Arizona Court of Appeals Division One Holds that Courts Should Apply a Balancing Test to Determine Whether to Use Actual Income or Earning Capacity to Calculate Spousal Maintenance when Voluntary Reduction of Income Issues are Raised.

After 29 years of marriage, Connie Pullen filed a petition for dissolution of marriage.  In that petition, Ms. Pullen requested an award of spousal maintenance.  During the divorce proceedings, her husband, Arthur Pullen, III, voluntarily ended his employment at FedEx and moved to Washington where he obtained a lower-paying job.  The trial court granted Ms. Pullen an award of spousal maintenance and used Mr. Pullen’s previous income to calculate the award.  Mr. Pullen subsequently filed a motion for a new trial, which the court denied.  He appealed, arguing that the trial court applied an incorrect legal standard for attributing income to him for purposes of determining spousal maintenance and that there was insufficient evidence to hold that he voluntarily reduced his earning capacity. 

The Arizona Court of Appeals held that the trial court considered the appropriate factors for attributing to Mr. Pullen his prior income in determining spousal maintenance and that there was evidence supporting that holding.  Arizona courts have adopted an intermediate balancing test to determine whether to use actual income or earning capacity to calculate child support when a parent voluntarily reduces his or her income.  Although that balancing test has never been applied to attribute income for spousal maintenance purposes, the Court determined that the rationale behind the test clearly applies in the spousal maintenance context.  Therefore, according to the Court, “courts should balance [the following] five factors in determining whether to use actual income or earning capacity to calculate spousal maintenance when voluntary reduction of income issues are raised”: (1) the reasons asserted by the party whose conduct is at issue; (2) the impact upon the oblige of considering the actual earnings of the obligor; (3) when the obligee’s conduct is at issue, the impact upon the obligor of considering the actual earnings of the oblige and thereby reducing the obligor’s financial contribution to the support order at issue; (4) whether the party complaining of a voluntary reduction in income acquiesced in the conduct of the other party; and (5) the timing of the action in question in relation to the entering of a decree or the execution of a written agreement between the parties.  In this case, although the trial court did not expressly balance these factors, the Court of Appeals found that the record supported its decision under that analysis. 

Judge Kessler authored the opinion; Judges Hall and Orozco concurred.