Failure to Increase Alimony Reversed in Maryville, TN Post-Divorce Dispute: Hiatt v. Hiatt

Facts: Husband and Wife divorced in 2007 after 20 years of marriage.

alimony increaseAt the time of the divorce, Wife earned no income and Husband earned almost $9000 per month. They agreed Husband would pay Wife at least $1500 per month in alimony. Their marital dissolution agreement also contained a provision for adjusting Wife’s alimony 2.5% should Husband enjoy an increase in income.

In 2014, Wife filed a motion to increase Husband’s alimony obligation. At the time of the hearing, Wife earned $650 per month while Husband was earning over $23,000 per month.

The trial court found Wife was voluntarily underemployed and declined to increase her spousal support for that reason.

Wife appealed.

On Appeal: The Court of Appeals reversed the trial court.

To modify an alimony award, there must be a substantial and material change in circumstances. This change in circumstances must have occurred since the original award.

A substantial change is one that significantly affects either the obligor’s ability to pay or the obligee’s need for support.

A change is material if it was not anticipated or within the contemplation of the parties at the time of the original divorce.

The party seeking modification bears the burden of proving a substantial and material change in circumstances has occurred. Once a substantial and material change in circumstances has been established, the trial court is under no duty to modify the award; the party seeking modification must demonstrate a modification is warranted, considering the factors set out in Tennessee Code Annotated § 36-5-121(i), to the extent they are relevant in the modification proceeding.

Tennessee law requires that, as a matter of policy, spousal support should be set at a level that allows the economically disadvantaged spouse a standard of living that is reasonably comparable to the standard of living enjoyed during the marriage or to the post-divorce standard of living available to the other spouse, considering the statutory factors and the equities between the parties. This applies to modification proceedings as well as the initial divorce proceedings.

After reviewing the evidentiary record, the Court reasoned:

While the Trial Court found that Wife is underemployed, the inescapable fact is that Husband’s earning capacity has increased greatly since the divorce. This is true irrespective of Wife’s business failures or poor financial decisions. A significant increase in Husband’s income constitutes a substantial and material change in circumstances, and the Trial Court erred in declining to so find.

The Trial Court referenced only one factor in reaching its decision not to increase the alimony award. That one factor was the Trial Court’s finding that Wife is underemployed and has been so basically the entire time since the divorce. We take no issue with that finding by the Trial Court, and the Trial Court’s finding of Wife’s underemployment remains intact. However, that single finding should not have ended the analysis by the Trial Court. Wife’s underemployment was simply one of many factors, including the statutory factors, that the Trial Court should have considered in arriving at its determination of whether or not the amount of alimony should have been increased, and if so, to what amount. The Trial Court erred when it apparently considered only Wife’s underemployment as being dispositive of the requested alimony increase. This was error by the Trial Court. The preponderance of the evidence entitles Wife to an increase in her alimony. The question remains, however, as to the amount of the increase which is a decision best decided initially by the Trial Court. We remand this case to the Trial Court to apply all the relevant factors in light of this substantial and material change in circumstances to determine the increase in the alimony due Wife.

Accordingly, the trial court’s judgment was reversed and the case remanded back to the trial court to increase Husband’s alimony obligation.

K.O.’s Comment: (1) Keep in mind that “economically disadvantaged spouse” is a term of art referring to a spouse who suffered “economic detriment” for the sake of the marriage or the family. It does not include a spouse who simply earns less than than other spouse when the lower-earning spouse did not subordinate his or her career to benefit the marriage or the family. See, e.g., McKee v. McKee.

(2) Compare this case with Lane v. Lane, where Husband’s request to reduce or terminate his alimony obligation was denied based on the trial court’s finding that Husband was willfully underemployed.

Hiatt v. Hiatt (Tennessee Court of Appeals, Eastern Section, January 28, 2016).

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

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K.O. Herston is a family-law attorney in Knoxville, Tennessee whose practice is devoted exclusively to family law, including divorce, child custody, child support, alimony, prenuptial agreements, and other aspects of family law.

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