Wednesday, May 10, 2006
A Colorado woman is seeking $2.5 million from a businessman who she claims was involved in a polygamous marriage with her. She alleges that when she left a business that she and the other wives were working in that the man had agreed to pay her $2.5 million to settle her interest in the business. Attorneys for the man contend that the woman is attempting to extort money by threatening to have him prosecuted for polygamy. Source. AP, cbs4denver.com. Please click here to read the complete story (last visited May 10, 2006, reo).
Tuesday, May 9, 2006
Case Law Development: Effect of Bankruptcy Discharge on State Court Judgements to Enforce Non-Discharged Debts
The United States Court of Appeals for the Fifth Circuit was called upon to revisit what it characterized as the “ceaseless litigation” involved following a couple’s divorce in 1993. The case addresses the issue of discharge of debt in bankruptcy but also provides yet another example of how difficult and contentious efforts to enforce obligations under divorce judgments can be.
After their 1993 divorce action, Husband filed bankruptcy and had discharged certain property settlement obligations but was unsuccessful in discharging his alimony debt. Wife then brought several state court contempt actions to enforce the obligations under the divorce proceeding. In one of these actions, she obtained a state court judgment for contempt ordering that Husband pay the discharged property settlement (the court being unaware of the bankruptcy discharge at that point), the alimony arrearages of over $96,000, damages for failure to pay alimony (primarily Wife’s lost equity in property that was foreclosed when she was unable to pay her mortgage), and attorneys fees in enforcing the obligations.
Husband then brought an action in bankruptcy court to reopen the bankruptcy and requested the court to void the state court judgments. The bankruptcy court ruled that Husband's prior bankruptcy discharge caused all of Wife's claims, except for the claim for non-discharged alimony, to be barred by res judicata. The decision was affirmed by the district court.
The court of appeals, rejected the bankruptcy court’s use of res judicata to resolve the dispute and focused instead solely on the questions of focus instead on the requirements of section 524(a)(1) of the Bankruptcy Act regarding whether the state court judgments were for debts that had been discharged by the bankruptcy action. Thus, the court pointed out that the state court’s original judgment for non-payment of the property settlement was clearly an attempt to enforce a discharged debt and was void.
As to the judgment for attorney’s fees, the court of appeals noted that reasonable attorneys' fees incurred in collecting support obligations should be treated as support obligations while attorney’s fees related to discharged debts should be considered discharged debt. Wife’s award of attorneys’ fees related to efforts to enforce both discharged and non-discharged debt. The district court had held that, because of this, the entire judgment of attorneys' fees was void under the equitable doctrine of unclean hands. The court of appeals disapproved this use of the unclean hands doctrine, noting that this equitable doctrine may not be used by a federal court to void a state court judgment. Rather, the court held that the state court judgment for fees was void to the extent that those attorneys' fees were incurred in enforcing discharged debt and remanded for a determination of what portion of the attorneys’ fees related to that debt.
As to the damages for foreclosure of Wife’s property, the court noted that because the foreclosure occurred before Husband had filed for bankruptcy, they were “claims” in the bankruptcy and were discharged along with Husband’s other debts. As to losses of other property, the court remanded for a factual determination of how much of that award was for pre-petition and post-petition claims.
In re Egleston, 2006 U.S. App. LEXIS 11296 (May 5, 2006)
Opinion on the web (last visited May 8, 2006 bgf)
Tuesday, May 2, 2006
Case Law Development: New Hampshire Supreme Court Addresses Rehabilitative Maintenance Preference, Extended Payments of Property Settlements and Division of Moral Obligations that are not Legal Debts
The New Hampshire Supreme Court reviewed a divorce action with a spectrum of economic issues worth noting. The couple in the case had been married 13 years and had four children. Husband owns a dental practice with his father. Wife earned a law degree early in the marriage but, by agreement between the couple, she remained at home as homemaker and primary caretaker of the children.
One issue related to the choice of rehabilitative rather than permanent maintenance. The trial court awarded wife $3000 a month alimony for three years, based on the amount of time required for her to prepare herself (in terms of mental health and education and job placement) to return to the job market. Wife argued that she should have been awarded permanent alimony, given the couple's agreement that she stay home with the children, the fact that the children would still be school aged in three years, and her current depression and anxiety. The Supreme Court affirmed the alimony order, noting that rehabilitative alimony is the preferred approach and should only be rejected where "a supported spouse suffers from ill health and is not capable of establishing an individual source of income, or where the supported spouse in a long-term marriage lacks the requi-site job skills to independently ap-proximate the standard of living established during the marriage." Neither situation existed in these facts. Moreover, the court noted, Wife could petition for extension of the alimony if at the end of three years she was still not in a position to meet her reasonable needs.
A second issue concerned the division of property. The court divided the marital estate of $ 2.9 million and awarded 55 percent to Wife. The trial court then ordered that Husband be permitted to pay her the outstanding share of the property settlement over a period of 23 years. The Supreme Court found such an extended payment schedule to be an abuse of discretion. The court did observe that case law from other jurisdictions supported extended payment schedules where there were substantial nonliquid marital assets and a lump-sum cash payment would create a serious financial hardship for the obligor. The court further commented that "We acknowledge the frustration and inconvenience that may occur when one former spouse must sell part of his or her assets to make the payments required by a divorce judgment. It is an inevitable result of virtually every property division, however, that a former spouse who is required to turn over assets to the other at the termination of the marriage has fewer assets after the division than before.... Accordingly, we hold that the trial court unsustainably exercised its discretion by allowing the respondent to pay a substantial portion of the petitioner's share of the marital estate over a twenty-three year period."
Finally the court held that the trial court had abused its discretion in ordering reimbursement to Husband's parents of contributions they made to certain marital property. The court cited the general rule that courts may not divide mere "moral" obligations but only legal debts. The court concluded that if Husband reimbursed his parents for their contributions, "he would be doing so gratuitously and not as a result of an enforceable legal obligation. Accordingly, the trial court unsustainably exercised its discretion in ordering such a reimbursement and reducing the marital estate by $ 275,000."
Harvey v. Harvey, 2006 N.H. LEXIS 49 (April 26, 2006)
Opinion on the web (last visited May 1, 2006 bgf)
Friday, April 28, 2006
The Georgia Supreme Court considered the retroactive application of family law rulings in a case in which the question was whether alimony obligations survive the death of the obligor parent. The court affirmed the trial court's decision that husband's estate could not be held in contempt for failing to continue to pay the alimony obligation. The trial court had concluded that the normal rule that death of the obligor terminates the agreement should apply because the settlement agreement's provision that Wife was entitled to alimony until she remarried or died did not evidence a manifest intention to reverse that rule.
The issue for the Supreme Court was whether that rule, drawn from a 1981 Georgia Supreme Court decision, should be applied retroactively to the couples' incorporated settlement agreement entered in 1975. The court concluded that it would apply the general rule that "a judicial decision announcing a new rule is retroactive unless the decision itself expressly makes it a matter of pure or selective prospectivity or, after examining whether retroactive application would adversely affect operation of the new rule and weighing the inequity imposed by retroactive application, we subsequently conclude application of the new rule would cause unjust results to those who justifiably relied on the former state of the law." Applying that rule to this case, the court noted that there had been conflicting authority on the issue of whether alimony terminates upon death of the obligor. The authority wife argued supported her position was a narrowly drawn case and a plurality opinion which set itself out as an exception to the general rule that a recipient spouse's claim for alimony terminated upon the death of the obligor spouse. A subsequent decision that overruled that authority did not indicate that it should be applied prospectivity only. Accordingly the court concluded that retroactive application would not result in "substantial inequitable results that amounts to the injustice or hardship that would authorize a holding of nonretroactivity."
Findley v. Findley, 2006 Ga. LEXIS 254 (April 25, 2006)
Opinion on the web (last visited April 28, 2006 bgf)
Tuesday, April 25, 2006
Case Law Development: Conviction of Domestic Violence Basis for Termination of Alimony Even Though Agreement Makes Support Nonmodifiable
The California Court of Appeals has held that the rebuttable presumption its Family Code that an award of spousal support not be made to a spouse who has been convicted of intraspousal domestic violence applies where Wife was convicted of domesic battery, stalking, and violation of a protective order in Florida, even though the parties' settlement agreement provided that spousal support was not subject to modification or termination. "We conclude that the public policy against enforcement of the nonmodifiable spousal support provision clearly outweighs any interest in its enforcement. Though there is a strong public policy in favor of enforcing the spousal support provisions of the parties' settlement agreement and appellant would forfeit a substantial amount of spousal support if there were no enforcement, the parties could not have reasonably expected that respondent would finance his own abuse by appellant. Balanced against these factors, we note that there is a significant public policy against domestic violence. ... Refusal to enforce the spousal support provision will further this policy against domestic violence, because appellant will have fewer financial resources to continue her harassment of respondent. We must also emphasize that appellant's misconduct is extremely serious and has continued despite incarceration and court orders in California and Florida. Moreover, there is a direct connection between appellant's misconduct and the nonmodifiable spousal support provision."
In re Marriage of Cauley, 2006 Cal. App. LEXIS 566 (April 24, 2006)
Opinion on the web (last visited April 25, 2006 bgf)
Saturday, March 25, 2006
Our readers may find the survey article by Joan Biskupic written earlier this week in USAToday interesting and an excellent overview of the present status of the same-sex marriage battle throughout the United States. Source: Ms. Joan Biskupic, USAToday.com. Please click here to go to Ms. Biskupic’s article (last visited March 25, 2006, reo).
Tuesday, March 14, 2006
The Georgia Supreme Court found no error in a trial court's ruling that a portion of Husband's undivided interest in the estates of his late parents may be awarded as alimony. However, the court did reverse the trial court's joinder of Husband's two brothers (the co-executors of the estate) in the divorce action, finding that "the absence of the Co-executors from this litigation would not render the relief afforded the wife partial or hollow because she would obtain an interest as full and complete as that presently held by Husband."
Searcy v. Searcy, 2006 Ga. LEXIS 170 (March 13, 2006)
Opinion on the web (last visited march 14, 2006 bgf)
Sunday, March 5, 2006
Two Pennsylvania legislators, Senators Linda Short and Brad Hutto, were reportedly unsuccessful last week in their effort to amend Pennsylvania law to remove adultery from consideration as a factor in awarding alimony. Under their proposal, family court judges could excuse marital misconduct “as grounds to deny alimony once a temporary hearing has been held on a divorce proceeding — a much earlier point in the process.” The proposal was voted down in the state senate by a vote of 26-16. Supporters of the proposal argued that spouses involved in a divorce action may “string out” court proceedings in order to “catch” their partner in adultery. “Then, the partner — usually the man — can then use the misconduct to deny alimony.” Source: Roddie Burris, centredaily.com. Please click here to read the complete story (last visited March 5, 2006, reo).
Tuesday, February 21, 2006
The Florida Court of Appeals has held that, although contempt is not available in Florida to enforce equitable distribution, it is available in case of nonpayment of alimony. The court upheld its use in this case where husband failed to pay lump sum alimony which had been ordered after husband failed to comply with the court's order that he pay wife a share of the proceeds of sale of equitably distributed property.
Bongiorno v. Yule, 2006 Fla. App. LEXIS 1970 (February 17, 2006)
Opinion on the web (last visited February 21, 2006 bgf)
Friday, February 10, 2006
Case Law Development: Alimony and Property Division May not Be Based on Entirety of Relationship but only the Marriage being Dissolved
In this case, the couple were married for 11 years, had three children, divorced, reconciled and cohabited for a number of years, and then remarried for another six years. At the time of their second divorce, their children were between the ages of 16 and 22 and the 20-year-old had a child. (I always wonder how common this situation is. I haven't found much research on the subject. Professor Howard Wineberg has reported that "Approximately 10 percent of all currently married couples in the United States have separated and reconciled" Wineberg and McCarthy, "Separtion and reconciliation in American marriages," 29 Journal of Divorce & Remarriage 131-46 (1993) and my students' anecdotal reports of these situations tend to run at a rate of about 1 out of 150 students.)
The trial court granted Wife the marital home, half of Husband's pension, and 12 years of non-modifiable maintenance. Husband appealed, arguing that the trial court had improperly relied on the total length of the parties' relationship rather than on the length of their second marriage only in making these awards. The Connecticut Court of Appeals agreed with Husband and reversed. The court reviewed Connecticut law on the status of cohabitants and concluded that the trial court clearly could not take the period of cohabitation into account as this would undermine Connecticut publicc policy, which makes "a clear distinction between marriage and mere cohabitation, even when that cohabitation was preceded by, or ultimately led to, a marital relationship.... parties who have made the formal commitment of marriage are afforded greater rights and protections than those who choose to reside together informally." As to the consideration of the first marriage, the court noted this issue was closer but ultimately concluded that the plain language of the statute, the principal of res judicata, and the guidance of the decisions of other states in "serial marriage cases" all supported the court's conclusion that the trial court erred in considering, as equitable factors, the prior marriage.
Loughlin v. Loughlin, 2006 Conn. App. LEXIS 58 (February 7, 2006)
Opinion on the web (last visited February 10, 2006 bgf)
Tuesday, January 3, 2006
In a classic case study of alimony in a long-term marriage, the Missouri Court of Appeals reversed a trial court’s decision to award limited, non-modifiable maintenance of $1000 a month, holding that the facts of the case could not justify such a limited award.
During their twenty-two-year marriage, Wife, at Husband’s insistence, did not work outside the home. Without any assistance from Husband, she cares for the household and raised the children. She also acted as Husband’s bookkeeper for his profitable trucking business (for which Husband did not pay her because it caused her to accumulate Social Security) and doted on her husband (to the point that the court notes that she bathed him and gave him regular pedicures). After a two-year affair with a co-worker, husband filed for divorce. The trial court awarded the vast majority of the assets to Husband and awarded Wife $1000 a month nonmodifiable maintenance for two years. Wife appealed only the maintenance.
The Court of Appeals held that $1000 a month was insufficient given the facts and suggested an award of twice that to be more appropriate. Husband and Wife had maintained a relatively high standard of living during the marriage. Wife’s expenses after divorce exceeded her income by approximately $4000 a month.
Limited duration maintenance was inappropriate as “there was virtually no evidence that Wife would be able to find appropriate employment or acquire sufficient education or training within two years…. Wife has a high-school education; however, the expert witness, hired by Husband, testified that though Wife could read at the high-school level, her spelling and arithmetic were at the eighth-grade level.” Wife was currently working two part-time jobs, but the trial court had imputed earnings to her based on a full-time job. The appellate court found this inappropriate, as she had never held a full-time wage-earning job. “The limitation on her earnings was at Husband's insistence as he felt she should be home with the children. …. In short, at forty-five years of age and being out of the workforce for twenty years, Wife has no viable work history.”
The court noted the strict division of roles in the marriage as an additional factor favoring maintenance of a larger amount and unlimited duration. “It was also admitted by Husband that he did not participate in any household chores, that Wife virtually did any and all household and childcare chores. On the other hand, Husband used his twenty-plus years during the marriage to build and maintain his business acumen, free from the responsibilities of caring for the household. He had no health issues and was able to produce substantial income.”
As to making the award non-modifiable, the court commented, “we are unable to conclude that there are no circumstances under which a non-modifiable order would be authorized; however, we perceive that they would be exceedingly rare.”
Van Shannon v. Shannon v. Shannon, 2005 Mo. App. LEXIS 1952 (December 30, 2005)
Friday, December 16, 2005
The Nebraska Supreme Court has held that bankruptcy law does not preclude the modification of maintenance based on changed economic circumstances that result from one spouse filing bankruptcy. Upon divorce, wife was awarded maintenance of $1 a year. Almost a year later, husband filed for Chapter 7 Bankruptcy when his veterinary clinic failed. After discharge, the bank foreclosed and sued the wife, who had signed as a guarantor for the loan, for the deficiency. Wife then moved for a modification of maintenance on the basis of changed circumstances. The court of appeals found the “wife's liability for the deficiency judgment resulted in a material and substantial change in the relative economic circumstances of the parties which was not within the reasonable contemplation of the parties at the time of the dissolution.” Thus a modification of maintenance was appropriate. The court noted however, that “if a spousal support modification is essentially a reinstatement of the property settlement under the guise of alimony, the modification violates 11 U.S.C.S. § 524 and is not permitted. Mere attempts to "end run" around a bankruptcy discharge are not allowed. However, if the alimony modification merely takes into account the fact that one spouse would no longer receive the property settlement payments upon which the original support award was premised and the discharge results in changed financial circumstances, then modification will not violate federal bankruptcy law.”
Collett v. Collett, 270 Neb. 722; 2005 Neb. LEXIS 196 (December 9, 2005)
Opinion on the web at http://court.nol.org/opinions/2005/december/dec9/s04-850.htm (last visited December 15, 2005 bgf)
The Florida Court of Appeals reversed a permanent periodic maintenance award in favor of wife in a 47 year marriage. Both husband and wife were on fixed incomes, though the husband's income was four times that of the wife. Husband had paid $1000 a month temporary alimony during the couple's separation. The trial court concluded that wife had not proven that she needed more or that husband could pay more.
The court of appeals reversed and remanded for additional findings on these issues. The court noted that the couple's standard of living during the marriage was "far from frugal." While recognizing that maintaining the same standard of living after divorce is impossible, the appellate court noted that the trial court should have explained a decision that left Wife with "less than the husband to cover her expenses in this long, long-term marriage." The dissent would have given greater deference to the trial court's finding that wife had failed to prove that husband could pay more, noting that "Any additional obligation that the former husband must incur would require him to dip further into his savings or deplete his capital assets at an increased pace. This court has been loath to require such actions."
Sussman v. Sussman, 2005 Fla App LEXIS 19611 (Dec. 7, 2005)
Opinion on the web at http://www.4dca.org/Dec2005/12-07-05/4D04-3804.op.pdf (last visited December 15, 2005 bgf)
Friday, November 18, 2005
The California Court of Appeals agreed with a 61-year-old wife's argument that "the trial court manifestly abused its discretion by pulling the plug on her spousal support after 14 years had gone by without any indication from [Husband] or the court she was expected to become self-supporting through employment and giving her only three weeks to find a job." Wife had been granted $5,800 a month spousal support from her ex-husband in 1989. The decree did not contain a "Richmond order" terminating spousal support jurisdiction as of a specific date (In re Marriage of Richmond, 105 Cal. App. 3d 352 (1980)) nor a "Gavron warning" advising Judy she needed to become self-sufficient or face legal and financial consequences (In re Marriage of Gavron, 203 Cal. App. 3d 705 (1988)).
Husband brought an action to terminate the support because wife was able to earn income with her social work license, her medical expenses had substantially decreased, and she had attained an age at which she could draw upon her IRA without penalty. The court of appeals found that there was substantial evidence to justify terminating Wife's spousal support but the trial court abused its discretion in doing it so abruptly as to deny Judy reasonable notice and an opportunity to find a job.
As a remedy, the court of appeals directed that Wife's spousal support be returned to the original amount and continue until Wife "obtains employment at the rate of at least $ 2,500 per month or ceases to make a good faith effort to obtain such employment, or attains the age of 65 years, whichever occurs first."
In re Marriage of Schmir, 2005 Cal. App. LEXIS 1792 (November 16, 2005)
Opinion on the web at http://www.courtinfo.ca.gov/opinions/documents/B175397.PDF (last visited November 17, 2005 bgf)
Sunday, November 13, 2005
Case Law Development: Consideration of VA Disability Benefits in Marital Property Awards and Maintenance
In an opinion providing an exhaustive review of cases from across the United States, the Illinois Court of Appeals held that a trial court may consider accumulated veterans disability benefits as a consideration in dividing marital property and in determining maintenance awards. The court reviewed the case law interpreting 38 U.S.C.A. § 5301(a)(1) (2004), which prohibits the assignment or attachment of present or anticipated veteran's disability benefit payments. The court acknowledged that, given this statute, state trial courts may not divide present or anticipated VA disability benefits as a marital asset.
In this case, the trial court awarded a slightly larger share of the marital estate to Wife, in part because Husband's separate property included $28,000 in disability benefits Husband had accumulated and which had been deposited in the couple's bank account. The federal statute prohibiting attachment of present and future disability payments, however, "did not preclude the trial court from acknowledging the existence of such funds as being available to [Husband] as nonmarital property.
Husband also argued that the trial court erred in denying his request for maintenance from Wife in that, here too, the trial court took into account Husband's VA disability benefits. The court of appeals held that consideration of disability payments in determining need for maintenance was not error.
Wojick v. Wojick, 2005 Ill. App. LEXIS 1098 (November 4, 2005).
Opinion on the web at http://www.state.il.us/court/Opinions/AppellateCourt/2005/2ndDistrict/November/Html/2041076.htm (Last visited November 12, 2005 bgf)
Tuesday, November 8, 2005
Case Law Development: Cohabitation and Remarriage as Changed Circumstances Justifying Modification of Alimony
The Vermont supreme Court considered three consolidated cases in which the central issue was, "when does cohabitation or remarriage constitute a real, substantial, and unanticipated change of circumstances justifying a modification of spousal support?"
Unlike the majority of states, Vermont does not presume that maintenance will be reduced or terminated on remarriage of the recipient spouse. Rather, remarriage is simply one circumstance -- like cohabitation -- that can constitute a "real, substantial, and unanticipated change of circumstances."
Vermont had not previously addressed the effect of cohabitation as a changed circumstance in maintenance actions. The court concluded that cohabitation should be treated like remarriage in that it can constitute a change in circumstances if the obligor spouse can prove that it was unanticipated, and effects a real and substantial change in the financial circumstances of the obligee spouse. The court cautioned that to constitute changed circumstances, "cohabitation must approach the permanency of marriage."
Applying these standards to the cases before it, the court upheld the modifications in some and not in others, depending on the evidence of financial contribution from the new partner and its effect on the recipient spouse's financial condition. The court held in one case, in which wife's cohabitant partner was not actually contributing to household expenses, that this did not constituted changed circumstances. The court suggested that even cohabitation plus contribution would be insufficient unless the movant showed that this resulted in a actual improvement in the finances of the recipient spouse. One judge dissented from this holding and objected to the dicta, finding that the court's rule was inconsistent with the approach used by the majority of states and unduly restricted the trial court's discretion.
Miller v. Miller, 2005 VT 122, 2005 Vt. LEXIS 303 (November 4, 2005)
Opinion on the web at http://dol.state.vt.us/gopher_root3/supct/current/2004-187.op (last visited November 7. 2005 bgf)
Saturday, October 22, 2005
AUSTIN - A proposed ban on gay marriage probably will be the big ballot draw as Texans start casting early votes Monday for the Nov. 8 constitutional amendments election. Proposition 2 would define marriage as being only between one man and one woman. State law already bans same-sex marriage, but the amendment would cement that definition in the state constitution. Groups on both sides of the same-sex marriage ban are working to stir interest in the ballot issue. The Republican Party of Texas' leader is aggressively speaking out in favor of it, while gay rights groups are opposed to it. Source. Kelley Shannon, Associated Press, Star-Telegram.com. For additional information, click here (last visited October 22, 2005, reo).
Friday, October 21, 2005
Case Law Development: Spending Patterns As Evidence Of Ability To Continue To Pay Alimony In Spite Of Income Reduction
The Michigan Court of Appeals affirmed a trial court's decision to lower but not eliminate Husband's alimony payment. Husband had lost his job and was near retirement. His income had been drastically reduced, near to the amount of alimony he was paying. On a motion to modify, he asked the court to eliminate the duty to pay alimony. The trial court held that cutting the alimony payment by about a third was justified. The appellate court affirmed, finding that, given husband's lavish spending habits, and his ability to draw on an IRA for additional income, there was ample "evidence of plaintiff's continued ability to pay, regardless of his age and reported income" to uphold the trial court's decision to reduce but not eliminate alimony. One dissenting judge would have found the trial court's decision clearly erroneous and inequitable.
Holmes v. Holmes, 2005 Mich. App. LEXIS 2480 (October 11, 2005)
Opinion on the web at http://courtofappeals.mijud.net/documents/OPINIONS/FINAL/COA/20051011_C252528_57_252528.OPN.PDF (last visited October 20, 2005 bgf).
Friday, October 14, 2005
Case Law Development: Court may not Impute Income to Starving Artist Wife upon Husband's Motion to Modify Maintenance
The Massachusetts Court of Appeals reversed a trial judge's reduction of alimony in a case involving an aspiring artist mother. The couple in this case divorced when they were in their late 40s, with a 13-year-old son and twin 6 year olds sons. Wife stayed home with the children and painted. The trial court suggested that Wife would have to think about a different career in the future if her painting didn't pan out. The trial court granted alimony and suggested that it was likely the Husband would have to continue to pay that alimony until retirement.
Three years later, with wife's painting career improving but still not generating a positive cash flow, Husband moved to reduce alimony, claiming that wife was voluntarily unemployed and should be credited with larger earning capacity and that she had reduced expenses. Husband also argued that he had fewer assets because he had transferred income-producing assets to his mother. Vocational experts for both parties testified regarding Wife's ability to earn more income than her painting was providing.
Trial court granted the reduction in alimony.
The Massachusetts Court of Appeals reversed. The opinion contains plenty of scoldings:
First, the court of appeals noted that the trial court properly scolded the Husband for trying to argue changed circumstances in his reduced income, because his employment income had actually increased since the divorce. Moreover, the trial court noted that it would not consider Husband's argument that he had reduced income from assets because he had transferred those assets since he had transferred the assets to his mother with the clear expectation that she would return them at a future date and he did not declare any income from those interests as of the time of the divorce. The trial court noted that Husband was "asking the Court to reduce his present support obligations in order to allow his future assets to be protected, preserved and enhanced -- all at the expense of the [wife] and the parties' three unemancipated children, whom he is obligated to support."
The appellate court had some scolding of its own to do. In reversing the trial court's decision, the court found that there was no change in circumstance from the original decree. While conceding that imputing income may be appropriate in modification in certain circumstances where there is evidence that an obligee is deliberately choosing to deflate their income, the court noted that those were not the circumstances in this case. Rather, the court concluded, the trial court's decision was based on the "judge's personal disapproval" of the wife's "avocation." The appellate court noted that at one point the judge had commented, "I'd love to be a professional golfer." He told the wife, "You may be a fine artist, but the term . . . 'starving artist' exists for a reason. . . . You can't keep losing money, ma'am. If you want to, that's your business, but he's not going to subsidize [your avocation]." The court emphasized the caution "against relying unduly on the income-earning potential of a wife and mother who has been out of the regular job market for decades.... Such caution is appropriate in this case, where the wife has dedicated herself and expressed commitment to her vocation as an artist, whether or not she could earn more money in a clerical position."
Kelley v. Kelley, 2005 Mass. App. LEXIS 951 (October 11, 2005)
Massachusetts opinions are available online at http://massreports.com/slipops/ (last visited October 12, 2005 bgf)
Friday, September 30, 2005
Case Law Development: Property Settlement Agreements to Divide Military Disability Benefits May Not Be Enforced By State Courts
The Supreme Court of Montana, in a 4-3 decision, held that federal preemption precludes the state from holding husband in contempt for failing to pay VA disability benefits that had been awarded to wife in the prior dissolution action. The award was made pursuant to an property settlement agreement in which Husband agreed to pay Wife a portion of his VA disability benefits each month. In holding that federal law preempted the state in enforcing such an agreement, the court expressly overruled prior precedent distinguishing maintenance agreements from the scope of federal preemption. The court emphasized that a trial court may still consider military disability retirement pay “as a source of income in awarding spousal or child support, or generally as an economic circumstance of the parties justifying a disproportionate award of marital property to the nonretiree spouse."
Two dissenting opinions strongly disagreed that federal law preempted state enforcement of voluntary maintenance agreements involving military disability benefits.
In re Marriage of Lutes, 2005 MT 242; 2005 Mont. LEXIS 416 (September 27, 2005)
Opinion on the web at http://www.lawlibrary.state.mt.us/dscgi/ds.py/Get/File-45266/04-416.pdf (last visited September 29, 2005 bgf)