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Baker v. Baker


March 23, 2009


On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Morris County, No. FM-14-660-97.

Per curiam.


Argued February 3, 2009

Before Judges Wefing, Yannotti and LeWinn.

Defendant appeals from a post-judgment order denying his application for a modification of his alimony obligation. After reviewing the record in light of the contentions advanced on appeal, we reverse and remand for further proceedings.

The parties were married on May 31, 1975, and divorced pursuant to a judgment of divorce entered on December 18, 1998. They had two children, both of whom are now emancipated although defendant provides support to both of them. At the time of their divorce, defendant was a Managing Director at Pershing Trading Company and earning nearly $800,000 per year, the great bulk of which came in the form of an annual bonus. The judgment of divorce incorporated the parties' property settlement agreement under which defendant agreed to pay to plaintiff permanent alimony of $10,000 per month.

In May 2005, defendant lost his position at Pershing. He attributed this loss to the fact that Bank of New York had taken over Pershing and his position was eliminated. The record before us includes defendant's pay stub for the period ending May 14, 2005. It reflects a bonus of $700,000 (as opposed to the year-end bonuses defendant had received in the past) and a severance pay of $175,000, supporting defendant's assertion that his separation from Pershing was involuntary.

Defendant eventually obtained a new position at Olson Global Markets, at which he was to receive a salary of $120,000 (equivalent to what he had earned as a salary at Pershing) and receive bonuses that would place his earnings at the same level he had previously enjoyed. Defendant asserted that Olson was not profitable, that he had not received any bonuses, and that he had not even received a salary for the years 2006, 2007, and 2008. Indeed defendant maintained that the situation at Olson was such that he was obliged to advance $138,000 to it from July 2007 to January 2008.

Based upon this apparent reduction in his earnings, defendant filed a motion in March 2008 seeking a reduction in his monthly alimony obligation. He stressed that he had continued to pay alimony but that because of the reduction in his earnings it was no longer equitable that he pay alimony at the former level. He requested the trial court to take judicial notice of the downturn in the field of investment banking. He also pointed out that he was continuing to contribute to the support of the couple's two children and that he had made his financial records, and those of Olson, available to plaintiff's attorney to demonstrate the accuracy of his assertions.

Plaintiff opposed defendant's application. She maintained that defendant's ability to support himself at the same standard of living had not been affected. She disputed the sufficiency of the financial information that had been provided in advance of the motion. She also maintained that her level of support should not be reduced because defendant was voluntarily assisting their grown children.

After hearing oral argument, the trial court denied defendant's application. It did so without conducting a plenary hearing.

N.J.S.A. 2A:34-23 specifically recognizes the equitable power of courts to modify alimony and support orders. "Courts have the equitable power to establish alimony . . . and to revise such orders as circumstances may require." Crews v. Crews, 164 N.J. 11, 24 (2000). A court should continue to enforce the alimony provisions of a matrimonial settlement agreement only so long as they remain fair and equitable. Carter v. Carter, 318 N.J. Super. 34, 51-52 (App. Div. 1999).

A reduction in the supporting spouse's income has been recognized as a changed circumstance warranting modification in alimony provided that the decrease is not merely temporary in nature. Lepis v. Lepis, 83 N.J. 139, 151 (1980). Defendant stresses in this regard that he waited three years to seek a modification of alimony, thus demonstrating that the reduction in his income is not merely temporary.

One who seeks a modification of alimony bears the burden of demonstrating the existence of changed circumstances. Id. at 157. Upon a prima facie showing of changed circumstances, a trial court may order discovery and hold a hearing. Miller v. Miller, 160 N.J. 408, 420 (1999). A hearing is only necessary when it appears that there is a genuine issue of material fact with respect to the existence of changed circumstances. Murphy v. Murphy, 313 N.J. Super. 575, 580 (App. Div. 1998).

Here, the trial court rejected defendant's arguments with respect to changed circumstances and, in doing so, relied in part on Storey v. Storey, 373 N.J. Super. 464 (App. Div. 2004). We consider that matter distinguishable.

In that case, a former computer technician lost his job, which had paid him $111,000. He did not obtain a new position in his field but, rather, became a massage therapist, earning $300 per week. We held that this change did not entitle him to a modification of his alimony obligations because he had not demonstrated that he was not "voluntarily underemployed." Id. at 473. In Storey, we outlined the factors a court should consider in determining whether a party has successfully demonstrated that he or she is not voluntarily underemployed. Those factors include: the reasons for the career change (both the reasons for leaving prior employment and the reasons for selecting the new job); disparity between prior and present earnings; efforts to find work at comparable pay; the extent to which the new career draws or builds upon education, skills and experience; the availability of work; the extent to which the new career offers opportunities for enhanced earnings in the future; age and health; and the former spouse's need for support. [Id. at 470.]

We do not consider defendant's situation to be comparable to the facts presented in Storey. Defendant did not embark upon an entirely new field but tried to remain in the field in which he had previously been successful. In addition, his new position had the same compensation structure as had his previous one: an annual salary combined with a much larger annual bonus. We recognize that "[e]ach and every motion to modify an alimony obligation 'rests upon its own particular footing and the appellate court must give due recognition to the wide discretion which our law rightly affords to the trial judges who deal with these matters.'" Larbig v. Larbig, 384 N.J. Super. 17 (App. Div. 2006) (quoting Martindell v. Martindell, 21 N.J. 341, 355 (1956)). We are satisfied, nonetheless, that the record at the point to which it had been developed would not support a finding that defendant was voluntarily underemployed.

We are also satisfied, on the other hand, that the record that had been put forth before the trial court would not support a finding that defendant was entitled to a reduction in alimony. He did, however, present a prima facie case of changed circumstances, thus warranting a plenary hearing to determine whether he is entitled to relief with respect to his alimony obligations.

Reversed and remanded for further proceedings.


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