Market Downturn Not Adequate to Cause Alimony Modification

Tennessee alimony modification case summary.

James S. Schrade v. Cassandra Jean Ament Schrade

The husband and wife in this Cumberland County, Tennessee, case were divorced in 2008.  Most of their income had consisted in income from a trust.  The parties’ marital dissolution agreement provided that the wife was to receive 35% of the distributed amounts, but that she would never receive less than $1,200 per month.  This amount was designated as alimony.  In 2013, the husband filed a petition to modify alimony.  He argued that there were changed circumstances for two reasons.  First, he argued that the payments had dropped dramatically, from about $80,000 per year to about $55,000.

The trial court held that the drop in income did not constitute a material change of circumstances.  The trial court noted that putting in the minimum floor of $1,200 showed the parties’ realization that the income could drop.

The husband also argued that the alimony should be changed due to the wife’s adult children living with her.  The husband then appealed to the Tennessee Court of Appeals.

The appeals court found that the language of the marital dissolution agreement was clear and unequivocal.  Because the agreement provided for what to do in the event of a market downturn, the appeals court agreed with the lower court that the downturn did not constitute a material change of circumstances.  For that reason, it affirmed that portion of the lower court’s ruling.

The husband fared better, however, when it came to his evidence of the wife’s adult children living with her.  It noted that if an alimony recipient is living with a third person, there is a rebuttable presumption that there is no longer a need for alimony.  If that presumption is not rebutted, then part of the alimony should be suspended.

The wife argued that this issue was not properly pled.  However, the appeals court noted that it was undisputed that the two children lived with her on the property.  The trial court found that the children did not provide any financial support.  However, the trial court had not ruled on whether the children provided any services which contributed to her support.  For that reason, the Court of Appeals vacated a portion of the order and remanded the case to make a specific determination of whether the wife had overcome the presumption.

For these reasons, the Court of Appeals affirmed in part, vacated in part, and remanded the case for further proceedings.

No. E2016-01105-COA-R3-CV  (Tenn. Ct. App. Feb. 13, 2017).

See original opinion for exact language.  Legal citations omitted.

To learn more, see Alimony Modification in Tennessee Law | How to Modify Alimony.