Facts: The parties divorced after 18 years of marriage. Wife was awarded alimony in futuro of $3500 per month.
Five years after the divorce, Husband filed his first petition to reduce or terminate his alimony obligation. The trial court reduced his alimony obligation to $2870 per month.
Three years later, Husband filed his second petition to reduce or terminate alimony. The trial court denied that petition.
Three years after that, Husband filed his third petition to reduce or terminate his alimony based on his retirement. The trial court reduced his obligation to $1035 per month, but that reduction was reversed on appeal.
Before the Tennessee Supreme Court could reject Husband’s request that they reverse the Court of Appeals, he filed a fourth petition to reduce or terminate alimony alleging his expenses had increased substantially since his retirement.
At the hearing on his fourth petition, Husband claimed his increased expenses involved medical expenses and expenses previously paid through his professional corporation that he now pays individually. While Husband could not provide much detail about these expenses, the proof showed substantial increases in the value of his retirement assets, purchasing season tickets from professional sports teams, and numerous charitable contributions.
The trial court reduced Husband’s alimony obligation to $1300 per month and ordered the parties to pay their own attorney’s fees.
On Appeal: The Court of Appeals reversed the trial court.
Res judicata bars a second lawsuit between the same parties on the same cause of action regarding all issues which were or could have been litigated in the prior lawsuit.
A trial court’s order establishing alimony is res judicata as to all circumstances in existence at the time of the order. Where the trial court has decided one petition to modify, the order entered in that proceeding is res judicata, and a second petition to modify cannot be entertained unless it is shown there has been a substantial and material change of circumstances since the earlier decision was made.
When analyzing alimony, a change in circumstances is “material” when the change
- occurred since the entry of the order establishing an alimony obligation, and
- was not anticipated or foreseen by the parties when the order was entered.
The Court found Husband failed to prove a material change since the entry of the last alimony order:
From our review of the record, Husband’s increased expenses for medical insurance and out-of-pocket costs do not constitute material changes in circumstances since the last proceeding [on his third petition], as they were circumstances already existing or anticipated at that time.
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[Husband] went on to testify that other expenses he previously paid from his corporate bank account were now paid by him personally, such as accounting expenses, income taxes, and expenses related to his automobile.
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Husband was required to demonstrate that these expenses were unanticipated or unforeseen when alimony was set the last time. During the [hearing on Husband’s third petition], the parties litigated the issue of Husband’s recent retirement, whether it was “bona fide,” and how Husband’s income was impacted by his retirement. For the most part, they failed to discuss how Husband’s expenses would be affected by his retirement. However, that does not mean that Husband gets a second chance to do so in this proceeding. Husband must now prove a material change in circumstances occurring since the last proceeding. Husband has not demonstrated that the dissolution of his professional Corporation after his retirement, and the resulting inability to continue paying his expenses through his business account, or anticipated changes in circumstances. These were not new expenses for Husband that were unknown or unforeseeable when alimony was addressed shortly after his retirement. He is still paying the same expenses but from a different account. Husband failed to prove that this was a material or unanticipated change in circumstances.
The trial court’s judgment reducing Husband’s alimony obligation from $2870 to $1300 per month was reversed.
K.O.’s Comment: For more details on the fate of Husband’s third petition to modify alimony, read my post.