Brand New NJ Alimony Reform Case Law

Hot off the presses!  Application of the new alimony statute modification provision based on retirement was tested in the Superior Court of New Jersey, Appellate Division case, Landers v. Landers, Docket Number A-3931-14T3, which was approved for publication on February 22, 2016.  In Landers the court clarifies the standard for retirement based alimony termination or modification based on the Alimony Reform statute amendments effective September 10, 2014.

New Jersey alimony law was revised on September 10, 2014 to change the provision for ‘permanent alimony’ to the newly termed ‘open durational alimony’.  In addition, the revised statute provided that “alimony may be modified or terminated upon the prospective or actual retirement of the obligor.”

This new case law confirms that the recently adopted standard for alimony modification or termination which essentially transferred the burden of proof from the obligor to the obligee only applies to alimony awards issued after the new law was enacted in 2014.  Alimony orders which predate the 2014 revision retain the obligor’s burden of proof based on specifically delineated statutory factors.

Section j of the revised New Jersey alimony law codifies the revised standards and factors to be considered in a modification or termination case based on the retirement of the payor.  Subsection 1 of N.J.S.A. 2A:34-23(j) is getting all of the attention for creating, “a rebuttable presumption that alimony shall terminate upon the obligor spouse or partner attaining full retirement age…”

In contrast Subsection 3 of N.J.S.A. 2A:34-23(j) provides that, “[w]hen a retirement application is filed in cases in which there is an existing final alimony order or enforceable written agreement established prior to the effective date of this act, the obligor’s reaching full retirement age as defined in this section shall be deemed a good faith retirement age.”

The Landers court concluded that, “the rebuttable presumption included in subsection (j)(1), which places the burden on the obligee to demonstrate continuation of the alimony award once an obligor attains full retirement age, N.J.S.A. 2A:34-23(j)(1), is not repeated, but replaced by a different standard in subsection (j)(3).”   Furthermore, the court continues, “[w]e understand that subsection (j)(1), if read in isolation, appears to apply to any motion to modify or terminate alimony upon an obligor’s retirement.  However, when construing these two subsections ‘together as a unitary and harmonious whole,’ (citations omitted), the particular language used in subsection (j)(3) clarifies the Legislature’s intent to apply (j)(1) only to orders entered after the amendments’ effective date.”

In other words, the burden of proof and factors which are considered for modification or termination of alimony based on retirement are different for alimony orders or enforceable agreements entered prior to the enactment of the statutory amendments.  Pursuant to Subsection (j)(3) the obligor must demonstrate by a preponderance of the evidence that modification or termination of alimony is appropriate.  “Importantly, subsection (j)(3) elevates the ability of the obligee to have saved adequately for retirement, listed only as a factor under N.J.S.A. 2A:34-23(j)(1), setting it apart from other considerations and requiring its explicit analysis.”  In addition, the list of factors to be considered for modification/termination are different in the two sections “mandating an examination of the obligor’s ability to maintain payments upon retirement, and ‘[t]he obligee’s level of financial independence.’”

The New Jersey Appellate Court has now held that there is a clear and significant distinction in review of the requirements for modification/termination of alimony orders issued prior to or post the September 10, 2014 alimony statute revisions.  One thing is certain, there will be more case law coming down the pike as the revised alimony statutes are tested in the New Jersey courts.