Alimony Modification Reversed in Knoxville, Tennessee: Covarrubias v. Baker

Facts: Husband and Wife divorced after 22 years of marriage. In their marital dissolution agreement, Husband agreed to pay periodic alimony, i.e., alimony in futuro, to Wife in the amount of 50% of his gross income until either party’s death.

The same day the divorce decree was entered, a separate agreed order was entered dealing with the alimony in futuro award. This order specified that Husband’s payments of one half of his gross earnings would be payable to Wife on the 15th and 30th day of each month. The order further provided that either party’s remarriage would not terminate Husband’s obligation. It also stated that Wife could modify the alimony in the event of “unforeseen circumstances.”

wife's moneyEight years later, Husband petitioned to terminate or modify his alimony obligation. He claimed his income had been stagnant since the divorce, he could not afford to buy a home or pay his bills, and he owed approximately $19,000 in taxes. He complained that Wife was doing better financially than he was.

The trial court found there had been a substantial and material change in circumstances that was not anticipated by the parties. Specifically, the trial court found Husband lost the marital residence even though the parties thought at the time of divorce that he would continue to gain equity in the home, that he had been injured seven years earlier, and that Wife was helping provide for her adult children. The trial court reduced Husband’s alimony obligation to $3500 per month.

Wife appealed.

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

An award of alimony in futuro may be increased, decreased, terminated, extended, or otherwise modified upon showing a substantial and material change in circumstances.

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 occurred since the original alimony award, and the change was not within the contemplation of the parties during the divorce.

If the petitioner establishes that both a substantial and a material change in circumstances exists, the petitioner must then establish that a modification is justified based upon the same factors relevant to the initial award of alimony, i.e., the factors in Tennessee Code Annotated § 36-5-121(i), which include, inter alia, the relative earning capacity, financial resources, education, and separate assets of each party.

The Court of Appeals could not find evidentiary support for the trial court’s findings:

[T]he trial court made no factual findings that would show that Husband’s injury [seven years earlier] and the subsequent “loss” of the marital home substantially affected his ability to fulfill his alimony obligation. The court merely noted that Husband rents a home while Wife owns a home. There appears to be no testimony as to the nature of Husband’s injury [seven years earlier] and no testimony showing the level of financial hardship that resulted. Nor is there testimony explaining the circumstances surrounding the loss of Husband’s home, whether through foreclosure or traditional sale.

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We also find it significant that the trial court found that Husband’s income increased from $120,000 per year . . . when the parties divorced to $158,000 per year [at the time of trial]. . . . Conversely, and significantly, it is undisputed that Wife’s annual income of $41,000 per year remained the same.

Although the trial court found it “significant” that Wife financially supported the couple’s adult daughter, adult son, and two grandchildren, the record reveals that she had been supporting them prior to the parties’ divorce . . . . Therefore, this circumstance cannot constitute a change that occurred after the divorce.

The fact that Wife owns a home while Husband had to sell his house and now rents a home fails, on its own, to support a finding that Husband no longer has the ability to pay alimony pursuant to the [divorce] decree. Instead, . . . Husband’s assertions that he struggles to pay his bills while Wife is able to maintain her standard of living shows only that Wife is better able to manage her funds. Given the foregoing, we find no factual basis in the record that would support a finding that this change in circumstances was substantial.

* * * * *

The only significant change in [the statutory] factors since the divorce is that Husband’s income has increased. Wife’s income, however, has remained the same. We fail to see how this finding supports a decrease in Husband’s alimony obligation.

The trial court’s decision was reversed and remanded to the trial court to reinstate the original alimony award.

Covarrubias v. Baker (Tennessee Court of Appeals, Eastern Section, December 11, 2017).

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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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