HELP! I Can’t Pay Alimony and I Don’t Want to Go to Jail!
Can Tennessee Courts Modify Alimony Obligations?
On December 11, 2017, in Covarrubias v. Baker (hereafter “Baker”), the Tennessee Court of Appeals addressed, among a couple of other issues, whether alimony in Tennessee is subject to modification. Of course, Tennessee Code Annotated 36-5-121(f) deals directly with this issue and, absent some agreement between the parties that the alimony is not subject to modification, it can be changed if the Court determines certain facts exist. As the Court said in Baker,
An award of alimony in futuro “may be increased, decreased, terminated, extended, or otherwise modified, upon a showing of substantial and material change in circumstances.” Baker at 7, citing Tenn. Code Ann. § 36-5-121(f)(2)(A). A party seeking a modification of alimony in futuro has two significant hurdles to overcome. First, the petitioner must establish that there has been both a substantial and a material change in circumstances since the entry of the original support decree,” citing Bogan, 60 S.W.3d at 727-728. A change in circumstances is “substantial” when it significantly affects either the obligor’s ability to pay or the obligee’s need for support. Id. A change in circumstances is “material” when the change occurred since the original alimony award, and the change was not within the contemplation of the parties at the time of the divorce. Id.
If the petitioner establishes that both a substantial and a material change in circumstances exists, then the petitioner must overcome the second hurdle—proving that he or she is entitled to a modification. For the petitioner to be entitled to a modification of his or her alimony obligation, the petitioner must establish the modification is justified based upon the same factors that are relevant to the initial award of alimony. Id. at 730. Those factors are found in Tenn. Code Ann. § 36-5-121(i) and include, inter alia, the relative earning capacity, financial resources, education, and separate assets of each of the parties.
So as you can see, you can get a court to modify the amount of alimony you are paying (or receiving), but you have a pretty high burden of proof to overcome. Showing a “substantial and material change in circumstances” means there has been a change which (1) affects your ability to pay and (2) which has occurred since the original alimony award and was not reasonably foreseeable at the time the final decree was entered. Only after you overcome that hurdle do you move on to the second, which is to prove that you are entitled to a modification using the same factors that were relevant to the award of alimony when it was initially ordered (how much money each party is able to earn, what your present financial resources are, how much education you have, and what your assets are).
It is important to note that, in Baker, the wife tried to convince the Court that the alimony agreement was not modifiable because the contract through which the parties agreed on the alimony amount was not incorporated into the Final Decree. The logic was that, because that was merely a contract between the parties (as opposed to a court order), the Court did not have the power to modify it. Under Tennessee law (like all states I know about), the Court can modify its prior orders. However, the Court is without authority to modify a valid and binding contract between the parties. The mistake that counsel made in the original action was that the Marital Dissolution Agreement, which was incorporated into the Final Decree of divorce, also referenced the alimony obligation. Because that document (the MDA) had become a court order (because it stated that it was to be incorporated into the Final Decree), the Court could modify it. Therefore, the Court of Appeals ruled that the trial Court could modify the alimony obligation. I think that, if the MDA had not referenced the alimony obligation, the alimony would have been non-modifiable because it would have remained a valid contract.
The lesson is, if you don’t want alimony to be modifiable (either up or down), then you should (1) have the parties sign a contract which is not incorporated into the final decree so that the agreement remains a contract (which is not modifiable) and does not mature into court order (which is modifiable) or (2) simply state in the MDA that the parties agree that alimony is non-modifiable. Whether that is a good idea or not depends on whether you’re the payor or the payee. But no one can read the future, so I think it’s probably best if you allow the alimony to remain subject to modification by the Court so that it can be tailored as needed. If my cleint were receiving, say, $20,000.00 per month in alimony and was fine to live on that for the rest of his/her life, I would honor my client’s wishes and try to make it non-modifiable. But other than a situation where my client is receiving a large amount of money each month, I think it is safer for both parties to allow it to remain modifiable.
You can read the full decision in Baker here.
Best wishes and thanks for reading.
Sam Robinson III
Attorney at Law