The order reducing the plaintiff’s spousal support obligation to the defendant by several thousand dollars each month must be vacated because the trial court “failed to link its analysis … to the amount of the reduction,” the Michigan Court of Appeals has ruled.

In Rosin v Rosin (Docket Nos. 357142 and 358764), the Oakland County Circuit Court cut the plaintiff’s spousal support obligation from $6,500 a month to $3,350 a month. The defendant appealed, claiming the trial court abused its discretion by reducing her spousal support.

The Court of Appeals agreed with the defendant.

Although the trial court considered the spousal support factors set forth in Berger v Berger, 277 Mich App 700 (2008), “it failed to link its analysis of the factors to the amount of the reduction,” the Court of Appeals said. “Without such an explanation, we cannot conclude that the reduction was equitable. We, therefore, vacate the order reducing spousal support and remand for reconsideration of this issue.”

On remand, the trial court must explain how its reduction in spousal support “is tied to its analysis” of the Berger factors and “how it is an equitable result,” the Court of Appeals said.

The Court of Appeals further held that the trial court erred by failing to address whether, and to what extent, the defendant was entitled to attorney fees under MCR 3.206(D), separate from her entitlement under other authorities. “We vacate and remand for the trial court to address whether defendant is entitled to additional fees under MCR 3.206(D).”

Court of Appeals Judges Noah P. Hood, Thomas C. Cameron and Kristina Robinson Garrett were on the panel that issued the unpublished opinion.

Background

The plaintiff and the defendant married in 1992 and were divorced in 2011. During their marriage they had two children, who were 16 years old and 14 years old at the time the parties divorced. The parties entered into a divorce settlement agreement, which the trial court incorporated and merged into a consent judgment of divorce. Relevant to the spousal support issues in this case, the divorce judgment provided: “… Subject to the terms and intentions set forth herein, commencing on January 1, 2012, Plaintiff shall pay to Defendant, through the Michigan State Disbursement Unit, the sum of $6,500.00 per month as modifiable spousal support.”

In January 2020, the plaintiff filed a motion to terminate or significantly reduce the amount of spousal support. He asserted it was no longer warranted because his income had substantially decreased since the divorce judgment was entered and because the defendant was capable of supporting herself. The defendant sought interim attorney fees and claimed the plaintiff failed to establish a change in circumstances that would warrant modification of spousal support.

At a hearing, the parties presented evidence of their finances since the divorce judgment. The plaintiff, a partner at a law firm, presented evidence that his income had decreased from $474,142 in 2011 to $362,487 in 2019. The defendant, a former school teacher, had no income from 2011 to 2016 because she was raising the parties’ children and no longer worked outside the home. In 2017, 2018 and 2019, the defendant’s earned income (not including spousal support) was $12,519, $22,527 and $15,931, respectively.

In December 2020, the referee recommended the plaintiff’s spousal support obligation be reduced from $6,500 a month to $3,350 a month, retroactive to February 1, 2020. In a written opinion, the referee reviewed the Berger factors for awarding spousal support. However, the referee did not explain which factors were most important or how she specifically arrived at the reduction, nor did she address the defendant’s request for attorney fees.

The defendant objected to the referee’s recommended order and requested a new hearing. The trial court subsequently entered its opinion and order, finding that none of the defendant’s objections had merit. The trial court adopted the referee’s recommended order.

The defendant appealed.

Spousal Support

The primary objective of spousal support (also known as alimony) is to “balance the incomes and needs of the parties in a way that will not impoverish either party,” the Court of Appeals explained at the outset of its opinion. “The court must base spousal support on what is just and reasonable under the circumstances of the case.”

When a party requests that spousal support be modified, the trial court must undertake a two-step inquiry, the Court of Appeals said, citing Luckow v Luckow, 291 Mich App 417 (2011). “First, for a court to modify spousal support, the moving party ‘must establish new facts or changed circumstances arising since the prior order regarding support was issued.’” Citing Berger, the appeals court said that, when determining if there has been a change in circumstances, a trial court should consider: 1) the past relations and conduct of the parties, 2) the length of the marriage, 3) the abilities of the parties to work, 4) the source and amount of property awarded to the parties, 5) the parties’ ages, 6) the abilities of the parties to pay alimony, 7) the present situation of the parties, 8) the needs of the parties, 9) the parties’ health, 10) the prior standard of living of the parties and whether either is responsible for the support of others, 11) contributions of the parties to the joint estate, 12) a party’s fault in causing the divorce, 13) the effect of cohabitation on a party’s financial status and 14) general principles of equity.

In this case, the threshold inquiry of whether there was a change in circumstances was satisfied through the parties’ stipulation, the Court of Appeals observed. “The judgment … provided that after January 1, 2020, the passage of time would be deemed a change of circumstances entitling plaintiff to move to modify spousal support.”

The second inquiry - application of the Berger factors - “is more complicated,” the Court of Appeals continued. “For the most part, defendant does not contest the trial court’s factual findings regarding the relevant Berger factors. Rather, her main argument is that the court’s reduction of the amount of spousal support is inequitable.”

The Court of Appeals continued by reviewing the trial court’s analysis of each Berger factor. “Here, the dispute is largely over the final factor, general principles of equity. Regarding this factor, the court simply noted that it ‘was considered in light of the facts and circumstances already described.’ …”

The Court of Appeals pointed out the referee addressed each Berger factor in her written opinion, which the trial court basically adopted. “But the referee did not provide an explanation of how the analysis of these factors rationally linked to its reduction of spousal support from $6,500 a month to $3,350 a month – or why such a reduction was equitable. Acknowledging the deference we afford a trial court’s dispositional ruling on spousal support, we are unable to conclude that this almost 50% reduction is equitable.”

The “significant” amount of the spousal support reduction “is not the problem,” the Court of Appeals noted, explaining the trial court could have justified a significant reduction in spousal support in several ways. “It is uncontested that plaintiff’s income decreased since the divorce judgment. … But as the referee recognized, plaintiff also was financially responsible for the parties’ two daughters in 2011. He had no such legal obligations in 2019. So, although his income was less in 2019, the impact of that reduction was lessened. If plaintiff’s reduction in income was to affect the amount of spousal support, then the amount reasonably would be lessened by a proportionate amount. Plaintiff’s 2019 income represented an approximate 25% reduction from his 2011 income, when the judgment of divorce was entered. A commensurate 25% reduction in spousal support would result in a spousal support amount of $4,875 a month, which is substantially greater than the awarded amount of $3,350. Also, the referee highlighted that at the time the judgment of divorce was entered, the amount of spousal support awarded was 16.45% of plaintiff’s income. Using that same percentage, 16.45% of plaintiff’s 2019 income of $362,487 would be approximately $60,123 a year, or $5,010 a month. Again, this amount far exceeds the $3,350 that ultimately was awarded.”

Similarly, “we can find no equitable link between the reduction and defendant’s needs,” the Court of Appeals said. “We recognize that because the referee stated multiple times in her opinion that $78,000 met defendant’s needs, one could infer that the referee’s goal was to award spousal support in an amount that, combined with defendant’s income, totaled defendant’s previous income of $78,000. The court assumed that defendant was working 1,600 hours a year, which would result in a yearly income of $30,000. Taking $78,000 and subtracting defendant’s earned income of $30,000 yields a difference of $48,000. But dividing that $48,000 into monthly installments would result in $4,000 in monthly spousal support. Once again, this amount is substantially larger than the awarded amount of $3,350.”

Without the trial court providing an explanation tying the Berger factor analysis to the amount of the reduction, “we are left with a firm conviction that the reduction in spousal support from $6,500 a month to $3,350 a month is not equitable,” the Court of Appeals held. “The onus is on the trial court to clarify its reasoning, to enable us to understand how it arrived at this $3,350 amount.”

Therefore, because it was unclear how the reduction in spousal support was equitable, “we vacate the order reducing spousal support and remand for the trial court to reevaluate the modification of spousal support, including any retroactive application,” the Court of Appeals held. On remand, the trial court “should address whether and to what extent defendant is entitled to attorney fees under MCR 3.206(D). The court should also explain how its reduction in spousal support is tied to its analysis of the Berger factors and how it is an equitable result.”