NJ Supreme Court Case Raises Important Questions About Alimony Awards for Stay-At-Home Spouses

The New Jersey Supreme Court yesterday began hearing arguments in the alimony dispute of Elizabeth Gnall v. James Gnall (Gnall v. Gnall). For anyone with questions concerning how and when permanent lifetime alimony is awarded, and whether stay-home-spouses should be expected to resume their career in the event of divorce, this is a case to pay attention because its outcome could change how future alimony awards are decided.

[Note: The NJ Supreme Court issued a decision in Gnall v. Gnall on July 29, 2015. For a summary of the Court’s findings, please see our update blog: NJ Supreme Court Case Addresses Questions About Alimony Awards for Stay-At-Home Spouses: Gnall v. Gnall (Part II).]

Case Background

Gnall v. Gnall centers around the 15-year marriage of Elizabeth and James Gnall. The Ridgewood, NJ couple married in 1993 and went on the have three children. At the time of the marriage, Elizabeth Gnall, who already held a bachelor’s degree in electrical engineering and master’s in computer science, worked full-time as a software programmer and systems analyst. She continued working until just before the birth of the couple’s second child in 1999. At the time she was earning approximately $115,000 per year. According to court documents, Elizabeth’s decision to become a stay-at-home mom was made with her husband’s assent. At the time, James was earning approximately $500,000 in annual income as a business accountant.

In 2008, Elizabeth Gnall (“the plaintiff”) filed for divorce. In 2009, the couple’s divorce ended up in court. Both parties were 42 years old and by this time, the income of James Gnall (“the defendant”) had grown to about $1.8 million per year. The couple’s divorce dispute centered around a disagreement over alimony terms — specifically whether Elizabeth Gnall should be awarded permanent alimony, given her established lifestyle as a SAHM and the difficulty of returning to work in the fast-moving computer industry after an almost 10-year absence, or limited duration alimony, due to her relatively young age, the relatively short length of the marriage, and her excellent educational credentials.

At the trial, the plaintiff argued that her computer programming skills were obsolete in the current marketplace, making job re-entry all but impossible without complete retraining. An expert hired by the defendant, however, asserted that Elizabeth Gnall could make $65,000 per year upon re-entering the workforce and approximately $115,000 per year shortly thereafter. The defendant also argued that given the relatively short length of the marriage (15 years), limited duration alimony and not permanent alimony would be the fairest outcome for all.

In the court’s decision, the trial judge considered the “relatively young” age of the parties, their good health and education, and the 15-year duration of their marriage, in concluding that, “the parties were not married long enough and are not old enough for defendant to be responsible to maintain that lifestyle permanently for plaintiff.”  The judge awarded the plaintiff 11 years of limited duration alimony at $18,000.00 per month. In that 11 year timeframe, the plaintiff would be responsible for obtaining needed retraining or otherwise figuring out her own financial future.

Shortly thereafter, the plaintiff’s side appealed on the grounds that when alimony is requested, the court must examine the 13 statutory factors under N.J.S.A. 2A:34-23(b) and weigh all of these statutory alimony factors to determine whether permanent alimony is appropriate. These factors include the duration and cause of the claimed economic dependence; sacrifices made to assure the non-dependent spouse’s financial success; whether the dependent spouse’s return to full-time employment causes disruption to the needs of the children; and the nature and extent of the dependent spouse’s predicted financial independence, measured against the non-dependent spouse’s continued ability to provide financial assistance.

Only after the court determines that permanent alimony is not warranted does the court then examine whether it is a limited duration alimony case.  Limited duration alimony is reserved for “shorter term marriages where permanent or rehabilitative alimony would be inappropriate or inapplicable.”

The Appellate Division agreed with the plaintiff that the trial court had not followed this approach in evaluating all factors. It also rejected what it called the trial court’s “bright line rule” that permanent alimony is solely reserved for long-term marriages of 25 to 30 years or longer duration. Writing for the Appellate Division, Judge Lihotz stated, “we do not intend to draw specific lines delineating ‘short-term’ and ‘long-term’ marriages in an effort to define those cases warranting only limited duration rather than permanent alimony.”

The Appellate Division also observed that the plaintiff could not earn enough to satisfy her monthly budget of $18,000.00, which represented the marital standard of living. Furthermore, for more than two-thirds of the marriage, the plaintiff functioned as the primary caretaker for the children and has primary responsibility for the children going forward. The parenting time schedule (alternate weekends and dinner on Wednesday) favors the defendant to conduct his professional life free of daily child rearing concerns. The same arrangement puts the plaintiff at a professional disadvantage.

In its ruling, the Appellate Division reversed the award of limited duration alimony and the matter was remanded (“sent back”) for an evaluation of an award of permanent alimony. Both parties appealed their matter to the NJ Supreme Court, which began hearing arguments in the case on November 12, 2014.

At Stake

In the matter currently before the NJSC, the following issues are being argued:

• What is a “long-term” marriage in New Jersey? A deciding factor when awarding permanent alimony is how long a marriage lasted, or the marriage’s “duration.” Is a 15-year marriage long-term or short-term? Should there be a “bright line rule” for deciding this, or should what constitutes a long-term or short-term marriage be decided, as it has been, on a case by case basis?
• Is Ms. Gnall’s SAHM status a good enough argument for permanent alimony? In arguments yesterday, counsel for the defendant accused the plaintiff of “doing absolutely nothing” to try to find work. At the same time, Judge Albin showed concern that after 11 years of receiving limited duration alimony, once “the term expires, [does] Ms. Gnall sink back down to whatever she can earn?” Is there a legal expectation that a SAHM or SAHD must try to find work outside the home? What about the “worth” and economic value of work the stay-at-home spouse performs in raising children and maintaining the home?
• Should the Gnall’s case be subject to New Jersey’s alimony reform laws, passed and signed into law by Governor Christie this past September? Alimony reform laws are intended to be applied prospectively to new cases. Does the Gnall’s ongoing dispute qualify? If judges apply reform laws to this case, does this open the door to other alimony cases in New Jersey to ground their claims in the new alimony rules? There was evidence yesterday that alimony reform may come into play when one of the judges was heard asking (paraphrased): “Talking about the new statue; alimony [in the past] has exceeded the length of the marriage, but that’s no longer the law in light of new statute.” Which statue — new or old — will win out? If the new rules apply, does this mean the most Ms. Gnall can hope for is to extend her limited duration alimony from 11 to 15 years?

It will be interesting to see what answers justices come up with in response to the many intriguing and important questions Gnall v. Gnall has raised. We are now awaiting the Supreme Court’s written opinion in what could be a groundbreaking ruling. In the meantime, you can learn more about New Jersey alimony reform by viewing our easy-to-follow summary of changes to alimony law as of September 10, 2014: