Prior to the amendment of N.J.S.A. 2A:34-23 on Sept. 10, 2014, there were 13 alimony factors to consider when assessing the type, length and amount of alimony. The amendment expanded that list to 14 factors.
While a number of other changes were made in the current version of the alimony statute, the purpose of this article is to highlight the change made to the fourth enumerated factor.
The prior version of the statute provided that “the standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living.” The recent amendment to the statute modified that language so that it states “the standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living, with neither party having a greater entitlement to that standard of living than the other.”
As practitioners, we understand that the marital standard of living is but one of a number of factors to be considered by the court, with no one factor being given greater weight than another factor. See Gnall v. Gnall, 222 N.J 414 (2015).
Therefore, in the scope of negotiations or arguments at trial, we often have seen opposing positions; namely that alimony must be based upon the marital standard of living determined by the highest earning level of the supporting spouse during the marriage or, the antithesis, that alimony can be paid based upon income higher than the highest level of earnings because it costs more for parties to live separate and apart, as the economies of scale that exist when parties are living together no longer exist.
What may be a game-changer as it relates to this factor is the fact that the legislature has added the language “with neither party having a greater entitlement to that standard of living than the other.” The question posed by this article is: What does that change, in fact, mean?
Let us assume that either by agreement, or by a joint lifestyle analysis, or by separate lifestyle analyses which are substantially equivalent, that the parties agree on what the lifestyle of the marriage is, inclusive of a savings component. Let us further assume that during the marriage the husband’s earnings were $100,000 a year, and the wife’s earnings were $400,000 a year, and it is an open durational alimony case. The final assumption would be that the open durational alimony being paid by the wife to the husband is $100,000 per year. During the marriage, neither party had any part-time work, nor did their incomes substantially fluctuate from one year to the next.
Both parties signed off on a comprehensive Matrimonial Settlement Agreement (MSA) resolving all issues including the open durational alimony as set forth above. They both agreed that neither one of them could maintain a reasonably comparable marital lifestyle to the one maintained during the marriage based upon the alimony being paid and received. Therefore, they are both in parity in terms of their ability to pay expenses, and both are living at a reduced lifestyle from the one maintained during the marriage.
The wife obtains a new job which requires her to travel move, put in more hours but provides her an income of $600,000 per year, a $200,000 per year increase. The husband finds out about this and his lawyer sends a letter to the wife’s lawyer requesting information and indicating that he is going to pursue a claim for an increase in the amount of open durational alimony. He cites the provisions of the MSA, which recite that based upon the $100,000 per year of alimony he is receiving, he cannot live at the marital lifestyle. The wife has her lawyer send a response indicating that they agreed that neither party could maintain the marital lifestyle and, even with this increase in earnings, she would have a difficult time meeting the marital lifestyle, but she does not contest that her income has gone up.
What is the effect of this increase in earnings? Is the husband entitled to an increase in alimony based upon the fact that he could not meet the marital lifestyle based upon the $100,000 of alimony he is receiving? Or is it unlikely that he will receive an increase based on the wife’s earnings during the marriage?
The wife argues that she took a job with more responsibilities, more hours and more travel, that this is post-judgment, and the husband could do the same if he elected to, but he chooses not to.
Since the amendment to the alimony statute, there have been only four cases citing the newly added language to factor number four. All four are unreported cases and do not specifically deal with the issue of post-judgment earnings and an alimony modification.
It is the position of these authors that this issue, like most issues in the Family Part, requires an analysis of all factors and, as such, there cannot be one concrete, dispositive answer one way or the other on this issue. Like almost all matrimonial matters, they are fact-specific.
That being said, the language the legislature has chosen to include in the lifestyle factor must be looked upon as favoring the primary income-earning spouse. The legislature went out of its way to include such language and, as practitioners, we cannot attempt to argue this factor the same way we did prior to Sept. 10, 2014.
Then what facts do come into play? Primarily, and most obviously, a de minimis increase in income would probably be insufficient to even make a claim on behalf of the supported spouse. By this, we are not suggesting that such a claim by the husband in the example above would not satisfy the first and second prongs of the Lepis decision. But once a Lepis change of circumstances has been demonstrated, there must be even more of a substantial change in earnings for the supported spouse to pursue a claim for an alimony increase with any chance of success.
The other obvious factor is a comparison of the lifestyle lived during the marriage with the lifestyle of the primary earning spouse post-judgment. We believe that if the primary bread-winning spouse simply bolstered their savings that this would be a more difficult argument for the supported spouse to make than if the primary breadwinner were actually expending these monies on cars, travel, clothing, jewelry and more tangible items. Said another way, by putting more of that income into savings, the primary earner could argue that they took on a more difficult job which requires more hours, time and travel so that they could put more money away so that they did not have to work until they were 75 years old, and that if the parties were still living together as an intact family, they would not have made these choices because they would have spent more time with their family, children, etc.
The supported spouse would argue that any increase of earnings, no matter where they are spent, means that there is more money to pay alimony in an attempt to allow the recipient spouse to live at a level closer to the marital lifestyle. This would be true whether that income was spent on more tangible or for savings.
Another argument that could be made by the supporting spouse would be if they chose to remarry and perhaps start another family. That argument could be made that they took on this additional work in order to be able to fund this second family and they would not have done so had the initial family remained intact. The corollary argument the supported spouse would make would be that for the 20-plus years of the marriage that they supported that person to allow them to obtain the current position, and without those marital efforts and marital contribution, the supporting spouse would never have had the opportunity to obtain such a position.
Our legislature has chosen not to go the route of utilizing an alimony schedule such as was done for child support. They left the decision on such important matters in the hands of the Family Part judges who see these issues day-in and day-out and are better equipped, with the factors provided by the legislature, to make decisions that are equitable, fair and serve to carry out articulable justice.
It is very clear, based upon how the current alimony statute reads in comparison to the law prior to Sept. 10, 2014, that it favors the primary bread-winning spouse. We all know that when we were dealing with a marriage of perhaps 12 or 14 years in length, we would have made a permanent alimony argument, since N.J.S.A. 2A:34-23(c) required that “in any case in which there is a request for an award of permanent alimony, the Court shall consider and make a specific finding on the evidence about the above factors. If the Court determines that an award of permanent alimony is not warranted, the Court shall make specific findings on the evidence setting out the reasons therefore.”
Additionally, the current version of the statute provides more latitude to the supporting spouse if the supported spouse cohabits or if the supporting spouse seeks to retire. Taken in its entirety, we believe that there was a clear indication given by the legislature that either the supporting spouse must be viewed more in parity with the supported spouse, or perhaps that the supporting spouse should be given more deference.
This point is highlighted as we believe that the pendulum has swung and that it will be used in evaluating post-judgment claims for an alimony increase under this section.
We continue to hope and believe that the judges of this state will continue to evaluate the dissolution of every family unit as independent and fact-specific, rather than one-size fits all, even when applications for post-judgment increases in alimony are sought based upon an increase in earnings of the supporting spouse.
David S. Carton and Lynne Strober are members of Mandelbaum Salsburg in Roseland. They are co-chairs of the firm’s Matrimonial and Family Law practice group.