Many couples decide to execute settlement agreements in an effort to quickly and cleanly resolve their divorce. These agreements can include provisions for property distribution, alimony, and child support payments. While a settlement agreement is a great idea, sometimes circumstance change, and a payment arrangement that once seemed fair may no longer cover as much as it used to. As a family law attorney with over twenty years of experience with the New Jersey court system, I am quite familiar with when, why, and how courts modify support obligations.
Lepis v. Lepis, is one of the most paramount cases in New Jersey family law, and illustrates the proper procedure required for modifying support and maintenance arrangements after a final judgment of divorce has been entered. A showing of changed circumstances is required in the modification of both child support and alimony. Then, the court will consider both the finances of both parents, and the best interests of the children and determine a solution that is equitable to both parties.
Cabrini and James Lepis were married in 1961. The couple went through a period of marital strife and conflict. On January 8, 1974, Cabrini claimed desertion and obtained a judgment of divorce. The final judgment included with it a comprehensive agreement overseeing property distribution, alimony, child custody and support.
Not only did Cabrini receive title to her husband’s car and the marital home, but she also retained all the household items and all other tangible personal property located at the home. James was also ordered to make a single payment of $ 22,000 as settlement of Cabrini’s claim to her right for equitable distribution and any other claims now or in the future.
According to the agreement, Cabrini was also awarded custody of the children subject to flexible visitation provisions. James agreed to pay $ 120 per week for alimony and $210 per week for child support. Furthermore, the agreement stipulated that a child’s attendance at college, business or trade school would not terminate child support. James was also required to maintain health insurance for Cabrini until her death or remarriage, and for each child until emancipated. This included all necessary medical, dental and prescription drug expenses for the children, and all medical dental and prescription drug expenses over $ 50 for Cabrini. James also promised to pay for all college expenses for four years for each child, however if the child lived at school, child support would be reduced by an appropriate amount.
The agreement went on to stipulate that neither, changes in James income, nor separate earnings by Cabrini would alter James’ obligations. The only way the agreement could be altered would be a voluntary written agreement, executed by both parties. Regardless, on February 1, 1978, Cabrini moved to modify the support and alimony provisions of the agreement.
Cabrini requested increased child support and alimony, in addition to a single payment of $ 1,500 for household repairs, furniture, and counsel fees. Additionally, Cabrini wanted the court to compel her husband to produce his 1976 and 1976 income tax returns prior to the hearing. The motion was denied by the trial court and James did not have to disclose his earnings. Cabrini’s request for counsel fess was also denied.
On April 19, 1978, Cabrini appealed the trial court’s decision, and filed a notice of motion for rehearing her modification motion the next year. In response, James filed a notice of cross-motion for counsel fees and costs on the ground that Cabrini’s motion for rehearing was frivolous. The trial court denied a rehearing because the pending appeal removed them from jurisdiction. The court did however grant James’ cross-motion for counsel fees, because the application for rehearing was clearly without merit. Cabrini appealed this decision as well, and the Appellate Division consolidated both appeals into one.
The Appellate Division held that the trial court’s failure to compel James to produce his income tax returns, even though Cabrini showed increased need, deprived her of an opportunity to prove changed circumstance. Furthermore, because the court stated that Cabrini’s application required further examination, the Appellate Division also held the award of counsel fees as premature. Accordingly, the trial court’s orders were vacated and the case was to be heard again with directions to order the production of all of James’ tax returns since 1973. Subsequently, James petitioned the New Jersey Supreme to review the case.
The New Jersey Supreme Court stated that the power of the courts to modify alimony and support orders comes from New Jersey Statute 2A:34-23. The court has the authority to review and modify alimony and support orders upon a showing of changed circumstances. The issue in Lepis v. Lepis, was that Cabrini and James entered into a voluntary separation agreement. Even though the court can still modify a voluntary separation agreement, the 1971 case of Schiff v. Schiff, stated that a far greater showing of changed circumstances is required than modifying a court order would. The level of changed circumstances required is such that would convince the court that to enforce the agreement as is would be unconscionable.
Fortunately for Cabrini, New Jersey Statute 2A:34-23 gives the court considerable leeway and authority in matters of equitable distribution. The New Jersey Supreme Court considered this issue in 1977 in Smith v. Smith. The court noted that support payments are considerably related to equitable distribution, and trial judges should have the utmost flexibility in determining what is just and equitable in making distributions of marital assets. Thus the Schiff rule was rejected.
A supporting spouse’s support obligation is primarily determined by the quality of life during marriage, and the continued maintenance of the standard of living the dependent spouse and children had become accustomed to. As a general principle, a modification to the same obligation may be warranted in certain changed circumstances. A few examples of valid changed circumstances include: an increase in living cost; increase or decrease in the supporting spouse’s income; illness or disability; the dependent spouse living with another partner; or employment by the dependent spouse. Courts have consistently rejected requests for modification for temporary changes in circumstances, or expected changes that have not occurred. An increase in children’s needs due to maturing has also been held to justify and increase in support as long as the supporting parent is financially able.
The Supreme Court also made special note that the dependent spouse’s ability to contribute to his or her own expenses, both at the time of the original judgment and during when the modification is requested should be considered. The extent of economic reliance, not a status as a wife, must determine the length of support as well as its amount. This is based not only on the actualities of today’s market, but also the constitutional guarantee of “the equal protection of the law.” The law is concerned with the financial realities of modern married life, not an antiquated model of domestic relations that provided women with security in exchange for economic dependence and discrimination. Gender is no longer an acceptable reason for economic need. Need must be calculated based on the earning capacity of the individual spouse in the marketplace.
A “prima facie” showing of changed circumstances is required before a court will order the ex-spouse to produce financial documents. “Prima facie” is a Latin term that literally means “on its face.” It means afact presumed to be true unless it is disproved. Prima facie proof is based on first impression, and accepted as correct until proved otherwise. To accomplish this, the party seeking modification must demonstrate that changed circumstances have substantially impaired the ability to support himself or herself. This involves the full finding of the dependent spouse’s financial status. Conversely, in the modification of child support the most important factor is the best interest of the children. A prima facie showing in such a case would require evidence that the child’s needs have increased to a level for which the original agreement does not deliver. In either case, only after a prima facie showing has been made will the supporting spouse’s ability to pay become a factor.
Taking the prior standards into consideration, the Supreme Court concluded that the Appellate Division was correct in reversing the trial courts denial of Cabrini’s motion, and ordering the James’ to produce his financial information. Cabrini alleged specific increases in her and her children’s needs were caused by inflation and the mounting cost of supporting growing children. The court found that these changes were not temporary and would only increase with time. James should have been required to produce evidence of his income. The Supreme Court ordered that there be another hearing where the trial court could determine whether the earlier agreement provided for Cabrini’s present circumstances. Even though Cabrini and James had an agreement that stated that the increase income of either spouse would not be consideration to modify James’ support obligations, the court can still utilize its authority and discretion to modify obligations if based on changed circumstances.
Cabrini was a teacher before marriage and holds a Master’s degree in Speech Communication. She was also on her way to earning a Ph.D. during the course of the modification hearings. While she contended that she was unable to find desirable employment, and that positions for which she was overqualified would lessen her self-image or esteem, James stressed that Cabrini was unreasonably restricting her choice of employment. The Supreme Court ordered that this dispute be addressed by the trial court in a hearing. The court was also required to determine the best interest of the children and if they needed more support, whether James was obligated to provide this support, and whether he had the financial ability to do so. Children are entitled to a determination based on their best interest, but both parents have a duty to support them. Therefore, the entire amount of increased need would not necessarily to be weighed against James alone. For more information on this issue, please contact my office today.
If you have any questions about modifying child support or alimony based on changed circumstances please feel free to contact me at (732)515-5593.