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Divorce Mediation Blog

“[T]he Parties Proceed at Their Own Risk” in the Probate and Family Court: Smith v. Smith

Wednesday, June 27, 2018

Levine Dispute Resolution - Alimony

For decades, Massachusetts divorce lawyers have advised their clients that if they depart from their divorce judgment obligations informally, and don’t incorporate their new deal in a modification order or judgment, they cannot rely on their consensus alone if one of the party decides to enforce the divorce orders that still exist, in court. The Appeals Court now says that we have all been wrong, with the blazingly ironic “... the parties proceed at their own risk.”

In a court system and body of law with judicial discretion that sometimes takes the breath away, life just became even less predictable. As did advising clients.

In Smith v. Smith, the husband accumulated $87,400.00 of alimony arrearages but claimed that he did so with the wife’s advance agreement, sometimes in return for his taking on voluntary financial burdens for emancipated children. The wife eventually thought better of her purported compromises, and she sued. The Probate and Family Court judge bought the husband’s claim that he relied on the wife’s prior agreements to his detriment, rejecting the wife’s claim of coercion, and wiping out the husband’s arrearages.

For reasons not addressed in this entry, the Appeals Court reversed the Probate Court’s retroactive reduction of the husband’s alimony, but it upheld that trial judge’s ruling of non-contempt, because the wife’s consent precluded a finding that the husband’s violation of the alimony orders was “undoubted”. So much for the previously given truth that only the court can modify its own orders.

In support, the Appeals Court cited its own Wooters v.Wooters, a case in which the husband was relieved of a contempt finding, while the established an alimony arrearage nonetheless, because of a bona fide dispute about the meaning of the alimony order: did a divorce judgment that ordered a lawyer to pay his wife a third of his compensation apply to a stock option income, that didn’t exist at the time of divorce, but arose later, when the husband left law practice for a corporate job.

Readers can reasonably debate the Appeals Court’s conclusion in Wooters, but what does a legal dispute over the meaning of the previous order have to do with the Smith judgment, with orders of unquestioned meaning? In fairness, the Appeals Court’s citation was limited to the principle that an arrearage (they even called it a “violation”) need not compel a finding of contempt. Wooters to Smith is, at best, a non sequitor.

An important principle was at stake, here. Either parties can or cannot supplant the court’s authority by their own behavior. If they do, the violation cannot be doubted. The question, really should be “can it be excused?

The answer to the real question now appears to be a resounding “maybe”, as in “maybe they can”. In a field where lawyers struggle to give clear and assured advice, life just became more, rather than less, uncertain.

 

This time it's a state case: merger and survival, with an alimony waiver twist McManus v. McManus

Wednesday, September 02, 2015

McManus follows on the heels of Judge William Young's federal trial court decision in Irish v. Irish, about which we recently wrote in "Making a federal case of surviving agreements", in the August 3, 2015 issue of Massachusetts Lawyers Weekly. This time, the Massachusetts Appeals Court confronted a separation agreement that unambiguously recited the parties determination that the parties' alimony exhibit survive incorporation in the divorce judgment.

The problem was that the parties' alimony exhibit stated expressly that both parties were waiving "past and present" alimony, but it did not state with particularity that they were waiving the right to seek alimony in the future. The wife later demanded alimony. The husband claimed that the silence, in the context of survival, established mutual intent to preclude future alimony; and he sought dismissal. The trial judge agreed and entered a defendant's summary judgment.

The Appeals Court did not agree, though. It concluded that silence was not golden for the husband, though it may not be ultimately for the wife either. The appellate court vacated the judgment and ordered the Probate and Family Court to hear "parol evidence", i.e., the parties' recitation of facts about what they intended at the time of the separation agreement. From there, the trial court must rule on the legal question of whether alimony is precluded by the contract, and if not, proceed to fact-finding in accordance with judgment modification standards.

This was a tough call. One logic says that the parties' selection of survival without any reservation of future alimony rights implies, as the trial court concluded, that their mutual intent was expressed as being preclusive. On the other hand, future alimony rights are so significant, and negotiations over them so frequently fraught, that if the husband had secured a preclusion, he would have been sure to include it in bright lights, in the parties' agreement.

Did the parties reach a sort of impasse at the time of divorce, such that the only way to reach a settlement was to finesse the issue by endorsing the agreement as written, and hope that the issue would never arise? Did the two sides differ about the meaning of the ultimate language? Is one side opportunistically side-stepping the parties' known divorce consensus?

Whatever the cause, the current mess is arguably the result of imperfect "boilerplate"; and perhaps both sides are paying the price. Often, this kind of an appellate outcome will facilitate settlement before formal remand proceedings, sometimes with help of the trial judge, or even in mediation. Both parties have distinct interests in resolution without trial, and avoidance of another appeal, later. Both sides have real risks; and both have the ability to compromise, and mitigate those risks.

Perhaps, cooler heads will prevail.

As we have addressed previously, "boilerplate" matters.

 

A Child Support Puzzlah: Martin v. Martin Part 1

Wednesday, June 10, 2015

The May 13, 2015 "unreported" decision of the Massachusetts Appeals Court, Martin v. Martin, has us scratching our head: it is a Puzzlah, as Tom & Ray used to say.

As always, this Rule 1:28 decision is sparse on facts, but they may be summarized as follows:

  1. In 2009, the husband/father agreed by stipulation/divorce judgment to pay 50% of all of his gross pre-tax income, including salary increases and bonuses, as child support; and that, at no time, would his total annual payment be less than that provided for in the Child Support Guidelines for the parties' (2) unemancipated children.
  2. In 2012, the parties settled the parenting aspects of a complaint for modification, which increased the father's parenting time from about 33% to "up to forty percent of the time".
  3. The parties asked the trial judge to decide whether or not the father should be ordered to pay child support on "joint income over $250,000" (joint with whom?).
  4. The trial court held a "non-evidentiary hearing" (in some form or other), and then ordered the father to pay "additional support in accordance with a calculation dependent on the gross incomes of the parties". The Appeals Court did not set out the Probate judge's actual formula.
  5. The Appeals Court vacated the child support orders on income above $250,000 in the modification judgment because it was "... unsupported by findings that the children are in need of additional support."

Since the fuller facts were not reported, some of our questions may be answered in the actual record, but still, we wonder:

  1. Why did the mother join in asking the judge if there should be support on income over $250,000, when she was entitled to it already under the reported terms of the divorce judgment (#3 above)?
  2. Aren’t modifications supposed to bear some rational relation to the change of circumstances found? The guy had increased his overnights by about 26 per year (from .33 to .40 of 365 nights). What has that got to do with whether or not income above $250,000 is fair?
  3. Was the Appeals Court trying to save this guy from himself, at least in part? At divorce, the father agreed to pay more that half of his net-after-tax income (assuming that he pays taxes!), without any cap or other known relief, in a self-executing formula. Did the appellate panel take pity on a poor soul and give him another bite at the apple, in hopes that the trial court might think better of its order and reduce or eliminate the upper tier(s) of support?
  4. Even if the part above $250,000 were to be cured on remand, what of the 50% order below?
  5. Did anyone ask why an order so blatantly beyond the 2009 Child Support Guidelines was deemed fair and reasonable by the divorce judge?

Maybe, a reported decision would have provided the answers to all of these curiosities. But, we’ll get to that in the next entry.

 

NO COUNTRY FOR OLD MEN: PRE-ARA ALIMONY PAYORS CAN’T STOP PAYING AT RETIREMENT AGE JUST BECAUSE THE LAW CHANGED Chin v. Merriot, Rodman v. Rodman & Doktor v. Doktor Part 3 (Here Comes Huddleston?!)

Wednesday, February 18, 2015

In our last 2 entries, we reviewed the common central holding of these three cases; namely, that with the sole exception of the presumptive general term alimony durational limits for marriages that lasted 20 or fewer years, alimony payors under judgments that preceded the Alimony Reform Act (eff. 3.1.12) (ARA) cannot benefit from the presumptive retirement age termination provisions of the statute; and, then, the unfortunate treatment of cohabitation in Chin v. Merriot.

Now, we dig into the footnotes of Rodman v. Rodman and worry about a return engagement that Footnote 5 invites with 2001’s Huddleston v. Huddleston. Yikes! We apologize in advance for the length of this blog.

Merger and Survival

Generations of lawyers and clients have chosen between two distinct forms of support agreement: those that merge in the Probate and Family Court’s divorce judgment; and those that survive incorporation with independent legal significance. The differences were stark.

Survival meant that parties together could preclude the court from changing their agreed contractual alimony terms absent express subsequent agreement. Appellate courts limited this power at certain extremes (public charge and major default exceptions of Knox v. Remick and Stansel v. Stansel); but in the main, this prerogative, once incorporated into a divorce judgment, was solid and predictable.

For everyone else, there was merger. Modification of merging agreements, by definition, mirrored judge-made decisions. The parties did not challenge the trial court’s right to modify all support terms of judgments into which agreements had merged, when the circumstances in which they were negotiated had materially changed. Everyone’s safety net was preserved by future court access. Sometimes merger was actively desired; and at others it was all that could be agreed. Everyone knew what they were getting, or so they thought.

Bercume v. Bercume

The erosion between merger and survival began innocently enough with the SJC’s Bercume v. Bercume in 1999. In that case, Justice Marshall observed that the Probate and Family Court’s modification powers should be informed by the parties’ expressed intentions in merged agreements. The modifying court did not write on a clean slate, but on one in which the parties expressed intent ought be determined and respected. Bercume was a curb of sorts on the Probate and Family Court’s modification authority; but it did not shake the foundation of merger and survival theory.

Huddleston v. Huddleston

That is, until Huddleston v. Huddleston came along. In Huddleston, the parties executed a merging support agreement that only identified death of either spouse, or remarriage of the alimony payee, as causes for automatic termination of payment obligations. Common professional understanding of this termination language was that death, remarriage or a judgment of modification for other materially changed circumstances would, or could, result in termination. This was so because of context: merger.

The Wife sought increased alimony; but instead, the trial judge ordered that support would continue unchanged, but then abate at the Husband’s age 65 (a proxy for retirement age - not a recognized concept in pre-ARA Massachusetts). The wife appealed and in Huddleston v. Huddleston, the Massachusetts Appeals Court vacated the age 65 cut-off.

The result could have been justified on prevailing modification law alone. The Husband was not yet at age 65. The facts and circumstances that might exist when he did were then unknown; therefore, the Probate and Family Court judge could be reversed for anticipatory modification unsupported by facts found or knowable. I

Instead, the Appeals Court one-upped Bercume. Justice Duffly wrote that the trial court should have inferred that the parties’ silence about other bases for modification indicated their mutual intention that other modifications never occur. Relying on Bercume v. Bercume, and re-shaping it by extension, the Huddleston court vacated the termination provisions of the modification judgment, precluded as it were, by the sound of the parties’ silence.

Bercume’s erosion became Huddleston’s earthquake.

Reaction to Huddleston

Some cases make divorce lawyers sit up straight as they read. This one raised lawyer-hackles everywhere. Hadn’t we been taught since law school that the court could modify any merged support agreement, to meet materially changed circumstances? Didn’t judge after trial judge tell us to quit fussing, and wasting our clients’ money, by negotiating about endless permutations of what might, or might not, lead to modification? “Don’t worry”, they said. “It’ll be modifiable.”

But, Huddleston made them wrong. In the new century, silence could be louder than words in a merged agreement. “Death or remarriage” no longer read like “death, remarriage or other material change of circumstances.” The parties’ merged agreement had been construed at the appellate level like a surviving contract. Ever since, divorce lawyers have struggled to preserve modification rights in merged alimony agreements, never knowing for sure the ultimate result, clarity and predictability taking the hit.

After Huddleston, just what was the difference between merger and survival?

ARA § 4(c)

Uncodified §4(c) of the ARA states that a court may not modify “… an existing alimony judgment in which the parties have agreed that their alimony judgment is not modifiable…” Unfortunately the drafters did not distinguish between merging and surviving agreements in this regard.

As a result, since ARA’s enactment, we have worried that this statutory choice, or oversight, would bring down the wall between merger and survival. In an earlier presentation of “The Seven Sins of Alimony”, we fretted that §4(c) could become “Bercume on steroids” in the appellate courts’ hands, meaning that parties’ recitals in merged support agreements might exceed the justifiable influence to which Bercume entitles them; and making them, instead, binding permanently on the court.

Rodman v. Rodman

Then came Rodman v. Rodman. Now writing for the SJC, Justice Duffly observed at Footnote 5 that:

    We agree that the first clause [of §4(c)] appears, by implication, to include merged agreements, and that the Legislature intended to honor clear expressions by the parties regarding the terms under which alimony may terminate.

Consigned to a footnote, but neither gratuitous nor insignificant because of its editorial placement, the SJC signaled that merged agreements, which evidence a mutual intent to deny the court authority to modify alimony, may have preclusive effect, as a matter of law. Now, where is the firewall between merger and survival?

When Huddleston Meets Rodman

This is when it gets really scary.

Some day, some party will ask the SJC to rule that a merged agreement that is silent about some or all modification contingencies should have the same legal effect as a surviving agreement that is similarly silent. In other words, in any form of agreement, if authority to modify is not spelled out in sufficiently specific form, modification ought be precluded.

How can the SJC say “no”, when Judge Duffly wrote both Rodman and Huddleston? If they do not, Bercume plus Rodman plus Huddleston will equal the end of merger as we know it. The circle will be closed and merged agreements will equal surviving agreements.

What then becomes of the thousands of merged agreements executed before and after Rodman? How can lawyers advise clients about modification rights or vulnerabilities with anything like assurance? Will people who cannot achieve a surviving agreement (as most cannot) default to a judge-made decision after trial to avoid the vagaries of appellate interpretation of modification rights in their merged deals? At least, so far, judgments entered by a judge, after trial, are still modifiable upon a material change of circumstances.

We hope that our projection proves more paranoid than correct. Otherwise, woe is to the alimony payors and payees, whose expectations of modifiability will be toppled. And what about legal counsel, who did not insist upon, or succeed in attaining, merged agreement language that anticipates every possible basis for a future modification by the court?

Now, that’s something that should keep alimony payors, payees and their counsel up at night.

 



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