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Divorce Mediation Blog

Ohio Continues to Stew about Double Dipping Settele v. Settele

Wednesday, February 17, 2016

Our friend and colleague, Michael Flores of Orleans, knows that we obsess about these things, so he recently sent along September 2015’s case, Settele v. Settele. It is Ohio’s latest foray into the fractious realm of double counting income, to value small businesses, and then for support. The Delessio, Champion, Sampson and Adlakha cases have made Massachusetts lawyers and courts acutely sensitive to the issue, and debate rages daily, here, about what is or is not an “inequitable”, and thus impermissible, double dip.

Ohio lawyers seem to be equally tuned in, as the spate of recent reported cases indicates. That state has gone from relative clarity in Heller I, II and III (2008 -11) [Excluding business income above “reasonable compensation” used in discounted cash flow valuation because: "[t]rial courts may treat a spouse's future business profits either as a marital asset subject to division, or as a stream of income for spousal support purposes, but not both."]; to repudiation in 2015’s Bohme [upholding the trial judge’s use of capitalized income as a simultaneous source of support because double counting is an economic fallacy]; to broad discretion in last year’s Gallo [the courts have been “softening” Heller since its inception and a judge will know an “unfair” double dip when he or she sees it; and is fully armed to mitigate it].

In Settele, Ohio adds denial.

In Settele the court addresses the following question: where a business is valued by net worth calculation only, but including accounts receivable (A/R) as an asset, is support that is drawn from the future collection of those specific A/R a double dip that is barred by Heller I? The husband-appellant complained that his available income stream should have been reduced for support calculation purposes to reflect that a portion that income was A/R at the valuation date, and thus divided already with his wife.

Rather than indulge the “we’ll fix it if it is unfair” approach of Gallo, the Settele court decided, instead, that because A/R have already been “earned”, just not collected, no double dip would occur at all. So, the court concluded, the question of unfairness need not be reached. The decision certainly lines up with the orthodoxy, both here and in Ohio, that an asset-based valuation will generally not yield a double dip problem. But, is it right? Where the asset-based valuation does include A/R, why is it not a double dip to use those specific collections as a source of support? Doesn’t the bare statement that the A/R dollars are already “earned” deny the reality of a cash basis taxpayer? Surely, an owner takes his or her chances on collecting A/R dollars for which he or she has been charged a divisible asset value. Does not the use of those assets (which may never, in fact, be collected) for support, double the owner’s jeopardy?

As Gallo asserts, the Ohio courts have broad discretion to find that double dips are outweighed by other equities. Certainly, A/R, which hopefully yield income in the relative near-term, present a problem of lesser degree than indefinite future cash flows that have been capitalized to form an opinion of value. But, that does not make them inapposite in principle.

It seems that the court could have acknowledged that A/R as a support source may well be a double dip, but that its impact may be minimal, is trumped by other equities, or may be remedied, by exercise of discretion. This would have, it seems, been truer to Gallo by, softening, but not simply disregarding the core of Heller.

 

The Appeals Court Speaks on RSU’s in Child Support: This is Going to Be a Challenge Hoegen v. Hoegen

Wednesday, February 03, 2016

In this child support modification case, a Probate and Family Court judge declined to “count” the husband’s income derived from restricted stock units (RSU’s), granted in a corporate compensation package. He did so on the theory that, in the parties’ divorce agreement, the wife had waived all rights in the husband’s “stock plans”. The Massachusetts Appeals Court reversed this month in Hoegen v. Hoegen, ordering the trial court to re-calculate the increased child support with the husband’s RSU derived income included, because:

  1. The Child Support Guidelines (CSG) definition of income is all-encompassing;
  2. Prior case law (Wooters v. Wooters II), established that stock option generated income is countable towards child support
    (an egregious misstatement of the Appeals Court’s own case, since Wooters was not a child support case at all, and it reviewed the construction of broad underlying alimony judgment that gave rise to a contempt controversy, not addressing the discretion of a court to order alimony from stock option derived income, per se);
  3. The husband “regularly” earned income from RSU’s;
  4. The wife’s waiver was not, under any circumstances, binding on the children (who are the beneficial targets of child support);
  5. The court did not make written findings to justify exclusion of this income, other than the wife’s improperly enforced waiver; and that
  6. The order did not comply with the policy of the CSG, and earlier case law, of enhancing child support to reflect the higher standard of living enjoyed by the financially stronger parent.

The appellate decision has a rational basis, but will be difficult to implement; and, as often is the case, it has implications well beyond the results for these parties. Here are a few that come to mind:

  1. Where the legislature determined that income for alimony purposes is defined by the CSG (as the trial court may change it from time-to-time) does every child support case necessarily require examination for alimony implications?
    We think so.
  2. Where the Appeals Court mandated that RSU’s be counted towards CSG income, does this open the door to more self-adjusting litigated judgments (as distinct from incorporated agreements) in both child support and alimony matters?
    It may have to, given the challenges of doing otherwise.
  3. If not, does this decision encourage speculative alimony and child support awards by requiring judges to project market action between grant date and vesting? Is past performance a reliable indicator of future value? Must a judge allow evidence that it may not be?
    Yes, no and, we believe, very probably.
  4. If the market betrays the judge’s projection, high or low, is that a material change of circumstances?
    Why would it not be?
  5. If the judge bets high, as measured against ultimate market value, and resulting income at vesting, would that make the judgment unenforceable by contempt?
    Given In re: Birchall especially, one would expect so.
  6. If self-adjusting judgments are used, when would RSU income realized for support purposes?
    The only reasonable inference would be at the time of vesting, as that is when income is realized. What right does this imply if employee terminates employment and RSU’s are lost?
  7. If self-adjusting judgments ensue, how does this square with Hassey v. Hassey’s prohibition in the alimony context?
    It doesn’t, because the Appeals Court reversed Hassey’s 30% bonus order as related to §34 contributions, and not to traditional needs and ability to pay alimony criteria. The rules may just evolve differently for the two forms of support, despite the legislature’s deference to the trial court’s discretion to define income via CSG. Not ideal, certainly.

 

Important Arbitration Case Pending: May Have Particular Impact on Family Law

Monday, January 18, 2016

We read with interest about the pending case Supreme Judicial Court (SJC) case, Katz Nannis & Solomon, PC v. Levine (no relation), in the October 12, 2015 issue of Massachusetts Lawyers Weekly. Holland & Knight’s Attorney Gordon P. Katz wrote “SJC to Consider Expanded Review of Arbitrators’ Awards”, about the case, a civil action between estranged shareholders of an accounting firm. The question on appeal arises from an arbitration agreement; and specifically whether or not parties can bind each other and the court to rights of review that are broader than those that are set forth in the Massachusetts version of Uniform Arbitration Act.

M.G.L., ch. 251, § 12 limits the right to vacate an arbitral award to the grounds of: corruption or fraud; evident arbitral partiality; exceeded authority; and arbitrator’s refusal to grant a continuance sought with reasonable cause; or failure to admit material evidence. The contract in Katz case added that a court could overturn an award if it were based on “material, gross and flagrant error”, a higher threshold for appeal than provided in civil litigation, but broader, certainly, than §12. The SJC should rule on the matter sometime next year

One of the more frequently cited impediments to the growth of divorce arbitration, despite its manifest opportunities (efficiency, expediency, convenience, privacy, cost and control of selection of decision-maker), is that lawyers are deterred by the general loss of appellate rights. While everyone is well aware that appeals are rare, lengthy, obscenely costly, often inconclusive and always unpredictable, they are slow to relinquish the fail-safe for the true outlier result that they may encounter. We certainly understand the defensive impulse: divorce litigation clients are among the more litigious with their lawyers, post-divorce.

We have long believed that the law should allow people to agree to that level of review that they, as competent contracting parties, feel is appropriate. The American Academy of Matrimonial Lawyers Model Family Law Arbitration Act, includes the right of parties to elect appeal of errors of law to the trial court judge, in the first instance, then to the appellate level. The local AAML has advanced a Massachusetts version of that model act here, without success so far. It, too, contains that right to vary review and appeal provisions.

We hope that the SJC recognizes this important contractual right; and that if they do, divorce lawyers will take another look at matrimonial arbitration.

We’re always happy to talk.

 

DeMarco v. DeMarco: Three Surprising Things

Wednesday, January 13, 2016

Three rarities --

    -- a “Hail Mary” pass that works,
    -- a trial court order that makes news, and
    -- a judge who takes the hit for a litigant --

-- all converge in Judge John D. Casey’s recent decision in De Marco v. De Marco, for the Suffolk Probate and Family Court, making it remarkable beyond its outcome.

Michael DeMarco asked Judge Casey to terminate his alimony obligation to Katherine DeMarco, under M.G.L., ch. 208, §49(f), the social security full retirement age provision of the Alimony Reform Act (eff. 3/1/12). The judge advised the parties at the start of trial that he believed the result to be foregone: that §49(f) applies to all cases, and therefore, DeMarco alimony would end. The attorneys adopted the court’s view and devised a surviving settlement agreement with a terminal lump sum payment, and the end of periodic alimony.

Then, the Supreme Judicial Court (SJC) decided to the contrary, in Chin v. Meriott and two companion cases, ruling that §49(f) applies prospectively only, to those alimony payors whose divorce judgments followed March 1, 2012. While it is fair to say that Judge Casey’s belief reflected a consensus view of the bench and bar at the time, the SJC proved it flawed. It is not the first time that an appellate court nixed a trial judge’s view of the law, and certainly won’t be the last. The law develops, accordingly.

What makes this case interesting is that:

  1. Ms. DeMarco, asked Judge Casey to vacate the judgment that arose from the parties’ settlement contract, by way of a motion under Mass. R. Dom. Rel. P. Rule 60 (b) (5) and (6), which is the Hail Mary pass of litigation. Vacating an established judgment by mere motion is a last resort relief for a litigant. Every veteran litigator has weighed the odds of bringing one against the chance of being assessed with fees for being wrong; many have taken their shot; and few have succeeded.
  2. Trial court divorce decisions are rarely noted outside of the parties themselves, and a bit of occasional gossip, especially motion practice. After all, it is appellate work that creates precedent, shaping the law, debate, future strategies and outcomes. Unusually, this case was the lead story in Massachusetts Lawyers Weekly, and the buzz persists.
  3. Judge Casey fell on his sword, where he could easily have demurred. He gave the parties honest direction, without any warranty of perfection. Ms. DeMarco did not have to accept the judge’s colloquy. She could have tried the case and forced Judge Casey to apply the law as he saw it; and then challenge him on appeal. Yet, the judge ruled that his was an incorrect interpretation of the statute, upon which Ms. DeMarco had “detrimentally relied”, and vitiated the judgment.

The fact that the judge allowed the Rule 60 to negate a contract of the parties, as distinguished from a judgment that he had, himself, written, is substantively remarkable – and potentially dangerous – as attorney David H. Lee (disclosure: Mr. Lee is William M. Levine’s former longtime law partner) pointed out in the Lawyers Weekly piece. Certainly, it is a challenge to the policy of finality. It is also understandable that Judge Casey, always a gentleman, felt responsible for the harsh result to Ms. DeMarco.

This was no simple “mulligan”, but one with combined factors that we won’t likely see again soon.

 

O Pfannenstiehl! Part 6: No Wonder We’re All Confused (Just What Might the SJC Do?)

Wednesday, December 09, 2015

We have not talked to anyone yet who is not hoping that the Supreme Judicial Court (SJC) grants further appellate review, though admittedly, we have not spoken with Mrs. Pfannenstiehl or her counsel! At this point, it is hard to imagine the high court not taking the case.

We cannot know what the SJC will do on the merits, but it is hard to envision the SJC not reversing. The case is just too wrong; and it is too public. The far more intriguing question is, will the SJC improve a highly problematic situation for the bench, bar, estate planners and divorcing clients? Or will it muddy the waters further? Today, we indulge in some educated guesswork, about what the justices may, or may not, do.

Might the SJC abandon the central tenet of Lauricella v. Lauricella, that a spendthrift provision does not bar inclusion of a trust interest in the marital estate? Unlikely. Too many other appellate cases have relied on this basic premise since 1991; and there are too many trusts that truly are disingenuous exercises in long or short-term divorce planning.

Might the court alter or clarify the meaning and significance of the ascertainable standard concept? Hopefully, yes. That a beneficiary could bring suit against a trustee for failure to distribute funds for a cause that falls within the trustee's discretion, just does not logically mean that the corpus is an open check book for the beneficiary, as the Pfannenstiehl trial and Appeals Court's have concluded. A nuanced concept demands a nuanced analysis.

Might the SJC provide guidance, for the first time, on how to value a trust interest? Possibly. It is a very tall order, but highly desirable, given the seemingly indefensible conclusion of the Appeals Court, that a beneficiary has an enforceable pro rata share of a corpus, where the trust says no such thing. The baseline premise of every valuation must be "what are we actually valuing"? This answer, which seemed so seductively easy in Lauricella (one asset, the parties' home, with two sibling beneficiaries only), was anything but for Mr. Pfannenstiehl, one of 11 beneficiaries, in a class that is subject to expansion, and with various forms of securities in the trust res.

What might guidance on the ascertainable standard and valuation look like? Would the SJC stretch to find a mechanical construct, in some way like the time formula of Baccanti v. Morton, for stock options? More, likely, in our view, the court would look to JS v. CC, on the matter of S corporation earnings in support matters, as a guiding format, perhaps placing the burden on the beneficiary to disprove a compelling nexus to the marital estate, based on a series of criteria, including, but certainly not limited to the ascertainable standard itself.

Might the SJC limit non-beneficiary recoveries to "if and when" distributions, in part because valuation is just too difficult? Maybe. This would be a conservative result to be sure, letting the proof of the beneficiary's financial access to the trust corpus and income bear the test of time. But, this would belie the caution of Dewan v. Dewan, that it is less preferable to present buyout strategies, to avoid both the continued enmeshment of the parties, and the threat of illusory recovery by reason of trustee manipulation, a la Krintzman v. Honig I.

Does Krintzman v. Honig II presage the outcome? One hint of what the SJC might do lies in its Krintzman v. Honig II, and with former Appeals Court Justice, and now SJC Justice Fernande R.V. Duffly. In Krintzman I, the Appeals Court rejected the wife's complaint that the trial judge had included her self-settled trust, of which she was the sole beneficiary, as a divisible asset; but it vacated the "if and when" judgment, accepting the husband's argument that the assigned recovery would likely prove unenforceable, and, therefore, illusory.

On remand, the Probate and Family Court complied with the appellate order by dropping the "if and when" approach, and replacing it with a lump based on the husband's assigned 20% share of the trust's corpus value. The wife appealed again; and she prevailed in Krintzman v. Honig II. The Appeals Court vacated the revised judgment, this time because the new order was inconsistent with the judge’s original findings, in which he observed the existence of a valid trust, however porously (“a private pocket”) it had been administered.

While Rule 1:28 opinions are not "authored", one member of the Krintzman v. Honig II panel was Justice Duffly, a veteran divorce lawyer and former Probate and Family Court judge. In its memorandum, the Appeals Court panel ordered the trial judge specifically to hear expert testimony, and then to establish the value of the distributions that the wife was expected to receive during her lifetime, reduced to a present value; whereupon, the court could order a lump sum buyout.

At the time, one's reaction might have been, well, how do you do that?! (Disclosure: one of us was trial and appellate counsel for Mr. Krintzman.) By retrospect, though, doesn’t Krintzman II go directly to the essence of the problem? Where "if and when" won't do, doesn't the real value of the trust interest begin, at least, with an inquiry of what the beneficiary will receive in the future? Even if unknown, or unknowable, isn't the economic significance of the trust interest to the beneficiary, the financial gain still that which s/he is, more likely than not, to receive?

Could the SJC apply to this principle generally? Maybe not, as the crystal ball may be less than reliable. Then again, is it possible that when benefits cannot be projected with some measure of reliability, because the facts don't justify it, is there any rational alternative to "if and when"?

 

O Pfannenstiehl! Part 5: No Wonder We’re All Confused (The Fruit of the Poisonous Tree)

Tuesday, November 24, 2015

It started with an "easy" case.

In 1991's Lauricella v. Lauricella, the Massachusetts Supreme Judicial Court (SJC) Court first decided that a trust was not a trust, for divorce purposes. The facts were compelling:

  1. a simple trust (settled by the husband's father, with only two beneficiaries living, the husband and his sister, until divorce eve amendments diluted the husband's share),
  2. a single asset (2-family home in Newton),
  3. inarguable entwinement (the parties' marital home),
  4. economic dominance of the marital estate (as found, the parties' largest asset),
  5. a financially vulnerable spouse (a non-beneficiary wife who was both primary caretaker of children and possessor of "a relatively low income capacity"), and
  6. recent precedent, albeit from a lower court, in the Appeals Court's 1985 Davidson v. Davidson (holding that a remainder interest could be an asset).

In Lauricella, SJC Justice John Greaney made short work of the trial court's finding the trust "not per se" connected to the marriage, thereby excluding of the trust interest from the divisible estate. After all, Massachusetts embraces a broad view of what a "marital asset" is, including the intangible, the unvested, the fractional, the difficult-to-value and the illiquid. In essence, the SJC decided that the equities of the situation -- the demand that the court find "fairness" -- trumped a valid spendthrift clause, which would not stand as a firewall between the settlor's intent and the judicial power of equitable division.

By retrospect, Lauricella was a ripple in the family law pond. After all, the facts made an equities-based decision defensible. The corpus was the family home. Trust restrictions looked illusory. Last minute trustee machinations suggested victimization. Compared to Davidson, the SJC's leap over the spendthrift clause was unsurprising, and in the moment, comparatively benign.

In the interim, we have received a number of consequential trust/divorce cases, including, SL v. RL, DL v. SL, Williams v. Massa; and Rule 1:28 Appeals Court decisions, most notably, Krintzman v. Honig I and II. These cases address how to discern an includible trust interest from one that is too speculative or remote to be termed an asset (the first two), and when circumstances suggest that exclusion is equitably appropriate, as in Williams. Krintzman upheld a trust's inclusion, but vacated an "if and when" economic assignment as illusory, under the facts of that case.

But, none of these cases taught how to place a value on a trust interest, which the Lauricella court, perhaps with unintended irony called, "obviously... not difficult", in its case (focusing on the underlying asset, while begging the question of the husband's shared beneficiary status with his sister).

Until now.

Now, Lauricella may be seen as a ripple turned tidal wave, in the 2015 form of Pfannenstiehl v. Pfannenstiehl, which its critics call the final sublimation of trust law to divorce; where a complex intergenerational trust interest, with an expandable class of 11 living beneficiaries and a discretionary, if ascertainable, standard for distribution, is termed a marital asset, valued as 1/11 of trust corpus market value, and paid out over time to a non-beneficiary.

We know, for certain, that Mr. Pfannenstiehl has asked the SJC to review and reverse the Appeals Court decision. It seems increasingly likely to us that the SJC will accept the challenge, and grant further appellate review.

If they do, this is the time for the high court to look at this issue globally; to create broadly applicable rules for the treatment of trusts in divorce; and modifying or abandoning precedent as necessary, to bring order out of the chaos of this problematic area, which straddles, and mutually hobbles, the family law and estate planning worlds.

In our final (!) Pfannenstiehl entry, we will think through, and speculate a bit, on what the SJC justices might do, if they take the case, as we surely hope they will.

 

O Pfannenstiehl! Part 4: No Wonder We’re All Confused (Equities Trump Law?)

Wednesday, November 11, 2015

In his recent blog entry about the Massachusetts Appeals Court case, Pfannenstiehl v. Pfannenstiehl, at http://www.margolis.com/our-blog/does-recent-divorce-undermine-centuries-of-spendthrift-trust-law, Boston estate-planning counsel Harry S. Margolis, wrote that:

    This ruling, which undermines centuries of established trust law, was based in part on the equities of the situation and in part on a misunderstanding of wording commonly used in trusts.

Who are we to argue with Mr. Margolis’ observations about trust law? They sound about right to us. Today, instead, we are focused on the equities, and ask did they trump the law of trusts in the courts?

The facts that the Appeals Court highlighted shone harshly and disparagingly on the husband and his family. The decision recited the relaxed and informal manner in which biased trustees (sibling and family accountant) administered the trust, and their divorce-eve cut off of family benefits, in great detail and with considerable care. The court trashes the trust as a sham, and the husband’s advocacy, as disingenuous at best. The husband’s overpaid, no show, family business job (as in four years of paid leave) is reported, even if marginally relevant. The court also details the wife’s considerable burdens, including her care responsibilities for a Downs child, and the husband and family’s pressure for her to exit military service, just shy of her pension vesting.

The trial court’s action was extraordinary in many ways. After determining that the trust is a devisable marital asset (we don’t find that part surprising), the court completely disregards any of the ways that this generational trust restricts beneficiary access to trust resources. It simply divides the corpus by 1/11, despite those restrictions, and the fact that the beneficiary class is subject to expansion. The court ordered a 24-month cash buy out of the wife’s adjudged interest, irrespective of liquidity, taxation and access issues.

But, beyond that, the court then divided the husband’s family trust interest disproportionately against him, in tandem with an unequal split of the non-trust estate, in the same proportions.

It is not unusual in a case of trust-divorce case, for the court to split the non-trust estate in favor of the non-beneficiary spouse. This is usually a form of compensation for a disproportionate split of the trust asset in the beneficiary’s favor. But, here, the judge favored the wife with 60% of the whole estate, trust included. It is entirely fair to argue, that by valuing the trust as if it were cash in the bank, rather than a discretionary vehicle of future distributions, that the net asset split to the wife is substantially greater than the surface 60%.

How does this square with Moriarty v. Stone, still good law that establishes that “contribution” remains “touchstone” of asset division? Neither party created the trust wealth, so the only contributory link is the husband’s lineage. Do the wife’s overall contributions echo Williams v. Massa, the famous case of the multi-hatted (economic and non-economic) contributor, who kept his trust interest? Not really.

In the end, it does look like the trial court punished the spouse whom she took to be the bad actor, and advanced the interests of the needier, and perhaps more virtuous spouse, notwithstanding the law of trusts. The Appeals Court decision, and its machinations to get a majority, does nothing to dispel that view.

In our next blog, we will turn to how the Supreme Judicial Court may look at the situation, should it accept the case.

 

Lawyers Weekly Takes On Rule 1:28: We Agree

Wednesday, November 04, 2015

We have commented here, on a number of occasions, about the Appeals Court's use and misuse of Rule 1:28's so-called "unpublished" opinions.

They are informal, scant on facts and often reasoning, sometimes obscure and too-often just confusing to family law discourse. If the Appeals Court is not going to stand behind its cases as precedent, or if an opinion is truly for the sole benefit of the captioned parties, the public record would be better served by a simple "affirmed" or "reversed" notation. As public records, the "full" opinions would be available to the highly motivated, but the cases would not be citable from the current netherworld of "persuasive but not precedent", to which the Appeals Court has assigned them.

For that reason, we delighted in reading October 26th's Massachusetts Lawyers Weekly, wherein the Editorial Board opined, at p. 38, that newly minted Chief Justice Scott L. Kafker should pay "immediate attention" to the problem of Rule 1:28. Lawyers Weekly described the intent of the rule to address "straightforward cases" and that the Appeals Court overuses the rule to the public's detriment. While our critique goes further, the editorial's targeting of the issue is welcome; and we thank the board for its call to action.

Either way: elevate all opinions to the level of precedent, then analyze and write them accordingly; or reduce them to simple announcements of the action taken on appeal. We respect the burden that the Appeals Court's unchecked, non-discretionary caseload poses. But do something please, Chief Justice Kafker, about this unhelpful practice.

 

O Pfannenstiehl! Part 3: No Wonder We’re All Confused (Be Careful What You Wish For)

Wednesday, October 28, 2015

In our last Pfannenstiehl entry, we looked at the internal inconsistency of the Massachusetts Appeals Court decision, in which it found that the husband’s trust interest was a divisible marital asset, and that he can access its fruits, freely. But, when the trustees called the trial court’s bluff by refusing to give the husband money to pay the wife under the divorce judgment mandate, the appellate court blinked, concluding that trial judge was wrong under the law in enforcing her judgment with the coercive powers of contempt.

Putting aside the impact on the public in future estate planning, family law negotiations, divorce mediations and litigations, what about Mrs. Pfannenstiehl?

We have to assume that the trial judge adopted the wife’s theory the case, or some proximate version of it. The extremity of the result left the husband with little option but to appeal, which he did. But, in a strange irony, while he lost again on the substantive questions, he may have won a larger battle, when the Appeals Court vacated the contempt judgment. There was no remand. There is no re-trial. There is no ready way for the trial judge to make her judgment more enforceable.

So, what does the wife have to show for her efforts, time and cost?

She is a judgment creditor, which gives her 20 years to collect, under Massachusetts law. She is denied the normal enforcement remedies for divorced persons: either a Probate and Family Court contempt, with its coercive powers and streamlined procedures; or, for people with surviving agreements, breach of contract actions in the District or Superior Courts (she has no contract).

Might she sue on the judgment in a supplementary process action in the Superior Court? If so, she would have to bide her time and determine when the husband might have the provable resources against which to proceed. But how will she know? There is no known divorce order to the husband to disclose future circumstances, as there might have been with an “if and when” assignment order. And, she would have to fund the action.

Could the wife obtain some form of equity relief through an action under M.G.L., 215 ch. §6, asking the Probate and Family Court to create a supplemental judgment that obliges the husband to disclose and/or pay over any sums that he ultimately receives from the trust? If so, his failure to disclose may give rise to contempt exposure.

We doubt that she could bring a complaint for modification, because nothing has changed! The trustees stopped distributing on the eve of divorce, and post-divorce, they are just doing more of the same.

Might she negotiate, or even mediate a solution with the husband? Maybe. To avoid the threat of the wife laying in wait to enforce the judgment, and to avoid paralyzing the trustees, the husband might drive down the price to an acceptable level, and then pay off the judgment agreeably (with the trustees’ acquiescence, of course).

Or maybe the SJC will take the case, with who knows what result.

We will take a guess on that, in later blog entry.

 

“Reconstituted” Majority Nixes Panel Consensus, Again

Wednesday, October 21, 2015

Well, maybe we were wrong about this happening infrequently, and we just woke up to it. Or maybe it is a new trend.

On the heels of Pfannenstiehl, in which a “reconstituted majority” vetoed the 2-judge majority who heard the case, AT v. CR is a new decision in which Justices Meade and Blake’s consensus failed, when other non-panel justices rallied with Justice Hanlon to nullify the panel majority. It is not a family law case, but, rather, a juvenile harassment case.

Again, the majority became dissenters, with Justice Blake (a veteran divorce lawyer and former Probate and Family Court Judge) writing a crisp dissent, joined by Justice Meade. Perhaps coincidentally, Justice Berry, whose minority panel view ultimately prevailed in Pfannenstiehl, voted in the rump majority that carried the day, here.

What’s going on up there at the Appeals Court?

 



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