June 10, 2009

New Case Law – Spousal Support Modification

As a Portland Oregon divorce law firm, Stephens & Margolin LLP is dedicated to keeping up to date on Oregon Court of Appeals and Oregon Supreme Court opinions. As a service of The Oregon Divorce Blog, we will be providing updates as new opinions come out.

On May 27, 2009, the Court of Appeals ruled in the case of Haley and Haley. With the current economy, courts are inundated with support modification motions.

Husband appealed and Wife cross-appealed from the entry of supplemental judgments in their family law matter. Husband appeals the trial court’s denial of his motion to terminate or reduce his spousal support obligation. Wife appeals from the trial court’s denial of her request for a money judgment against Husband for his failure to pay debts that were allocated to him in their divorce judgment. The court of appeals ruled that Husband failed to establish a sufficient basis for a modification of spousal support.

Husband owns and works for a company. Wife was a 50 percent owner before the divorce. In 2004, at the time of the divorce, the company earned $77,900 and paid Husband $30,673 in salary. The parties were divorced in 2005, after 16 years of marriage. At that time, Husband’s income was $5,731 per month and Wife’s income was $2,300 per month. Wife was awarded support of $500 per month for 10 years, and Husband was awarded the business.

After the divorce Wife remarried. Her new husband earns $34,000 per year. Husband filed to modify support in December of 2005 and a hearing was held in August of 2006. At the time of the hearing Wife was pregnant and not working. Husband argued that he was making less money (in 2006 the company had lost money and Husband was taking a salary of $4,000 per month) and that Wife had the benefit of her new husband’s income and no longer needed support. Husband’s CPA testified that he had urged Husband to reduce his salary to $2,500 per month in order to keep the company solvent. Wife provided evidence that Husband was expensing significant costs to the company and that her new husband had significant costs of his own. The trial court concluded that Husband had not proven a substantial change in circumstances.

On appeal, Husband argues that he has had a sufficient change in circumstances on his own to justify the modification. The court of appeals held that the evidence regarding Husband’s income was not sufficiently definite to satisfy his burden of proof. “In summary, the record does not establish how much husband’s income has diminished. It follows that husband did not show that the disparity in the parties’ income has been eliminated or, consequently, that the purpose of the maintenance support award has been satisfied. Nor did he prove a substantial change in circumstances.”
This case shows how important it is for a successful appeal to have competent trial counsel and a clear and sufficient case put on before the trial court. It may be the case that Husband had a substantial reduction in income, but he did not put on a strong enough case on this issue.

The entire opinion can be viewed here: http://www.publications.ojd.state.or.us/A134174.htm

The lawyers at Stephens & Margolin LLP can assist you with your family law questions. As this case shows, it is crucial to have a competent attorney at both the trial court and appellate level. If you have any questions about Oregon appellate law please contact Daniel Margolin, who focuses part of his practice on family law appeals, or C. Sean Stephens at Stephens & Margolin LLP