Recession fuels changes in divorce settlements
by Jennifer Golson/The Star-LedgerSunday May 03, 2009, 7:20 AM
Michelle Copland is 42 and relies on her ex-husband’s child support to cover the growing needs of their two daughters, one a teenager, the other a preteen.
Scott Caridi is 46 and collecting unemployment as he tries to drum up business for a North Jersey construction company. “If they get work, I get work again.” His own company went out of business.
The former couple from Bergen County was married for almost 10 years until divorcing in 2003. For most of the time since then, Caridi paid $700 a week in alimony and $500 in child support. When the alimony ended, the child support bumped to $700 a week.
Then, Copland said, the checks stopped showing up and Caridi fell $6,000 behind.
With no work and another family to support, Caridi did what a growing number of divorced men and women are doing: They are filing for reductions in alimony and child support obligations.
While the Administrative Office of the Courts does not maintain statistics on the issue, lawyers and judges across the state say the recession is fueling a dramatic increase in applications to change divorce settlements.
“You could either call it a tidal wave or a tsunami,” said Frank Louis, a Toms River-based family lawyer who moderated a sold-out seminar last month on the impact the economy is having on family law cases for the New Jersey Institute for Continuing Legal Education. “It is an enormous issue and an enormous problem, both for individuals and the court system.”
Attorneys started seeing a spike in cases about six months ago, said Robert Corcoran of Hackensack, president of the American Academy of Matrimonial Lawyers, New Jersey chapter, and lawyer for Copland.
“It’s always the topic of conversation,” he said, adding that applications for support reductions are “probably the biggest issue facing family lawyers right now.”
A CHANGE IN PERCEPTION
It was once quite rare for a judge to grant such motions, called change of circumstance applications. Divorce decrees were practically written in stone and obligations were seldom altered. But attorneys say there is now a perception among lawyers that the claims of financial hardship are more likely true than not, and judges are more inclined to accept the argument that a person can’t find a job or that his or her income has been sharply reduced.
Richard Weiner said he has seen a 30 to 40 percent spike in applications to change divorce settlements. The Hackensack lawyer is currently representing a car dealer who is gathering paperwork showing how car sales are down.
“They’ve had to make drastic changes in the business, in terms of advertising, marketing, layoffs, et cetera,” Weiner said. “He had to come to me say to say, ‘Can I move to modify?’ I thought he could.”
Overall, Weiner said, “We’re seeing a trend in courts being much more sympathetic.”
Bruce E. Chase, also of Hackensack, is representing a woman who had four children with her ex-husband. One of the youngsters is in high school, another is in college.
The couple from Bergen County married in 1978 and divorced in 2005, and her ex, a house painter, agreed to pay $275 a week in alimony and $250 a week in child support, based on the nearly $93,000 he was earning at the time. She was making about $42,000.
Her salary and her hours have increased over the years, but her ex-husband’s lifestyle also improved after he remarried, even if he’s not making what he once was in his business, according to Chase.
And proving the hardship is harder when one has his own business, Chase said.
“There is always a greater level of suspicion when you own your own business, and it’s harder and harder to prove, because you’re controlling your own paperwork. It’s less verifiable.”
The search for relief is reaching across all income brackets.
At Seton Hall’s Family Law Clinic, the typical client earns $8 to $12 an hour, and many are women asking a judge to establish support right after a divorce or seeking enforcement of an existing order.
Kevin B. Kelly, one of two professors supervising law students who staff the clinic, says that in the past judges were more apt to uphold the original obligation.
“What you’re seeing now is judges being very empathetic with these parties and lowering support obligations, giving people much more leniency in terms of enforcement,” he said.
As a result, he said, the clinic’s clients are trying to be more understanding about money issues. Kelly cited one woman who was entitled to proof of what her husband makes as a driver for a car service — but she didn’t push the issue.
“This woman understands, ‘Maybe I could get more out of him, but I’m just happy to be getting what I’m getting.’ … She just didn’t want to alienate him or risk losing what she’s already got.”
Most family lawyers encourage divorced couples to settle things without a judge, said Risa Kleiner, an attorney based in Woodbridge and vice president of the New Jersey Association of Professional Mediators.
“The cost of going to court is so high that anything that you can do outside of the court setting saves the client money,” Kleiner said.
To win a reduction, the person seeking relief must file a motion and give their former spouse a chance to respond. The judge could render a decision based on the papers, with or without oral argument, Kleiner said.
If there are conflicting facts, the judge can schedule a hearing. The process can be lengthy and expensive.
The success of a motion, attorneys said, usually depends on the reliability of the financial information disclosed and the effort the applicant has made to find comparable employment or liquidate assets.
There are no figures on how many reductions are being granted but most everyone agrees the number is still rising.
Judges seem to agree that both sides have to sacrifice, said Charles Vuotto Jr., chairman-elect of the New Jersey State Bar Association’s Family Law Section.
“The consensus seems to be that there needs to be a sharing of the pain,” Vuotto said. Judges will ask: “What would you guys do if you were still married? You would each begin draining your assets. You would each try and take multiple jobs. You may not go on that second vacation anymore.”
Kleiner said that reopening old cases can be very hard on both parties.
“The most difficult cases are the post-judgment cases, where the people have been divorced for a while and the spouse who is paying the support is trying to reduce that,” she said. “There is often a lot of anger and distrust and mistrust, even if the divorce was 10, 15 years ago.”
For those fortunate enough to win reductions, the luck could be short-lived. Lawyers say that once the recession eases there is nothing to stop a spouse from going back to court to ask that the alimony be increased to its former level — or higher.
In Essex County, Superior Court Assignment Judge Patricia Costello said they’re already bracing for the flood of work they’ll get when the economy and the market turn around. Spouses and lawyers should think ahead and make sure their agreements leave room for changes.
“We’re encouraging lawyers to think this through when they negotiate their agreements today,” Costello said. That way, “you don’t have these litigants coming back to court.”
THE JUDGE’S DECISION
As for the dispute between Copland and Caridi, the debate in front of Superior Court Judge William R. DeLorenzo Jr. in Hackensack last month came down to whether Caridi could afford to keep making his payments.
Caridi represented himself.
“They made a big deal that I had two luxury cars,” Caridi said, arguing that trading them in wouldn’t generate enough to pay for cheaper vehicles. Plus, Caridi said he and his current wife are expecting a baby. She has two young children from a previous marriage.
“Every day I go out looking for work,” said Caridi, who added that his wife is selling “things” on eBay to raise money.
For her part, Copland — who also is remarried — said her ex-husband hadn’t done anything to show he’s making changes to cope with hard times.
“I can’t say what they did on the inside behind their closed doors, but he didn’t sell the cars, he didn’t move. He showed no reduction in his status. … He didn’t really try to do anything. He took the easy way out and tried to cut expenses by cutting his child support.”
Ultimately, Judge DeLorenzo denied the reduction.