Voluntarily Retiring Early is Not a Changed Circumstances

Aug 05, 2016

Under New Jersey case law, the Family Part has discretion to decide whether the facts of a given case require income to be imputed to either spouse in calculating appropriate alimony payments.  For example, income might be imputed to a husband or wife if he or she is voluntarily unemployed or underemployed.

In Mathias v. Mathias, the husband and wife were divorced on July 29, 2008, after a 15-year marriage.  At the time of divorce, they had two minor children.  After further litigation and an appeal on the issue of alimony, a March 10, 2010 consent order provided that the husband would pay the wife $380 per week in permanent alimony and $290 per week in rehabilitative alimony.  Rehabilitative alimony payments ended on January 1, 2011.  The consent order specified that the alimony payments were based on the husband’s actual income of $2,368 per week as a state trooper, and the wife’s imputed income of $1,000 per week.

Subsequently, in July 2012, the husband retired when he was 49, even though troopers are not required to retire until they turn 55.  The next month, he moved to reduce his alimony and child support payments because: (1) one of the children had moved in with him; (2) the wife was living with someone else who the husband believed was contributing financially; and (3) his income was diminished because of his retirement.  He claimed that he was forced to retire because of health issues.  The court ordered a plenary hearing, but the motion was dismissed before the hearing began because the husband had failed to provide the wife with discovery regarding his alleged health issues.

In December 2013, the husband refiled the motion, and it was heard by a different court.  At oral argument, the husband claimed that the previous court had ruled that his retirement was involuntarily; the wife contended that there was a discrepancy between the prior court’s written order and its oral decision.  After reviewing both decisions, the second court concluded that the original court had made no finding that the husband’s retirement was involuntary.  The second court also found that the husband’s claim that medical issues forced his retirement was unsupported, and accordingly concluded that his retirement was voluntary.  It therefore ruled, in February 2014, that his retirement could not be considered a legitimate change in circumstance warranting modification of his support obligations.

However, the second court did order a plenary hearing to address cohabitation and whether child support should decrease in light of one of the children turning 18 and going to college.  In a June 11, 2014 order, the court found that the wife had been cohabitating, but was no longer doing so, and that her income had increased by $23,000 since the divorce.  As a result of her higher earnings, the court reduced alimony from $380 per week to $280 per week.  In calculating child support, the court also took into account the wife’s boosted income, and her annual receipt of $20,072 as her share of the husband’s pension.  In its calculations, the court imputed to the husband his trooper salary of $111,841, plus the $51,168 that he received from his pension each year.  As a result, his child support obligation actually increased from $157 per week to $346 per week.

On appeal, the husband argued that the second court had improperly found that his retirement was voluntary, maintaining that the original court had ruled that his retirement was involuntary.  The Appellate Division refused to address this argument because the husband had only appealed the June 11, 2014 order, which did not address the voluntariness or involuntariness of his retirement.  The husband had never challenged the court’s February 2014 ruling that his retirement was voluntary, and the Appellate Division found that it was without jurisdiction to hear such arguments.

The Appellate Division also rejected the husband’s argument that the trial court should have revisited the issue of the husband’s retirement.  The Appellate Division explained that it was implicit in the February 2014 opinion that his retirement was voluntary and without just cause, and there was no reason for the lower court to reconsider that issue before imputing income to him 4 months later.  Finally, the Appellate Division upheld the lower court’s imputation of the husband’s trooper salary to him in calculating support.  The Appellate Division explained that “[o]ne cannot purposely put himself in a position where he has a diminished earning capacity and expect to be relieved of his or her support obligations.”  It did note, however, that because the husband would have had to retire in 2017 upon turning 55, he may file a new motion to modify his support obligations at that time.

If you have a post-judgment alimony issue, contact the skilled matrimonial attorneys at Sarno da Costa D’Aniello Maceri LLC.  Call us today at (973) 274-5200.