Does a Sudden Reduction in Income Always Justify Reducing a Former Spouse’s Alimony Obligations?

A Maryland court has the discretion to modify an alimony award based on a substantial change in either party’s financial circumstances. For example, if the party required to pay alimony has experienced a substantial reduction in their income or earning capacity–assuming it is not voluntary–that can support a petition to reduce the amount of an alimony obligation. At the same time, however, the court may find that any reduction in income is simply temporary and reject a modification request.

Judge Finds Former Husband’s Dip in Income During Cancer Recovery Was Only a “Temporary” Change

A recent unpublished decision from the Maryland Court of Special Appeals, TIscher v. Lambeck, provides a useful illustration. In this case, a husband and wife married in 2002. They separated 13 years later, in 2018, and negotiated a settlement agreement as part of their divorce proceedings. Under this agreement, the husband agreed to pay the wife $6,000 per month in alimony for 47 months, followed by a reduced payment for the following 88 months. The agreement provided the alimony award would not be subject to modification, but the husband reserved the right to seek a court-ordered reduction if he became involuntarily unemployed or sustained at least a 15% reduction in his annual wages.

A few years later, the now-former husband filed a petition to reduce his alimony payments. He pointed to a substantial reduction in his yearly income. The former husband was an anesthesiologist in private practice. In 2020, he was diagnosed with cancer and as a result was not on disability. Between his cancer treatment, which required multiple surgeries, and the ongoing COVID-19 pandemic, the former husband said that he had seen a drop in his yearly income from $341,000 to $119,000.

Despite this, the trial court declined to reduce the former husband’s alimony obligation. The judge noted that based on testimony from the former husband’s own doctor, he had “seemed to recover from his cancer” and was capable of resuming full-time work within six to 18 months. As such, the former husband had only experienced a “temporary change in income,” which did not justify departing from the terms of the marital settlement agreement.

The Court of Special Appeals agreed. It noted that despite the reduction in yearly income, the former husband had a net worth of approximately $3.5 million, which itself was more than enough to cover his alimony obligations. The appellate court also agreed with the trial judge that the former wife was at an inherent disadvantage since she was not allowed to seek any extension or increase in alimony pursuant to the terms of the settlement. Given all this, the trial court acted within its discretion in denying the former husband’s modification request.

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This article has been provided by the Law Office of Robert Castro. For more information or questions contact our office to speak to an experienced lawyer at (301) 870-1200.

Source:

https://www.courts.state.md.us/sites/default/files/unreported-opinions/0982s21.pdf