Florida House Bill 231 and Senate Bill 718 are a remarkable statement in alimony policy and worthy of national attention. Briefly, the bills create standards (in the form of presumptive caps based on percentage of income) for alimony awards. However, the bills have been sensationalized, and careful readers are advised to review the proposed legislation for themselves (the House Bill can be found here. I want to discuss the retroactivity language in the bills, as it applies to private marital settlement agreements, in relation to Maryland and District of Columbia law.
Two concerns that have come up in discussions of the bills are: (1) that by their own terms they apply retroactively, and (2) that they would allow the courts to modify privately-agreed-to alimony terms. These concerns, if unqualified, would strike fear in any lawyer who believes in the finality of judgments or the freedom to contract, and any divorcing (or divorced) couple who wants to have final say over the resolution of their marital obligations. Though these aspects of the proposed legislation are not as far-reaching as many news sources present them, I do find it concerning that the proposed legislation would allow courts to modify private agreements for alimony, entered into before the law came into effect, based solely on the change in law. .
To oversimplify, alimony generally is a payment obligation incident to the dissolution of a marriage that ends on the death or remarriage of the recipient, or death of the payor. Alimony in Maryland or D.C. can be for a fixed term or indefinite. Either form, if ordered by a court, can be modified upon a material and substantial change of circumstances, such as a loss of a job, medical conditions, or many other events. Importantly, however, parties can enter marital settlement agreements creating support for a former spouse that specify the length, amount, and modification criteria, and state that courts cannot change those terms. So long as the agreement is fairly negotiated, the issue is settled. The ability to agree that alimony will not be modifiable by the courts is important to divorcing couples who want to know what their obligations (or income) will be. Moreover, it is important to courts in managing their caseloads. .
A concerning issue in the proposed Florida legislation is the ability of courts to modify settlement agreements entered into before the proposed law comes into effect based solely on the new guidelines. Compare this to the revised Child Support Guideline that went into effect in Maryland in October 2010. The revised guideline raised child support across the board, and in some cases, quite significantly. However, in revising the Child Support Guideline, the Maryland Code explicitly provided that “[t]he adoption or revision of the guidelines set forth in this subtitle is not a material change of circumstance for the purpose of a modification of a child support award.” Md. Code Family Law § 12-202 (b). This applied both to child support set by agreement and child support set by the court according to the former Guideline. In doing this, Maryland avoided the blitzkrieg of litigants seeking to modify child support based solely on the change in law. .
Notably, the proposed Florida bills would not leave the ability to modify alimony in marital settlement agreements without qualification. Florida’s bills would limit a court’s ability to modify alimony in marital settlement agreements to alimony that is 25 percent or more in duration or amount above the alimony cap set forth in the legislation. Compare this to the D.C. Child Support Guideline that provides, “There shall be a presumption that there has been a substantial and material change of circumstances that warrants a modification of a support order if application of the guideline to the current circumstances of the parents results in an amount of child support that varies from the amount of the existing support order by 15% or more.” D.C. Code § 16-916.01(r)(4)(A). In modifying child support under District of Columbia law, a variation of 15% is sufficient to create a presumption that there has been a material change of circumstances necessary to modify child support. In modifying alimony in Florida, a variation of 25% is necessary to create a presumption that the alimony (in a marital settlement agreement) should be modified. .
In Maryland and D.C., children are a protected class and parents cannot waive the prescribed child support for their own reasons. Now, Florida would, in many ways, be treating those paying alimony in a similar way. With child support in D.C. and Maryland, parents cannot agree to too little. Under this proposed Florida law, the economically dominant spouse could, in theory, agree to non-modifiable alimony at a level above the statutory cap, but I imagine it will happen very rarely. .
It appears the Florida legislature is aware of what might happen if too many people are paying too much when the legislation goes into effect. The courts would be swamped. Thus, the bills also would limit when a person could seek modification based on the proposed changes in the law. In the case of an agreement entered into before July 1, 2013, an obligor who has agreed to durational alimony for more than ten years would not be able to file for a modification until on or after July 1, 2014. An obligor who has agreed to durational alimony between five years and ten years would not be able to file a modification until on or after July 1, 2015. An obligor who had agreed to permanent alimony that was too high could file as soon as the law went into effect. .
Finally, the most important qualification in the proposed changes in Florida laws is an element used frequently in Maryland and D.C.: if the parties expressly state in their agreement that they do not want the court to change alimony (i.e. that it is “nonmodifiable”), the court is unable to change the alimony. .
However, even with these qualifications, Florida’s bills would still allow courts to modify private settlement agreements entered into before the law came into effect, that were not explicitly non-modifiable, based on nothing more than the change in the law. Many parties who agreed that alimony could be modifiable based on loss of job or serious medical condition could find their agreement modified based solely on this change in law – something they did not bargain for. I think the approach Maryland took with the Child Support Guideline in October 2010 is the better approach. Although, admittedly, obligees searched high and low for changes of circumstances, while obligors trod carefully to avoid them, people got what they bargained for – child support that was not modifiable unless and until there was a material change of circumstances. Even if the sensational part of these bills becomes law, and alimony caps are enacted, the Florida legislature should remove the provision that allows its courts to modify private settlement agreements entered into before the proposed law comes into effect based solely on this change in law.