The Non-Effect of the Recession on Downward Modification Applications

In Awaad v Awaad, 2009 NY Slip Op. 03719 ( 2nd Dept 2009), and Illidge v Lewis, 2009 NY Slip Op 03730 (2nd Dept 2009), both issued on May 5, 2009, the Second Department reviewed downward modification orders issued in Family Court after hearing and found that modification was not appropriate. In Awaad, the court, referencing Fragola, reversed the trial court and held, “Although the loss of employment can constitute such a change in circumstances, the father failed to present competent proof that, after he lost his job, he made a good-faith effort to obtain new employment commensurate with his qualifications and experience ' ” In Illidge, the court upheld the denial of modification, finding that the father “failed to present competent proof that he was incapable of working in any capacity.”

In an April 2009 decision, the court in Ripa v. Ripa , 2009 NY Slip Op 03003 (2nd Dept 2009), affirmed the Family Court's denial of modification after hearing:

The burden was on the father to show that he used his best efforts to obtain employment commensurate with qualifications and experience after losing his job ' Here, the Support Magistrate found, in effect, that the father's tax returns and other financial documentation provided an incomplete account of his finances. In addition, at the hearing there was a “failure of proof“ as to exact circumstances under which the father lost his former employment, whether it was due to his fault, and whether he used his best efforts to obtain new employment commensurate with his qualifications and experience. (citations omitted) (emphasis added)

A similar denial of relief was had upon a failure of proof in Liano v. Bell, 2009 NY Slip Op 02366 (2nd Dept 2009). Although there was sufficient evidence that the father was physically unable to return to work, there was no medical evidence that he was unable to perform other work. The court held:

Although a petition for downward modification of child support may be granted when a party loses his or her job due to an injury, it may be denied when the moving party has the ability to provide support through some other type of employment. Here, although there was sufficient evidence to establish that the father was currently physically unable to return to his work as a police officer, there was no medical evidence that he was also unable to perform other work. Also, the father failed to present a clear picture of his current financial situation since he did not present any proof of income from disability pension. (emphasis added) See also, Gray v Gray, 52 AD3d 1287 (4th Dept 2008)

The Third Department in Latimer v. Cartin, 57 AD3d 1264 (3rd Dept 2008), also affirmed the denial of downward modification where the father claimed loss of income and earning capacity. It held that he failed to meet his burden of proving an involuntary and unavoidable change in financial circumstances or that he made reasonable and diligent efforts to obtain employment. In Latimer, the father was a doctor who had voluntarily surrendered his license after being charged with professional misconduct. His application for a reduction in his support obligation filed two months after he surrendered his medical license was rebuffed.

In Matter of Perrego v Perrego, 2009 NY Slip Op. 05347 (2nd Dept 2009), issued on June 23, 2009, the Family Court denied the father's application after a hearing and the Second Department affirmed:

The appellant did not meet his burden of establishing a substantial change in circumstances that would warrant a downward modification in his child support obligation. Although the appellant claimed a loss of business since the time of the divorce, the Support Magistrate was entitled to discredit this testimony, especially since his reported income had increased.

A similar result occurred in the June 30, 2009 decision in Afriye-Fullwood v Opetubo. 2009 NY Slip Op 05543(2nd Dept 2009).

Lower Court Chagrin

Typically, the appellate courts do not, of course, provide us with any great detail as to the intricate facts of the matter at hand, but three recent lower court decisions out of Nassau County Supreme Court in which relief was denied ' Cox v Cox, 23 Misc3d 1115 (Sup. Court Nassau County 2009, Falanga, J.), Chaplin v Chaplin, NYLJ 4/27/09 at 20, col 2 (Sup. Court Nassau County, Driscoll, J.), and L.D. v A.D, NYLJ 5/4/09 at 21, col 1 (Sup Court Nassau County, Maron, J.) ' are interesting for the detail provided and the chagrin in which trial courts are viewing many of the presented applications.

In Cox, the father was obligated, by a 2004 stipulation incorporated by reference into and surviving the divorce decree, to pay child support of $1650 a month ($19,800 a year) for the parties' 12-year-old daughter. At the time of the stipulation, his income was $123,094 and the mother's was zero. He was also required to make three payments totaling $30,000 denominated as maintenance. After first filing for relief in Family Court, which was later withdrawn, the father brought his application in Supreme Court and alleged that his employment was terminated on Nov. 28, 2008 due to downsizing; his present wife with whom he has two minor sons also lost her job; he attempted to obtain a six-month deferment on his mortgage, but the lender refused the request; his home is in the process of foreclosure; he has no option but to file bankruptcy; he was earning $3,700 biweekly before he lost his job; his present income is $1,741.50 a month in unemployment benefits; his child support obligation equals 95% of his income; he is making diligent effort to obtain employment.

The court acknowledged that the father suffered an involuntary loss of employment as claimed, but that in 2007 he earned $318,346; his present wife earned $95,995 and that they sold stock worth $498,458. They had gross income of $912,799 in 2007, while the mother had income of less than $49,000. The court further found that “knowing that he would receive severance benefits in excess of $150,000 and that he would earn almost $500,000 in 2008, excluding his present wife's earnings for that year, it was an abuse of the judicial process for the husband to file a petition for a downward modification in the Nassau County Family Court on or about December 3, 2008, and the instant application is clearly forum shopping.” The father was further excoriated by the court in its decision.

In Chaplin, the parties entered into a divorce agreement in 2000, which was later upwardly modified in Family Court. The father, a mortgage loan officer, thereafter moved in Supreme Court for a downward modification of his child support obligation in 2007 due to the conditions in the housing market. As a sufficient demonstration was initially made, that application resulted in a 2008 order directing a hearing to be held to determine the issue. The matter was then settled by stipulation and the parties were allocuted on the record with the father raising the issue of his right to move for further modification if the market continued to decline; the court, of course, declined to give him legal advice. Thereafter, in October 2008, he moved again for relief claiming he:

“suffered an unanticipated and unreasonable change of circumstances which has made it an extreme hardship for me to continue to pay child support at the current level[,]” claiming, specifically, “ I am a mortgage broker, and within the last few months have experienced unprecedented turmoil and change in the mortgage market, such that I can no longer meet my child support, college, health insurance and life insurance obligations.”

In opposition to the father's motion, the mother alleged that the market forces to which her ex-husband referred were anticipated, and provided documentation suggesting that there have been positive changes in the real estate market since the 2008 Stipulation, including an article from the Associated Press that discussed the recent drop in fixed mortgage rates to their lowest levels in at least 37 years, as well as the Federal Reserve's pledge to pour money into the mortgage market in an effort to spur the moribund U.S. housing market.

The court also found credible the mother's claim that the father was living a pampered existence that belied his claims of financial need, relying upon a copy of the transcript of his girlfriend's prior deposition of March, 2008, which provided insight into the style in which he was living and the expenses that he was paying. As in Cox, the court's disenchantment with the father's application was evident:

The Court senses a certain entitlement on the part of Husband and his Girlfriend, who do not appreciate that Husband's financial obligations to his Children are paramount. To be clear, if Husband has to choose between paying for Girlfriend's pool, tennis court and housekeeper, and meeting his financial obligations to his Children, he must choose the latter.

In L.D. v A.D., the court again viewed the disingenuousness of the father's application with disapproval. In this case, the parties had been divorced for approximately one year. At the time the case was settled by written agreement, the father had claimed his purported dire financial straits ' an argument that had already been rejected by the court. When he made his post-judgment application, the father, who sought reduction in his child and spousal support obligations, again claimed that the economy had decimated his business. The court found his description of his current financial status to be “ambiguous at best and grossly inconsistent with prior statements.” It found the arguments to be “without credibility and merit,” just as the prior assigned judges did.

Defendant proffers that due to lawsuits filed against himself personally and against his businesses, that he has incurred further expense, which was not anticipated at the time the Stipulation was entered into. The court notes that the defendant has not submitted proof that either the bankruptcy or the related litigation has been adjudicated or that a single judgment has been entered against him, therefore, there can be no consideration of the potential financial impact of the actions. Further, although the defendant contends that he has had to incur large amounts of attorney's fees in defending the aforesaid litigation, he submits no proof of payment of any legal fees, bills from counsel for legal fees, or any retainer agreement for said services.

Recent Decisions from Other States

The resistance to downward modification is also being felt in states other than New York. In New Jersey, the Superior Court in Bello-Englesbe v Englesbe, Docket No FM-03-605-06, 2009 WL 1562943 (N.J. Super A.D. June 5, 2009), decided on June 5, 2009, denied the father's application without a hearing. Mr. Englesbe alleged a reduction of his income due to the collapse of the sub-prime market, which was 99% of his business income. In 2004, he claimed he had a gross income of $2,265,054 with net profit of $320,864 plus W-2 income of $193,472; in 2005 he had gross income of $6,664,102 with net profit of $658,012 and additional $100,000 in W-2 income from his mortgage business; in 2006, at the time the parties were divorced, he had gross income of $671,1096 with net profit of $658,012. Then in 2007, his gross income was reported to be $3,040,994 with net loss of $287,283. He projected a further decline in 2008 estimating his gross profit to be only $1,241,125. He claimed there was no additional W-2 income in 2006 or 2007. The ex-wife had also seen her income decrease. The court affirmed the trial court's finding that a prima facie change in circumstances was not demonstrated as “temporary unemployment or under-employment is not basis to modify support.” Mr. Englesbe did not develop the record sufficiently for the court and produce evidence as to his “prospective earning capacity, ability to find alternate employment or comparable business opportunities or access to other assets to fund his support obligation.” The court went on to say if his “'immediate past ability to earn a specific salary as to find employment' is any measure of his future fiscal situation, defendant's prospects are not as bleak nor remote as he suggests.”

In Newman v Klett, Docket No. FA64020229, 2009 WL 1753785 (Conn. Super. May 22, 2009), the Superior Court of Connecticut denied the ex-husband's application for downward modification, even though his income dropped from $150,000 at the time of the 2007 divorce to $52,000. The ex-husband, a Yale-educated physician specializing in ocular plastic surgery, ceased working as a professor to go into private practice. This event was memorialized in a modification agreement. Dr. Klett, borrowed money from his mother and sister to start the practice, and his weekly gross income was decreasing over an 18-month period from $3,052 to $1,000. His cash assets increased from $19,294 to $37,144, as did his liabilities from $136,745 to $148,723. The ex-wife's income over the same period increased from $1,442 to $1,864 over the same period; her cash assets increased from $8,682 to $41,150 and her liabilities decreased from $56,100 to $48,800. The court relied upon the parties' modification agreement contemplating Dr. Klett's change in employment and his earning capacity in finding there was not a demonstrated change in circumstances warranting a downward modification of child support.

Of course, there appears to be a stereotypical gender bias. In Lynn v Lynn, A.2d, 2009 WL 1098450 (N.H.), an April 24, 2009 opinion out of New Hampshire, the mother moved for a downward modification of child support where the parties had split custody of the children ' mom had one, dad had two, and one child was on his own. The divorce decree indicated that the mother had “low income” that was an accepted factor under New Hampshire law permitting deviation from the support guidelines. Consequently, she was paying $300 per week in child support to Mr. Lynn. Thereafter, she was accepted into a nursing program and intended to change her employment to part-time, which would make her ability to provide medical coverage unaffordable. Mrs. Lynn alleged that under the circumstances, she should not have to pay any child support.

The trial court agreed and found her “income while in school” to be a substantial change in circumstances and eliminated her child support and health insurance obligation. On appeal, the father continued to argue that the mother was voluntarily underemployed, should have had income imputed to her, and that there was no demonstrated change in circumstances. Despite the father having responsibility for two of the children, the appellate court affirmed, indicating that the trial court did not abuse its discretion in finding the mother's low income and primary residential responsibility for one child to be a “special circumstance” for downward deviation for the guidelines. Interestingly, the court pinned blame on the father for not annexing the transcript of the lower court hearing and, as a result, “assumed the evidence does not support the father's argument that the mother voluntarily reduced her income to circumvent the child support guidelines.” One must wonder, given the many other decisions issued as to imputation of income and voluntary under- or unemployment, if this result would have been the same if the genders were reversed.

Lessons, Proofs and Unanswered Questions

So what is the lesson to be learned? Courts have seen litigants in both good and bad economic times. Downward modifications granted now without substantial proof being offered are felt to be an inappropriate response to a temporary economic condition, despite what has been termed the worst economic downturn since the great depression. The court remains highly skeptical of these applications, particularly when they come from the self-employed. For certain, as it relates to child support, courts are reluctant to reduce existing levels of support for children, even where the payor is legitimately without the ability to pay. Further, the granting of a reduction based on “judicial notice” of the state of economy, without more, would merely be a precursor to the additional litigation instituted when the economy turns positive, to restore or otherwise again upwardly modify the reduced support. This is something that courts do not want to wish upon themselves. The number of denials of downward modification applications so deep into the recession speaks volumes, at least to this point, about the courts' predilections. Is it fair? Probably not. While we have been told what is insufficient, we have not, as of the writing of this article, seen a recent case telling us, based upon the existing economic climate, what an applicant must do to sustain the burden. While downward modifications met with some very limited degree of success before the economic downturn, there seems to be no relief during it, even though we are faced with the most serious economic crisis since the 1930s.

We know detailed proofs are required. The standards to sustain the burden are clearly set forth in the governing statute and case law. Since we are in what has been described as uncharted economic territory, no one seems to know exactly what to do ' not the general public, not sophisticated investors, not the government, and not the courts. Until the economy really improves, parties must fashion their own interim solutions. Based upon recent decisions, an applicant cannot provide sufficient proof to meet his burden to succeed in a downward modification application.

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].

The first part of the article described the difference between court-ordered and agreement-based support and denial of modification without a hearing. The conclusion herein discusses recent decisions in New York, New Jersey, Connecticut and New Hampshire.

Recent Appellate Decisions

Albeit rarely, courts have in the past permitted downward modifications of child support orders where the parent becomes unemployed subsequent to the initial order of support. Dupree v Dupree, 62 NY2d 1009 (1984); Marchese v Marchese, 11 AD3d 546 (2nd Dept 2004); Hall v Hall, 22 AD3d 979 (3rd Dept 2005); Cole v Irizarry, 307 AD2d 890 (1st Dept 2003); Beal v Beal, 270 AD2d 256 (2nd Dept 2000); Meyer v Meyer, 205 AD2d 784 (2nd Dept 1994). The Second Department, in Fragola v. Alfaro , 45 A.D.3d 684 (2nd Dept. 2007), denied the modification, but reiterated that “a parent's loss of employment may constitute such a change in circumstances, justifying a downward modification, where the termination occurred through no fault of the parent and the parent has diligently sought re-employment.” However, some more recent decisions, denying such relief, are instructive. See also, Muselevichus v. Muselevichus , 40 A.D.3d 997 (2nd Dept. 2007), Beard v. Beard, supra at endnote 6.

In Awaad v Awaad, 2009 NY Slip Op. 03719 ( 2nd Dept 2009), and Illidge v Lewis, 2009 NY Slip Op 03730 (2nd Dept 2009), both issued on May 5, 2009, the Second Department reviewed downward modification orders issued in Family Court after hearing and found that modification was not appropriate. In Awaad, the court, referencing Fragola, reversed the trial court and held, “Although the loss of employment can constitute such a change in circumstances, the father failed to present competent proof that, after he lost his job, he made a good-faith effort to obtain new employment commensurate with his qualifications and experience ' ” In Illidge, the court upheld the denial of modification, finding that the father “failed to present competent proof that he was incapable of working in any capacity.”

In an April 2009 decision, the court in Ripa v. Ripa , 2009 NY Slip Op 03003 (2nd Dept 2009), affirmed the Family Court's denial of modification after hearing:

The burden was on the father to show that he used his best efforts to obtain employment commensurate with qualifications and experience after losing his job ' Here, the Support Magistrate found, in effect, that the father's tax returns and other financial documentation provided an incomplete account of his finances. In addition, at the hearing there was a “failure of proof“ as to exact circumstances under which the father lost his former employment, whether it was due to his fault, and whether he used his best efforts to obtain new employment commensurate with his qualifications and experience. (citations omitted) (emphasis added)

A similar denial of relief was had upon a failure of proof in Liano v. Bell , 2009 NY Slip Op 02366 (2nd Dept 2009). Although there was sufficient evidence that the father was physically unable to return to work, there was no medical evidence that he was unable to perform other work. The court held:

Although a petition for downward modification of child support may be granted when a party loses his or her job due to an injury, it may be denied when the moving party has the ability to provide support through some other type of employment. Here, although there was sufficient evidence to establish that the father was currently physically unable to return to his work as a police officer, there was no medical evidence that he was also unable to perform other work. Also, the father failed to present a clear picture of his current financial situation since he did not present any proof of income from disability pension. (emphasis added) See also, Gray v Gray, 52 AD3d 1287 (4th Dept 2008)

The Third Department in Latimer v. Cartin , 57 AD3d 1264 (3rd Dept 2008), also affirmed the denial of downward modification where the father claimed loss of income and earning capacity. It held that he failed to meet his burden of proving an involuntary and unavoidable change in financial circumstances or that he made reasonable and diligent efforts to obtain employment. In Latimer, the father was a doctor who had voluntarily surrendered his license after being charged with professional misconduct. His application for a reduction in his support obligation filed two months after he surrendered his medical license was rebuffed.

In Matter of Perrego v Perrego, 2009 NY Slip Op. 05347 (2nd Dept 2009), issued on June 23, 2009, the Family Court denied the father's application after a hearing and the Second Department affirmed:

The appellant did not meet his burden of establishing a substantial change in circumstances that would warrant a downward modification in his child support obligation. Although the appellant claimed a loss of business since the time of the divorce, the Support Magistrate was entitled to discredit this testimony, especially since his reported income had increased.

A similar result occurred in the June 30, 2009 decision in Afriye-Fullwood v Opetubo. 2009 NY Slip Op 05543(2nd Dept 2009).

Lower Court Chagrin

Typically, the appellate courts do not, of course, provide us with any great detail as to the intricate facts of the matter at hand, but three recent lower court decisions out of Nassau County Supreme Court in which relief was denied ' Cox v Cox, 23 Misc3d 1115 (Sup. Court Nassau County 2009, Falanga, J.), Chaplin v Chaplin, NYLJ 4/27/09 at 20, col 2 (Sup. Court Nassau County, Driscoll, J.), and L.D. v A.D, NYLJ 5/4/09 at 21, col 1 (Sup Court Nassau County, Maron, J.) ' are interesting for the detail provided and the chagrin in which trial courts are viewing many of the presented applications.

In Cox, the father was obligated, by a 2004 stipulation incorporated by reference into and surviving the divorce decree, to pay child support of $1650 a month ($19,800 a year) for the parties' 12-year-old daughter. At the time of the stipulation, his income was $123,094 and the mother's was zero. He was also required to make three payments totaling $30,000 denominated as maintenance. After first filing for relief in Family Court, which was later withdrawn, the father brought his application in Supreme Court and alleged that his employment was terminated on Nov. 28, 2008 due to downsizing; his present wife with whom he has two minor sons also lost her job; he attempted to obtain a six-month deferment on his mortgage, but the lender refused the request; his home is in the process of foreclosure; he has no option but to file bankruptcy; he was earning $3,700 biweekly before he lost his job; his present income is $1,741.50 a month in unemployment benefits; his child support obligation equals 95% of his income; he is making diligent effort to obtain employment.

The court acknowledged that the father suffered an involuntary loss of employment as claimed, but that in 2007 he earned $318,346; his present wife earned $95,995 and that they sold stock worth $498,458. They had gross income of $912,799 in 2007, while the mother had income of less than $49,000. The court further found that “knowing that he would receive severance benefits in excess of $150,000 and that he would earn almost $500,000 in 2008, excluding his present wife's earnings for that year, it was an abuse of the judicial process for the husband to file a petition for a downward modification in the Nassau County Family Court on or about December 3, 2008, and the instant application is clearly forum shopping.” The father was further excoriated by the court in its decision.

In Chaplin, the parties entered into a divorce agreement in 2000, which was later upwardly modified in Family Court. The father, a mortgage loan officer, thereafter moved in Supreme Court for a downward modification of his child support obligation in 2007 due to the conditions in the housing market. As a sufficient demonstration was initially made, that application resulted in a 2008 order directing a hearing to be held to determine the issue. The matter was then settled by stipulation and the parties were allocuted on the record with the father raising the issue of his right to move for further modification if the market continued to decline; the court, of course, declined to give him legal advice. Thereafter, in October 2008, he moved again for relief claiming he:

“suffered an unanticipated and unreasonable change of circumstances which has made it an extreme hardship for me to continue to pay child support at the current level[,]” claiming, specifically, “ I am a mortgage broker, and within the last few months have experienced unprecedented turmoil and change in the mortgage market, such that I can no longer meet my child support, college, health insurance and life insurance obligations.”

In opposition to the father's motion, the mother alleged that the market forces to which her ex-husband referred were anticipated, and provided documentation suggesting that there have been positive changes in the real estate market since the 2008 Stipulation, including an article from the Associated Press that discussed the recent drop in fixed mortgage rates to their lowest levels in at least 37 years, as well as the Federal Reserve's pledge to pour money into the mortgage market in an effort to spur the moribund U.S. housing market.

The court also found credible the mother's claim that the father was living a pampered existence that belied his claims of financial need, relying upon a copy of the transcript of his girlfriend's prior deposition of March, 2008, which provided insight into the style in which he was living and the expenses that he was paying. As in Cox, the court's disenchantment with the father's application was evident:

The Court senses a certain entitlement on the part of Husband and his Girlfriend, who do not appreciate that Husband's financial obligations to his Children are paramount. To be clear, if Husband has to choose between paying for Girlfriend's pool, tennis court and housekeeper, and meeting his financial obligations to his Children, he must choose the latter.

In L.D. v A.D., the court again viewed the disingenuousness of the father's application with disapproval. In this case, the parties had been divorced for approximately one year. At the time the case was settled by written agreement, the father had claimed his purported dire financial straits ' an argument that had already been rejected by the court. When he made his post-judgment application, the father, who sought reduction in his child and spousal support obligations, again claimed that the economy had decimated his business. The court found his description of his current financial status to be “ambiguous at best and grossly inconsistent with prior statements.” It found the arguments to be “without credibility and merit,” just as the prior assigned judges did.

Defendant proffers that due to lawsuits filed against himself personally and against his businesses, that he has incurred further expense, which was not anticipated at the time the Stipulation was entered into. The court notes that the defendant has not submitted proof that either the bankruptcy or the related litigation has been adjudicated or that a single judgment has been entered against him, therefore, there can be no consideration of the potential financial impact of the actions. Further, although the defendant contends that he has had to incur large amounts of attorney's fees in defending the aforesaid litigation, he submits no proof of payment of any legal fees, bills from counsel for legal fees, or any retainer agreement for said services.

Recent Decisions from Other States

The resistance to downward modification is also being felt in states other than New York. In New Jersey, the Superior Court in Bello-Englesbe v Englesbe, Docket No FM-03-605-06, 2009 WL 1562943 (N.J. Super A.D. June 5, 2009), decided on June 5, 2009, denied the father's application without a hearing. Mr. Englesbe alleged a reduction of his income due to the collapse of the sub-prime market, which was 99% of his business income. In 2004, he claimed he had a gross income of $2,265,054 with net profit of $320,864 plus W-2 income of $193,472; in 2005 he had gross income of $6,664,102 with net profit of $658,012 and additional $100,000 in W-2 income from his mortgage business; in 2006, at the time the parties were divorced, he had gross income of $671,1096 with net profit of $658,012. Then in 2007, his gross income was reported to be $3,040,994 with net loss of $287,283. He projected a further decline in 2008 estimating his gross profit to be only $1,241,125. He claimed there was no additional W-2 income in 2006 or 2007. The ex-wife had also seen her income decrease. The court affirmed the trial court's finding that a prima facie change in circumstances was not demonstrated as “temporary unemployment or under-employment is not basis to modify support.” Mr. Englesbe did not develop the record sufficiently for the court and produce evidence as to his “prospective earning capacity, ability to find alternate employment or comparable business opportunities or access to other assets to fund his support obligation.” The court went on to say if his “'immediate past ability to earn a specific salary as to find employment' is any measure of his future fiscal situation, defendant's prospects are not as bleak nor remote as he suggests.”

In Newman v Klett, Docket No. FA64020229, 2009 WL 1753785 (Conn. Super. May 22, 2009), the Superior Court of Connecticut denied the ex-husband's application for downward modification, even though his income dropped from $150,000 at the time of the 2007 divorce to $52,000. The ex-husband, a Yale-educated physician specializing in ocular plastic surgery, ceased working as a professor to go into private practice. This event was memorialized in a modification agreement. Dr. Klett, borrowed money from his mother and sister to start the practice, and his weekly gross income was decreasing over an 18-month period from $3,052 to $1,000. His cash assets increased from $19,294 to $37,144, as did his liabilities from $136,745 to $148,723. The ex-wife's income over the same period increased from $1,442 to $1,864 over the same period; her cash assets increased from $8,682 to $41,150 and her liabilities decreased from $56,100 to $48,800. The court relied upon the parties' modification agreement contemplating Dr. Klett's change in employment and his earning capacity in finding there was not a demonstrated change in circumstances warranting a downward modification of child support.

Of course, there appears to be a stereotypical gender bias. In Lynn v Lynn, A.2d, 2009 WL 1098450 (N.H.), an April 24, 2009 opinion out of New Hampshire, the mother moved for a downward modification of child support where the parties had split custody of the children ' mom had one, dad had two, and one child was on his own. The divorce decree indicated that the mother had “low income” that was an accepted factor under New Hampshire law permitting deviation from the support guidelines. Consequently, she was paying $300 per week in child support to Mr. Lynn. Thereafter, she was accepted into a nursing program and intended to change her employment to part-time, which would make her ability to provide medical coverage unaffordable. Mrs. Lynn alleged that under the circumstances, she should not have to pay any child support.

The trial court agreed and found her “income while in school” to be a substantial change in circumstances and eliminated her child support and health insurance obligation. On appeal, the father continued to argue that the mother was voluntarily underemployed, should have had income imputed to her, and that there was no demonstrated change in circumstances. Despite the father having responsibility for two of the children, the appellate court affirmed, indicating that the trial court did not abuse its discretion in finding the mother's low income and primary residential responsibility for one child to be a “special circumstance” for downward deviation for the guidelines. Interestingly, the court pinned blame on the father for not annexing the transcript of the lower court hearing and, as a result, “assumed the evidence does not support the father's argument that the mother voluntarily reduced her income to circumvent the child support guidelines.” One must wonder, given the many other decisions issued as to imputation of income and voluntary under- or unemployment, if this result would have been the same if the genders were reversed.

Lessons, Proofs and Unanswered Questions

So what is the lesson to be learned? Courts have seen litigants in both good and bad economic times. Downward modifications granted now without substantial proof being offered are felt to be an inappropriate response to a temporary economic condition, despite what has been termed the worst economic downturn since the great depression. The court remains highly skeptical of these applications, particularly when they come from the self-employed. For certain, as it relates to child support, courts are reluctant to reduce existing levels of support for children, even where the payor is legitimately without the ability to pay. Further, the granting of a reduction based on “judicial notice” of the state of economy, without more, would merely be a precursor to the additional litigation instituted when the economy turns positive, to restore or otherwise again upwardly modify the reduced support. This is something that courts do not want to wish upon themselves. The number of denials of downward modification applications so deep into the recession speaks volumes, at least to this point, about the courts' predilections. Is it fair? Probably not. While we have been told what is insufficient, we have not, as of the writing of this article, seen a recent case telling us, based upon the existing economic climate, what an applicant must do to sustain the burden. While downward modifications met with some very limited degree of success before the economic downturn, there seems to be no relief during it, even though we are faced with the most serious economic crisis since the 1930s.

We know detailed proofs are required. The standards to sustain the burden are clearly set forth in the governing statute and case law. Since we are in what has been described as uncharted economic territory, no one seems to know exactly what to do ' not the general public, not sophisticated investors, not the government, and not the courts. Until the economy really improves, parties must fashion their own interim solutions. Based upon recent decisions, an applicant cannot provide sufficient proof to meet his burden to succeed in a downward modification application.

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].