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Divorce Mediation Blog

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.

 

Making a federal case of surviving separation agreements

Wednesday, August 12, 2015

The divorce bar does not often look to the federal trial court for guidance in family law matters. In fact, outside of discovery and the Rules of Civil Procedure, we rarely look to federal courts at all when constitutional rights are not at issue.

But U.S. District Court Judge William G. Young’s ruling in Irish v. Irish is a noteworthy exception.

Young’s findings and conclusions establish contractual liability from a former husband’s false statement on his Supplemental Probate Court Rule 401 Financial Statement, filed in a Middlesex Probate & Family Court divorce case and referred to in a separation agreement that the state court incorporated into its divorce judgment. Critically, the agreement survived incorporation in the judgment and did not merge therein.

The federal case concerns a payout to defendant Craig S. Irish that plaintiff Dawn E. Irish, and now Judge Young, view as a form of phantom equity, in which the former wife has continuing contractual rights. Young makes quick and eloquent work of Mr. Irish’s contention that a substantial sum received by him afer divorce was merely a bonus and, thus, outside the scope of Ms. Irish’s property claims.

The forum and the substance both merit close consideration for divorce lawyersRead more...

 

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.

 

Massachusetts Alimony and Child Support: Much Ado About Double Counting

Wednesday, March 19, 2014

At the November 22, 2013 MCFM Institute, and in many other settings, divorce lawyers, mediators and judges have considered and debated aspects of the interaction between the March 1, 2012 overhaul of Massachusetts alimony laws and the August 1, 2013 revamp of the Child Support Guidelines, here. One of the hottest topics was the apparently inconsistent way in which each body of law treats the other! At LDRC, we waded into the deep end by addressing the subject in two blog entries, which we have edited only lightly here for FMQ.

 

Some of Our Best friends are Divorce Lawyers

Tuesday, October 08, 2013

There, we said it. Many of them are very good at what they do -- responsible sorts, even; and they are nice people. In a field and among circumstances that tolerate and even encourage some pretty bad behavior, sometimes divorce lawyers are the only cool headed adults in the room. Yet, in a culture that values lawyers only when you need one, we are very free to stereotype and thus condemn a whole walk of professional life with cheap jokes and throwaway lines that if spoken about a race, a gender, a sexuality or an ethnicity, would be taboo. Not so with lawyers -- divorce lawyers foremost.

Such was the case in September 23, 2013's Boston Globe column by Jennifer Graham. In her piece "Free to be you and mean", Ms. Graham explored the case of Lawrence Summer's fall from political grace, shunned from his desired job as head of the Fed, she claims, because he is a nasty man in the workplace. In pressing the theory that the public trust requires competency first and compatibility not-so-much, she reduces divorce lawyers to a cultural cliché, a rhetorical prop. Ms. Graham asks herself "...are there certain jobs where a certain level of jerkiness is an asset?" In mock seriousness we suppose, she answers:

"Divorce lawyers, maybe. I've heard it said that you should never hire one that you like."

We do not say that there are not divorce lawyers who are irritating, difficult, even unlikable. We know a few. Some of them make a pretty good living, too. But, does this make "jerkiness an asset"? In the perverse sense that being difficult to deal with sometimes does make divorce cases longer and more than necessarily complex, and therefore more profitable for the lawyers, can that really be said to be an advantage for the client? Our answer is: "almost never".

Liking your divorce lawyer is no substitute for hiring one who is smart, skilled and measured; but most clients most of the time benefit most from competent counsel with whom they wouldn't mind breaking bread, too. In a relationship that begins with faith and is built on trust, confidence and a sense of pride in being publicly represented by this person, likability matters. It matters in the feelings engendered in the client (often while absorbing unavoidable disappointment), in the opposing spouse, in forensic specialists, in courthouse personnel and -- very much so -- in judges who decide cases.

As divorce mediators and family law arbitrators, we are much aware not only of the competent service that we try to provide, but also the quality of the experience for the lawyers and clients who work with us. In our corner of the business, jerkiness surely does not pay. We know that we see a self-selecting population of clients and counsel -- those who have opted out of the more confrontational or extreme forms of dispute resolution, so we see little of the reprehensible few that Ms. Graham damns with disingenuous praise. But, the cause of one brilliant jerk doesn't justify smearing an entire craft, and it certainly didn't add credibility to the Graham piece.

Now, about journalists...

 

Dependency Exemptions After Divorce: A Good Reminder From the Appeals Court

Wednesday, June 12, 2013

In a recent case, the Massachusetts Appeals Court revisited the federal tax code’s provisions on the allocation of child dependency exemptions between divorced parents. In upholding a probate judge’s decision to award a child’s exemption to the non-custodial but child support-paying father, over the mother’s objection, the appellate court reviewed current tax regulations and concluded that state courts continue to have the power to direct the exemptions as deemed appropriate.

But, but that since the court’s judgment alone is insufficient to satisfy the IRS’ requirement that the custodial parent “release” the exemption, the appellate opinion clarified that the trial court must also specifically order the custodial parent to sign [and presumably deliver] an IRS Form 8332 release to make the assignment effective. The failure to sign or deliver the form, then, becomes the state court enforcement (contempt) trigger.

At first glance, we wondered: “why did they bother?” Most divorce lawyers are familiar with Form 8332 and its effect. Then, we asked why she bothered. The mother appeared to have no financial stake in the outcome of her own appeal (for which she presumably paid legal fees), since her income was too low to have the exemption save her any tax dollars, even if she did wrest the exemption back from the father. Perhaps, the associated federal tax credits made the exercise worthwhile, or maybe her motivations were non-financial.

Then, on second thought, we realized that the case is a useful reminder to all family law drafters. This includes Massachusetts divorce mediators who write separation agreements, lawyers who draft proposed judgments for judges and suggested awards for divorce arbitrators, and for arbitrators themselves, that best practice dictates that dependency exemption provisions make reference to Form 8332 and place an affirmative obligation on the releasing party to sign and deliver. Otherwise, a client who does have a discernible stake in the having the dependency exemption just may not get it.

 

What's Good About Mediating Without Lawyers Present?

Tuesday, January 31, 2012

For many people, mediation with lawyers present is a contradiction in terms, as in "if we have a mediator, why do we need lawyers?"  In fact, mediation without lawyers present is the dominant form in Massachusetts family law practice, though not in commercial mediation generally here, or even in family law elsewhere.  While clients who choose to mediate without lawyers in "the room"  (in quotes, because much mediation with lawyers "present" involves "caucus-style" mediation, wherein the mediator shuttles between the parties, who are in separate spaces), many do, and all should, have lawyers with whom to consult between sessions.

But one of the attractions to mediation for clients is the desire to avoid the distortions in their own desired messages and the potential for exacerbation of tensions that comes with what otherwise be perfectly effective and well-intentioned advocacy by lawyers.  Some people would rather just speak for themselves.  Another motivation for non-lawyered mediation is that people perceive that they will more truly "own" their agreements if they are organically involved in the negotiations to close them.  Finally, many clients fear that the cost savings of mediation will be negated, or at least undermined, by having lawyers present.  (While true that lawyers add cost, they also add value in ways that many clients cannot anticipate in advance, when poised to enter into the sometimes mystifying word of family law.)

Two additional advantages for clients to enter into mediation without their lawyers on site are pacing and understanding.  Agreements that are the product of direct party-to-party negotiation tend to evolve at a slower and more deliberative pace, often resulting from periodic (1- 2 hours) sessions, paced out over the course of other life events.  As any divorce lawyer would confirm, coming to grips with family law issues is usually part of a larger emotional process.  People who are immersed in the shock/anger/grief/confusion of the early days of separation (and for some, not so early) need time to process the most intense personal crisis of their lives to date, and making prompt decisions at the expense of deliberative ones can result either in buyer's remorse (making a "bad" deal to get out of the discomfort of an unsettled situation) or being blinded/hindered by the emotional moment so as to be unable to recognized a "good" deal because of the confounding influence of negative emotions.

Mediated agreements that do not involve the "crutch" of having a lawyer present to formulate and articulate "positions" and demands, may be made with greater understanding for the people who must live the deal.  Especially if these clients are consulting with their lawyers between sessions, they have the ability to discuss their own interests in their own way, while still gaining clarifications, nuances and strategic guidance that help shape the ongoing process.   Yet, they have the time to question, to ponder, to re-think and to re-shape a settlement at a pace that may increase understanding and appreciation of the stakes, the concepts and the solutions.

But,there also advantages to mediating with lawyers present.  I will consider this in another blog post.

 



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