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Divorce Mediation Blog

Pre-marital Cohabitation in Defining Marital Length Clarified

Tuesday, May 15, 2018

But, In Rejecting Normalized Income for Alimony & Accepting Early Valuation Date:
Why won’t the Appeals Court tell us what they really think?
BORTOLOTTI V. BORTOLLOTTI - Part. 1


Levine Dispute Resolution - Alimony

We have previously lamented the shortcomings of Massachusetts Appeals Court’s Rule 1:28 opinion practice, and the recent Bortollotti v. Bortollotti has us at it again, but that will have to wait until Part 2.


Today, instead, we focus on the court’s helpful clarification of the legislature’s provision that tasks trial judges with determining if and when a marriage may be construed to begin before its legal registration, for purposes of calculating the length of marriage, and the resulting presumed durational limit calculated under M.G.L., ch, 208, § 48. When we say it is helpful, it is not to say that we agree or disagree with the concept, but rather, that, like a puzzle part, it fills a gap that makes the statute more understandable and, therefore, more predictable in outcome.

The concept of a de facto relationship giving rise to an obligation normally associated with a legal one preceded the Alimony Reform Act (“ARA”), beginning with California cases involving child support by estoppel (obligations arising from unrelated-party voluntary undertakings and resulting reliance), to pre-marital contribution in equitable division cases (see, Liebson v. Liebson and Moriarty v. Stone) and, more recently and directly on point, judges’ grappling with the inequities of same sex couples who were divorcing after long relationships and fact-based economic unions, but to whom marriage was foreclosed until implementation of 2005’s Goodridge decision.

In ARA, the legislature expanded the notion to all marriages in the alimony context.

Section 48 allows the trial court to back-date the start of marriage for a “significant marital cohabitation that includes ‘economic marital partnership’”, per Bortollotti. In this case, the trial judge found that the parties had, in fact, cohabited before legal marriage, but that the wife had not contributed income to the partnership, therefore, an economic marital partnership did not exist.

With logic more parallel to actual marriage, and historic alimony law, the Appeals Court reversed, stating that the wife’s very economic dependence signified that the marital partnership had begun. They reconciled three ARA features: the enumerated criteria for awarding alimony; the “common household” needed to trigger a payor’s post-divorce right to demand redress; and the pre-marital issue, here.

Since economic dependence is one of the enumerated alimony factors, the appellate court reasoned, it will suffice to extend the length of marriage retrospectively, for alimony’s presumed durational limit purposes.

The holding is fairly simple. It will apply to many cases, sometimes with minor, and other time substantial effect. The most extreme, obviously, will be when this metric leads to a finding that a 19 ½-year marriage was preceded by a more than 6-month cohabitation with economic dependency, stripping the payor of any presumed durational limit whatsoever, especially where the payor is more than 16 years shy of full social security retirement age. We can expect that this aspect of those cases to be most hotly contested.

The next time, Rule 1:28 and why the rest of Bortollotti is frustratingly sparse.

 

Hoisted on Her Own a Fraudulent Petard, or There’s Just No Damn Honor Among Frauds Anymore: Shea v. Cameron – Part 2

Thursday, April 05, 2018

Levine Dispute Resolution - Alimony

It is tempting to dismiss the Massachusetts Appeals Court’s Shea v. Cameron as a confection of divorcing people behaving badly, and a tale of narcissistic comeuppance. But, the case actually has two important messages in it, for which we are grateful.

First, obviously, is that “not all human actions…have an avenue for legal recourse, no matter how much anger, sorrow, or anxiety they cause.” Those words would be well-posted over the courthouse door.

But second, the court underscored the gravity of the allegation “undue influence”, the key to many efforts to avoid enforcement of pre-marital and divorce agreements specifically, and to eschew responsibility for one’s own actions, more generally. The court aptly cited SJC precedent, in stating that:

    …a plaintiff must establish that the defendant overcame the will of the grantor …. [by]… some form of compulsion which coerces a person into doing something the person does not want to do.

And, in connection with Ms. Shea:

    …the undisputed evidence shows that [she] was in full command of her personal affairs and was neither ill, dependent nor enfeebled at the time of the transfer of real or personal property to Cameron.

Undue influence is a high bar, as well it should be.

 

Hoisted on Her Own a Fraudulent Petard, or There’s Just No Damn Honor Among Frauds Anymore: Shea v. Cameron – Part 1

Wednesday, March 21, 2018

Levine Dispute Resolution - Alimony

It isn’t often that we get to see the phrase “joint stipulation of fraud”.

But, in the Massachusetts Appeals Court’s recent Shea v. Cameron, it is the perfect appetizer to a meal of mutual marital chicanery that resulted in the court’s decision to distance the itself from the:

    … “ingratitude, avarice, broken faith, brutal words, and heartless disregard of feelings of others,” which although blameworthy, are not legally compensable.

He lied about loving her. They married. He cheated. She filed for divorce. She withdrew her complaint. She filed a new complaint, this time for annulment. He snapped up that opportunity, only too happy to admit his faux amour.

Not so fast. After the parties presented their cooked-up annulment petition to the court, Ms. Shea served Mr. Cameron – on his way out of the courtroom, no less - with an complaint demanding a cookbook of damage remedies based on his “fraudulent inducement to marry”.

First, the Probate and Family Court, and then the Superior Court, kicked out Shea’s claims on summary judgment. But, the second judge “reported” the question to the Appeals Court, which took the matter up despite its procedural reservations. After a scholarly review of the history of various “heart balm” actions, the court wisely ended the matter for good, with unassailable logic:

  1. the law provides remedies for married persons when they break up, for equitable property division and support; and
  2. when the wife chose annulment instead of divorce, she gave up those remedies, since no marriage ever existed, a fiction of her own design.

Thus did Ms. Shea hoist herself, luring Mr. Cameron into admitting fraud, while plotting to then show him, but accidentally giving him a free pass, in the process.

There is just no honor in fraud anymore.

 

Wanted: An SJC Case to Challenge the “Real Advantage” Standard: Chief Justice Gants’ Compelling Concurrence in Miller v. Miller

Wednesday, March 07, 2018

Levine Dispute Resolution - Divorce Mediation

Concurrences are rare in family law cases, but when the Chief Justice writes a clear-eyed one with firm conviction, people take notice. C.J. Gants, with Associate Justice Gaziano joining him, did not take issue with majority’s decision, but rather the “analytical gymnastics” necessary to find it. They were right.

The source of the problem is less 1985’s Yannas v. Frondistou-Yannis, though that case alone has doomed the efforts of countless “non-custodial” parents to resist the removal of their children to other jurisdictions than the more problematic case of Mason v. Coleman (2006), or as the concurrence points out, the toxic intersection of the two cases.

It is Mason that undermined decades of effort in the Probate and Family Courts, and among its practitioners, to tone down the fight over custodial labels by fractious parties, by awarding access to the lower-bar “real advantage” removal test to parents with “sole physical custody”, setting up a two-stage fight in every potential removal case: first, does someone have sole physical custody (later modified to be a “functional” test rather than a legal label); and if so, are the childrens’ best interests driven by that individual parent’s personal needs?

It took the Miller case to put this problem into stark relief, presenting a matter where no labels, or functional findings, could have attached previously, since it was the time of divorce. Thus the court had to conclude, based on the messy life of an intact family, who would have been hypothetically denominated the physical custodian. A fiction on top of a fiction – and one that Judge Gants persuasively argues ought to end.

Whether the Mason problem is a product of a fundamental mis-perception of Yannis may be beside the point that both the Miller majority and concurring justice make: that the best interests of the child is meant to be the overarching inquiry for every removal case. For too long practitioners have accurately read the trial court’s predominant “read” of Yannis, namely, that the primary caregiver’s personal needs pretty much trump further inquiry, absent spousal spite, or a child who is too young to yet be bonded to the parent who would be left behind in Massachusetts.

Justice Gants’ point: artificial jousting over the label, or even the “functional” reality of primary caregiving, is too often confounded by informal parenting histories, by self-serving constructs and by too little historical precedent (as in Miller); and it does not serve the ultimate policy of finding and enhancing children’s outcomes via a straight up best interests inquiry. Rather, the exercise can range from pointless to damaging, by obscuring the true issues.

Justice Gants is also right that a primary care parent’s individual needs and interests cannot, and should not, be ignored. The certainly can be critical to a child’s interest; just not always so, and as often, not conclusively. We hope that the opportunity arises for the SJC majority to follow its Chief, as they may have signaled in Miller already, acknowledging but deferring the issue to another day and case, wherein one of the parties directly challenges, briefs and argues the issue on appeal.

We hope that that opportunity comes soon.

 

The SJC Weighs in on Self-Adjusting Alimony Orders and Recipient “Need”: Young v. Young, Part 9

Wednesday, February 07, 2018

Levine Dispute Resolution - Alimony

“Fair balance of sacrifice?”

In Young v. Young, the Supreme Judicial Court (SJC) imported a concept that it had previously coined in the case of Pierce v. Pierce.

In the latter, the SJC reviewed (and upheld) a modification judgment of the Probate and Family Court in which the judge had reduced, but not terminated, the payor’s alimony obligation after he had voluntarily reduced his income, and his resulting ability to pay, finding that the reduction achieved a “fair balance of sacrifice” between the parties.

This modification concept followed an original divorce judgment which occurred without regard to any such construct. Rather, as a matter of law, the original alimony orders were necessarily based on the wife’s “need”, the husband’s ability to pay and what the divorce judge concluded to be “fair and reasonable”.

The Pierce court’s crafting of “fair balance of sacrifice” focused on the husband’s need to bear up under the circumstances of his own making, even if it felt to him as payor that he had paid quite enough alimony and he deemed the court’s modification judgment to be onerous in his current circumstances.

In the intervening years, the Alimony Reform Act (ARA) (eff. 3.1.12) introduced a formal range of maximum presumed alimony in M.G.L., ch. 208, §53(b) (since deemed the lawful and reasonable presumptive order by appellate case law), without any reference at all to the theme of “sacrifice”.

Rather, by comparing “need” to the maximum of 30-35% income differential, the legislature recognized that there is often not enough income in a case to sustain the marital station in two households, and formalized a longstanding practice of equitably sharing income, after presuming the tax leveraging of IRC §215 (which may or may not survive the 115the U.S. Congress). This is completely consistent with case law that establishes that a recipient has no guarantee of unchanged lifestyle, if the payor can’t provide it.

The equitable sharing of income can be a useful construct both in acknowledging that the parties can’t necessarily maintain the marital standard post-divorce; and in explaining why a payor will inevitably keep more of his or her income than the recipient will receive, because of the post-judgment efforts required to earn the money that funds spousal support.

But a “fair balance of sacrifice”? Where the vast bulk of divorce cases resolve with equal division of assets and debt, how can the same concept justify an unequal division of income, at the time of equitable distribution?

We are not advocating for the equal division of income, and it is not a result that will ever be required in our time. But was it helpful for the SJC to gratuitously introduce a standard that the legislature neither enunciated nor necessarily implied? Was it necessary support for its central outcome in Young? Will it now complicate cases with another subjective standard about which to fuss?

No, no and we’re afraid so.

 

The SJC Weighs in on Self-Adjusting Alimony Orders and Recipient “Need”: Young v. Young, Part 8

Wednesday, January 24, 2018

Levine Dispute Resolution - Alimony

“Did stated intent of the
order trump the its effect?”

In Young v. Young, the Supreme Judicial Court (SJC) vacated the trial court judgment that awarded variable alimony based on a fixed percentage of the husband’s gross pre-tax compensation, based in part on its conclusion that it crossed the Alimony Reform Act (ARA) (eff. 3.1.12):

…[B]ecause [the order] was intended to award the wife an amount of alimony that exceeds her need to maintain the lifestyle she enjoyed during the marriage. (Italics ours)

By focusing on the intent of the order, we can only infer that the court was addressing the judge’s rationale for the order, instead of the order itself. That election matters, because it raises two questions:

  1. If the trial judge explained herself differently, might the SJC have upheld the judgment?
  2. If the SJC looked at the order in its full ramification, would it have impacted the outcome?

The actual support award in Young was bi-lateral, rising and dropping with the husband’s income, a fact eclipsed by the court’s sharp focus on intent. Thus, while the trial judge may have focused her analysis of the parties’ rising station, her order actually provided downside protection for the husband, too.

Had the judge expressed an intent to protect the husband in the event of income decline and stressed it concomitantly with the potential for “upside”, might the “intent” infirmity that the SJC seized upon been neutralized? Or, if the judge had found that a family with roller coaster income might experience corresponding lifestyle flux?

After all, as the SJC observed:

    There may also be special circumstances where an alimony award based on a percentage of the supporting spouse's income might not be an abuse of discretion, such as where the supporting spouse's income is highly variable from year to year, sometimes severely limiting his or her ability to pay, and where a percentage formula, averaged over time, is likely not to exceed the needs of the recipient spouse.

The SJC dealt with the former, but not the latter.

 

Why was the GOP out to get Alimony?

Monday, January 22, 2018

Levine Dispute Resolution - Alimony

Well, they did it. In December, Congress repealed the alimony deduction, and as a result, support for divorce families will become more expensive and less generous, beginning in 2019.

Unbeknownst to us, the federal alimony deduction was on Republican chopping block wish list for a long time, with previous failed repeal attempts in 1984 and 2014. Few of us thought it important enough to the president or the GOP caucus to actually make it happen this time, especially when the senate bill did not mention it in its bill. Boy, were we wrong.

The question is: why?

To save majority lawmakers from having to reach actual consensus with Democrats, God forbid, by keeping the red ink caused by the 2017 Tax Cuts and Jobs Act below $1.5 trillion over the next ten years, permitting a budget reconciliation maneuver and permitting passage on Republican votes only?

Whatever happened to simplification and revenue neutrality: watchwords of tax reform and Republican faith, for as long as memory serves? Not this Congress, and not this time.

But, really, how much did it help that cause? According to the House Ways and means Joint Committee on Taxation, repeal of the alimony deduction, upon which divorcing families have relied for three-quarters of a century, will “save” $8.3 billion from the aggregate deficit over 2018-2027. See here.

A drop in the bucket…

… especially in context. When a Fox Business reporter asked Treasury Secretary Mnuchin about the president’s abandonment of his campaign-guaranteed crackdown on carried interest preferences for private equity and hedge fund principals, which would have saved an estimated $100 billion over the same ten years, he blathered that, “…it’s not that much money…”. Really. Listen for yourself here.

So, we come back to “why”, if not budget reconciliation? Was it the moralism of Paul Ryan’s wing of the GOP, punishing divorcing families for their failings? If so, we are dangerously more like the theocratic regimes that our president loves to praise or castigate, depending on his momentary whim, than we like to believe.

In the meantime, families are the collateral damage. So much for family values.

 

The SJC Weighs in on Self-Adjusting Alimony Orders and Recipient “Need”: Young v. Young, Part 7

Wednesday, January 10, 2018

“Is ‘need’ a floor or a ceiling?”

Levine Dispute Resolution - Alimony

This question does not rise from historic alimony law, which has long rested on the axiom that alimony exists to meet a recipient’s “needs”, as measured by the marital living standard.

But, the Alimony Reform Act (ARA) (eff. 3.1.12) created the question with its M.G.L., ch. 208, § 53(b), stating that general term alimony

    …should generally not exceed the recipient’s need or 30 to 35 per cent of the difference between the parties’ gross incomes…” (Italics ours)

Since the lawmakers did not specify “the greater of” or “the lesser of”, judges and lawyers (and we, in earlier blog entries) have been left to speculate about whether “need” functions as a “floor” for support.

Since the appellate courts have now branded 53(b) as the range a “reasonable and lawful order”, this question was critical.

Where the payor’s income capacity is more than sufficient to meet the recipient’s “need”, should the latter enjoy “upside” alimony, even if that raises him or her above the marital station? Or, does the marital living standard cap the payor’s exposure?

We have consistently suspected the latter, and we have said so during many conciliation cases, since we did not believe that the legislature intended to upend the time-honored linkage to need. If anything, the ARA signaled a reining in of alimony, not its expansion. But given the vagaries our appellate courts, we braced for another surprise.

It didn’t happen.

The SJC spoke plainly:

    Here, the percentage-based award ran afoul of the act and therefore was an abuse of discretion not because of its variable nature but because it was intended to award the wife and amount of alimony that exceeds her need to maintain this lifestyle she enjoyed during the marriage. (Italics ours)

Now, we know for sure: “need”, in the law, is a ceiling.

 

The SJC Weighs in on Self-Adjusting Alimony Orders and Recipient “Need”: Young v. Young, Part 6

Wednesday, December 27, 2017

“Not everyone can afford a special master”

Levine Dispute Resolution - Alimony

Now, we will consider the role that financial complexity played in undermining the fate of the trial court decision in the Supreme Judicial Court’s (SJC) Young v. Young. The SJC reports that:

    …the [trial] judge found that, because of "the complex nature of [the husband's] compensation over and above his base salary and bonus," and because of "the constantly shifting nature of [the husband's] compensation," "it is reasonable and fair in the circumstances" to award alimony to the wife in the amount of thirty-three percent of the husband's gross income, rather than a fixed amount. (Italics ours)

The husband’s employment income arose from seven different compensation programs, including stock options, bonuses, investor entity units and discount stock purchase program opportunities. The various compensation modes featured differing consistencies, liquidity and transferability attributes, “…both considerable and variable”.

The SJC worried that the trial court’s self-adjusting alimony award (one-third of the husband’s gross pre-tax compensation) would lead to uncertainty of implementation, causing “continued strife” between the parties, citing the potential for inexact drafting and employer-employee collusion (to depress applicable income). The trial judge implicitly recognized the chance of future contention by appointing a special master, to keep the peace. Think: alimony coordinator.

The SJC deadpanned that: “Not everyone can afford a special master.”

If Mr. Young were simply a salaried employee, without the corporate power to manipulate his compensation, might the result have been different?

 

The SJC Weighs in on Self-Adjusting Alimony Orders and Recipient “Need”: Young v. Young, Part 5

Wednesday, December 13, 2017

“What’s a judge to do?”

Levine Dispute Resolution - Alimony

In this entry, we consider a particular challenge that the trial judge will have on remand from the Supreme Judicial Court (SJC) in Young v. Young, in grappling with her assessment of the wife’s “need” for alimony. The trial judge tried to quantify the wife’s “need” by the tangible costs thereof, a common means of doing so. But, it appears that the evidence thwarted the judge in doing so, as she bumped up against a too frequent phenomenon: incredible and incredibly rising expense claims on sequential Rule 401 financial statements during litigation.

During an 11-month span of the Young case, the wife’s claims of weekly expense rose a remarkable 44%, from $453,856 per year to $653,906!

We have seen this movie before, as lawyers, judge, special master and divorce arbitrator. While it is certainly challenging for parties to give dispositive expense information when Rule 410 requires a full statement within 45 days, or when a party files motions, just 10 days. Moreover, uncertainty about just what “need” means, can make presenting financial statement expense claims dicey for the preparer.

Yet, litigation strategy plays an undeniable role. And, strategy evolves..

As a result, the judge critically found that the wife lacked “…personal knowledge regarding her own expenses,” and that her financial statements were not “…an accurate reflection of her need.” The wife’s credibility shot, the judge avoided the quantification of need and, instead opted for an ill-fated percentage-of-income order.

So, where the judge simply disbelieved the wife, and where she did not, apparently, find other, more convincing evidence of the wife’s “need” in the trial record (presumably there was no expert “lifestyle” testimony, or none at least that the court found credible), how will she do so now, on remand?

Don’t bet against a Young v. Young II appellate case, when one of these spouses appeals the judgment after remand.

In our next entry, we will consider the role that financial complexity played in undermining the fate of the trial court decision.

 



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