Over the years, I have blogged several times on the Appellate Division rejecting a trial court’s use of a formula to calculate alimony as opposed to a fulsome consideration of the statutory alimony factors. I blogged about cases that rejected the use of formulas both for initial alimony awards, and when the issue of modification was before the Court. In fact, the only case I ever saw that approved the use of a formula, sort of, was a 2011 unreported decision in a malpractice case that said that the so called “rule of thumb” was an appropriate way to calculate alimony as part of a settlement.
This was true until February 21, 2024, when the Appellate Division released the unreported (non-precedential) decision in Geary v. Geary. In this case, the Court alluded to and tacitly approved a formulaic approach in a modification case.
The pertinent facts are as follows. The parties married in 1993 and divorced in 2014. Pursuant to their Marital Settlement Agreement (MSA), the husband was to pay limited duration alimony for almost 16 years, until 12/31/30, in the amount of $120,000 per year. Apparently, husband’s income at the time of the divorce was less than it was previously because the MSA provided that the wife had a claim for arrearages in the event that the husband failed to advise her that his income returned to $325,000 or greater. The agreement also made provisions for alimony/arrearages if the husband’s income returned to $300,000 or greater. Also, the MSA provided that there could be a downward modification if the wife’s income rose above $100,000.
During the marriage, the husband was employed as the managing director of an advertising agency in New York earning $325,000 per year. He claimed to have been terminated in September 2019, receiving severance through the end of that year. The Wife earned $55,000 at the time of the divorce and at the time of the hearing she earned $97,000, though she earned more than $100,000 in 2019 and 2020.
At the hearing for an alimony reduction, husband testified that despite a diligent job search throughout the US, including a spreadsheet showing 1,000 entries, that he could get no job in advertising, marketing, media or sales. He then located to Hilton Head and decided to become a realtor, obtained his license, established an LLC, created a website and began promoting his business on social media. That said, he never began work as a realtor for himself or anyone else.
At the hearing, the trial court found that the husband proved a prima facie change of circumstances, “but only for a temporary modification of alimony” and thus, only reduced alimony to $100,000 per year from the date he filed his motion until the commencement of the plenary hearing (about 15 months). The trial court then imputed income to husband of $180,000 per year as a realtor in South Carolina, commencing the first day of the hearing, noting:
“… given [plaintiff’s] acceptance as a realtor in Hilton Head and the thriving real estate market during the pandemic . . . [p]laintiff certainly could have earned a substantial salary as a realtor in Hilton Head by the time he testified after moving two years ago to South Carolina,” taking judicial notice under N.J.R.E. 801(c)17 of South Carolina market reports and other commercial publications concerning the South Carolina real estate market. Similarly, the court took judicial notice of and considered the average salary of Hilton Head real estate agents, imputing income to plaintiff in the amount of $180,000 per year commencing in September 2021.
As a result, the trial court reduced the alimony to $60,000 per year until the end of 2022 while husband “builds his career.” The court, however, continued the reduced alimony for the rest of the duration unless he resumes a salary of $300,000 or greater. The Court further added that in the event that the husband earns “… $325,000, “at or near the end of the limited term of alimony, the duration may extend upon motion by defendant with all financials provided.” The Court further required the exchange of tax returns yearly until 2035, 5 years after the expiration of the alimony.
Relevant to this blog post, the husband argued that the trial court erred using a mathematical formula to set alimony. The Appellate Division disagreed and affirmed the trial court’s decision.
As to the arguments regarding the mathematical formula, the Appellate Division noted that:
“We disagree with plaintiff’s argument that the court “improperly” used a mathematical formula to determine his alimony obligation. The court explained the plaintiff’s alimony obligation of $60,000 per year in 2021 and 2022 was “33.3 percent of [$180,000] imputed to him as a realtor in South Carolina.” The court then noted the MSA provided for $120,000 per year in limited durational alimony which was “36.9 percent of his income for purposes of the [MSA.]” Based on the sufficient credible evidence in the record, we discern no factual or legal basis to conclude the court abused its discretionary authority by utilizing the same percentages as those utilized when his income was established in the MSA. (Emphasis added).
While factually different, this holding is contrary to a different unreported Appellate Division holding that I blogged on, linked above. In a way, the trial court decision seems a lot like prairie justice given the limited facts presented in the opinion. One gets the sense that the court believed that the husband did not voluntarily lose his job, but was not convinced that his job search was fulsome, or in the usual parlance used, entirely bona fide. It probably didn’t help that he moved to a well known retirement hot spot and then never actually got a job when he got there, either in advertising or real estate. Moreover, all of the things that the judge took judicial notice of regarding the South Carolina job market vs. having the wife prove those things was interesting.
It seems clear that the finding regarding the job search contributed to the unusual order permitting the limited duration alimony to be extended when this isn’t necessarily “exceptional circumstances” as contemplated by the statute. Given these finding, it seems odd that the wife’s request for counsel fees was denied.
Either way, this was an interesting set of facts with interesting holdings from both the trial court and Appellate Division.
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