Alimony Award Modified in Divorce Appeal

13 August, 2013 by Lawrence in alimony, Divorce, Marital debt

Background

The parties were married for approximately 20 years and had two children.  During the marriage, Wife occasionally worked at various jobs but never earned more than $37,000 per year.  Wife had a Bachelor’s degree from the University of Tennessee, but had not been able to translate her education into significant income producing employment.

hand over the piggyThe husband, on the other hand, worked as a stockbroker and had earned as much as $500,000 per year.  However, in the year prior to the breakup of the marriage his employer had demoted him and his income had declined to around $100,000 per year.  The demotion was due to husband’s personal issues, including his “inappropriate relationship” with a coworker.  Husband testified that it would be difficult for him to build his income back up.

Due to the couples exorbitant spending, they only had about $25,000 in net assets at the time of the trial.  Regardless, the court awarded wife $237,000 in assets and gave the husband $213,541 in debts.  Further, the court ordered the husband to pay wife $5,000 per month in transitional alimony for 10 years.

Husband appeals alimony award

There were actually several issues raised in the appeal, but I’m going to focus on the alimony award.

The court quoted the following prior case law:

For well over a century, Tennessee law has recognized that trial courts should be accorded wide discretion in determining matters of spousal support. …  This well-established principle still holds true today, with this Court repeatedly and recently observing that trial courts have broad discretion to determine whether spousal support is needed and, if so, the nature, amount, and duration of the award.

Equally well-established is the proposition that a trial court’s decision regarding spousal support is factually driven and involves the careful balancing of many factors. As a result, “[a]ppellate courts are generally disinclined to second-guess a trial judge’s spousal support decision.” … Appellate courts decline to second-guess a trial court’s decision absent an abuse of discretion.  An abuse of discretion occurs when the trial court causes an injustice by applying an incorrect legal standard, reaches an illogical result, resolves the case on a clearly erroneous assessment of the evidence, or relies on reasoning that causes an injustice. … Consequently, when reviewing a discretionary decision by the trial court, such as an alimony determination, the appellate court should presume that the decision is correct and should review the evidence in the light most favorable to the decision.

[R]ehabilitative alimony is intended to assist an economically disadvantaged spouse in acquiring additional education or training which will enable the spouse to achieve a standard of living comparable to the standard of living that existed during the marriage or the post-divorce standard of living expected to be available to the other spouse.

[T]ransitional alimony, is appropriate when a court finds that rehabilitation is not required but that the economically disadvantaged spouse needs financial assistance in adjusting to the economic consequences of the divorce. … In contrast to rehabilitative alimony, which is designed to increase an economically disadvantaged spouse’s capacity for self-sufficiency, transitional alimony is designed to aid a spouse who already possesses the capacity for self-sufficiency but needs financial assistance in adjusting to the economic consequences of establishing and maintaining a household without the benefit of the other spouse’s income. As such, transitional alimony is a form of short-term support. Transitional alimony is payable for a definite period of time and may be modified only upon certain circumstances: (1) the parties agree that it may be modified; (2) the court provides for modification in the divorce decree; or (3) the recipient spouse resides with a third person following the divorce. (Citations deleted)

In this case, the court noted that there was little, if any, proof that the wife needed additional education or training in order to support herself.  However, she had not worked much during the marriage and had a low-paying job at the time of the trial.

Hold on to the piggyThe husband, on the other hand, clearly had a much higher earning capacity than the wife.  Regardless, the court felt that it could not ignore the fact that the husband had experienced a large reduction in his actual earnings.

Taking all of the relevant factors into consideration and recognizing that the parties may never be able to achieve their previously lavish lifestyle, the court changed the alimony award from rehabilitative to transitional, and modified the amount to $5,000 per month for 4 years, then $3,000 per month for another 4 years.

The change in type of alimony may not seem important, but the change to transitional from rehabilitative alimony affects when the support can be modified or terminated.

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Want to read the case for yourself?  There’s a lot more to it.  Kelly v. Kelly