Decrease in Alimony Granted as a Result of a Loss of Employment.

P.J.W. v. E.B.W.

Docket No. A-5308-18T3

Decided November 16, 2020

Submitted by New Jersey Family Law Firm, Hark and Hark.

In a recent unpublished decision the Appellate Division reviewed a trial court’s order granting a decrease in alimony as a result of a loss of employment.

In P.J.W., the parties divorced after 20 years of marriage.  After two years of litigation, the parties entered into a Support Agreement, incorporated into the final judgment of divorce, requiring, in part, husband to pay permanent alimony of 25% of his total gross compensation. Husband also paid child support in the agreement.

At the time of the divorce, plaintiff was a senior executive at Barclays Bank (Barclays). His total gross compensation in the last four years of the marriage averaged over $910,000.  The Support Agreement also provided that either party could seek to modify the alimony if there was a “material change” in his or her financial circumstances.

For approximately four years husband paid his support, until he was notified that he was being fired from Barclays effective January 5, 2018. Plaintiff began to search for a new job and in February 2018 accepted a position as Director of Software Engineering for AlphaPoint, a start-up blockchain company. His base annual salary at AlphaPoint was $200,000, with the potential for bonuses.

Husband made an application to reduce his alimony and child support based on a change in circumstances due to his reduction in income.  Wife alleged Husband was voluntarily underemployed.  At trial, husband testified that he conducted his post-Barclays employment searches in two phases: (1) October 2017 into February 2018; and (2) December 2018 into April 2019. He explained that he used recruiters, his professional network, and directly applied to positions posted on the internet. Between October 2017 and February 2018, he applied for over thirty positions and received three offers with salaries ranging between $120,000 to $200,000.

Plaintiff accepted the position at AlphaPoint in February 2018. He testified that AlphaPoint offered $40,000 more than other companies with which he had interviewed, and he believed that the position would allow him to get back into software development.

The parties also submitted expert reports, husband’s expert concluding he had exhausted all reasonable efforts for securing employment, and wife’s expert concluding husband was voluntarily underemployed.

The Trial Court found that Husband had partaken on a diligent job search following his involuntary firing from Barclays. The Judge granted Husband’s application to modify his financial obligations of alimony and child support based on a change in circumstances.

Wife appealed, arguing the 25% figure in the agreement was only for his Barclay’s salary, and that husband was still underemployed. The Appellate Division found, by a reading of the plain language of the agreement, that the 25% was not just for Barclays, but any job husband could obtain. Therefore, husband did not even need to show a change in circumstances for the figure to apply to different employment.  With regard to husband’s underemployment, the Appellate Division found that it was a factual question and the court deferred to the trial court’s decision.  The Appellate Division remanded a child support issue for a factual basis lacking in  the record.

Making an application for a modification of alimony and/or child support is not an easy task.  Under the law, the movant needs to demonstrate a significant non-temporary change in circumstance. After that has been demonstrated, the movant also needs to show that the job search was diligent and the lowering paying job was the best they could find.  Whether the job search was diligent enough is a question for the trial court to determine.

This case is also important for the use of consent orders when coming to agreements in divorce and family cases.  The agreements must be clear, in writing, and preferably filed with the court.  They are interpreted by courts with an understanding of the surrounding circumstances and overall fairness and equity.

At Hark & Hark, we help clients with domestic violence restraining orders, prenups, divorce, custody, domestic violence, child support, alimony issues and more.

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Jeffrey Hark is a New Jersey Civil and Criminal Lawyer.

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