therefore, the inevitable collapse of the companies did not and could not constitute a change of circumstances. The trial court concluded that there had been no change of circumstances warranting modification of support because at the time of the divorce, plaintiff had known about the dire economic situation that his businesses were in and the possibility of liquidation.
Plaintiff argues that the trial court abused its discretion when it concluded that no change of circumstances had occurred and denied his motion for modification of spousal support on the sole basis of its determination that plaintiff knew that his businesses were failing when the divorce judgment was entered. This Court reviews the trial court's factual findings relating to the award or modification of spousal support for clear error. There must be an evaluation of the circumstances as they exist at the time modification is sought, as compared to the facts and circumstances that existed at the time the divorce judgment was entered. Again, the trial court found that, at the time of the divorce, plaintiff had known that his companies were financially unstable and would have to be liquidated. Plaintiff testified that he did not believe when settling the case that he would be able to pay $3,500 a month until defendant reached age 62. Plaintiff also testified that he insisted on inclusion of the modification provision so that the spousal support amount could be adjusted if he were not able to pay in the future. He was not asked, and did not testify, about how long he anticipated he could meet the $3,500 monthly obligation. Nevertheless, the trial court viewed as dispositive plaintiff’s concession that he knew at the time of the divorce that he would have to invoke the modification provision at some point before defendant reached age 62. The trial court indicated that having this belief and still signing the divorce judgment bordered on fraud on plaintiff’s part. This accusation was not deserved or appropriate. The record reflected that defendant was also aware of the financial difficulties of the businesses at the time of mediation, yet she agreed to the inclusion of a modification provision with respect to spousal support. Plaintiff’s belief that the modification provision would have to be employed at some point in the future did not eliminate his ability to rely on it once a change of circumstances actually occurred. Additionally, the fact is that the companies had not yet been dissolved when the divorce judgment was entered; consequently, their subsequent dissolution was indeed a new fact and constituted a change of circumstances. Furthermore, the trial court should have considered whether plaintiff’s financial situation deteriorated beyond the extent that he expected when he signed the divorce judgment.
We hold that the evidence indisputably established the presence of new facts and a change of circumstances when comparing the facts and circumstances as they existed at the time of divorce to the facts and circumstances as they existed when plaintiff moved to modify his spousal support obligation. The threshold having been satisfied, trial court must now determine an amount of spousal support that is fair and equitable under the circumstances.
ADVICE TO CLIENTS FACING SPOUSAL SUPPORT ISSUES IN DIVORCE CASES
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