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In the unpublished Arizona Court of Appeals case of Costa v. Costa, Nanci J. Costa, Wife appealed the trial court’s order granting Husband a modification of spousal maintenance. In Arizona, a modification of spousal maintenance may only be granted when a substantial and continuing change of circumstances is shown.
On appeal, the Court of Appeals had to determine whether or not the Husband met the burden of proof validating the trial court’s modification. The parties were married in 1983 and Wife petitioned for dissolution of the parties’ marriage in July 2013.
The wife requested spousal maintenance of $200 per month for life. The husband did not respond and the court entered a default decree of dissolution of marriage, including the requested spousal maintenance. That divorce decree was entered on October 2013.
The husband filed for a modification in July 2014 stating that he had experienced a significant, substantial and continuing change of circumstance and that qualified him to terminate the spousal maintenance obligation. The husband stated that at the time the divorce decree was issued, he was employed part-time, but that he was now unable to maintain employment due to his health.
He claimed he only had Social Security Disability Benefits as his only source of income. Husband testified at the evidentiary hearing that in the past eighteen-month period he worked part-time at a retail store, but quit due to health problems.
Specifically, he claimed his emphysema prevented him from completing the required tasks at work. When the decree was entered, the Husband was earning $750 per month from his part-time employment in addition to the $1,550 per month he received in Social Security Disability Benefits. The husband did acknowledge that his health condition had not changed since the time the divorce decree was entered but argued his financial situation changed significantly.
Wife testified that the spousal maintenance enables her to meet her monthly expenses. The wife’s income was $1,489 per month. She testified she was not aware of the Husband’s employment at the time of the original decree and that evidence of such was not presented. The trial court found that the situation did represent a substantial and continuing change in circumstances and that it was appropriate to decrease the Husband’s monthly spousal maintenance obligation to $42.85 per month.
Modification of Alimony Based On Loss of Employment
The wife argued on appeal that the trial court erred when it found the Husband’s voluntary termination of employment justified a reduction of the spousal maintenance obligation in accordance with A.R.S. Section 25-327(A). Changed circumstances alleged as the basis for a modification of support obligation must be proved in comparison to the circumstances that existed at the time of the original order.
The wife argued on appeal that the trial court should have compared the Husband’s current financial circumstances to the circumstances that were considered by the court at the time the decree was entered.
The doctrine of res judicata prevents a party who failed to participate in divorce proceedings and did not appeal the award of spousal maintenance in a default decree from being granted a modification based on facts that could have been raised at the hearing.
Yet the doctrine of res judicata does not prevent a party from introducing evidence of circumstances that existed at the time of the dissolution in order to show that a change in circumstances has occurred since the divorce.
The husband did establish through the presentation of evidence that he was employed at the time of the original divorce decree, but he did not establish that the court was aware of his employment at that time or that awareness of his part-time employment would have impacted the award of spousal maintenance.
There is no reasonable argument that can be made that the court would have decreased the amount of the spousal maintenance award had the court been aware of the additional income.
Judging from the record, the court approved the spousal maintenance award based solely on the Husband’s disability income, which would mean his loss of part-time work that the court was unaware he had in the first place, does not constitute a change at all.
The Arizona Court of Appeals of Arizona, therefore, reversed the trial court’s order to modify spousal maintenance. The appeals court also denied both parties’ requests for attorney fees on appeal.
Modifying a Spousal Maintenance (Alimony) Award That Was Agreed Upon by the Spouses
In Arizona, a spousal maintenance award in a divorce decree can only be modified if the parties’ financial circumstances have changed. But, changes the parties already considered when they entered into a divorce settlement cannot justify a modification of that spousal maintenance award.
How does this rule apply to an award of spousal maintenance that was not agreed up by the parties in a settlement agreement but, instead, was ordered by the court after a contested trial? The Arizona Court of Appeals discussed this issue in Chaney v. Chaney, 699 P.2d 398 (1985).
Facts and Background
Mr. Chaney and Mrs. Chaney divorced in 1980. At the time, Mr. Chaney worked as a postal clerk earning about $1,200 a month. He also collected a military pension of $550 a month. Following the trial, the court granted the divorce and, among other things, ordered a division of his military pension and his future civil service pension between him and Mrs. Chaney.
The judge also awarded Mrs. Chaney spousal maintenance in the amount of $450 a month. Three years later, Mr. Chaney filed a petition requesting a modification of the spousal maintenance award. He had retired and his pensions taken together totaled only $876 a month. He argued that the $450 per month spousal award was too much.
The court denied the petition. It based its decision on the fact that the parties knew at the time of the divorce of Mr. Chaney’s future retirement. Therefore, the court found that Mr. Chaney’s retirement did not constitute a substantial and continuing change in circumstances to justify modifying the spousal maintenance award. Mr. Chaney appealed the trial court’s dismissal of his petition to modify the alimony award.
The Linton Case: Changes within Contemplation of the Parties
Arizona courts permit modification of a spousal maintenance order only if a substantial and continuing change in financial circumstances is shown. This change of circumstances must happen after the court enters the original decree. The trial court based its ruling refusing modification on the appellate decision in Linton v. Linton, 499 P.2d 174 (1972).
The trial judge recited its understanding of the Linton holding as follows: “Where … the change in circumstances relied upon by the party seeking to modify the spousal maintenance was within the party’s contemplation at the time of the decree, no relief is available since the change is not a material change in circumstances.”
The trial court found that Mr. Chaney, Mrs. Chaney, and the divorce judge knew during the divorce that husband would soon retire. The divorce decree even divides his future retirement pension between the spouses. For that reason, the lower court held that the Linton case was controlling.
However, the Court of Appeals reviewed the Linton case and interpreted it differently. It found that the case turned on the fact that the parties negotiated a divorce settlement. It may not apply in the present case where the parties did not settle; instead, the judge awarded spousal maintenance after a trial.
In Linton, the spouses entered into a settlement agreement that included a spousal maintenance award. The husband in Linton sought a modification of a support obligation only nine months after the divorce decree was issued. He claimed his retirement as the changed circumstance. But he had been planning his retirement for three years before the divorce.
At the time of the settlement, he knew exactly when he would retire and what his pension would be. Both spouses knew the facts about his impending retirement. They structured their property settlement agreement with those facts in mind at the time.
The Court of Appeals concluded its review of Linton by saying: “Thus, Linton is essentially based upon the principle that the court will look with disfavor upon a party who attempts to evade contractually agreed upon spousal maintenance responsibilities by asserting a change of circumstances when the parties originally made their agreement with such changes in mind”.
The Court noted that decisions relying on Linton all involved support obligations established by agreement of the parties. One example is Jorgensen v. Jorgensen, 640 P.2d 202 (App. 1981). The Jorgensen court allowed modification because the parties had not, when they signed a separation agreement, contemplated the subsequent changes.
Not Applicable to Court-Ordered Support
The Court of Appeals noted the facts here are in sharp contrast to the facts in Linton. Mr. Chaney and Mrs. Chaney did not enter into a property settlement agreement or spousal support agreement. The court determined the obligation to pay and the amount of spousal maintenance. It made the ruling after a trial on these issues. Therefore, the appropriate inquiry in a modification petition is whether the decree precludes the modification.
The Court reviewed the terms of the decree. It found nothing to indicate that the divorce judge intended to preclude modification when the husband retired. The decree mentioned his retirement only to note that Mrs. Chaney would receive a percentage of it.
While they knew that Mr. Chaney would retire over the next few years, nobody knew the exact retirement date or the amount of pension he would receive when he retired. In fact, the Court ruled, such evidence would have been speculative. The trial court could not have considered it when establishing the initial spousal maintenance award.
Possible future changes in a spouse’s employment cannot be considered in establishing a spousal maintenance award. Rather, the spouse must wait until the change happens and then petition for modification.
The trial court also supported its denial of the motion by saying that Mr. Chaney failed to prove that his retirement was involuntary. The Court of Appeals disagreed. It noted that the retirement was in good faith and was contemplated by the parties. No evidence suggested that he retired simply to reduce spousal maintenance.
The Court of Appeals reversed the trial court’s ruling. It remanded the matter to the lower court to determine the effect of the reduced income on Mr. Chaney’s spousal support obligation.
If you need information about the required change in circumstances to modify alimony in Arizona, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona alimony attorneys have over 100 years of combined experience successfully representing clients in modification of alimony cases in Arizona.
Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.
Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your Arizona modification of alimony case around today.
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About the Author: Chris Hildebrand has over 26 years of Arizona family law experience and received awards from US News and World Report, Phoenix Magazine, Arizona Foothills Magazine and others. Visit https://www.hildebrandlaw.com.