Another Unsuccessful Attempt to Modify Periodic Alimony

April 25, 2016 § Leave a comment

Do after-acquired debt and other personal expenses justify downward modification or termination of alimony? That was the central question in the COA case, Hardin v. Grantham, decided March 1, 2016.

Robert Hardin was ordered in 1991 to pay periodic alimony in the sum of $750 a month to his ex-wife, Betty Grantham. In the 1991 judgment, the chancellor projected that Robert’s business could not sustain his then-$80,000 annual income, and based alimony on an assumed $40,000 annual income. In 2013, Robert filed a petition to modify or terminate the payments, claiming that there had been a material change in circumstances so that he could no longer afford to pay Betty.

At trial, Robert claimed that his business had declined, and his income with it. He reported income of $5,562 per month, personal expenses of $4,822 a month, which included the alimony, and business expenses of $8,351. The chancellor found Robert lacked candor and provided evasive and inconsistent answers to questions in his testimony. The chancellor declined to modify, and Robert appealed.

In her opinion for the court, Judge Carlton first spelled out the familiar rules that govern modification of alimony: the chancellor must (1) determine whether an unforeseeable and material change occurred since entry of the original alimony order; and (2) if so, then consider the Armstrong factors relative to the parties’ financial positions at the time of the original order, and (3) consider the ex-wife’s accustomed standard of living, less her own resources, and the husband’s ability to pay. If no (1), then no modification.

She then turned to the question whether the after-acquired expenses could be a basis to modify:

¶13. Despite Robert’s assertions, the Mississippi Supreme Court has previously rejected “the idea that alimony or child[-]support obligations should be reduced because of the obligor’s other financial commitments[.]” Yancey v. Yancey, 752 So. 2d 1006, 1010 (¶12) (Miss. 1999) (citing Varner v. Varner, 666 So. 2d 493, 497 (Miss. 1995)). See also N. Shelton Hand, Mississippi Divorce, Alimony, and Child Custody § 14–10 (6th ed. 2012) (“Obligations of child and[/]or spousal support are not generally to be considered as or equated with any other debt known to and collectible under the law. There is more to these obligations than mere debt.”).

¶14. In Varner, a husband argued that the chancellor should reduce his child-support and alimony obligations in light of his other financial obligations. Varner, 666 So. 2d at 497. After the parties’ divorce, the husband opened his own veterinary practice. Id. He also filed for bankruptcy, and he claimed that he had been forced to borrow money from friends and family to pay his child-support and alimony obligations. Id. at 495-97.

¶15. On appeal, the supreme court found no merit to the husband’s argument that his child support and alimony obligations should be modified. Id. at 497. In fact, the supreme court stated:

Personal bills cannot be used as a factor to reduce support payments. Furthermore, simply alleging, as does [the husband], that one is subsisting on borrowed funds does not show with the required particularity that he is unable to pay.

In this case, the chancellor properly found that there had been no material change in circumstances. [The husband’s] income apparently decreased between the time of his divorce and the hearing. However, that decrease was directly related to his decision to open a solo practice and a voluntary move which caused him to give up his supplemental income. [The husband] filed for bankruptcy on July 7, 1993, two weeks after the chancellor denied his request for modification. His bankruptcy petition was dismissed and the case closed on April 18, 1995.

A debtor is prohibited from discharging debt to a former spouse for alimony or support to a child in connection with a separation agreement. Furthermore, simply filing for bankruptcy does not rise to the level of a substantial change without a finding by the chancellor that the filing was made in good faith. The law is well-settled that, if an obligor, acting in bad faith, voluntarily worsens his financial position so that he cannot meet his obligations, he cannot obtain a modification of support. Id. (internal citations and quotation marks omitted).

¶16. Citing Mississippi precedent, including the supreme court’s holding in Varner, the chancellor here found no merit to Robert’s claim that his alimony payments should be modified or terminated because he had incurred other debts and financial obligations. Instead, the chancellor found that he must compare the parties’ relative positions at the time of the divorce with their positions at the time of the requested modification to determine whether an unforeseeable and material change occurred. In looking at the facts of the present litigation, the chancellor ultimately concluded that the only material postdivorce change occurred when Robert’s business became very successful and afforded him many opportunities and luxuries.

The COA affirmed.

We have recently dealt with other cases denying modification or termination of alimony here and here.

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