Paying permanent Alimony?
Thinking about retiring?
Hoping to terminate alimony as a result?
If you said yes to all of the questions above, then you may want to become acquainted with Henneberry v. Henneberry, an unpublished Appellate Division case that was decided this past July 2017.
Richard and Barbara were married on February 7, 1970 and divorced on June 29, 2007. At the time of their divorce, they had two (2) emancipated children, Barbara was a teacher earning approximately $52,000 and Richard was a firefighter earning approximately $95,000 with a side business in construction.
Pursuant to the parties’ Interspousal Settlement Agreement (“ISA”), Richard was obligated to pay permanent alimony in the amount of $1,750 per month and to maintain $300,000 of life insurance coverage with Barbara as the sole beneficiary for as long as he was paying alimony.
It is significant to note that in September 2012, Barbara was diagnosed with stage four ovarian cancer. The cancer metastasized, requiring surgical intervention and a continuing course of chemotherapy. Although Barbara required medical absences from work totaling several months in the years following her diagnosis, she continued her full-time employment as a teacher until her retirement in June 2015.
Richard, too, experienced a health issue. In 2011, Richard was diagnosed with papillary urothelial carcinoma, a form of bladder cancer. He required chemotherapy treatment every three months; however, he continued working full time as a firefighter for several additional years until his mandatory retirement in March 2014.
After Richard’s retirement in March 2014, he filed a motion asking the court to terminate his alimony obligation and seeking reimbursement for alimony that he paid after his retirement. The Court denied Richard’s motion without prejudice for his failure to attach a Case Information Statement (“CIS”), which is required pursuant to the Court Rules. In April 2015, Richard filed a second motion seeking termination of his alimony obligation, reimbursement of alimony paid since retirement and authorization to reduce his life insurance obligation to $225,000 instead of $300,000. Richard only attached his current CIS and failed to attach his prior CIS with the Court.
Barbara filed a cross-motion seeking denial of Richard’s motion and enforcement of the alimony and life insurance provisions of their ISA. Barbara properly filed an updated CIS and her prior CIS’s. Significantly, Barbara filed a Certification in support of her cross-motion which pointed out many items that were missing from the information submitted by Richard. Notable among these omissions were that Richard inherited two properties. One was a condominium on a golf course in Virginia and another was a home near college campus in North Carolina. Barbara also pointed out that Richard received distributions from an estate and other income producing assets.
Furthermore, Barbara noted that Richard had $232,091 in his bank accounts, two vehicles that totaled $19,000, deferred compensation accounts valued at $110,000 and no debt. Additionally, Richard received $4,587 per month in pension benefits and $325 in Social Security benefits.
On July 10, 2015, the court denied Richard’s papers in its entirety and granted Barbara’s requested relief regarding the life insurance and continue paying alimony, and ordered Richard to pay $2,000 towards Barbara’s counsel fees.
Richard appealed claiming that he is entitled to termination of alimony based upon his good-faith retirement. There is no dispute that this was a good-faith retirement on Richard’s part, however, under the terms of the ISA, a good-faith retirement did not trigger an automatic right to termination of alimony or even a reduction in alimony.
It is well-established law in the state of New Jersey that a party seeking modification of a prior order bears the burden of making a prima facie showing of changed circumstances. In a case such as this, where the supporting spouse (Richard) is seeking a downward modification of his alimony obligation, the central issue is Richard’s ability to pay. The Appellate Division specifically noted that Richard’s assets, whether acquired through inheritance or accumulated through his own earnings, must be considered in this analysis.
Additionally, the trial court was not pleased that Richard was not forthcoming with his assets and withheld critical information (until it was brought forward by Barbara). The Court listed in detail the basis for determining Richard’s overall financial status and thus, his ability to continue paying support to Barbara. The Court also considered Barbara’s financial circumstances and determined that she had a continuing need for the full amount of alimony as provided for in the ISA.
According, Richard’s motion was specifically denied because Richard was financially capable to continue paying support and his financial circumstances upon retirement did not substantially change as to warrant a termination or modification of his alimony obligation to Barbara.
Should you wish to file an application seeking a termination and / or downward modification of your alimony obligation, don’t make the same mistake that Richard made. Make sure your attorney files a proper motion – one that successfully demonstrates a prima facie showing of changed circumstances; and, more importantly, that you no longer have the ability to pay such alimony based upon your good-faith retirement.
Call Ziegler, Resnick & Epstein today if you are looking to make such an application in the near future.
Alexandra M. Kachala, Esquire