Facts: Husband petitioned to modify or terminate his $5500/month alimony in futuro obligation from his divorce after he was terminated through no fault of his own from his job that paid $250,000+ and had been unable to find other employment. After a hearing, the trial court denied Husband’s petition and awarded Wife her attorney’s fees of $8200. Husband appealed.

On Appeal: The Court of Appeals affirmed the trial court but vacated the dismissal of Husband’s decision and remanded the case back to the trial court for reconsideration.

A party seeking a modification of alimony in futuro must satisfy two requirements. First, the party must establish that there has been a change in circumstances that is substantial and material since the entry of the original support decree. Second, the person seeking modification must establish that modification is warranted.

A change in circumstances is “substantial” when it significantly affects either the obligor’s ability to pay or the obligee’s need for support. A change in circumstances is “material” when the change occurs since the date the alimony was ordered, and the change was not foreseeable at the time of the final decree or within the contemplation of the parties when they entered into a property settlement agreement.

The trial court found that the change in Husband circumstances was “material” but not “substantial” for purposes of modifying the award of alimony because Husband’s assets were sufficient to continue to make the payment of alimony.

While Husband did not contest the trial court’s conclusion that he had assets sufficient to continue to make alimony payments, he argued he should not have to spend down those assets in order to have his alimony obligation modified.

The Court rejected Husband’s argument, holding that

[t]he statute and cases are clear that assets other than income may be considered by the trial court in determining whether to modify an award of alimony to the same extent as they are considered in setting the initial award.

Husband then argued that the trial court failed to consider that the substantial assets Wife received as the division of marital property. Again, the Court made short work of rejecting Husband’s argument.

[T]he court made the determination that [Wife’s] assets were not of such a nature or character that would support a modification of alimony. In making its determination, the court considered the fact that the assets held by [Husband] were more liquid than those held by [Wife], a distinction that is permissible under the statute. Having considered the proper factors in accordance with Tenn. Code Ann. § 36-5-121(f)(2)(A), the court did not abuse its discretion in denying [Husband’s] petition.

After rejecting all of Husband’s arguments, the Court noted that while Husband’s appeal was pending the Tennessee Supreme Court issued its opinion in Gonsewski v. Gonsewski. In that opinion, the Tennessee Supreme Court stated that “alimony in futuro should be awarded only when the court finds that economic rehabilitation is not feasible and long-term support is necessary.” The Court commented:

Inasmuch as the parties and the court in this case did not have the benefit of the holding in Gonsewski when Mr. Osesek’s petition to modify or terminate the alimony in futuro was heard, we deem it appropriate to remand the case for the court to consider whether a modification of alimony is warranted under the principles announced therein, which may include consideration of the likely duration of [Wife’s] assets. . . .

The Court then vacated the dismissal of Husband’s petition and remanded the matter back to the trial court for reconsideration in light of Gonsewski.

K.O.’s Comment: What is the trial court supposed to reconsider after the Court of Appeals affirmed the finding that there had been no substantial and material change of circumstances? Procedurally, this is an appeal of a post-divorce modification, not a direct appeal from an initial determination of alimony. Even if the trial court thinks a modification of alimony is appropriate, what about the requirement that a substantial and material change of circumstances must be found? Furthermore, the Gonsewski opinion does not purport to change Tennessee law on alimony. The remand for “reconsideration” would make more sense if (a) this had been a direct appeal from an initial determination of alimony, or (b) the Court had reversed the trial court on the issue of a substantial and material change of circumstances.

Osesek v. Osesek (Tennessee Court of Appeals, Middle Section, March 6, 2012).

Information provided by K.O. Herston: Knoxville, Tennessee Matrimonial, Divorce and Family Law Attorney.