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Divorce Mediation Blog

Recipe for Premarital Agreement Failure, Redux - Allen v. Allen

Wednesday, September 28, 2016

After 2001’s DeMatteo v. DeMatteo, we wondered just what one would have to do, in the real world, to cause a premarital agreement to be struck down as invalid or unenforceable, short of a literal or figurative “gun to the head”, or blanket waivers of everything.

In 2014, we commented here on Kelcourse v. Kelcourse, noting that a husband who sought to enforce a prenup had materially violated the agreement, and generally acted in a matter so unseemly during the marriage itself, that he undermined the very deal that he was seeking to enforce. There was also a vermin factor, but you may go back and read that entry if you are sufficiently curious!

Now, in last month’s Allen v. Allen, a Rule 1:28 decision of the Massachusetts Appeals Court, we have clear primer on how not to conclude a premarital agreement, if you ever want to enforce it. Without further ado, here are the Allen Rules:

  1. Marry someone whose primary language is Portuguese, of which you speak none.
  2. Use hand signals with each other.
  3. Have your non-Portuguese speaking lawyer “explain the agreement” to your intended (assisted by your hand signals).
  4. Arrange for a Portuguese speaking personal injury and real estate lawyer to meet with your fiancée 4 days before the marriage, to orally translate the agreement into Portuguese and give no legal advice (perhaps she didn’t want any; or maybe it was because he had no involvement in divorce practice).
    Make sure that the agreement waives all property and support rights, except to keep the assets that she had before the marriage, disclosed on the agreement as “none”.
  5. Stay married for 15 years and then demand specific enforcement of the agreement which gives her nothing.
  6. Oh, and don’t forget to ask the Appeals Court to bar your wife from presenting oral argument.

Hope you practitioners are taking notes!

 

O Pfannenstiehl! Part 7: The Eagle (SJC) Has Landed

Wednesday, September 14, 2016

The 2015 Massachusetts Appeals Court case of Pfannenstiehl v. Pfannenstiehl was so problematic and peculiar that that we published 6 previous blog entries about it. We hoped that the Supreme Judicial Court (SJC) would accept the husband’s request for further appellate review, and it did, on the trust issues only. Happily, it did, and when the SJC issued its decision in August, it reversed the Appeals Court’s split decision.

In the process, SJC furthered our understanding of just when a trust interest is, or is not, a marital asset that is subject to division in a divorce case. In deciding that Mr. Pfannenstiehl’s interest was too speculative to be deemed an asset, the court avoided the equally vexing question of how to value an interest when it is properly found to be an assignable asset; so, that is left for another day.

The SJC attacked the problem from two vantage points: 1. Was the trustees’ authority such that the husband could have a legally enforceable interest? 2. If so, was the husband’s interest, as one of 11 living beneficiaries, subject to expansion by reason of newly birthed issue, sufficiently discernible to call it an asset and assign an interest in it to the wife?

The answer on each was a resounding “no”.

The critical language was that the trustees:

“… shall pay to or apply for…

… any one or more of the Donor’s then living issue…

… such amounts of income and principal and income…

… in [the trustees’] sole discretion…

… in equal or unequal shares…

… for the comfortable support, health, maintenance, welfare and education of [the beneficiaries]...”

The wife, and the Appeals Court, focused on the “shall” and the so-called “ascertainable standard”, i.e., the “comfortable support” clause, to argue that the Husband could plausibly force the trustees to make any distribution to him that qualified under that standard. An enforceable right equals an asset, they reasoned.

The husband, and ultimately the SJC, instead seized on the open class of beneficiaries, “sole discretion” and the “equal or unequal shares” leeway, to undermine the claim that the Husband could really enforce anything. Because the donor vested the trustees with sole discretion, because some beneficiaries could receive less than others – including nothing – and because the husband’s interest could be diluted by the birth of new beneficiaries, the SJC concluded that there was nothing to enforce; hence no asset; but rather a mere “expectancy”, i.e., an economic factor but not a divisible asset under equitable division law.

The facts bore out the high court’s analysis. To the point of the parties’ divorce, only 3 of the 11 beneficiaries had received anything from the trustees. What the husband and his siblings did receive varied year-to-year, heavily dependent on the productivity of the trust res, which was stock in the donor’s company. When divorce hit, distributions for the husband stopped cold. Could they resume? Sure. Was there any legal path for the husband to compel resumption. Not by the SJC’s light.

The substantial history of trust distributions to Mr. Pfannenstiehl constituted an important financial consideration for this divorcing family, which, however, did not make it any more enforceable, the court analogized, than social security. The SJC remanded for reconsideration of the trial court’s decision to not award alimony to the wife, with language that could even justify a reconfiguration of the remaining marital assets, as impacted by the potential quantum of the husband trust expectancy. But, assignable property? No.

The bottom line for practitioners is that the financial history of the trust matters, but trust language really matters. The trial court’s charge is to determine, as nearly as possible, what the donor intended, as gleaned from the trust instrument. By that measure, this was not a hard case.

Now, one of these days, we are going to get a case that tells us something about how to value a trust interest that is a marital asset.

 

GUEST BLOG: Facilitative Mediation Includes Informed Decision Making

Wednesday, August 17, 2016

[This letter to the editor of Lawyers Weekly highlights an important debate within the mediation community. We post it with the authors’ permission. John Fiske and Diane Neumann are giants in our field, and trained both of us.]

July 25, 2016

Letter to the Editor
Lawyers Weekly

Re: Facilitative Mediation Includes Informed Decision Making

Thomas Elkind’s Opinion of June 20 advances our understanding of mediation in distinguishing between facilitative mediation and evaluative mediation. In the latter, the mediator is almost a conciliator and the parties look to the mediator to advise them of the strength of their position. In the former, Tom says facilitative mediators spurn all techniques that seem to involve any evaluation of the parties even if it leaves them uninformed about the laws or procedures that might affect their positions. We disagree, maybe just a difference in emphasis.

Since 1989 we have taught over 1,000 people a different definition of facilitative mediation in our Divorce Mediation Training Associates programs. We believe facilitative mediation is informed decision-making, in which the mediator makes sure both spouses have accurate and relevant information about the laws affecting divorce and the procedures available for obtaining a divorce. The Standards of the Massachusetts Council on Family Mediation say “The mediator has a responsibility to the parties to help them reach an informed agreement.” In addition to encouraging the parties to, seek professional advice, “The mediator may give general information that will help the parties make their decision.” For example, the mediator may explain income tax and other differences between alimony and child support so that the parties know which approach may be more advantageous, or may tell the parties about how they could choose to divide a 401(k) retirement plan with a Qualified Domestic Relations Order, or inform couples married 9 years and 6 months that if they are married for at least 10 years there is a Social Security spousal share benefit.

As Tom writes, both types of mediators need to know the judicial process. Sharing that knowledge with both parties is not the same as giving legal advice to one party about what action should be taken. Part of the great satisfaction we derive as family mediators and mediation trainers is offering a process in which the clients choose their own particular solution with knowledge of the relevant law, sometimes deliberately offering something more generous that the likely legal outcome. It does happen.

Diane Neumann and John A. Fiske have been training divorce mediators since 1989.

 

Making A Bad Situation Worse: Rosenwassser v. Rosenwasser

Wednesday, August 10, 2016

In Rosenwasser v. Rosenwasser Massachusetts Appeals Court recently faulted a trial judge for denying a father’s request to “remove” his daughter to the State of Florida, dissecting her application of the facts to the two-pronged “real advantage” test that governs such requests by primary custodial parents, with painstaking care and convincing detail. Piling one critical point on another, the opinion yielded two inevitable conclusions: that the trial court ineffectively weighed and explained the advantages for the father in his requested move; and she over-weighted the hope that the mother’s recent efforts to kindle a relationship with the child would result in a benefit for the child. All signs pointed plainly to reversal.

Then, without explanation, but inexplicably calling it a “close call”, the Appeals Court remanded the case for more trial court hearings, more written findings, very probably another appeal; deferring any final decision and prolonging the agony for another family in limbo. A really fine decision turned bad: a victim of appellate irresoluteness.

Too often, as we learn again, litigation is a futile exercise in matters involving children.

Here’s why. The child was in utero when the parties separated in 2010. Shortly after the divorce, the mother became unavailable for mental health reasons. By 2012 a partial modification judgment formalized the father’s assumption of exclusive care for the child, a fact on the ground since shortly after her birth. For two of the child’s first three years, her mother was an infrequent presence in her life.

In August 2012, the father sought permission to move, for very strong reasons under the law. Trial did not begin until a year later and concluded five months after that. The trial court’s new judgment entered in July 2014. The husband’s appeal absorbed another 24 months, resulting in the Appeals Court opinion on June 17, 2016.

Just since the father filed his request to move child has aged from two to six years, fully two-thirds of her young life. With the Appeals Court’s tepid remedy, the clock continues to run, and it is fair to predict that this case will continue into 2017 and perhaps well beyond. The facts on the ground change daily, as the system grinds on, blind to the stress that this process imposes on a young child, whose road is difficult enough.

One bedrock principle that appellate law imposes on the trial court is that a judgment must logically flow from the facts found in the case. We wish that the Appeals Court applied this standard to itself.

 

The Return of DeMarco v. DeMarco: Contract Trumps Hindsight

Wednesday, August 10, 2016

Some months back, we commented on a trial court decision in the case of DeMarco v. DeMarco. The parties entered into an agreement for the ex-husband to pay a lump sum of cash, in return for a termination of alimony. It followed a discussion with the judge at the outset of trial, in which the court and the lawyers expressed a mutual understanding that M.G.L., ch. 208, §49(f) presaged termination of alimony by reason of the husband’s age. If tried, the wife would likely lose her alimony, with nothing in return. She chose to get something, by settling.

It turned out that the professionals were wrong (as were many of their colleagues), when the Supreme Judicial Court ruled in the Rodman, Chin & Doktor trilogy of cases that §49(f) would only apply to divorces decided after March 1, 2012, of which this case was not one. The wife then sought “relief” from the modification judgment, and contract; and the trial judge embraced personal responsibility for the wife’s decision to settle, in an extraordinary ruling. At the time we worried that the court’s principled decision, which we admired personally, was problematic because of its impact on the finality of agreements, and the judgments into which they incorporate.

The husband appealed and the Massachusetts Appeals Court reversed, recently, in a clear-eyed decision. Quite simply, the panel concluded, the lawyers and judge wrongly predicted the prospective nature of §49(f), and the wife chose to rely on that common misunderstanding in making her deal. In doing so, she did not just walk away. She demanded and received cash consideration for doing so. Thus, she did not rely on “the law” at all, but rather weighed out the risks and benefits of proceeding to trial and came down on the side of salvaging a bad situation. It happens every day in every court in America.

The Appeals Court correctly concluded that the wife’s interest in requesting relief was unhappiness at the result, with benefit of hindsight; and that her cause did not thread the extremely narrow needle of Mass. Dom. Rel. P. 60(b)(5). Litigants make deals every day because of judgment calls about the law’s application to their facts. The only thing that stood this case apart was that it addressed an extremely controversial aspect of a highly contentious new statute (Alimony Reform Act), and that an apparent consensus of judge and lawyers preceded its conclusion.

In the end, the settlement was supported by sound contract principles, unaltered by the SJC’s later “clarification” of the law; and the appellate court reversed. We don’t doubt the legal correctness of the Appeals Court’s decision, which does not reduce, in the least the gallantry of the trial judge’s action. Too few grab responsibility to themselves, even at the risk of being wrong.

In an interesting side-note, we have wondered here previously whether or not the ARA’s blanket statement, in “uncodified” §4(c), that the parties’ surviving agreement that there shall be no alimony is absolutely binding on the trial court, as it states, or if it is still subject to the court-made exception of “countervailing equities”, as expressed in 1976’s Knox v. Remick, and others. The DeMarco panel, at least, believe that this equitable construct survives ARA, as expressed in dicta, at the conclusion of its decision. In other words, surviving agreements to waive or terminate alimony are “almost impossible to change”, in the DeMarco judge’s words, and not absolutely binding as §4(c) suggests, at least until further word.

 

#marriedseparateddivorcedcohabitedmarrieddivorced: The SJC makes it up and gets it right: Duff-Kareores v. Kareores – Part 3

Wednesday, July 27, 2016

In our last two entries, we considered the central features of the Supreme Judicial Court’s (SJC) recent case, Duff-Kareores v. Kareores. Today, we comment briefly on a collateral benefit of the SJC’s opinion in another area the Alimony Reform Act (eff. 3.1.12) (ARA): the “common household” provision of in M.G.L., ch. 208, § 49(d). In its decision, the high court lifted the enumerated criteria of §49(d) (how to prove common household) and grafted them onto §48 (how to prove length of marriage to equitably pre-marital economic partnership during cohabitation).

In doing so, the SJC described §49(d) as the factual basis upon which a judge may reduce, suspend or terminate alimony by reason of a relationship that:

“…resembles, but is not equivalent to a legal marriage.”

In this dictum, the SJC says what the legislature did not with the greatest clarity: that the purpose of §49(d) is to give potential recourse to an alimony payor, without the burden of proving abated financial “need”, when an alimony recipient has assumed a marriage-like relationship. In the bare statute, the only word that connotes this meaning is “couple”, appearing in sub-sections ii. and v.; the dictionary meaning of which is not limited to romantic pairings. (See, http://www.merriam-webster.com/dictionary/couple.)

We hope that this collateral comment by the SJC will caution any future litigant against stretching the benefits of §49(d) beyond what we believe be its intended purpose.

 

#marriedseparateddivorcedcohabitedmarrieddivorced: The SJC makes it up and gets it right: Duff-Kareores v. Kareores – Part 2

Thursday, July 14, 2016

In our last entry, we began discussing the law school exam scenario turned real life divorce case in the Supreme Judicial Court’s (SJC) recent case, Duff-Kareores v. Kareores. The trial judge faced the challenge of determining how long the marriage was for alimony purposes, under M.G.L., ch. 208, §4. The parties were married for 8 years, divorced and lived separately for 4 years, cohabited while divorced for 5 ½ years and, finally, re-married each other for 6 months before the onset of divorce #2: uncharted territory under the Alimony Reform Act (ARA) (eff. 3.1.12).

The SJC upheld the inclusion of the first marriage years, and the cohabitation era, but vacated the trial court’s order because the 4-year period of divorced separation should not have been counted, since the statutory marriage extender (§48) is limited to cohabitation periods. The last time, we concurred with the SJC’s treatment of the separation and non-married cohabitation periods.

Today, we tackle the SJC’s decision to include the years of the first marriage in calculating the length of maximum alimony for the second divorce, under M.G.L, ch. 208, §49(b). At stake for the parties:

    1. Was this a 6 or 14-year marriage for alimony purposes?

    2. Was the presumed maximum length of alimony, therefore, 3 years, 7 months or 9 years, 10 months?

The SJC chose the longer marriage length, and resulting alimony term, focusing on the totality of the parties’ marriage/cohabitation history, rather than its truncated reality.

In doing so, the SJC showed little concern that “marriage” is a distinct legal status from pre-marital “cohabitation”, the latter term being the statutory language on which the question turns. The contrary argument goes that a judge may lengthen a marriage by reason of economic partnership during a non-married cohabitation, but the statute says nothing about a prior marriage. But, perhaps because marriage itself includes an expectation of cohabitation, the SJC saw this distinction as one without a difference, for these purposes. Being versed in criminal law, maybe they saw cohabitation as a lesser-included offense!

The SJC also navigated past the fact that the alimony obligations arising from the first marriage had been previously adjudicated by a judgment that included merged alimony; effectively, treating the first divorce as simply another a stop along the way for this evolving family. As we view it, the court, did not re-adjudicate previous rights. Rather, in determining alimony rights created by the law as applied to the second marriage, the trial judge and the SJC simply “counted” years of the first marriage, as part of a factual artifice that the legislature created, and which had to be construed one way or another, in frankly, unanticipated circumstances.

Once the legislature plunged into the business of calling something that it is not– the explicit permission granted by §48 - it opened the door to interpretation. In Massachusetts, the SJC is the interpreter-in-chief; and we don’t have a problem with the call that the high court made on this one. There is nothing in ARA that precludes the Kareores result, and if the purpose of M.G.L, ch., 208, §49(b)’s sliding time scale for durational limits is to honor the concept that longer partnerships connote greater rights and obligations, it seems that the SJC’s construction achieves this purpose.

As the SJC previously said in Bercume v. Bercume (admittedly, a different context), it does not write on a clean slate; and the parties’ here knew their slate very well indeed, including the risks and benefits of ARA, when they resumed marital status. (What a perfect situation for a prenuptial agreement, but that is water under the bridge.)

We do have one reservation that the SJC did not address, however: the troubling fact that the husband paid alimony for 4 years, under the first divorce and before the pre-second-marriage-cohabitation. By tacking on the period of the first marriage as part of the statute’s fictional length of marriage, a risk of double counting arises. It seems that the remand ought to have required the trial court to consider this fact in determining the ultimate alimony term, either as a “credit” against the alimony months ultimately ordered, or at least as an equitable basis for considering a shorter term. After all, M.G.L., ch. 208, §49(b) sets forth a “not longer than” standard and not a rote alimony length.

In our next entry, we will comment on an unrelated collateral benefit of this decision.

 

#marriedseparateddivorcedcohabitedmarrieddivorced: The SJC makes it up and gets it right: Duff-Kareores v. Kareores – Part 1

Friday, July 08, 2016

The Massachusetts Supreme Judicial Court (SJC) recently encountered a fact pattern that only a law school professor could love. In all likelihood, the state legislature did not consider it while cobbling together the Alimony Reform Act (ARA). Then again, life happens; and sometimes we have to make it up on the fly! The SJC did, and got it right.

In Duff-Kareores v. Kareores, the couple modeled marital ambivalence. They married, had 2 children and divorced after 8 years, with a financial settlement that included periodic alimony. After 4 years of divorced living, they resumed cohabitation, albeit without the grace of marriage.

They looked like a family, acted like a family and encouraged the world to see them as one. Five and ½ years later, the reluctant divorcees re-married in 2012. Within 6 months, the wife filed for re-divorce.

This time the parties did not settle their case. Instead, they tried their case to a Middlesex Probate and Family Court judge, to whom fell the task of figuring out how to apply the M.G.L., ch. 208, §48 definition of marital length on these facts, since that, in turn, would dictate the maximum (and likely) length of resumed alimony under ARA.

Section 48 says that the length of marriage is defined by the number of months from marriage ceremony to the date of service of a divorce complaint, but also that:

    “…the court may increase the length of marriage if there is evidence that the parties’ economic partnership began during their cohabitation period prior to marriage.”

(Our italics.) (We can’t resist asking: “How can a marriage be longer than its length?” It’s a bit like calling a 5’10” NBA point guard 6’ 3”. It happens, but he still can’t see over the defender.)

The concept is that for alimony purposes the court may treat a marriage as if it were longer, to account for pre-marital contribution and dependency formation purposes, and to give judges a way around durational limits. This exception (most ARA rules have exceptions) begun as a way to recognize same sex couples who formed families before they could legally marry, has spawned disputes for many modern marriages, where pre-marital home life is increasingly common.

The cohabitation in this case was wedged between divorce #1 and separation #2, so it qualified as “pre-marital”, as the judge ruled. But, he did not distinguish between the post-divorce cohabitation, and its preceding period, when the parties actually lived apart as a divorced family. A literal 6-month marriage, which should have been deemed 14-years (8 + 5½ + ½) – per the SJC - became an 18-year one, by decree.

The Husband appealed. Going for broke – or maybe trying to avoid it – he argued that both the 4-year separation post-divorce and the 5½-year pre-marital cohabitation should have been excluded, because he was really just a “renter” during the cohabitation period. It appears that he staked the latter claim, ironically, on the continuity of alimony payments, which the judge held less pertinent than the lack of a lease and rental payments. (He also appealed the inclusion of the first marriage as a period of pre-marital economic partnership during cohabitation, relative to the second marriage, which we will address in a subsequent blog.)

The SJC agreed about the unmarried separation period, because, the statute says nothing about economic partnerships while not cohabiting. But, what about the cohabitation period? Section 48 bestows the right to equitably pretend that a marriage is longer than it is, but, it gives no guidance on how to resolve to apply it factually.

That’s where the SJC rode to the rescue courtesy of “statutory construction” by resorting to the statute as a “whole”. The appellate court keyed on section 49(d), which has nothing to do with the length of marriages. Rather, it empowers judges to reduce, suspend or stop ongoing alimony in a modification context, when an alimony recipient has created a “common household” with another person for more than 3 months’ time, stated colloquially, for cohabitation. Concluding what legislators would have said, had they thought of it, the SJC concluded:

    … that the Legislature intended to use the terms cohabitation, economic marital partnership and common household to describe a relationship that, if established, would affect a court order for alimony, either by increasing the amount and duration of alimony ordered or by reducing, suspending or eliminating the award.

There is no way of knowing what the legislature really meant, but the SJC’s version makes great sense. It plugs a legislative hole in a logical way, while making a confusing statute a bit more consistent; and the courts now have a list of criteria to consider the next time that family life challenges family law expectations.

 

Need and variable support orders: they are not mutually exclusive

Friday, June 17, 2016

[NOTE: This piece ran as a letter to the editor of Massachusetts Lawyers Weekly in its May 16, 2016 edition, under MLW’s chosen title “Need, variable support orders aren’t mutually exclusive in Probate Court”. We re-produce it here in its original form, and with our given title.]

David Lee’s April 25th rejoinder (“Court has it right regarding self-adjusting support orders”) to our March 28th article, (“The curious case of variable support orders…”), begs a clarification from us, and a related illustration of why one may wish to re-examine current law and practice.

In our piece, we advocated for a presumption in favor of sound and reasoned discretion for the judges of our highly specialized and carefully vetted Probate and Family Court, in fashioning self-adjusting support orders. We did so, both as a matter of consistency with the actual words of SJC precedent; and largely because, in most cases most of the time, there is insufficient income to leave an alimony recipient at the marital station, our long established measure of “need”.

Why should the law exclusively advantage the party who generates greater income, by shielding his or her rising income capacity from the party who is still in “need”, as defined by law; and by putting the disadvantaged party to the uncertain and costly test of initiating new litigation in the hope that the increased capacity is there? (The same principle would apply in reverse, of course. Why should a payor with sufficient income to meet all recipient “need” be blocked from a self-executing reduction where the court finds that the recipient’s need is likely to decline over time by reason of increasing independent earnings.)

We do not advocate for untethering alimony from its historic anchor of need, despite the fact that the legislature risked muddying the waters when it failed to include the clarifying words “lesser of” or “either” in stating that “… alimony should generally not exceed the recipient’s need or 30 to 35 percent of the difference between the parties’ gross incomes…” in the Alimony Reform Act (“ARA”). See, M.G.L., ch. 208, §53(b). In fact, we agree with Mr. Lee that the trial judge’s variable support order in Hassey v. Hassey was properly vacated, if it did not vindicate the purpose of meeting “need”.

But, what if the judge had found that Ms. Hassey’s “need”, based on marital lifestyle was $8,000.00 per month; that the alimony sum based on his 32.5% of his salary would likely net her $5,000.00 per month; that a history of earned bonuses established a reasonable likelihood that Dr. Hassey would have the ability to further assist in meeting Ms. Hassey’s “need”; and that it is equitable, therefore, that he pay additional alimony of 30% of his gross bonuses, to a sum that is no greater than $3,000.00 monthly, that which would return her to the marital station? Sound discretion could certainly condition the variable portion on a comparison of the parties’ incomes as per §53(b). The sheer weight of “the 99%”, for whom the marital station is at best an aspiration after divorce, and upon whom the cost of future litigation casts the greatest burden, suggests a re-examination of this doctrine.

 

GUEST BLOG: The Appeals Court Has it Right Regarding Self-Adjusting Support Orders

Wednesday, May 25, 2016

By: David H. Lee

William and Chouteau Levine’s March 28, 2016 Opinion Piece seems to suggest support for and the value of self-adjusting support orders in family law cases. In support for their position they reference the case of Stanton-Abbott v. Stanton-Abbott, 372 Mass. 814 (1977); suggest a chilling effect on negotiated resolutions as a result of limiting the court’s authority to enter self-adjusting support orders; and speculate that courts might reject agreements reached which contain self-adjusting formulae. While recognizing the general acceptance that such self-adjusting court imposed orders offend due process, the authors seem to suggest that construction of the law endorsing such support orders will give a greater opportunity for people to reach agreements including adjustments based on future circumstances.

All good family lawyers strive to assist their clients in achieving a settled resolution whether by encouraging mediation or by counsel directed negotiation. Creative and competent lawyers and mediators are often able to assist parties in achieving a settled resolution without their support case having to be tried in court. But expanding the Trial Court’s authority to enter self-adjusting support orders in order to accommodate opportunity for possible out of court settlement is not an acceptable basis for the compromise of established law and due process rights of the parties.

The Stanton-Abbott case recognizes its own uniqueness. Justice Kaplan identified the use of a self-executing formula in that case as being appropriate based on the special case circumstances presented there (a paraplegic payee living in a foreign country and the consideration of the payor’s resources to meet the judgment supporting an annual adjustment of the payee’s alimony by 50 percent of the UK equivalent of the consumer price index increase). He also acknowledged that the question was not reached in that particular case whether a variable provision was “advisable on the merits or compatible with the fundamental purposes of alimony.”

Since that decision almost forty (40) years ago, there have been fewer than a handful of appellate decisions which have supported any such type of judgments in the absence of the parties’ agreement, and each of those has been based upon “special case” circumstances. See Wooters v. Wooters, 42 Mass. App. Ct. 929 (1997); Drapek v. Drapek, 399 Mass. 240 (1987); Kirtz v. Kirtz, 12 Mass. App. Ct. 141 (1981).

Contingent or variable provisions for support orders in a divorce judgment such as termination on death of a party, remarriage of a recipient, events relating to children (which avoid concern for IRC Section 71 considerations), known future dates of trust or estate distributions or other identified events having a reasonable basis founded upon statute, fact, or trial evidence can be understood to often be appropriately included in judgments. But these examples are quite different from judgments applying fixed percentages to unlimited amounts of increased payor income in establishing future support obligations.

The general extension of the concept of “self-adjustment” or “self-modification” to support judgments poses serious concerns which run afoul of history, statutory direction and the Constitution. The CPI adjustment of an alimony order as in Stanton-Abbott is more a preservation of an existing order translated into future value than it is a substantive modification of a set support order. The entry of a judgment ordering support to be paid based upon a sharing of a future level of income or future source of income is a very different matter.

In Hassey v. Hassey, 85 Mass. App. Ct. 518, 528 (2014), the Appeals Court properly reversed the trial court’s judgment ordering alimony to be paid without limit as a fixed percentage of the payor’s gross income in excess of $250,000. This was done without consideration of the incomes and general financial circumstances of the parties at the time the additional income might be received and without consideration of the then existing need of the recipient. See also North v. Stephens-North, Rule 1:28 Decision (June 18, 2015) (reversing alimony award of 30 percent of payor’s bonus income because a self-modifying support order based on payor spouse’s income increases results in an automatic increase in alimony without the recipient spouse being required to show a material change in circumstances, and without judicial findings regarding the recipient spouse’s needs or the provider spouse’s ability to meet them).

A self-adjusting alimony order based upon a fixed percentage of the payor’s income, without limitation, is unsupportable. Alimony is a creature of statute and has historically been based upon the need of the recipient and ability of the payor to pay. Need has been defined by case law as referring to the lifestyle maintained by the parties during the course of the marriage. No modification can be made unless the party seeking modification shows a material change of circumstances warranting modification since the entry of the earlier judgment. Kelley v. Kelley, 64 Mass. App. Ct. 733 (2005); Binder v. Binder, 7 Mass. App. Ct. 751 (1979).

G. L. c. 208, § 49(e) states: “Unless the payor and recipient agree otherwise, general term alimony may be modified in duration or amount upon a material change of circumstances warranting modification.” G. L. c. 208, § 53(b) provides that the measure of need or difference between the parties’ incomes in setting alimony is to be established “at the time of the order.” If the measure of alimony set on a statutory basis is based upon need of the recipient at the time of the issuance of the order or the difference of income between the parties at that point in time, the self-adjusting alimony order applicable to a later point in time bypasses the well-established standard of change of circumstance. In essence, the law provides that alimony is set at one point in time “at the time of the order.” Alimony generally is not to exceed the recipient’s need at the time of the order of 30 to 35 percent of the difference between the parties’ gross incomes at the time of the order. G. L. c. 208, § 53(b). Thereafter, alimony may be modified in duration or amount upon a material change in circumstances warranting modification. G. L. c. 208, § 49(e). A self-adjusting order, without limit and without the requirement of showing change in circumstance, disregards the predicate for alimony. It circumvents established law, failing to consider the needs of the recipient at some future time, what the disparity in income may be between the parties at some time or whether or to what extent there have been any changes in circumstance which would warrant a modification. Case law also supports the principle that an award of alimony is improper absent a finding of corresponding financial need of the recipient. Heins v. Ledis, 422 Mass. 477 (1996). That essential element is not satisfied in an unlimited self-adjusting alimony order.

Massachusetts has long held that future earnings are not a marital asset to be divided by the court incident to divorce. The court cannot equitably assign to a spouse a present interest in the future earnings of the other spouse. Drapek. Awarding a fixed percentage of the future income of the payor effectively treats the payor’s increased income as a property element. The recipient is made an effective “owner” of a share of an indeterminate amount earned by the payor subsequent to judgment irrespective of circumstantial review, reference to need and other factual considerations which would typically be taken into consideration by the Court in determining whether any modification is appropriate.

Irrespective of the limitation on the Court’s ability to impose a self-modifying order, there is essentially no practical limitation placed on parties’ reaching an agreement which may contemplate support changes by the inclusion of self-adjusting provisions. Such provisions might be specific to the support issue or be in consideration of other provisions of the integrated settlement agreement. The suggestion that courts might not accept negotiated, reasoned self-adjusting provisions of an agreement is not supported by experience nor would it be supported by the strong Massachusetts public policy and case law encouraging parties to reach agreements. Moore v. Moore, 389 Mass. 21 (1983).

It is far more important in our legal system for the court, absent an agreement, to be able to timely assess each case on its merits after hearing and enter appropriate modified support judgments consistent with the law than run the risk of formulaic approaches becoming the norm for predetermining uncertain future circumstances. Expanding the court’s authority in an effort to lessen the alleged “chilling effect” on mediation or negotiation is not an acceptable basis for a compromise of fundamental legal rights.

The decisions of the Appeals Court in Hassey and the more recent North v. Stephens-North are not inconsistent with the special case standard of Stanton-Abbott and Wooters. It is the exceptional situations such as in Stanton-Abbott or Wooters where a self-adjusting alimony order may be acceptable, but not a common practice to be encouraged in setting alimony orders.

 



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