What Does “Voluntarily Underemployed” Mean In A Divorce Or Child Support Case?
This is when one spouse or parent earns significantly less than they could be in order to avoid paying for child support or alimony in a divorce. An example of someone that a lawyer in a New Jersey Family Court can prove to be voluntarily underemployed are when they are earning much less income than they traditionally did without evidence of a significant change of circumstance. Another example is when someone chooses a job that is not on the same level as their education should allow them to earn. The attorneys at our East Brunswick, New Jersey law firm are savvy at determining when one party is voluntarily underemployed in order to achieve the proper amount of alimony or child support that they deserve.
In Moodie v. Moodie, the parties divorced on June 21, 2010 by a final judgment of divorce, which included a matrimonial settlement agreement. A matrimonial settlement agreement is an agreement negotiated by the parties that divides the parties’ assets and debts, and also determines issues related to the divorce, such as alimony, child support, child custody and equitable distribution. The parties’ matrimonial settlement agreement stated that Mr. Moodie was earning $55,000 per year as a teacher and Mrs. Moodie was earning $12,000 per year as a substitute teacher. According to the agreement, Mr. Moodie was to pay $965 a month for twenty-four months to Mrs. Moodie in alimony and then $1,000 per month until Mrs. Moodie remarried or died. The agreement also stated that both parties were to exchange pay stubs, tax returns, and other proofs of income at the end of every.
The matrimonial settlement agreement also required Mrs. Moodie to prove that she was searching for a new job. As per the agreement, Mrs. Moodie was required to provide proof to Mr. Moodie that she was seeking higher paying employment every six months, beginning November 1, 2010. Mrs. Moodie was required to provide a list of jobs that she applied for and the names of the persons contacted. If Mrs. Moodie did not comply with the terms or make a good faith effort to seek employment, Mr. Moodie was allowed to ask the court to reduce or terminate his alimony obligation.
Mr. Moodie asked the Superior Court of New Jersey Family Part to reduce his alimony obligations in 2011. Although the trial court denied Mr. Moodie’s request, it did require Mrs. Moodie to provide a list of job applications, as required under the matrimonial settlement agreement, and proof of what interviews Mrs. Moodie has had every two weeks until she obtained full-time employment. In August 2013, Mr. Moodie asked the court to terminate his alimony obligation. Mr. Moodie claimed that Mrs. Moodie violated the agreement because she was not seeking meaningful employment. Mr. Moodie stated that Mrs. Moodie’s job search was inadequate and limited because she was only focused on one field and ignoring other potential employment areas. Mrs. Moodie opposed Mr. Moodie’s motion and filed a cross-motion, alleging she was abiding by the agreement. On October 4, 2013, the trial court ordered Mrs. Moodie to provide a list of job searches, contact persons and interviews to Mr. Moodie and the court within two weeks. The court also ordered both parties to provide copies of their tax returns for every year since the divorce.
The court conferenced with the parties on November 1, 2013 and stated that Mrs. Moodie was not being diligent in her job search, despite there being some sort of job contact every two weeks. The judge stated that he would impute Mrs. Moodie’s income, meaning he would attribute a specific amount to Mrs. Moodie based on what he thinks her earning potential is. Mr. Moodie then asked the court to give Mrs. Moodie a year to make the effort required by the court to find suitable employment. The court agreed and told Mrs. Moodie that she needed to step up her efforts to find a job and look in other places, such as the school districts where she worked as a substitute teacher. The court then ordered Mrs. Moodie to make five job searches per week, which would represent a real effort, and to expand her search to jobs in which she may be over qualified.
In October 2014, Mr. Moodie asked the court to terminate his life insurance and alimony obligations because Mrs. Moodie failed to find a suitable job within the one-year period. The court held a conference with the parties on December 2, 2014 and ordered a plenary hearing, which is needed when material facts are at issue and testimony is needed to resolve the issues. The plenary hearing was held in 2015 by a different judge. Mr. Moodie testified that he received a job search list every month from Mrs. Moodie, but that the list was vague and did not specify what positions Mrs. Moodie had applied for. He also testified that the parties co-owned a pharmacy in Jamaica and that Mrs. Moodie was a licensed pharmacist there. Mr. Moodie stated that pharmacists in Jamaica earn approximately $50,000-$60,000. Mrs. Moodie also testified at the hearing. She stated that her pharmacist license expired in 2002 after she left Jamaica, and she does not have a license in America. She also stated that she applied for pharmaceutical sales jobs but was unsuccessful. Mrs. Moodie testified that she received an M.B.A. in 2006 from Nova Southeastern University but did not begin working until January 2009 whens she started as a substitute teacher. In 2009, Mrs. Moodie earned approximately $11,000. In 2013, she earned $13,188 and in 2014, she earned $17,447. Mrs. Moodie’s pay stubs from March and April 2015 indicate that she was making $11.27 per hour.
Mrs. Moodie also testified that she searched for substitute teaching jobs every day and that long-term positions were hard to come by. She stated that she did not want to commute outside of the county where she resided because the costs were too high. Mrs. Moodie received eligibility to teach in Florida in 2011, but that expired in 2014. Mrs. Moodie indicated that she was not being offered full-time positions because most employers wanted certified teachers, which required extra schooling. Mrs. Moodie also testified that she participated in three job fairs and used career-building websites, but was unsuccessful. She stated she had received some interviews and job offers for commission-based sales positions, which were not appropriate for her because she would have to stop substitute teaching. Mrs. Moodie also testified that she was injured in a car accident in 1992, which prevents her from working in positions that require her to stand for long periods of time. Lastly, Mrs. Moodie vaguely indicated that she applied to jobs outside of Florida, but she would only move out of state if she secured a position first.
The trial court found that Mrs. Moodie did not uphold her end of the matrimonial settlement agreement and lacked credibility during the hearing. The judge found that Mrs. Moodie’s salary had only increased approximately $5,000 in the course of five years and that she was not diligent in her job search. The trial court found that Mrs. Moodie was voluntarily underemployed and imputed Mrs. Moodie with an annual income of $55,286.40, which is the salary of a full-time teacher in Mrs. Moodie’s area. Since Mrs. Moodie’s imputed income was similar to Mr. Moodie’s income, the trial court terminated Mr. Moodie’s alimony and life insurance obligations, rather than reducing them. Mrs. Moodie filed a motion with the court for reconsideration on July 17, 2015. The trial court denied Mrs. Moodie’s motion following oral argument because the court found that Mrs. Moodie did not make a good faith effort to secure employment, despite her claims that the court failed to consider her proof.
On appeal, Mrs. Moodie argued ten points. The New Jersey Appellate Division found that Mrs. Moodie’s third point lacks merit, and that only points five, six, seven, nine and ten warrant consideration. The Appellate Division stated that it must give great deference to the trial court’s decision to modify an alimony obligation because the trial court has particular expertise in the field, especially when credibility determinations are necessary. Trial court decisions are binding when they are supported by adequate and reliable evidence. Therefore, reversing a trial court decision is only appropriate when the decision was not supported by credible evidence and would be unjust. The Appellate Division concluded that there was no abuse of discretion relating to points five and seven, and that the trial court’s determination was supported by credible evidence regarding points six, eight and ten. Additionally, the Appellate Division found that the trial court’s decision did not lack reasonable support; therefore, the Appellate Division indicated that no discussion was necessary on those points.
The Appellate Division held that the trial court’s finding that Mrs. Moodie failed to adequately search for a higher paying job was supported by credible and substantial evidence. The Appellate Division reasoned that Mrs. Moodie did not comply with the terms of the agreement because she did not provide any contact information or job descriptions. The Appellate Division also reasoned that Mrs. Moodie’s job search attempts were also lacking and not made in good faith. Furthermore, the Appellate Division found that the trial court’s decision to impute Mrs. Moodie’s income was appropriate. The court stated that imputing income is proper when a spouse is voluntarily underemployed, meaning that the spouse was intentionally failing to earn what they are capable of earning. The Appellate Division reasoned that Mrs. Moodie has a high earning potential because she has a master’s degree and was a licensed pharmacist in Jamaica. Lastly, the Appellate Division affirmed the lower court’s decision to deny Mrs. Moodie’s request for reconsideration because Mrs. Moodie did not demonstrate that the lower court acted unreasonably. The Appellate Division explained that motions for reconsideration are warranted when the court failed to consider competent evidence, but in this case, Mrs. Moodie’s evidence could not be relied upon as support. Ultimately, the Appellate Division affirmed the decision of the trial court.