Facts: After 17 years of marriage, the parties divorced. Husband was ordered to pay Wife alimony in futuro of $1100 per month.

Three years later, Husband moved to terminate his alimony obligation because of Wife’s cohabitation with a paramour and renters, as well as his changing employment and deteriorating health.

After hearing the proof, the trial court found Wife no longer needed alimony because of her Social Security disability, contributions from her live-in paramour, and rental income. It also found that Husband could not pay alimony because of his declining health and reduced income from employment. Husband’s alimony obligation was terminated retroactive to Husband’s filing, and a judgment was entered against Wife four $16,000 for the alimony paid since then.

Wife appealed.

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

An award of alimony in futuro remains in the trial court’s control for the duration of the award and may be increased, decreased, terminated, extended, or otherwise modified upon showing a substantial and material change in circumstances. The party seeking modification must prove that a substantial and material change in circumstance has occurred.

A change in circumstance is material when it occurred after the entry of the alimony order and was not anticipated or foreseeable at the time of the entry of the order. A change is substantial if it significantly affects a party’s ability to pay or need for support.

The party requesting the modification must then prove that the modification is appropriate. While the analysis is factually driven and calls for carefully balancing many factors, the two most important considerations are the financial ability of the obligor to provide support in the financial need of the party receiving support.

Cohabitation. Tennessee law says the alimony recipient’s cohabitation with a third party creates a rebuttable presumption for modification if:

• the third party is contributing to the support of the alimony recipient, and the alimony recipient does not need the amount awarded, or
• the third party receives support from the alimony recipient, and the alimony recipient does not need the amount awarded.

Once the presumption arises, the burden of proof shifts to the alimony recipient to show a continuing need for the amount previously awarded. This often means the recipient must show a deficit of funds despite the third party’s support or cohabitation.

The Court found it was error for the trial court to terminate Wife’s alimony altogether:

First, [Wife’s cohabitation with the paramour] was not a substantial and material change in circumstances because [the paramour] resided with Wife when the spousal support was initially awarded….

Accordingly, the trial court was aware of Wife’s cohabitation with [the paramour] when the original alimony award was made and concluded that Wife needed support regardless…. Consequently, the trial court’s decision to terminate Wife’s spousal support was based in large part on her living with [the paramour]. Nonetheless, this issue was already considered and decided in the previous trial and Wife prevailed. With respect to alimony, a trial court’s final decree fixing alimony is res judicata as to all circumstances in existence at the time of the entry of said decree.

[T]he fact that Wife cohabitates with [the paramour] was inapposite for purposes of this modification proceeding, and the trial court erred in considering it…. This was an abuse of discretion.

Rental income. The Court also found it was error to consider Wife’s decision to rent the extra bedrooms in her home:

It is true that cohabitation with persons other than romantic partners can also raise the presumption [in favor of modification]; in this particular case, however, the trial court erred because there was no evidence by the time of the hearing that Wife had renters and because outright termination of Wife’s alimony was not the correct remedy under Tennessee Code Annotated § 35-6-121(f)(2)(B).

It is undisputed that Wife has rented rooms in her home intermittently since the divorce. There was no evidence presented, however, that Wife was renting the room is by the time of the modification hearing.

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Husband presented testimony from a private investigator who posed as a potential renter in August 2019 and visited the home. According to the private investigator, only Wife and [the paramour] were living in the home when she visited. Accordingly, as of August 2019, Wife was looking for a renter but did not have one. Wife testified at the modification hearing that she was not currently renting the rooms to anyone.

Termination improper. The Court also found that outright termination of Wife’s alimony would not have been the proper remedy even if Husband had established that Wife was currently renting one or both of her extra rooms:

Under the cohabitation statute, the court’s remedy is to suspend all or part of the alimony obligation, not terminate the alimony. The clear implication is that if the situation justifying the suspension ceases to exist, the alimony recipient may seek reinstatement of support from the former spouse. Accordingly, the trial court erred in totally terminating Wife’s alimony on the basis of Wife having renters in the past.

Finally, and perhaps most importantly, Wife demonstrated a need for support with or without extra income from renters….

Wife’s financial circumstances remain dire. To the extent that the rebuttable presumption created by cohabitation applies here, Wife rebutted the presumption at trial by demonstrating her ongoing need for support.

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[W]hile Husband is in a better financial position than Wife and has better earning potential overall, his financial situation has also declined since the divorce. Based upon the proof regarding Husband’s health, it also seems unlikely that Husband will soon resume earning the same amount of income….

Consequently, although we conclude that Wife’s alimony should not have been terminated altogether, we agree with the trial court that Husband’s ability to pay $1100 per month has undergone a substantial and material change since the parties’ divorce. As such, some modification of Wife’s spousal support is warranted.

The Court vacated the trial court’s judgment, including her judgment to pay back $16,000, and remanded the case for further proceedings.

Akers v. Powers (Tennessee Court of Appeals, Eastern Section, July 19, 2022).

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