In Jekot v. Jekot, No. M2010-02467-COA-R3-CV, the Wife appealed a trial court's reduction of her alimony after a contested divorce trial in Tennessee. Husband applied for this modification citing a lack of income. The Appeals Court reversed the trial court, finding that there was no substantial and material change.
The parties divorced in 2005, having been married thirty years. Wife was given rehabilitative alimony as follows: $15,000 in alimony for one year, $10,000 for the next two years and $5,000 for two years. Husband initially appealed this, and the alimony was modified to be in futuro because Wife had not worked in 25 years and could not realistically be expected to gain substantial employment while near the retirement age. The Appeals Court also changed the payment schedule to equal monthly payments of $9,000 for the same term of five years.
Then in 2008 Husband filed to modify his alimony because his income had decreased and Wife's need also had lessened. After a hearing, the trial court determined a substantial and material change existed, finding Husband's income decreased by 1/3rd and decreased his alimony to 5,000 per month. Wife appealed.
Modification of alimony depends on whether there is a substantial and material change of circumstances, which means the obligor cannot pay or the obligee has less of a need, and must have occurred since the entry of the divorce decree. The Appeals Court's review of Husband's tax records indicate his average taxable income in 2001-2003, used to first set alimony, was $404,000. His average income between 2006-2010 was $605,000. Accordingly, the trial court erred by not looking at Husband' income from all sources, but relying on just his private practice income and not including income received from working on call for emergency rooms.
Husband also argued that his expenses increased because he is paying $108,000 in alimony per year. This argument is meritless because this is not a material change - it did not occur after the entry of the final decree and was not unanticipated.
Finally, the trial court decided Wife had additional income and therefore less need. However, this income is from an income-producing asset awarded to Wife in the divorce. Although the original determination was for it to be sold and the proceeds divided, the parties entered an agreed order stating Wife would retain such an asset and keep the proceeds instead of selling it. Therefore, this is not unanticipated either. Absent Husband showing this income was unforeseen, income derived from a marital asset subject to distribution is not a factor in whether a substantial and material change exists.
Therefore, the trial court is reversed and remanded to have the divorce decree reinstated.
