Construing a House Payment as Alimony

Often the divorce court will order one spouse to pay the house payment of the other spouse, and in many cases the order will specify that the duty stops when the recipient spouse remarries or when the children reach the age of majority. In that case, courts usually have no trouble construing that obligation as one of support, in the nature of alimony.

But what happens when the order does not specify when the duty to pay ends? Is it alimony, meaning modifiable later if there’s a material change in circumstances, or is it property division, meaning it’s final and the court can’t change it? That’s the question the Alabama Court of Civil Appeals addressed in Lambert v. Lambert, Case No. 2070583, (Ala. Civ. App. December 31, 2008).

The parties agreed to the terms of their divorce. Their agreement stated that the husband was to build the wife a house of a specified value in a specified subdivision and place the title to it in the wife’s name, subject only to a mortgage, “the payment of which shall be the sole responsibility of Defendant Husband.” The agreement went on to provide: “Upon sale of the . . . home, remarriage of Plaintiff Wife, her cohabitation with a member of the opposite sex or upon her ceasing to occupy said . . . home place as her principal residence prior to the minor child of the parties attaining the age of nineteen (19) years, then Defendant Husband shall receive an amount equal to one-half of the appraised value of said home place as of the date of its construction. In the event that said house is not sold, Plaintiff Wife does not remarry or cohabit with a member of the opposite sex or cease to utilize said home place as her primary residence prior to the minor child of the parties attaining the age of nineteen (19) years, then Defendant Husband’s right to receive such sum shall terminate.”

The husband paid the mortgage payments as agreed. The appeals court pointed out that the husband did not claim alimony treatment for the payments, but this is unremarkable, because the husband could never have claimed alimony treatment for a debt in his own name. After the child became an adult, the husband filed a “Motion to Modify or Clarify” the divorce judgment, seeking the court’s determination that the husband’s obligation to make the house payments was in the nature of alimony “in that it is terminable upon the happening of specific events.” The husband also sought a declaration (one supposes in the alternative, although the opinion isn’t clear) that the husband’s obligation ended when the child became an adult.

The trial court entered two separate orders, together having the effect of finding that the husband’s obligation to pay the mortgage payment on the Wife’s house was in the nature of periodic alimony and therefore modifiable. The Wife appealed.

The appeals court first included the following summary of the distinction in Alabama between alimony in gross (property settlement) and periodic alimony from TenEyck v. TenEyck, 885 So. 2d 146 (Ala. Civ. App. 2003):

Our supreme court has explained the difference between periodic alimony and alimony in gross. Alimony in gross is considered ‘compensation for the [recipient spouse’s] inchoate marital rights [and] … may also represent a division of the fruits of the marriage where liquidation of a couple’s jointly owned assets is not practicable.’ An alimony-in-gross ward ‘must satisfy two requirements, (1) the time of payment and the amount must be certain, and (2) the right to alimony must be vested.’ It must also be payable out of the present estate of the paying spouse as it exists at the time of the divorce. In other words, alimony in gross is a form of property settlement. An alimony-in-gross award is generally not modifiable.

Periodic alimony, on the other hand, ‘is an allowance for the future support of the [recipient spouse] payable from the current earnings of the [paying spouse].’ Its purpose  ‘is to support the former dependent spouse and enable that spouse, to the extent possible, to maintain the status that the parties had enjoyed during the marriage, until that spouse is self-supporting or maintaining a lifestyle or status similar to the one enjoyed during the marriage.’ Periodic alimony is modifiable based upon changes in the parties’ financial conditions or needs, such as an increase in the need of the recipient spouse, a decrease in the income of the paying spouse, or an increase in the income of the recipient spouse. The paying spouse’s duty to pay periodic alimony may be terminated by petition and proof that the recipient spouse has remarried or is cohabiting with a member of the opposite sex.

The appeals court compared and contrasted this case with three cases cited by the husband, McGugin v. McGugin, 357 So. 2d 347 (Ala. Civ. App. 1978); Holman v. Holman, 435 So. 2d 98, 100-01 (Ala. Civ. App. 1983); and Daniels v. Daniels, 599 So. 2d 1208 (Ala. Civ. App. 1992.

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