Posted by Nydia Streets of Streets Law in Florida Alimony
Modification of alimony in Florida requires a showing of a substantial change in circumstances which was not contemplated at the time the support amount was established. The burden of proof on the party asking to modify alimony is considerable. So what is an example of a change in circumstances that qualifies? Today we discuss the case Allaire v. Allaire, 2D22-2804 (Fla. 2d DCA September 15, 2023).
The request for modification in this case dated back to the beginning of the COVID-19 pandemic. The former husband agreed to pay alimony to the former wife in their divorce. He worked as an upholsterer and had one client. Once the pandemic began and an order was issued essentially mandating that non-essential businesses stop operating, the former husband’s income substantially decreased and he eventually lost his business to his one client while signing a non-compete agreement. The former husband testified at trial that starting another business from scratch would require a lot of capital and work. He instead found work as an insurance adjuster making less money.
The trial court found the former husband’s selling of his business and signing of the non-complete agreement were reasonable. However, it denied his petition for modification, citing (1) his decreased income was not permanent; (2) that his financial problems were foreseeable because he chose to do business with only one client; and (3) that his income change was insubstantial because his new employment had him earning about the same as he did at the time the final judgment was entered. The former husband appealed.
The appellate court noted the standard for modification of alimony: “Specifically, ‘[t]o justify a modification of alimony, the moving party must establish: (1) a substantial change in circumstances; (2) that the change was not contemplated at the final judgment of dissolution; and (3) that the change is sufficient, material, permanent, and involuntary.’” (internal citations omitted). The court first noted the trial court misread the evidence as it related to the former husband’s income: “Seemingly, the trial court misread the Former Husband's financial affidavits. Former Husband's 2015 financial affidavit reported a monthly gross base salary of $3,033. His 2022 financial affidavit shows a gross monthly income of $3,354. Unfortunately, the trial court overlooked the portion of the 2015 financial affidavit indicating that Former Husband supplemented his monthly base pay with shareholder distributions of $2,500. Thus, the 2015 financial affidavit actually reflected a gross monthly income of $5,769 and a net monthly income of $4,502. In contrast, Former Husband's 2022 financial affidavit included no shareholder distributions. Thus, his gross monthly income totaled $3,354; his net monthly income was substantially reduced to $968.45. In similar circumstances, we have found a substantial change in circumstances.”
Turning to the issue of foreseeability, the appellate court held “The trial court's ‘foreseeability’ analysis should play no role in assessing whether the parties contemplated the loss of the client when they entered into the MSA. [internal citation omitted]. Nothing in our record suggests that the parties contemplated the closing of Former Husband's business, let alone the termination of the only contract sustaining that business.”
Finally, addressing the trial court’s rationale that the change was not permanent and involuntary, the appellate court held “Here, Former Husband sought modification in April 2020 due to the closure of his business. He reported having no income at that time. Leading up to the June 2022 modification hearing, Former Husband sold his upholstery equipment, signed a non-compete agreement, and took up new employment as an insurance adjuster with a reduced income. As his financial affidavit reflects, Former Husband saw a forty-one percent decrease in his gross monthly income and a seventy-eight percent decrease in his net monthly income commencing in April 2020, compared to his financial situation at the time of dissolution in 2016. This sustained change was sufficiently permanent. Although the trial court was concerned with the timing of Former Husband's petition, the record demonstrates that at the time of the hearing, his business had been closed and his reduced income had lasted for over a year. This sustained change was sufficiently permanent.”
The court concluded “Also, the record does not support the trial court's finding that the change was voluntary. [. . .] Here, Former Husband was faced with untenable business exigencies caused by Covid-19. He tried to make the best of a bad situation. Even the trial court recognized that Former Husband was ‘between a rock and a hard place.’ [internal citations omitted]. We do not fault Former Husband for the course he chose. Certainly, we discern no attempt to manipulate his finances to Former Wife's detriment.”
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