The question of what to do where a supporting spouse loses his employment and obtains a new position at a significantly lower salary has long troubled our State’s judiciary. In Mills v. Mills, the Chancery Division of Ocean County attempted to provide a more clear-cut analysis for family courts to follow in the wake of the recently-amended alimony statute, N.J.S.A. 2A:34-23.
The Mills were divorced in 2013 (prior to the amendment to N.J.S.A. 2A:34-23) after thirteen (13) years of marriage. Husband agreed to pay Wife limited duration alimony of $330 per week for a period of eight (8) years based upon his gross income of approximately $108,000 per year as a district sales manager for a company selling residential and commercial flooring services. At the time of the divorce, Wife was employed as a teacher and earned approximately $59,000 per year.
In January 2015, after twelve (12) years of being employed at the same company, Husband was let go when his employer restructured its business plan and eliminated Husband’s position. Husband received a one-time severance payment of $35,000 and a letter of recommendation lauding his positive job performance. Husband shortly began searching for replacement employment and in April 2015 received an offer for a similar position at another flooring company but at a significantly lower salary of $75,000 per year plus a $6,000 annual car allowance. While Husband initially continued to pay Wife alimony at the same level out of his $35,000 severance payment, once same was exhausted, he filed an application to reduce his support obligation based upon a substantial change in circumstances. Wife took the position that Husband was underemployed and that he should be imputed income commensurate with that which he earned at the time of the parties’ divorce, $108,000.
The trial court noted the supporting spouse’s “Catch 22” predicament in situations such as the foregoing, “specifically, no matter what decision he or she made in accepting or declining a new position at lower pay, that decision might subsequently be critiqued, criticized and even legally challenged by an ex-spouse who, in resisting a reduction in alimony, might contend that the supporting spouse made an inappropriate choice and therefore should not receive a reduction in his or her support obligation”. After reviewing the significant case law in this area as well as the new statutory language of N.J.S.A. 2A: 34-23, the Mills Court developed the following analysis “as a matter of equity and fairness”: First, was the supporting spouse’s decision to accept a particular replacement employment opportunity objectively reasonable under the circumstances? If so, what should be the resulting adjustment to support (if any) that is fair and reasonable to both parties? In performing this analysis, the Mills Court further held that it was appropriate to consider the factors enumerated in the newly-amended N.J.S.A. 2A:34-23(k) regardless of whether the parties were divorced prior to or following the amendment so long as their agreement did not call for the application of a different standard and the issue had not been previously litigated and determined by a court.
In applying the foregoing analysis to the Mills’ case, the Court found that Husband’s decision to accept the new position at a lower salary was objectively reasonable and that same called for an adjustment to his support obligation to Wife. Husband’s alimony obligation was accordingly reduced by $80 per week which the Court noted would likely cause both parties financial stress but was “equitable and reasonable under the totality of both parties’ circumstances”.
It will be interesting to see going forward how the Mills Court’s framework is applied in other cases and whether same truly uncomplicates the process for supporting and supported spouse’s alike.
