Dilger v. Dilger

• Decision Date: 23 February 1990
• Citation: 576 A.2d 951,242 N.J.Super. 380
• Parties: Jeanne M. DILGER, Plaintiff, v. William F. DILGER, Defendant.
• Court: New Jersey Superior Court

Page 380

242 N.J.Super. 380

576 A.2d 951

Jeanne M. DILGER, Plaintiff, v. William F. DILGER, Defendant.

Superior Court of New Jersey, Chancery Division Family Part, Monmouth County.

Decided Feb. 23, 1990.

Vincent L. Stripto, for plaintiff (Drazin & Warshaw, Red Bank, attorneys).

Michael L. Detzky, Freehold, for defendant.

BASSLER, J.S.C.

Plaintiff, Jeanne M. Dilger, and defendant, William F. Dilger, were divorced in September 1983 after a marriage of 30 years. The judgment of divorce incorporated a property settlement agreement which committed defendant to pay alimony of $1,000 a month. Less than six years after the divorce, defendant elected to take an early retirement and ceased making alimony payments. Plaintiff filed a motion for the enforcement of litigant's rights. Defendant filed a cross-motion to terminate alimony payments. The court is asked to resolve the question of whether voluntary retirement at the age of 62 1/2 years constitutes a change of circumstances justifying termination of the obligation to pay alimony. The court determines that the retirement was not undertaken in good faith and under the circumstances was not reasonable, and therefore, defendant is not entitled to the relief requested. ¹

At the time of the divorce in 1983, plaintiff was 54 years of age; defendant, 57. The parties, with the advice of independent counsel and after extensive negotiations, entered into a property settlement agreement. The transcript of the divorce proceedings reveals that "the settlement [was] based upon the husband having a gross income of approximately $60,000 per year; and the wife having a gross income of approximately $7,000 per year." The two children of the marriage were emancipated but defendant agreed to pay for a minimum of two years post-high school education for his son, Mark. Defendant was also required to maintain $106,000 of work-related life insurance for the benefit of plaintiff.

Defendant's obligation to pay alimony of $1,000 a month was to continue until plaintiff's remarriage, plaintiff's co-habitation in avoidance of marriage or the death of either party. "The first happening of any of those events, husband's obligation to pay alimony shall cease." Plaintiff relinquished all of her interest in defendant's pension. Defendant conveyed the marital home to plaintiff and she assumed the obligation to pay the mortgage on it. Defendant's preliminary disclosure statement filed with the court on March 17, 1983 estimated the marital home to be worth $175,000 and the mortgage to be $30,000.

The testimony at the plenary hearing in December 1989 established that defendant had been employed by the New York Stock Exchange for nearly 20 years. In 1987, he earned $85,852; in 1988, he earned $93,211; and in the three and one-half months prior to his retirement in 1989, he earned $42,621.

In anticipation of his retirement, defendant purchased an 86-acre farm in Pennsylvania with a $20,000 deposit and a $60,000 mortgage. His other assets included a bank account of approximately $27,000 and a 401 K plan of approximately $28,000.

Defendant currently receives $75 a month in social security benefits and $1,529.89 a month from his work related annuity for an annual income of $27,370. If he had waited to retire at 65, his annuity would have paid him $1,913 a month. His present wife is now unemployed and suffers from depression.

Plaintiff, employed by Citibank, earned $17,704 in 1987, $17,666 in 1988, and $19,100 in 1989. The unilateral decision of defendant to terminate alimony, done without any advance warning to plaintiff, caused her considerable financial hardship. The mortgage on her home fell into arrears and foreclosure proceedings were threatened. To bring the mortgage current she had to borrow money from a friend. Funds recently received from a personal-injury action were used to pay off the balance of the mortgage in order to remove the threat of another foreclosure action.

Plaintiff's current situation does not obviate the need for alimony. She is 61 and employed fulltime; her net monthly income is $1,095.92; her monthly shelter, transportation and personal expenses total $2,378. Although her son, Mark, who is 27, pays her $250 a month for room and board, he suffers from black lung disease and is not self-sufficient.

Plaintiff will be 65 on February 1, 1994, at which time she will receive a monthly pension benefit of $123 and a social security payment of $634. The only substantial asset plaintiff owns is the house with an assessed value of $310,800. She has placed it on the market for sale with a listing price of $325,000.

It is now an established canon of matrimonial law that alimony, whether determined by award of the court or agreement of the parties, can always be modified on a showing of "changed circumstances." It is also well settled that "changed circumstances" is not restricted to what was unforeseeable at the time of the divorce; that the party seeking to modify the alimony award has the burden of proving the "changed circumstances," and that such "changed circumstances" warrant the relief requested. Lepis v. Lepis, 83 N.J. 139, 416 A.2d 45 (1980). Of course, if the court award or the property settlement agreement itself has addressed what is advanced as "changed circumstances," a modification will not ordinarily be allowed. Id. at 153, 416 A.2d 45.

Any analysis of whether defendant's retirement amounts to a change of circumstances must, of course, begin by examining the intention of the parties as expressed in the agreement itself. But in this case, as is probably true of most, ² the parties did not explicitly provide for the consequences attendant upon defendant's retirement. If the agreement is read literally, only plaintiff's remarriage, co-habitation, or death would relieve defendant of his obligation to pay alimony. Of course, the absence of a modification clause does not make a property settlement agreement unmodifiable. McFadden v. McFadden, 386 Pa.Super. 506, 563 A.2d 180 (Super.Ct.1989).

The only apposite New Jersey decision addressing the issue of early retirement is that of Horton v. Horton, 219 N.J.Super. 76, 529 A.2d 1034 (Ch.Div.1987). There, Judge Krafte held that when defendant voluntarily retired at age 56, one and one-half years after entering into the property settlement agreement and early retirement was neither anticipated nor bargained for, his pension income would be considered in evaluating his ability to pay alimony. The subsequent amendment to N.J.S.A. 2A:34- " however, provides that pension benefits that have been treated as an asset for purposes of equitable distribution are not to be considered in determining alimony. The recent decision of Innes v. Innes, 117 N.J. 496, 569 A.2d 770 (1990) holds that this statute immunizes pension benefits from consideration by the court when determining applications for modification of alimony. ³ But in Innes, the Court was faced with a divorced spouse who was fired at the age of 61 and not, as here, with one who voluntarily elected early retirement.

The rationale underlying Horton, which was not the subject of the Supreme Court's scrutiny in Innes, is that, in certain cases, a voluntary termination of employment does not constitute "changed circumstances," and therefore, does not warrant modification of a prior alimony agreement.

Whether voluntary early retirement is a change of circumstances has been considered by courts in other jurisdictions. Some courts have held that "absent a substantial showing of good faith" a voluntary reduction of income is a self-imposed curtailment of income and will not constitute a change of circumstances warranting modification. See Tydings v. Tydings, 349 A.2d 462 (D.C.App.Ct.1975); Lambert v. Lambert, 66 Wash.2d 503, 403 P.2d 664 (Sup.Ct.1965).

In Ward v. Ward, 502 So.2d 477 (Fla.App.Ct.1987) the court, in refusing relief to the former husband who was 63, was of the opinion that only involuntary retirement could ever warrant reduction of an obligation to pay alimony. While in McFadden v. McFadden, supra, the court found that the husband's early retirement and its effect on his ability to pay alimony was a sufficient change of circumstance to allow modification of the alimony award.

In Commonwealth Ex. Rel. Burns v. Burns, 232 Pa.Super. 295, 331 A.2d 768 (Super.Ct.1974), the court held that voluntary retirement will not be a ground for reduction of alimony if it is undertaken for the sole purpose of reducing the funds available for support.

Similarly the Court of Appeals in In Re Marriage of Sinks, Jr., 251 Cal.Rptr. 379, 204 Cal.App.3d 586 (App.Ct.1988) affirmed the trial court's refusal to modify spousal support because of the husband's retirement at the age of 62 upon a finding that his motive in retiring was to end his financial responsibilities.

But in assessing the application of a doctor who chose to retire at the age of 64, the Supreme Court of Maine in Smith v. Smith, 419 A.2d 1035 (Me.Sup.Ct.1980) found the "sole purpose" rule of the Burns court too restrictive: "Under such a formula, however, the payor spouse would nearly always be able to cite at least one legitimate purpose for his retirement; the danger of pretext is great." Id. at 1038. Instead, the court articulated a rule to the effect that if the primary purpose of early retirement is to avoid alimony, a change of circumstances will not be recognized.

This court does not find these formulations to be of much help. Having to decide whether avoiding financial responsibility to the former spouse is the "sole purpose" or the "primary purpose" for electing early retirement invites scholastic distinctions of dubious value. And of what significance is motivation alone if early retirement either frustrates the reasonable expectations of the dependent spouse or robs the dependent spouse of all support or if the agreement makes no provision for early retirement?

It seems to this court that a better...