Facts: When the parties divorced in 1999, Husband agreed to pay spousal support to Wife in three phases: $1700 per month until child support ended for the parties’ oldest child, then $2300 per month until child support for the parties’ youngest child ended, then $2000 per month thereafter. In 2008, Husband filed a petition to modify his alimony obligation, arguing his health problems and the decrease in his income constituted a substantial and material change in circumstances that warranted a reduction in the amount of alimony. After a hearing, the trial court found the “economic downturn in the economy” was a substantial and material change, that Husband had “some health issues and that his age was beginning to limit his ability to do his job,” but that these matters were “not necessarily unanticipated” at the time of the parties’ divorce in 1999. The court denied the petition to modify and awarded Wife attorney’s fees in the amount of $7,500. Husband appealed.
On Appeal: The Court of Appeals reversed the trial court.
Husband argued, and the Court of Appeals agreed, that Husband’s income dropped dramatically from the time of the divorce to the time of the hearing on the petition for modification. From 2003 through 2008, Husband’s alimony obligation exceeded his income. Husband testified that he was only able to make alimony payments during this time because his spouse paid for “every bit of [the household expenses].” The Court found the decrease in Husband’s income constituted a substantial change of circumstance because it impaired Husband’s ability to pay the amount of alimony set at the time of divorce.
Whether modification of alimony is justified is based upon the same factors employed in the consideration of an initial award of alimony, i.e., the factors set forth in Tennessee Code Annotated § 36-5-121(i). Although the court must consider all factors under the statute, the two most important considerations in modifying a spousal support award are the financial ability of the obligor to provide the support and the financial need of the party receiving the support. While the need of the receiving spouse is the most important factor in addressing an initial award of support, when deciding whether to modify an award, the need of the receiving spouse and the ability of the obligor to provide support must be given at least equal consideration.
Determining what a parties’ potential income would be is a question of fact that requires careful consideration of all the attendant circumstances. In establishing this range, the trial court relied primarily on evidence of Husband’s earnings history, including time prior to the divorce and time when Husband was not suffering health problems which adversely affected his ability to earn income. Taking pre-divorce earnings into account is proper and consistent with the court’s responsibility in determining an initial award of alimony. When the inquiry before the court is whether the award should be modified as provided in Tennessee Code Annotated § 36-5-121(f)(2)(A), however, post-divorce earnings and other attendant circumstances are more probative of earning capacity. After reviewing the record to correct the trial court’s erroneous findings regarding the parties’ respective earning capacities, the Court concluded:
As noted previously, the two most important considerations in modifying a spousal support award are the financial ability of the obligor to provide for the support and the financial need of the party receiving the support and these considerations stand on equal footing. The evidence supports a finding that, based on Husband’s earning capacity of $75,000 per year, he has the ability to pay alimony; the record also shows that Wife’s need is $950 per month less than the amount Husband is currently paying. The decision to deny modification of the award of alimony is not supported by the preponderance of the evidence, and Husband’s alimony payment should have been modified in accordance with Tennessee Code Annotated § 36-5-121(f)(2)(A).
The case was remanded to the trial court with instructions to enter an order modifying the amount of alimony to $1,050 per month. Wife’s award of attorney’s fees was vacated.
Information provided by K.O. Herston: Knoxville, Tennessee Matrimonial, Divorce and Family Law Attorney.