ALIMONY — MODIFICATION — RETIREMENT — SEPARATION AGREEMENT TERMS — “FORESEEABLE” CHANGES IN CIRCUMSTANCES — STANDARD OF REVIEW. In Dailey v. Dailey, ___ Va. App. ___, ____ SE2d ____, 26 VLW 1168, http://bit.ly/dailey4c (3/6/12), a policeman had a very hard time showing that his retirement was a change in circumstances that could justify modifying alimony, even though his decree-incorporated separation agreement said alimony “shall be modifiable upon a material change in circumstances.” His ex-wife agreed that it was a change of circumstances, but argued that alimony could not be modified because, she claimed, “the parties had contemplated the change at the time they entered into their agreement”. The trial judge agreed that the parties had “bargained for” alimony on top of the sharing of the pension, and on that ground, refused to modify.
The Court of Appeals agrees with the ex-wife that, “In some instances, a petition for modification of spousal support will be defeated because the change in circumstances was ‘foreseeable.’” It reasons that trial courts making support awards “look to current circumstances and what the circumstances will be within the immediate or reasonably foreseeable future. Srinivasan v. Srinivasan, 10 Va. App. 728, 735, 396 S.E.2d 675, 679 (1990).” … “When a particular event or circumstance is reasonably foreseeable, trial courts are expected to build that event into the support award,” and “it will not constitute a material change in circumstances.” It cites Barrs v. Barrs, 45 Va. App. 500, 612 S.E.2d 227 (2005), where wife’s $60,000 annual income from investments received in equitable distribution was foreseeable at the time of the divorce.
After all, the Court adds, Code § 20-109(B) “provides that a trial court may revisit spousal support if there is a ‘material change in circumstances … not reasonably in the contemplation of the parties when the award was made.’” It does not note that that Section is about modifications of defined-duration awards, and that the statute on modifying alimony generally, § 20-109(A), says instead that a court may modify it “as the circumstances may make proper.” The alimony in this case was not defined-duration.
The Court admits that “Retirement is a likely and predictable occurrence for most. A broad reading of foreseeability would mean that retirement would never constitute a material change ….” But “We have rejected such a broad reading of the foreseeability concept.”
Retirement was not “foreseeable” in the sense of the word used above, the Court finds, looking at “objective evidence available at the time of the previous award of support”, as it must under Furr v. Furr, 13 Va. App. 479, 482, 413 S.E.2d 72, 74 (1992). For one thing, the husband might have died before retiring, in which case the wife would have no retirement income, since the department had no survivor benefits available in pre-retirement divorces. And husband testified that at the time of the decree, when he had 29.5 years on the force, he had no retirement plans — and that testimony was “uncontested”. Other facts that the Court recites prominently are that the agreement has an “if as and when” division of the pension; and that the parties stipulated to the material change of circumstances, and did not appeal the trial court’s finding of such a change.
The Court also looks at the wording of the agreement. It says an agreement “is highly relevant and perhaps dispositive in establishing what was reasonably in the contemplation of the parties at the time they entered into the agreement.” And this agreement “is silent on the question of whether spousal support should continue or terminate upon husband’s retirement,” and thus gives no evidence that the parties “reasonably contemplated, or foresaw, the effect of husband’s retirement.” The Court here reiterates that interpretations of contract language should be reviewed de novo as matters of law, and not “under a deferential abuse of discretion standard.”
The Court also takes note of its own opinions in other cases emphasizing that a support award should not be based on future conditions, but should instead set support based on current conditions and modify later if things change. (Rogers v. Rogers, 51 Va. App. 261, 270-71, 656 S.E.2d 436, 440 (2008); Robertson v. Robertson, 215 Va. 425, 428, 211 S.E.2d 41, 44 (1975).)
To use “foresee” in lay terms, the Daileys probably did foresee retirement, but they probably did not know for sure what economic effect retirement would have. Retirement could either decrease or increase income, depending on post-retirement employment. So perhaps the kind of foresight that will nullify statutory and contractual grounds for modification is foresight of a change which not only is extremely predictable, but also has very predictable, known, economic effects.
Many divorcing parties who include modifiability in an agreement do so precisely because they foresee that circumstances might change and modification might be needed. In some cases, parties contemplate very specific and likely changes of circumstances. Unfortunately, that very foresight can nullify those modification terms of their agreements, under the foreseeability rule discussed in this case. But must foresight be 20/20 to trigger that rule? At least, it must be more accurate, and clearer, than the prophecies of the Old Testament prophets, the Oracle at Delphi, and even parts of the New Testament, depending on how they are interpreted. This case will probably be cited to the effect that retirement is per se unforeseeable, but the Court’s prominent recitation of so many particular facts may help it distinguish this case from other future cases. So we should expect separation agreements to start sounding more like horoscopes, saying more about whether certain events are foreseen, and about what specific events might be material changes of circumstances. And some people who would otherwise reach agreement may not be able to come to an agreement when more specifics about future possibilities have to be expressly agreed-on.