United States: Appellate Division Addresses Retirement Application Under Amended Alimony Law

Last Updated: November 10 2015
Article by Robert A. Epstein

Litigants and family lawyers have eagerly awaited each decision from the Appellate Division that could shed some light on the numerous provisions in the amended alimony law that became effective on September 10, 2014. On November 6, 2015, the Court released an unpublished (not precedential) decision in Court v. Court, wherein the trial court's order denying an ex-husband's motion to terminate his alimony obligation and vacate his alimony arrears was reversed and remanded for a plenary hearing.

The decision is interesting in its application of the amended provisions of the alimony law with respect to the issue of retirement, especially based on the chronology of the facts at issue. The factual highlights are as follows:

  • The parties were married in 1981 and a judgment of divorce was entered in 2003 – approximately 11 years before the amended law took effect.
  • The court in the JOD ordered ex-husband to pay $1,000 per week in alimony.
  • Ex-husband was not paying as ordered and, in July 2013 he moved for a modification that resulted in a weekly alimony reduction to $500, plus a weekly payment towards accumulated arrears in the amount of $250.
  • An economic downturn in ex-husband's industry and his deteriorating health caused him to retire in August 2014.
  • In 2014, ex-husband sought to terminate his alimony obligation based on his retirement at age 72. He claimed that earned approximately $27k annually from Social Security and ex-wife was eligible, but refrained from applying for what would amount to $1,221 in monthly Social Security benefits.
  • Ex-husband's arrears totaled almost $200k as of July 30, 2014 – less than 2 months before the amended law went into effect.
  • The trial court found ex-husband "provided the [c]ourt with sufficient evidence of his health problems to show he ha[d] lost his life insurance and [was] unable to be gainfully employed." It also found both parties in a "difficult financial situation" and noted how ex-husband's sole income source of Social Security benefits was not enough for him to pay his bills, alimony and arrears. The court also noted, however, that ex-husband – at age 72 – may again find work in the future and, as a result alimony should only be reduced. The court, as a result, reduced the alimony obligation from $750 per week to $400 per week, with a $50 payment towards alimony and $350 towards arrears.

On appeal, the Appellate Court found that the trial court failed to make sufficient factual findings in support of its decision, specifically, it did not directly address the issue of ex-husband's retirement, nor did it provide a basis for the reduced amount or ex-husband's ability to pay "despite the findings defendant was unlikely to become reemployed given his advanced age and deteriorated health." Finally, the Court found that the family part judge "ignored defendant's right to retire in good faith at age seventy-two."

Notably, the Appellate Court directed the trial court to apply the amended alimony provisions on remand to determine whether ex-husband was still required to pay alimony. In so doing, the Court conveyed "There is a rebuttable presumption alimony shall be terminated 'upon the obligor spouse or partner attaining full retirement age.'" It then cited to subsection (j)(1) of the amended law, which provides that alimony could only continue if ex-wife presented proof to overcome the rebuttable presumption based upon the following factors:

  1. the ages of the parties at the time of the application for retirement;
  2. The ages of the parties at the time of the marriage or civil union and their ages at the time of entry of the alimony award;
  3. The degree and duration of the economic dependency of the recipient upon the payor during the marriage or civil union;
  4. Whether the recipient has forgone or relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award;
  5. The duration or amount of alimony already paid;
  6. The health of the parties at the time of the retirement application;
  7. Assets of the parties at the time of the retirement application;
  8. Whether the recipient has reached full retirement age as defined in this section;
  9. Sources of income, both earned and unearned, of the parties;
  10. The ability of the recipient to have saved adequately for retirement; and
  11. Any other factors that the court may deem relevant.

The Court added, in reference to subsection (j)(1) that "any arrearages that have accrued prior to [alimony] termination shall not be vacated or annulled." Thus, a payment towards arrearages was required in an amount based on ex-husband's ability to pay. Interestingly, Court indicated that the amount due could be reduced to a judgment upon which interest would accrue, thereby allowing ex-wife to take appropriate steps to collect.

I found the decision noteworthy multiple reasons, each of which have to do with the Court's application of the rebuttable presumption under the new retirement language and its related factors.

Generally, the amended law seemingly, but not definitively from a legal application standpoint, provides three subsections in connection with an application for retirement that a trial court is to utilize depending on the facts of a given situation: (j)(1), (j)(2) and (j)(3). Each subsection contains its own similar, but somewhat different sets of factors. Only subsection (j)(1), which the Appellate Court referenced here, contains the "rebuttable presumption" language. Subsections (j)(2), which applies to applications for early retirement, and (j)(3), which applies to retirement applications filed in cases where there is an existing final alimony order or enforceable written agreement, do not contain such language.

As a result, there existed a question emanating from the new language as to whether the rebuttable presumption referenced in (j)(1) applies to any retirement application, or just retirement applications stemming from final alimony orders/enforceable agreements entered AFTER the amendment's effective date. In other words, does the rebuttable presumption also apply to applications made under subsections (j)(2) and (j)(3)? As the factual circumstances in Court involved a pre-amendment final alimony judgment, the answer from the Appellate Division, although not in a reported decision, suggests that the rebuttable presumption may apply to all retirement applications made under the new law.

The answer becomes somewhat uncertain, however, because the Appellate Court remanded to the trial court with a direction that it apply the rebuttable presumption and factors enunciated in subsection (j)(1). No reference in the decision is made to subsection (j)(3), which, as noted above, applies to retirements applications filed in cases where there is an existing final alimony order or enforceable written agreement.

Thus, while the decision in Court sheds some light on applying the retirement provisions of the amended law, it and future decisions will only provide a greater roadmap for litigants and attorneys with respect to seeking an opposing an alimony termination.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Robert A. Epstein
 
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