This research was conducted by the National Legal Research Group
It may also be helpful to examine a few post-Stubblebine trial court decisions. In Poland v. Poland, 2005 WL 4277920 (Va. Loudoun County Cir. Ct. 2005), Judge James H. Chamblin reduced the husband's spousal support from $3,500 per month to $2,870 per month. The major changes in circumstances justifying the reduction was the husband's retirement and the related sale of his business:
Mr. Poland argues that he voluntarily retired in good faith and the resulting decrease in income is a basis for reducing spousal support. To the contrary, Ms. Poland argues that the principle of Antonelli v. Antonelli, 242 Va. 152 (1991) applies. She asserts that when Mr. Poland entered into the lease option with IMI he voluntarily placed himself in a position where he could lose the substantial rental income if IMI exercised the option to purchase. Because Mr. Poland's reduced income is a direct result of his voluntary act in granting IMI the option to purchase, Ms. Poland argues that Mr. Poland is voluntarily underemployed, i.e., he is not receiving the income that he had the capacity to receive when he owned the business property.
2005 WL 4277920 at *6. Despite Stubblebine, the court found that the issue before it was one of first impression:
Counsel have not cited and I have not found a Virginia case that establishes a special rule concerning the retirement of a spouse obligated to pay spousal support. Although the case involved an initial setting of spousal support, the Court of Appeals has stated:
Albert Stubblebine argues persuasively that a spousal support award should not operate to force persons who have reached usual retirement age to continue working. We do not by this opinion establish a bright-line rule requiring a payor spouse to forgo retirement in order to maintain support obligations at a pre-retirement level. Each case depends on its particular facts. See Pimm v. Pimm, 601 So.2d 534, 537 (Fla.1992); Avery v. Avery, 548 So.2d 865, 866 (Fla.Dist.Ct.App.1989).
Stubblebine v. Stubblebine, 22 Va.App. 703, 709 (1996).
2005 WL 4277920 at *6. Thus, the court relied heavily upon Stubblebine's express refusal to adopt a bright line rule. Somewhat overlooked was the fact that after denying any intention to adopt a bright line rule, Stubblebine held that the husband must work because he was able to work-a holding which comes close to establishing just the sort of bright line rule the court said it was not creating.
Continuing, the Poland court relied substantially on out-of-state authority, including the two Florida cases (Pimm and Avery) cited in the Stubblebine opinion:
Pimm held that post divorce retirement is a change of circumstance that may be considered upon a petition to modify spousal support. Avery, which involved the initial setting of permanent spousal support held that retirement is a factor to be considered and that each case must turn on its own facts.
Mr. Poland has cited other cases from other jurisdictions involving retirement. They are McFadden v. McFadden, 386 Pa. Super. 506, 563 A.2d 180 (1989) (Pennsylvania law clearly establishes that retirement can serve as a basis for the changed circumstances of a substantial and continuing nature necessary to modify an alimony award), Silvan v. Silvan, 267 N.J. Super. 578, 632 A.2d 528 (1993) (a payor spouse who retires in good faith at age sixty-five is entitled to a hearing on whether there is a resultant change in circumstances that alimony obligations should be modified citing Pimm and McFadden ), and Bogan v. Bogan, 60 S.W.3d 721 (Tenn.2001) (a bona fide retirement need only be objectively reasonable under the totality of the circumstances to constitute a substantial and material change in circumstances so as to permit a modification of spousal support).
The aforesaid cases seem to stand for an objectively reasonable standard for retirement under all the circumstances in order to justify a modification of spousal support. I think the Court of Appeals in Stubblebine recognized this same standard when it stated:
Similarly, the Supreme Court in Antonelli, 242 Va. at 155, 409 S.E.2d at 119, acknowledged that trial courts must consider "bona fide and reasonable" decisions concerning employment, which would include retirement; however, trial courts do not err or abuse their discretion in considering the extent to which the decision renders a person underemployed or unemployed. We find this reasoning persuasive and applicable to the circumstances of this case. When considering the issue of spousal support, whether in a modification or initial award determination, the trial court must take into account the receiving spouse's needs and ability to provide for the needs, and balance those against the other spouse's ability to provide support, even when the payor spouse has retired in good faith at a "normal" retirement age. See Code § 20-107.1.
22 Va. App. at 710.
The retirement issue cannot be ignored. I think Virginia recognizes a good faith "normal" retirement as a consideration in either an initial setting or a modification of spousal support.
2005 WL 4277920 at *6-*7 (emphasis added). Applying the emphasized standard to the facts before it, the court found:
Mr. Poland's decision in 1997 to enter into the lease option with IMI, liquidate Loudoun Furniture and leave the furniture business was clearly voluntary. He readily admitted it. In 1997 Mr. Poland was 60 years old. He had been in the furniture business since at least 1973. He says he retired.
After March 1997 Mr. Poland ceased to earn income from working. His income came from rent, social security and other investments. The American Heritage Dictionary defines "retire" as "to withdraw from one's occupation, business or office; stop working," and "retirement" as "withdrawal from one's occupation, business or office." I think Mr. Poland did retire from the furniture business when he entered into the lease option agreement with IMI.
Mr. Poland no longer worked after March 1997. Especially because he was 60 years old at the time I think that he made a prudent business decision in retiring as he did. It is not uncommon for persons to retire today at age 60. It was not uncommon in 1997. I find that Mr. Poland's retirement was objectively reasonable.
Even if one were to find that age 60 was not an objectively reasonable age to retire, Ms. Poland cannot complain because Mr. Poland's income in retirement did not fall below the 1995 level until 2004 when Mr. Poland was 67 years old. I don't think anyone can argue that age 67 is not beyond a normal retirement age.
2005 WL 4277920 at *7 -*8. The court specifically rejected the wife's argument that the husband was voluntarily unemployed:
It is Ms. Poland's argument that Mr. Poland is voluntarily underemployed. Under the circumstances of this case I do not agree with Ms. Poland.
Ms. Poland's argument would require any payor spouse to continue to work beyond normal and usual retirement age. Stubblebine clearly refuses to establish a bright-line rule requiring a payor spouse to forgo retirement in order to meet support obligations at a pre-retirement level.
A person can retire from one occupation and enter into another. This is not the type of retirement that would necessarily warrant a modification because such a retirement would be nothing more than a change of employment to which the rule in Antonelli would apply. But a retirement where one withdraws from his job or occupancy at a usual retirement age and thereafter lives on a pension, retirement savings, investment income or whatever other passive income the retiree has (with usually less income than when working) is the type of retirement that should be considered as a change of circumstances for support modification purposes. This latter type of retirement is exactly what Mr. Poland did.
2005 WL 4277920 at *8. The court therefore granted the husband a reduction in support.
Another trial court case is Kinsley v. Kinsley, 2005 WL 1356277 (Va. City of Richmond Cir. Ct. 2005). Kinsley was an initial spousal support case, in which Judge Randall Johnson refused to impute income to a 73-year-old retired husband. Again, Stubblebine was limited to its facts:
Ms. Kinsley argues that in spite of his retired status, Mr. Kinsley is capable of working and earning income, thus allowing permanent support. She cites Stubblebine v. Stubblebine, 22 Va. App. 703, 473 S.E.2d 72 (1996), to support her position. Mr. Kinsley argues that he is 73 years old and should not have to continue working or have income imputed to him solely to support Ms. Kinsley. The court agrees with Mr. Kinsley.
In Stubblebine, the court of appeals held that a trial court did not abuse its discretion in imputing income to a retiree. The court did not hold that income must always be imputed to retirees. The court concludes that the present case is substantially different from Stubblebine for several reasons.
First, the retiree in Stubblebine was 64 years old. Mr. Kinsley is 73. Second, the Stubblebines had been married and living together for nearly forty years, most of them during Mr. Stubblebine's army career during which Ms. Stubblebine was an "exemplary" wife and mother. 22 Va. App. at 706. While there is no evidence that Ms. Kinsley was anything other than a good wife, these parties were married and living together for less than nine years and had no children together.
Third, Mr. Stubblebine was still employed when he and his wife separated, meaning there was never a joint decision about his retirement. Mr. Kinsley had been retired for seven years before he and Ms. Kinsley separated, and there is no evidence she disagreed with his decision to retire.
Fourth, while Mr. Stubblebine was not working for compensation at the time of the trial in that case, he was working fifty or sixty hours a week "preparing for an annual conference for an organization involved in the study of parapsychology and psychic phenomena, subjects of personal interest to Stubblebine. He was also working twenty hours per week for his female friend, without pay, helping organize and manage her psychiatry practice." Id. Other than his phone card business, the income of which has already been taken into consideration in setting the amount and duration of support, Mr. Kinsley is not presently working, with or without compensation.
Fifth, Ms. Stubblebine suffered from "several chronic diseases, including arterial fibrillation, small bowel disease, and chronic shortness of breath caused by removal of part of a lung due to cancer," and was unable to work. Id. Ms. Kinsley is in good health and is gainfully employed. In short, the facts of this case bear almost no resemblance to the facts in Stubblebine. Its holding does not apply.
Neither Stubblebine nor any other case from Virginia's appellate courts sets a hard and fast rule about whether and how long a payor-spouse must forego retirement in order to pay support. In Stubblebine, the payor was 64. Would the result have been the same if he were 74, or 84, or 94? Normally, people should be allowed to retire at some point, even if they are physically able to work. Only by considering the particular facts in each case can the determination be made about whether that particular payor should be allowed to retire or have income imputed to him or her. Based on the facts of this case, the court will not require Mr. Kinsley to work or impute income to him.
2005 WL 1356277 at *7 -8. Kinsley, like Poland, was not appealed.
Summarizing the Virginia cases, there is general recognition that the court should not impute pre-retirement salary to a spouse who reasonably retires. Even Stubblebine, which eventually imputed income, imputed post-retirement income. The only cases to clearly impute pre-retirement income are Armar, where the husband retired seven years early, and Ryan, where the husband retired but went to work for another company.
The harder question is imputation of post-retirement earnings. Stubblebine imputed such earnings, relying heavily upon the husband's active post-retirement lifestyle. Geddis reached a similar result, as did the second opinion in Harber.
Indeed, when presented with a three-way choice between imputing pre-retirement income, imputing post-retirement income and imputing nothing, most of the cases opt for the middle ground of imputing post-retirement income. Only when the husband retired noticeably early has pre-retirement income been imputed. Here, if the husband presents evidence of post-retirement income, there will be very strong argument against imputing pre-retirement income.
It is much harder to predict what a court would do if the only options it is given are imputing pre-retirement income and imputing nothing. The general thrust of the Virginia cases, however, has been that the courts are reluctant to impute nothing. Some of this reluctance comes from the fact that the leading case, Stubblebine, had unusual facts and a somewhat unsympathetic husband. Yet Stubblebine was decidedtwenty years ago, and the reluctance of courts to impute nothing remains.
In determining whether a voluntary retirement is reasonable, the court must consider the payor's age, health, and motivation for retirement, as well as the type of work the payor performs and the age at which others engaged in that line of work normally retire. The age of sixty-five years has become the traditional and presumptive age of retirement for American workers: many pension benefits maximize at the age of sixty-five; taxpayers receive an additional federal tax credit at the age of sixty-five in recognition of the reduced income which accompanies retirement; under the Social Security Act the definition of "retirement age" includes "65 years of age"; and the Employee Retirement Income Security Act of 1974 defines "normal retirement age" as including the "time a plan participant attains age 65." Based upon this widespread acceptance of sixty-five as the normal retirement age, we find that one would have a significant burden to show that a voluntary retirement before the age of sixty-five is reasonable. Even at the age of sixty-five or later, a payor spouse should not be permitted to unilaterally choose voluntary retirement if this choice places the receiving spouse in peril of poverty. Thus, the court should consider the needs of the receiving spouse and the impact a termination or reduction of alimony would have on him or her. In assessing those needs, the court should consider any assets which the receiving spouse has accumulated or received since the final judgment as well as any income generated by those assets.
601 So.2d at 537. Pimm also held that the burden of proving changed circumstances is higher if the support award is based upon an agreement. This aspect of Pimm is inconsistent with Blackburn v. Michael, 515 S.E.2d 780 (Va. Ct. App. 1999), which reversed the trial court for applying a higher burden to modification of agreement-based spousal support. See also Pratt v. Pratt, 645 So.2d 510, 511 n.1 (Fla. 3d DCA1994) (noting that Pimm's holding on the burden of proof was reversed prospectively by an amendment to Fla. Stat. Ann. § 61.14, providing that the same standard applies to modification of agreement-based and order-based awards). Apart from the burden of proof, Pimm's recognition that payors are entitled to retire at some point is extremely helpful.
A similar result was reached by the Tennessee Supreme Court in Bogan v. Bogan, 60 S.W.3d 721 (Tenn. 2001). Bogan expressly held that retirement is unlike other forms of changed circumstances:
However, when an obligor seeks bona fide retirement, as opposed to mere willful underemployment, application of our traditional rules concerning modification of support agreements leaves much to be desired. Absent some tragedy or combination of unfortunate circumstances, retirement from further employment in the workforce is always voluntary and foreseeable because, at some point, every worker will eventually retire. Moreover, taken to its logical extreme, this standard would force an obligor to work until physically incapable of doing so merely to avoid the allegation that he or she was "voluntarily" avoiding spousal obligations. While the traditional standards regulating modification of support agreements should usually be applied to motivate parties to provide for such contingencies in their dissolution agreement, strict application of these standards in the retirement context can work unreasonable hardships. Cf. Sifers v. Sifers, 544 S.W.2d 269, 269-70 (Mo.Ct.App.1976) (denying modification when obligor "voluntarily" retired, even though he was 62, had a malignant kidney removed, and was unable to find employment in the industry in which he had worked all his life). At some point, parties must recognize that "[j]ust as a married couple may expect a reduction in income due to retirement, a divorced spouse cannot expect to receive the same high level of support after the supporting spouse retires." In re Marriage of Reynolds, 63 Cal.App.4th 1373, 74 Cal.Rptr.2d 636, 640 (Ct.App.1998).
Accordingly, we hold that when an obligor's retirement is objectively reasonable, it does constitute a substantial and material change in circumstances- irrespective of whether the retirement was foreseeable or voluntary-so as to permit modification of the support obligation. However, while bona fide retirement after a lifetime spent in the labor force is somewhat of an entitlement, an obligor cannot merely utter the word "retirement" and expect an automatic finding of a substantial and material change in circumstances. Rather, the trial court should examine the totality of the circumstances surrounding the retirement to ensure that it is objectively reasonable. The burden of establishing that the retirement is objectively reasonable is on the party seeking modification of the award, cf. Seal v. Seal, 802 S.W.2d 617, 620 (Tenn.Ct.App.1990), and the trial court's determination of reasonableness will not be reversed on appeal absent an abuse of discretion, see, e.g., Crabtree, 16 S.W.3d at 360. Although we decline to confine this inquiry to consideration of a list of factors, in no case may a retirement be deemed objectively reasonable if it was primarily motivated by a desire to defeat the support award or to reduce the alimony paid to the former spouse.
60 S.W.3d at 728 -729. Again, therefore, objectively reasonable retirement was treated as a basis for modifying spousal support. On the facts, Bogan held that the husband's retirement was reasonable, where his employer had a deliberate policy of downsizing:
The first question to be resolved, therefore, is whether Mr. Bogan's retirement was objectively reasonable under the totality of the circumstances so as to constitute a substantial and material change in circumstances. We conclude that his retirement was in fact objectively reasonable. First, there is no evidence in the record that Mr. Bogan's retirement from Eastman Chemical was primarily designed or motivated to escape his spousal support obligation. Instead, as the trial court found, his retirement was due to Eastman Chemical's attempt to downsize its workforce by encouraging employees to retire, as well as his own dissatisfaction with his job. The fact that more than 2200 other Eastman employees retired during this general period, exceeding any other level of retirement during a similar period in the company's history, must weigh in favor of finding the retirement reasonable. Moreover, at the time of his retirement, Mr. Bogan had been eligible to retire with full benefits for some time prior, indicating that he did not retire as soon as possible to diminish his available income.
60 S.W.3d at 731. Most significantly, the court found the retirement reasonable even though it occurred three months before the husband's 60th birthday:
Arguing against finding a legally material change in circumstances, Ms. Bogan takes substantial issue with her former husband's age at his retirement, which was less than three weeks before his sixtieth birthday. Several states have held that age sixty-five is the presumptively reasonable age for retirement, and one state in particular has held because of "the widespread acceptance of sixty-five as the normal retirement age," an obligor that retires before that time bears "a significant burden to show that a voluntary retirement ... is reasonable." Pimm, 601 So.2d at 537. Although an obligor's retirement age may be considered in assessing the overall reasonableness of the retirement, we are reluctant to establish a presumptive age for an objectively reasonable retirement. All things being equal, an obligor who retires at an exceptionally young age will necessarily run a greater risk of being unable to establish that the retirement is objectively reasonable so as to demonstrate a substantial and material change in circumstances. However, Mr. Bogan's retirement age, while less than many but more than some, is not necessarily so young as to be unreasonable, especially given the particulars of his retirement. Accordingly, based on the totality of the circumstances as supported by the preponderance of the evidence, we conclude that Mr. Bogan's retirement was objectively reasonable so as to constitute a substantial and material change in circumstances.
Id. at 731-32. Bogan is probably the most favorable case found in the course of the present project.
Part 2 of 2
This research was conducted by the National Legal Research Group.
The cases in Part 1 all support the general notion that employment income should not be imputed after objectively reasonable retirement. It still seems likely, however, that the court must consider whether the parties' post-retirement incomes still require that support continue at a reduced level.
Amount of Reduction
Assuming that the court finds a material change in circumstances, it is not guaranteed that the court will reduce support. "The moving party in a petition for modification of support is required, therefore, to prove both  a material change in circumstances and  that such change justifies an alteration in the amount of support." Yohay v. Ryan, 4 Va. App. 559, 566, 359 S.E.2d 320, 324 (1987).
In other words, if the husband proves a material change in circumstances, the prior agreement and order are no longer res judicata as to the proper amount of support, and the court should set a new support obligation in the same way it would in an initial award case. But it is possible that an equitable amount of support might be the same as a prior obligation. This result is especially important when changes in circumstances offset each other, such as when the recipient incurs $1,000 per month in unexpected medical expenses, but also finds a new position with a salary which is $1,000 per month higher. Individually, each of these changes would justify modification; together, they offset one another and there might well be no adjustment in the amount of the award.
Considering the second prong as applied to this case, there are two points of particular concern. First, the husband can order the husband to pay support from his assets. In Driscoll v. Hunter, 59 Va. App. 22, 27, 716 S.E.2d 477, 479 (2011), the husband retired from his oral surgery practice after suffering from medical issues. But he had $3.5 million in assets, including $1.376 million in an IRA. A trial court refused to reduce the husband's $2,100 per month support obligation, and the appellate court affirmed:
Husband's premise-that spousal support should be paid exclusively from work-related income-is flawed. No special consideration is given to income from wages or a salary over income from payor's other sources. The crucial question, once a material change in circumstances has been shown, is the "ability of the supporting spouse to pay." Id. Husband's ability to pay was undisputed. The fact that the payor husband may have to draw from other sources, such as the principal of investment or savings accounts, in order to make his spousal support payment does not by itself require the trial court to suspend or reduce his spousal support obligation.
59 Va. App. at 33-34, 716 S.E.2d at 482 (2011), citing Moreno v. Moreno, 24 Va. App. 190, 195, 480 S.E.2d 792, 794-95 (1997); see also Cid v. de Cid, 1952-11-4, 2012 WL 2378347, at *2 (Va. Ct. App. June 26, 2012) (reaching a similar result; "[h]usband did not dispute that he had the continued ability to pay his spousal support obligation despite the reduction in his salary income, and no evidence was presented that wife's need for spousal support had diminished).
The Virginia cases have generally been receptive to granting a payor some reduction in support upon retirement at normal age. But the courts have been reluctant to terminate support entirely. This result is most commonly reached by imputing some form of post-retirement income. It could also be reached by holding that the recipient's increased needs offset at least part of the decrease in the payor's income.