We have written about cases where Colorado’s appellate courts have reversed alimony awards from trial courts which simply applied the maintenance guidelines without evidence or specific findings on the need for maintenance. Now, the Colorado Court of Appeals has held, in a case of first impression, that courts are permitted to cut corners when it comes to a maintenance modification.
As we discuss more thoroughly in our maintenance modification article in the Colorado Family Law Guide, once maintenance is awarded by the court, it is subject to modification if the party seeking the change makes “a showing of changed circumstances so substantial and continuing as to make the terms unfair.” C.R.S. 14-10-122(a).
But what showing is required to modify maintenance? The same level of evidence as in the original spousal support hearing? No, according to a brand new decision.
Distinction Between Maintenance Award vs Maintenance Modification
In Young,1In re: Marriage of Young, 2021 COA 96. the husband had agreed to pay the wife $20K/mo of maintenance, based upon his earning $70,000/mo and her income being $3000/mo. The spouses also agreed that the amount of maintenance was subject to modification because, in the husband’s words, his income was “variable and “there was some uncertainty.”
Nine months later, the husband filed a motion seeking a maintenance modification to reduce his obligation to $12,000/mo on the grounds that his income had dropped to $42K/mo. By the time the parties went to their maintenance modification hearing, both parties agreed that his income had dropped to $17K/mo, and the wife was still capable of earning $3000/mo. The husband therefore requested a reduction to $5133/mo, below the $12,000/mo he had originally requested. The trial court denied his motion, finding he had failed to meet the burden to establish a substantial and continuing change in circumstances.
The husband appealed, arguing that the trial court erred by not making the findings required by C.R.S. 14-10-114(3)(a)(I), and citing Thorstad2In re: Marriage of Thorstad, 2019 COA 13. as support for his position that such findings were required for a maintenance modification proceeding.
The Court of Appeals rejected that argument, noting that such a finding was required only for an initial award of maintenance, where the statute says the court “shall make initial written or oral findings…” But the standard for a maintenance modification is more relaxed:
“Except upon written agreement of the parties, an award of maintenance entered pursuant to this section may be modified or terminated pursuant to the provisions of section 14-10-122. The court may consider the guideline amount and term of maintenance and the statutory factors set forth in subsection (3) of this section only in a modification or termination proceeding concerning a maintenance award entered on or after January 1, 2014.”C.R.S. 14-10-114(5)(a) (Emphasis added).
The court also noted that the Thorstad case, though decided only recently in 2019, was based upon the 2001 version of the maintenance statute, and did not address the current language in the maintenance statute. Use of the word “may” in the modification section gives the trial court discretion to make such findings, but does not require them:
“We therefore conclude that the magistrate was not required to address all of the factors in section 14-10-114(3) when ruling on husband’s motion to modify the existing award of spousal maintenance.”Young.3In re: Marriage of Young, 2021 COA 96, ¶17.
Finding of Voluntary Underemployment Reversed
All was not lost for the husband, however. While apparently accepting that the husband’s income had dropped, the trial court found that he was voluntarily underemployed, which means he was “shirking a financial obligation” by unreasonably foregoing higher paying employment. This finding was based upon the fact that the same board of directors resolution which reduced the husband’s salary authorized and encouraged him and other officers to find alternative employment, or even outside part-time employment as the company was in the process of being sold. But instead of seeking alternative employment, the court found that the husband traveled out-of-state 15 days/mo to visit with his girlfriend, thereby showing that he clearly was not fully employed.
But the trial court also found that the husband was not making a serious enough effort to sell the company – and that was an erroneous finding, because shirking requires forsaking higher paying “employment”, and not diligently trying to sell the company is not a relevant finding. Moreover, while the trial court found that the husband probably worked a maximum of 20 hours per week, there was no evidence in the record to support this finding (his travel alone was not a sufficient basis for this finding, given the ability of people to work remotely, and husband’s testimony that he did so).
“At bottom, the fact that there was some evidence that husband was not working full time did not, without more, permit the magistrate to pull a number out of thin air.”Young.4In re: Marriage of Young, 2021 COA 96, ¶31.
Not only was the trial court’s finding that the husband could earn $150K/yr on top of his current income a misread of the evidence (the evidence was that he could earn that in an alternative full-time position, not while moonlighting and still keeping his current job), but that even if that were added to his current income, his gross annual income would still be reduced to $350K/yr, a 50% reduction from the time of the original dissolution.
“So, even if husband’s imputed income was that which the magistrate implicitly found, the magistrate did not explain (and we cannot discern) how this salary reduction would not constitute a substantial and continuing change to make the terms of the original maintenance award — $20,000 per month — unfair.”Young.5In re: Marriage of Young, 2021 COA 96, ¶33.
Overall, the trial court’s erroneous findings caused the Court of Appeals to reverse the order denying a change in maintenance, and remand to the trial court with some pretty clear instructions as to the level of detailed findings which would be required for a finding of voluntary underemployment:
“If the district court or the magistrate again determines that husband is shirking his maintenance obligation by forgoing higher paying employment, then the court or the magistrate must explain how that finding bears on its conclusion that there have not been changed circumstances so substantial and continuing as to make the existing maintenance terms unfair. To the extent a voluntary underemployment finding is being used to support the proposition that husband would have adequate financial resources to pay the existing maintenance if fully employed, then the court must calculate husband’s imputed income, and analyze the effect the imputation has on husband’s financial circumstances.”Young.6In re: Marriage of Young, 2021 COA 96, ¶34 (Cleaned Up).
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