Alimony

Pierce Redux.  While we’re all waiting for the Legislature to act on the new alimony bill, it pays to remember that Pierce is still good law.  The controversial 2009 decision held that a modification or termination of alimony “should not be solely premised on a supporting spouse’s retirement.” A recent appellate decision clarifies Pierce further.  A sixty-five year old ex-husband filed a complaint to terminate his alimony because he had retired.  The Probate judge allowed the ex-husband’s complaint and the ex-wife appealed, asserting in her appeal that the judge’s order was inconsistent with Pierce.  The Appeals Court affirmed, noting that the judge properly based her decision on an analysis of the recipient’s need and the payor’s ability to pay and not solely on the fact of the ex-husband’s retirement.  Importantly, the court also noted that the ex-husband’s retirement was in “good faith” and at the “customary retirement age of 65.”  Ross v. Ross, 2011 Mass. Unpub. LEXIS 434 (April 6, 2011) (Unpublished)
 
Temporary Alimony Doesn’t Count.  In the most significant case to date concerning the Alimony Reform Act, the SJC determined that the period during which temporary alimony is paid during the pendency of a divorce proceeding pursuant to G.L. c. 208 s. 17 is not included in the calculation of the maximum presumptive duration of general term alimony.  Rather, the Court found, temporary alimony is separate and distinct from general term alimony as the new law did not amend or reference G.L. c. 208 s. 17, the temporary alimony statute.
 
As to a payor’s concern that this ruling might encourage payees to elongate divorce proceedings to maximize alimony payments, the SJC stated that a judge may shorten the duration of alimony in the event that “temporary alimony is unusually long in duration or where the [payee] has caused unfair delay in the issuance of a final judgment in order to prolong he length of time in which alimony may be paid…” The formulation allows that an “unusually long period of temporary alimony” can, by itself, be sufficient.
 
How long is an “unusually long” period of temporary alimony?  Here, it lasted almost two and a half years but there was no evidence that the wife delayed final resolution of the case.  As such, the SJC found that the judge did not abuse her discretion in deciding that the appropriate length of alimony was the maximum presumptive duration.  Holmes v. Holmes, 467 Mass. 653 (April 2, 2014)
 
Post-Retirement Alimony Obligations.  Mediators and lawyers read with interest every time the Appeals Court confronts the Alimony Reform Act.  The most recent case involves a 47-year marriage and two 68-year-old spouses in which the Probate and Family Court ordered (1) a roughly equal division of assets and (2) even though the husband had reached retirement age, payment of alimony until actual retirement. Among the assets divided equally was the husband’s teacher’s pension which, important to the Appeals Court, had not been valued.  Also central: the parties agreed to treat the husband’s other pension as a stream of income and not a divisible asset (and the judge ordered the husband to maintain the wife as the sole beneficiary of this pension upon his death.)  Although unelaborated in the decision, the latter is critical.  Post-alimony, the husband would continue to enjoy the fruits of the pension while the wife would not.  Post-alimony, the two would not be equally situated.
 
On appeal, the Appeals Court upheld the (1) property division, (2) amount of alimony, and (3) the husband’s obligation to pay alimony past retirement age.  As to (3), the Court found that the Probate Court did not abuse its discretion in deviating from the presumption in the new law that alimony terminate on the payor’s retirement age; it was apparent from the findings that the Probate Court had considered the relevant factors for deviation – “including the wife’s age, poor health, and lack of employment opportunity.”
 
The appellate court disagreed, however, that the husband could stop paying alimony post-retirement. Without evidence of the income that the wife would receive from the teacher’s pension, the Court held, the judge erred in assuming that it would be adequate for her.  The case was remanded to determine the wife’s income stream from the pension and “what amount of alimony (if any) the wife should receive after the husband’s retirement from teaching.” Green v. Green, 84 Mass.App.Ct. 1109 (August 30, 2013)
 
Support Obligations under Immigration Law.  Where a foreign-born spouse is involved in a divorce, drafters should be mindful that an American-citizen spouse may have signed an Affidavit of Support in connection with a petition for permanent residency.  In certain instances, federal immigration law requires the American spouse to guarantee support for ten years from the date of the petition (at the level of 125% of the federal poverty guidelines.)  An Indiana man signed an affidavit of support in 1999 on behalf of his foreign-born fiancée.  They were divorced a year later and the divorce agreement (incorporated in a judgment) contained a broad waiver of support.  Years later, the ex-wife sued in federal court, claiming that the husband’s failure to support her violated the immigration law.   The court found that the ex-husband’s duty to provide support was not extinguished by the Indiana divorce decree.  Chang v. Crabill, N. Ind., No. 1:10 CV 78 (June 21, 2011)
 
Court Must Consider Tax Consequences if Presented.  Under the Internal Revenue Code, alimony cannot be contingent on a child-related event lest it be re-characterized as non-deductible support.  Here, the Probate and Family Court entered a judgment requiring the Father to pay alimony until the youngest child graduated from high school at which point it would be reduced.  The Father sought post-judgment relief from the Probate and Family Court to no avail and appealed the denial. The Appeals Court affirmed the trial court judgment, and the SJC reversed, holding that because the law requires a court to consider “income” when determining alimony and property division, that court must consider income tax consequences as well when such evidence is presented.  L.J.S. v. J.E.S., 464 Mass. 346 (February 8, 2013)
 
Appeals Court Overturns Rehabilitative Alimony Order.  As with Green v.  Green, 84 Mass.App.Ct. 1109, discussed in this space about a year ago, this latest decision is another sign of close appellate scrutiny of alimony orders.  Here, the parties were married for 21 years.  The husband was a sheet metal worker with a fluctuating annual income and a high in the $74,000 range.  The wife, 58 at the time of the trial and 60 at the time of the appeal, had been in pharmaceutical sales earning an annual income of $80,000 before she was laid off a few years before the divorce.  She had been offered a commission-based job for a drug company located in Boston and declined to take it because it would have required her to relocate from East Longmeadow.  At the time of the trial, she was unemployed and was working as a teacher at the time of the nisi judgment earning $11.00 an hour.  The trial judge awarded her six months of rehabilitative alimony and the Wife appealed. The Appeals Court expressed serious concern about the wife’s likely reemployment in drug sales and pessimism about her earning capacity.   They vacated the order and sent it back down to the Probate Court for additional and updated findings on the wife’s earning capacity at the present time and for a resulting appropriate order for alimony based on the updated findings.  Nystrom v. Nystrom, 85 Mass.App.Ct. 1121 (May 22, 2014) (Unpublished)
 
Right to Trust Income Waived by Agreement.  The parties entered into a separation agreement that included a surviving provision in which the wife waived the right to seek future modifications of alimony to the extent that they are based on distributions that the husband may receive from a particular trust.  In the wife’s subsequent modification action, the Probate Court increased the husband’s alimony obligation, basing its decision in part on husband’s income from the aforementioned trust.  The Appeals court reversed on the grounds that the agreement barred any consideration of income from that trust. Slosberg v. Slosberg, 73 Mass.App.Ct. 1104 (November 4, 2008). (Unpublished)
 
Survived Agreement.  Parties entered into a separation agreement which provided that the husband was to pay $275.00 per week in alimony.  The agreement did not mention merger or survival.  The judgment nisi, however, stated that the agreement survived.  Years later, when the ex-husband sought a modification, the ex-wife moved to dismiss his complaint on the grounds that the agreement survived and that the ex-husband could not meet the “countervailing equities” standard necessary to modify a survived agreement.  The Probate Court judge allowed the motion to dismiss and the Appeals Court affirmed. The case reminds practitioners of the general rule regarding survival – that is, unless the parties expressly provide otherwise, an agreement will be held to survive.  Another reminder is that when the judgment nisi arrives in the mail, read it.  If you don’t agree with it, avail yourself of the applicable post-judgment remedies before it is too late.  Thomas v. Thomas, 71 Mass.App.Ct. 1126 (May 30, 2008)
 
Must a Changed Circumstance be Unanticipated? (Or A Change is a Change.)   In a modification action, to what extent does it matter whether the alleged material change in circumstance should have been anticipated? In a recent case, Lee Werling, a husband with a pre-existing medical condition at the time of divorce, agreed to a merged provision requiring him to pay alimony until the wife, Deborah Nutting, remarried or either party died. A few years later, the pre-existing medical condition came to fruition and Mr. Werling returned to court with a modification to terminate the alimony. The Probate and Family Court allowed the modification. Ms. Nutting appealed for a number of reasons, one of which caught my attention. Relying on Huddleston v. Huddleston, 51 Mass.App.Ct. 563 (2001), she argued that the “husband should have anticipated in the separation agreement the effect of his preexisting disability on his finances and should be precluded from obtaining termination of alimony on any basis other than those enumerated in the agreement.” The Appeals Court pointed out that Huddleston has a “common sense and justice” exception and found that Mr. Werling had met the criteria for this exception. In fact, although the Appeals Court does not note it, the modification statute itself requires only a “material change in circumstances” –and makes no mention of whether the change should have been anticipated. A change is a change, it seems to me, whether it’s anticipated or not. Nutting v. Werling, 81 Mass.App.Ct.1116 (February 24, 2012) (Unpublished)