How Does a Job Loss (or Disability) Affect Alimony?

Over the years, I have had to help clients whose alimony obligation is much higher than the client’s ability to pay. Sometimes a client agrees to an alimony obligation that is too high from the outset, and other times, the client’s ability to pay alimony decreased substantially due to a job loss. These cases can be difficult because an ex-spouse, especially a bitter ex-spouse, will not want to decrease those alimony payments without a fight. Legal actions to decrease alimony is an environment rife with long, hard-fought litigation.

Take the recent Issertell case, found here: https://law.justia.com/cases/utah/court-of-appeals-published/2020/20190467-ca.html.  In this case, the payor spouse, James, filed a petition to modify alimony based on a loss of a lucrative job and military-service-related disabilities. And, although it appears James tried very hard to find employment, he was unsuccessful. After a trial, the court ultimately reduced James’ alimony obligation from $2,500 per month (based on an income of $8,670 per month) to $131 per month (based on an income of $3,698.32 in VA disability). The wife, Tish (represented by Brian Arnold and Lauren Schultz) appealed. The appeal ended up being quite a waste of Tish’s money. Here is why.

Tish argued at trial and on appeal that James was voluntarily underemployed. A spouse is voluntarily unemployed or underemployed when he or she intentionally chooses of his or her own free will to become unemployed or underemployed. A person who has been involuntarily terminated from a position may thereafter become voluntarily underemployed by not attempting in good faith to obtain new employment or by refusing to accept suitable employment offers. If the court were to find voluntarily underemployment, the court could refuse to reduce alimony, or to make an adjustment to alimony that did not equate dollar-for-dollar to the loss in income the payor spouse received. This would be up to the discretion of the trial judge, which is very difficult to challenge on appeal, hence the injudicious decision to appeal in this case.

While Tish requested that James be imputed his income at the level he was making at his previous job, the court rejected that on the basis that James had disabilities and that the had clearly used sufficient efforts to obtain gainful employment which ended up being unsuccessful. In fact, the court found:

James is currently involuntarily unemployed in that since his firing, he has made every effort to network, apply for jobs, interview for jobs, become a better candidate for jobs, yet has failed to secure any offers of employment. Imputation of income beyond $3,698.32 is improper because James has made good-faith efforts to security remunerative employment since his job was terminated and his ability to work based upon his disabilities renders it impossible for him to earn the income which he earned until he was fired.

This serves as a lesson to those payors of alimony who lose their jobs, do everything you can to get a job commensurate to your prior job if you want to preserve your argument of reducing alimony in the future.

Tish also tried to argue on appeal that that the court “should have imputed income to James at the federal minimum wage for a 40-hour work week. But, Tish’s trial attorneys failed to preserve this issue for the appeal. “Parties are required to raise and argue an issue in the district court in such a way that the court has an opportunity to rule on it.” Here is what the court said, “[Tish] did not once, throughout the entire course of the modification proceedings, raise or even tangentially address a claim or theory that James should be imputed a different level of income (e.g., minimum wage or the level of income at his party-time library job.)” Therefore, Tish failed to preserve the theory she now propounds on appeal.

In coming to the reduced number for alimony, the court used the, “equalization of income” approach, also referred to at the equalization of poverty approach. This is used in situations in which one party does not earn enough to cover his or her demonstrated needs and the other party does not have the ability to pay enough to cover those needs. Importantly, when setting alimony, a court may consider a new, subsequent spouse’s financial ability to share living expenses with the recipient or payor spouse.

Can My New Spouse’s Income Be Used To Increase Or Decrease My Alimony Obligation?

What the Issertell case means is that if a new spouse has a good financial ability to contribute to the payor spouse’s living expenses, or even the recipient spouses’ living expenses, then those living expenses would be reduced in the alimony calculation.

For example, James’s new wife’s financial contributions were taken into account in the setting of alimony. “James’s monthly expenses are listed at $5,446.43. This figure already takes into account James’s new wife sharing in the household expenses and she is not expected to pay all of James’s expenses.”

The question remains on whether alimony should be reduced when a recipient spouse remarries a wealthy spouse, which would necessarily bring about a reduction in alimony need, due to the wealthy spouse’s ability to share in household expenses.

Alas, all of Tish’s efforts to resist James’ request for an alimony modification, including the hardship and cost of a trial and an appeal were for nothing, and it was pretty clear from the facts that the result reached by the trial court and the court of appeals was the right one. It is so important to not waste financial resources chasing bad arguments and bad positions.

If you want to understand more about whether you have a valid Utah alimony modification case or a Bountiful alimony modification case, or a good defense to an alimony modification case, we offer free consults at our Bountiful law firm to help you with that analysis so you don’t end up wasting money on a bad argument. call us at 801-448-0156. www.utahlawpro.com. You can also email me at wf@utahlawpro.com