Not Much Ado About Having Nothing

During the existing economic downturn, there has been much litigation seeking downward modification of support orders in New York. The standard for support modification in that state depends upon whether the order is the product of agreement or trial determination and whether or not the order is for child support or spousal support. (As this article seeks to examine “change in circumstances” applications resulting from recent economic events, it does not address any other basis upon which modification made be made.) While such applications have been historically difficult to win, legitimately suffering payors, thinking that job losses and reduced incomes would be the ticket for success, have nevertheless found the court continually reluctant to grant relief. Some recent decisions decided by the appellate courts on applications made prior to the recession, and lower court decisions which have considered its effect, have been consistent in denying relief. This two-part article discusses the trend in New York and other states to deny downward modifications.

Agreement vs. Order-Based Support

When determining whether a support order should be modified, the court must consider the factors set forth in ” 236(B)(9)(b) of the Domestic Relations Law.

Upon application by either party, the court may annul or modify any prior order or judgment as to maintenance or child support, upon a showing of the recipient's inability to be self-supporting or a substantial change in circumstance or termination of child support awarded pursuant to section two hundred forty of this article, including financial hardship. Where, after the effective date of this part, a separation agreement remains in force no modification of a prior order or judgment incorporating the terms of said agreement shall be made as to maintenance without a showing of extreme hardship on either party, in which event the judgment or order as modified shall supersede the terms of the prior agreement and judgment for such period of time and under such circumstances as the court determines ' DRL 236B(9)(b)

Where support is set by an order or judgment, there must be a “substantial” change in circumstances. DRL 236(B)(9)(b); Fein v Gilchrist, 23 A.D.3d 558 (2nd Dept 2005); Sannuto v Sannuto, 21 A.D.3d 901 (2nd Dept 2005); Di Giorgi v Buda, 26 A.D.3d 434 (2nd Dept 2006). The same is true where an agreement is merged into the judgment of divorce. Streit v Streit, 237 A.D. 2d 662 (3rd Dept. 1997).

The burden of the party seeking a modification from an obligation that stems from an agreement or stipulation which has survived the order or judgment requires that there be an “unanticipated and unreasonable” change in circumstances resulting in a concomitant need. Merl v. Merl, 67 N.Y.2d 359 (1986); see also, Boden v Boden, 42 N.Y.2d 210 (1977) That change must also be “substantial.” Beard v. Beard, 300 A.D.2d 208 (2d Dept.2002); Praeger v. Praeger, 162 A.D.2d 671 (2nd Dept. 1990); Arcienege v. Arcienege-Luizzi, 48 A.D.3d 677 (2nd Dept 2008); Cervone v. Cervone, 44 A.D.3d 985, 843 N.Y.S.2d 847 (2nd Dept 2007). As to spousal support obligations contained in an agreement that has survived the court's order, the movant must satisfy the additional burden of demonstrating “extreme hardship.” The party seeking the modification bears the burden of establishing the requisite change of circumstances. DRL 236B(9)(b); Comstock v. Comstock, 1 A.D.3d 308 (2nd Dept. 2003); Nordhauser v. Nordhauser, 130 A.D.2d 561 (2nd Dept. 1987); Figueroa v. Herring, 2009 NY Slip Op 03519 (2nd Dept 2009).

Whether the required change in circumstances has actually occurred is determined by comparing the applicant's current financial status with the applicant's financial status at the time of the divorce. Rosen v. Rosen, 193 A.D.2d 661 (2nd Dept. 1993); see also, Cynoske v. Cynoske 8 A.D.3d 720 (3rd Dept. 2004); Klapper v. Klapper, 204 A.D.2d 518 (2nd Dept. 1994). An applicant's income is properly determined by looking at his or her earning capacity. An individual's earning capacity is properly determined by looking at financial data from previous years. See Mayle v. Mayle, 299 A.D.2d 869 (4th Dept. 2002) citing McCanna v. McCanna, 274 A.D.2d 949 (4th Dept. 2000). In determining a party's child support obligation, a court need not rely upon the party's own account of his or her finances, but may impute income based upon the party's past income or demonstrated earning potential. Rocanello v Rocanello, 254 A.D.2d 269 (2nd Dept 1998); see Matter of Westenberger v Westenberger, 23 A.D.3d 571 (2nd Dept 2005); see also Herlitz-Ferguson v Herlitz-Ferguson, 48 A.D.3d 418 (2nd Dept 2008). A parent's child support obligation is not necessarily determined by his or her current financial condition, but rather by his or her ability to provide support. Matter of Davis v Davis, 13 AD3d 623 (2nd Dept 2004); Matter of Brunetti v Brunetti, 22 AD3d 577 (2nd Dept 2005); Beard v Beard, supra at endnote 6. The court is not bound by a party's actual reported income in applying the basic child support obligation, and instead could use that party's actual earning capacity or impute an amount onto the gross income reported by the party. Solis v Marmolejos, 50 AD3d 691 (2nd Dept 2008).

Denial Without a Hearing

In David v. David, the Appellate Division, Second Department, held that “if the party seeking modification of his or her maintenance or child support obligations presents genuine issues of fact regarding his or her entitlement to a downward modification, then the court must conduct a hearing to determine whether modification is warranted.” 54 A.D.3d 714 (2nd Dept. 2008). Vague and unsubstantiated financial claims, however, are insufficient. Rosen v. Rosen, supra at endnote 9. The same is true of applications based upon vague and conclusory allegations. Barson v Barson, 32 A.D.3d 872 (2nd Dept 2006).

Failure to state a prima facie case for a change in circumstances as is required by law requires the application's dismissal without a hearing. Arciniega v. Arciniega-Luizzi, supra at endnote 6; Martin v Martin, 194 A.D.2d 769 (2nd Dept 1993). Miller v Miller, 18 A.D.3d 629 (2nd Dept., 2005); Fein v Gilchrist, 23 AD3d 558 (2nd Dept 2005). The same is true upon a failure to raise a genuine issue of fact which requires resolution at a hearing. Stirber v Stirber, 139 AD2d 727 (2nd Dept 1988); Mishrick v Mishrick, 251 A.D.2d 558 (2nd Dept 1998); David W. v Julia W., 139 A.D.2d 727 (1st Dept 1990); Stock v Stock, 202 A.D.2d 914 (3rd Dept 1994).

Although the Family Court is often loath to consider motions to dismiss petitions that do not establish a prima facie case for relief, the appellate court in the April 28, 2009 decision in Figueroa v. Herring, affirmed the Family Court's dismissal of a downward modification petition without a hearing, holding “no hearing shall be required unless such application shall be supported by affidavit and other evidentiary material sufficient to establish a prima facie case for the relief requested.” 2009 NY Slip Op 03519 (2nd Dept 2009).

The conclusion of this article will describe recent appellate decisions.

Lee Rosenberg is a partner at Saltzman Chetkof & Rosenberg LLP in Garden City, NY, and a Fellow of the American Academy of Matrimonial Lawyers. E-mail: [email protected].

During the existing economic downturn, there has been much litigation seeking downward modification of support orders in New York. The standard for support modification in that state depends upon whether the order is the product of agreement or trial determination and whether or not the order is for child support or spousal support. (As this article seeks to examine “change in circumstances” applications resulting from recent economic events, it does not address any other basis upon which modification made be made.) While such applications have been historically difficult to win, legitimately suffering payors, thinking that job losses and reduced incomes would be the ticket for success, have nevertheless found the court continually reluctant to grant relief. Some recent decisions decided by the appellate courts on applications made prior to the recession, and lower court decisions which have considered its effect, have been consistent in denying relief. This two-part article discusses the trend in New York and other states to deny downward modifications.

Agreement vs. Order-Based Support

When determining whether a support order should be modified, the court must consider the factors set forth in ” 236(B)(9)(b) of the Domestic Relations Law.

Upon application by either party, the court may annul or modify any prior order or judgment as to maintenance or child support, upon a showing of the recipient's inability to be self-supporting or a substantial change in circumstance or termination of child support awarded pursuant to section two hundred forty of this article, including financial hardship. Where, after the effective date of this part, a separation agreement remains in force no modification of a prior order or judgment incorporating the terms of said agreement shall be made as to maintenance without a showing of extreme hardship on either party, in which event the judgment or order as modified shall supersede the terms of the prior agreement and judgment for such period of time and under such circumstances as the court determines ' DRL 236B(9)(b)

Where support is set by an order or judgment, there must be a “substantial” change in circumstances. DRL 236(B)(9)(b); Fein v Gilchrist, 23 A.D.3d 558 (2nd Dept 2005); Sannuto v Sannuto, 21 A.D.3d 901 (2nd Dept 2005); Di Giorgi v Buda, 26 A.D.3d 434 (2nd Dept 2006). The same is true where an agreement is merged into the judgment of divorce. Streit v Streit, 237 A.D. 2d 662 (3rd Dept. 1997).

The burden of the party seeking a modification from an obligation that stems from an agreement or stipulation which has survived the order or judgment requires that there be an “unanticipated and unreasonable” change in circumstances resulting in a concomitant need. Merl v. Merl , 67 N.Y.2d 359 (1986); see also, Boden v Boden , 42 N.Y.2d 210 (1977) That change must also be “substantial.” Beard v. Beard , 300 A.D.2d 208 (2d Dept.2002); Praeger v. Praeger , 162 A.D.2d 671 (2nd Dept. 1990); Arcienege v. Arcienege-Luizzi , 48 A.D.3d 677 (2nd Dept 2008); Cervone v. Cervone , 44 A.D.3d 985, 843 N.Y.S.2d 847 (2nd Dept 2007). As to spousal support obligations contained in an agreement that has survived the court's order, the movant must satisfy the additional burden of demonstrating “extreme hardship.” The party seeking the modification bears the burden of establishing the requisite change of circumstances. DRL 236B(9)(b); Comstock v. Comstock , 1 A.D.3d 308 (2nd Dept. 2003); Nordhauser v. Nordhauser , 130 A.D.2d 561 (2nd Dept. 1987); Figueroa v. Herring , 2009 NY Slip Op 03519 (2nd Dept 2009).

Whether the required change in circumstances has actually occurred is determined by comparing the applicant's current financial status with the applicant's financial status at the time of the divorce. Rosen v. Rosen , 193 A.D.2d 661 (2nd Dept. 1993); see also, Cynoske v. Cynoske 8 A.D.3d 720 (3rd Dept. 2004); Klapper v. Klapper , 204 A.D.2d 518 (2nd Dept. 1994). An applicant's income is properly determined by looking at his or her earning capacity. An individual's earning capacity is properly determined by looking at financial data from previous years. See Mayle v. Mayle , 299 A.D.2d 869 (4th Dept. 2002) citing McCanna v. McCanna , 274 A.D.2d 949 (4th Dept. 2000). In determining a party's child support obligation, a court need not rely upon the party's own account of his or her finances, but may impute income based upon the party's past income or demonstrated earning potential. Rocanello v Rocanello, 254 A.D.2d 269 (2nd Dept 1998); see Matter of Westenberger v Westenberger, 23 A.D.3d 571 (2nd Dept 2005); see also Herlitz-Ferguson v Herlitz-Ferguson, 48 A.D.3d 418 (2nd Dept 2008). A parent's child support obligation is not necessarily determined by his or her current financial condition, but rather by his or her ability to provide support. Matter of Davis v Davis, 13 AD3d 623 (2nd Dept 2004); Matter of Brunetti v Brunetti, 22 AD3d 577 (2nd Dept 2005); Beard v Beard, supra at endnote 6. The court is not bound by a party's actual reported income in applying the basic child support obligation, and instead could use that party's actual earning capacity or impute an amount onto the gross income reported by the party. Solis v Marmolejos, 50 AD3d 691 (2nd Dept 2008).

Denial Without a Hearing

In David v. David, the Appellate Division, Second Department, held that “if the party seeking modification of his or her maintenance or child support obligations presents genuine issues of fact regarding his or her entitlement to a downward modification, then the court must conduct a hearing to determine whether modification is warranted.” 54 A.D.3d 714 (2nd Dept. 2008). Vague and unsubstantiated financial claims, however, are insufficient. Rosen v. Rosen, supra at endnote 9. The same is true of applications based upon vague and conclusory allegations. Barson v Barson, 32 A.D.3d 872 (2nd Dept 2006).

Failure to state a prima facie case for a change in circumstances as is required by law requires the application's dismissal without a hearing. Arciniega v. Arciniega-Luizzi, supra at endnote 6; Martin v Martin, 194 A.D.2d 769 (2nd Dept 1993). Miller v Miller, 18 A.D.3d 629 (2nd Dept., 2005); Fein v Gilchrist, 23 AD3d 558 (2nd Dept 2005). The same is true upon a failure to raise a genuine issue of fact which requires resolution at a hearing. Stirber v Stirber, 139 AD2d 727 (2nd Dept 1988); Mishrick v Mishrick, 251 A.D.2d 558 (2nd Dept 1998); David W. v Julia W., 139 A.D.2d 727 (1st Dept 1990); Stock v Stock, 202 A.D.2d 914 (3rd Dept 1994).

Although the Family Court is often loath to consider motions to dismiss petitions that do not establish a prima facie case for relief, the appellate court in the April 28, 2009 decision in Figueroa v. Herring, affirmed the Family Court's dismissal of a downward modification petition without a hearing, holding “no hearing shall be required unless such application shall be supported by affidavit and other evidentiary material sufficient to establish a prima facie case for the relief requested.” 2009 NY Slip Op 03519 (2nd Dept 2009).

The conclusion of this article will describe recent appellate decisions.

Lee Rosenberg is a partner at Saltzman Chetkof & Rosenberg LLP in Garden City, NY, and a Fellow of the American Academy of Matrimonial Lawyers. E-mail: [email protected].