Under a 2004 stipulation of settlement that was incorporated, but survived the entry of the judgment of divorce that ended the parties seven-year marriage, the ex-husband/father was to pay $250,000.00 in annual maintenance and $140,000.00 in annual child support emancipated.
The stipulation further provided that the father would be able to apply for a reduction of his child support and spousal maintenance obligations in the event of an “involuntary, substantial, adverse change” in income. Moreover, if a downward modification were to be granted, the parties’ stipulation would be deemed amended to the extent of any relief afforded. The particular provision provided:
Anything herein to the contrary notwithstanding, in the event of an involuntary, substantial, adverse change in the Husband’s income, including income produced by his assets (such as involuntary loss of employment), he shall have the right to make application to a court of competent jurisdiction, which must include a sworn statement of net worth, for an appropriate modification of child-related support and/or spousal maintenance obligations hereunder, and if granted, the parties’ Agreement shall be deemed amended to the extent of any relief afforded on such application.
The September 10, 2012 decision of Westchester County Supreme Court Justice John P. Colangelo in Mark P. v. Teresa P., resolved such an application to reduce his support obligations. The father based his application on the reduction of his annual income from $3.3 million in 2004, when the stipulation was signed to $651,000.00 in 2011, and an anticipated $251,000.00 in 2012. The father, a securities trader, claimed that the reduction in his income was due to “changes in the securities industry, the economy and a general decline in securities’ sales volume . . . .”
The ex-wife/mother contended that the agreement’s support reduction paragraph should be read only to provide the threshold setting the father’s right to apply for a support reduction, but not necessarily to obtain such a reduction. The mother claimed that the provision did not alter the standards for granting a reduction in child support (a substantial unanticipated an unreasonable change in circumstances) or spousal maintenance (extreme hardship).
Justice Colangelo agreed with the mother, and denied relief to the father. Although the Court acknowledged that the parties had “sought” in their stipulation to provide a “less restrictive standard than that provided by prevailing law,” the Court held that the any easing of the standard was “more circumscribed” than the father argued. Justice Colangelo noted that “conspicuous by its absence is any standard to apply once the threshold to apply for reduction was met.” Thus, the Court would apply “well established principles of whether a reduction in amount is warranted.” The father failed to meet that standard.
Justice Colangelo discussed several decisions which honored agreement provisions that only lowered the threshold to apply for relief, but also held that meeting the threshold did not mandate a reduction.
Only by an explicit agreement . . . may the parties successfully substitute a different standard for support payment reduction from the well-worn standards established by statutory and case law.
Continue Reading Divorce Stipulations That Change Court Standards Must Be Precise