New York Law Review

Tag: Voluntary Income Reduction

  • সেক্ষেত্রে husband cannot maintain support obligation, such that the Appellate Division must use its discretion to modify the original support obligation.

    Hickland v. Hickland, 39 N.Y.2d 1 (1976)

    A court should consider the supporting spouse’s ability to provide support, not just their current economic situation; however, a downward modification of support is not warranted if the reduction in income is due to the supporting spouse’s voluntary actions to evade their support obligations, but an exception exists if the supporting spouse shows an inability to maintain the current support obligation due to factors beyond their control.

    Summary

    After a divorce where the husband was ordered to pay $100/week in child support, he voluntarily left his higher-paying job following a wage deduction order, taking a lower-paying job closer to his family. The Family Court granted a downward modification of support to $65/week, finding the husband unable to meet the original obligation given his limited skills and current income. The Appellate Division reversed, holding that voluntary actions leading to reduced income do not warrant modification. The Court of Appeals reversed the Appellate Division, holding that the Family Court’s decision was appropriate. The Court reasoned that there was an inability to provide support at the original level.

    Facts

    The parties divorced on July 28, 1981, with the husband ordered to pay $100/week in child support based on a stipulation merged into the divorce judgment.

    At the time of the divorce, the husband earned approximately $20,000/year in road excavation, working away from his family in Ogdensburg, NY, but visiting on weekends.

    Shortly after a wage deduction order was entered against him, the husband voluntarily left his job in September 1981 and took a job closer to his family with a starting salary around $9,145/year.

    After deductions for child support, taxes, and other expenses, his net weekly take-home pay was $35.79.

    By September 1982, his annual salary increased to approximately $10,596.

    Procedural History

    The Family Court initially dismissed two petitions for downward modification of the support obligation.

    On the third petition, the Family Court granted a downward modification, reducing support payments to $65/week.

    The Appellate Division reversed and dismissed the petition, holding that a downward modification is inappropriate when a spouse’s actions cause their financial hardship.

    The Court of Appeals reversed the Appellate Division’s order and remitted the case, giving discretion to the Appellate Division.

    Issue(s)

    Whether Family Court erred in reducing husband’s child support payments because he voluntarily took a lower paying job.

    Holding

    No, because the Family Court relied on the husband’s inability to return to his prior position, his limited vocational skills, and his inability to continue to make the original weekly support payments given his current income and that the Appellate Division must use its discretion.

    Court’s Reasoning

    The Court of Appeals acknowledged the Appellate Division’s reliance on cases supporting the denial of a downward modification where a spouse’s actions cause their financial hardship. However, the Court emphasized that the Family Court’s decision was based on the husband’s inability to maintain the original support level due to his limited skills, inability to return to his old job, and low income. The court distinguished this case from others where the spouse had a higher true income, the ability to obtain higher-paying employment, or concealed assets.

    The court stated: “It cannot be said as a matter of law that Family Court erred in exercising its discretion to modify the support obligation on this ground inasmuch as it could be found that the husband was unable to provide support at the original level.”

    The Court of Appeals reversed and remitted the case back to the Appellate Division, enabling them to determine the proper child support obligation.

  • Hickland v. Hickland, 39 N.Y.2d 1 (1976): Establishing Alimony When a Spouse Voluntarily Reduces Income

    Hickland v. Hickland, 39 N.Y.2d 1 (1976)

    A spouse cannot avoid alimony obligations by voluntarily reducing their income, especially when the reduction appears to be a deliberate attempt to shield assets from the other spouse.

    Summary

    In a divorce case, the wife appealed the Appellate Division’s decision to strike an alimony award and grant the husband farming rights on land where the wife resided. The New York Court of Appeals modified the Appellate Division’s order, reinstating the alimony award. The court held that a husband cannot shirk his alimony duties by voluntarily reducing his income, especially when it seems designed to hide assets. The court emphasized the importance of the marital standard of living and the husband’s earning potential in determining alimony.

    Facts

    The parties married in 1946 and had two children. The husband, an engineer, earned $45,000 annually plus bonuses until 1968. In 1968, he convinced his wife to let him become a full-time farmer. The farming venture proved unprofitable. In 1969, after a tractor accident, the husband switched to freelance management consulting, earning at least $35,000 net annually until 1972. In 1972, during separation negotiations, he abandoned a $20,000 consulting assignment and claimed to be a full-time subsistence farmer, refusing consulting offers. He transferred his real estate and stocks to his sister without cash consideration, receiving instead a car, food, housing, benefits for his children, and a percentage of potential farm profits.

    Procedural History

    Special Term awarded the wife $50 per week in alimony and exclusive possession of the house and farmland. The Appellate Division reversed the alimony award and granted the husband the right to farm the land. The wife appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether a husband can avoid alimony obligations by voluntarily reducing his income and transferring assets to a family member under a no-cash consideration agreement.
    2. Whether the wife’s income should be the primary determinant of alimony entitlement in a long-term marriage where the husband has a high earning potential.

    Holding

    1. Yes, because the husband deliberately stripped himself of income to avoid his obligation to his wife, and his arrangement with his sister was an attempt to avoid his spousal support obligations.
    2. No, because in a long-term marriage, the marital standard of living and the husband’s demonstrated earning potential are important factors in determining alimony, even if the wife has some separate income.

    Court’s Reasoning

    The court found that the husband deliberately reduced his income and transferred assets to avoid alimony obligations. The court stated, “It is the actual marital standard of living, realistically appraised, which provides the basis for an award of alimony where the husband can afford to maintain that standard.” The court emphasized that the husband’s earning potential and the marital standard of living were critical factors, stating, “Under such circumstances, a husband is under an obligation to use his assets and earning powers if these are required in order to meet his obligation to maintain the marital standard of living.” The court rejected the argument that the wife’s income should be the primary factor, especially given the long duration of the marriage and the husband’s ability to earn a substantial income. It characterized the husband’s actions as a “ploy to put his assets beyond his wife’s reach.” The court modified the Appellate Division’s order, reinstating the Special Term’s alimony award of $50 per week, finding the denial of alimony to be an abuse of discretion.