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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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