Modification of Escalation Clauses

The Mississippi Supreme Court decided Short v. Short located here last week.  The main issue was whether the trial court had erred by failing to determine a material change in circumstances had occurred since the original agreement of the parties had been entered.  Mr. Short had originally entered into a child support agreement that contained an escalation clause.  The clause provided a floor of $3,000 per month in child support.  Mr. Short's income dropped significantly and he filed for modification of the support order.  The trial court denied it since there was a minimum support amount in the agreement.  The Court of Appeals affirmed.  The Mississippi Supreme Court reversed finding that sufficient proof was presented of a change in circumstances to review the order.  As such, even though the parties originally agreed to the high amounts, circumstances had changed warranting a review of it.  The ruling also clarified what is essential in escalation clauses.  The Supreme Court overruled Bruce v. Bruce, 687 So. 2d 1199, 1202 (Miss. 1996) located here and stated that escalation clauses no longer have to be tied to all the factors set forth in Tedford v. Dempsey, 437 So.2d 410 (Miss. 1983)but only that they should be.  To me, this opens the door to trial courts attempting to craft escalation clauses in contested proceedings.