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May 16, 2022 VOL. 26, NO. 4

April 2022 Case Update

Editor: Laura Morgan

Case Update is a Section of Family Law Member Benefit publication. Not a member of the ABA Section of Family Law? Join now to view premium content.

(Editor's Note: Some cases may be from March, as they were not posted to Westlaw until after I prepared the March update on April 12, 2022.) 

AGREEMENTS - POST-NUPTIAL AGREEMENT - UNCONSCIONABILITY

Simon v. Smith, No. 18‑FM‑1333 (District of Columbia Court of Appeals, April 21, 2022)

During the marriage, the parties executed two agreements in the form of a lease and a transfer of property and management rights, whereby the wife leased to the husband her premarital condominium and granted him exclusive control over the same. [Ed.: Please read the opinion for the onerous terms of the agreements. Really insane.] Held: “In our view, the judge's findings in this case are amply supported by the evidence, and they demonstrate that Simon did take unfair advantage of his wife by means of the Lease and Property Agreements.”  

CHILD CUSTODY - JOINT CUSTODY PRESUMPTION - REBUTTAL

Carr v. Carr, No. 2019‑CA‑1780‑MR, No. 2019‑CA‑1781‑MR (Kentucky Court of Appeals, March 18, 2022)

The trial court misapplied the statutory amendment establishing the presumption that equally shared parenting time was in the child's best interest. The trial court’s conclusory statement that the presumption had been rebutted, without identifying which factors led the court to the conclusion that presumption had been rebutted, was inadequate, and nothing in the record suggested that the court had designed a parenting schedule to maximize the child's time with the father, as required by statute if the presumption had actually been rebutted. 

CHILD SUPPORT - INCOME - EVIDENCE OF INCOME

Interest of R.H.B., Nos. 04‑21‑00038‑CV & 04‑21‑00339‑CV (Texas Court of Appeals, San Antonio, March 30, 2022): Father

Oh, really, Your Honor, I only earn monthly gross wages of $9,148.38. Court: Oh yeah? What about the fact that your company pays $1,400 for a monthly lease for your primary vehicle, it pays your cell phone, it pays $750 monthly toward a money judgment against you, it pays for basketball tickets costing around $8,000 over nine months and $1,500 for season soccer tickets, and you pay $250 monthly for country club membership? Nah, I think your net income is $9,200. 

CHILD SUPPORT - INCOME - VA BENEFITS

State on behalf of Nathaniel R. v. Shane F., 30 Neb. App. 797 (Nebraska Court of Appeals, April 5, 2022)

The father filed for child support modification, alleging as a change in circumstances, inter alia, that the father had become totally disabled as determined by the VA and he was collecting VA benefits, and the VA or other governmental agencies had paid benefits on behalf of the child to the mother for which the father had not received credit. Held: First, there is no merit to the father’s argument that the VA benefits he receives are not income; they are. Second, the father is correct that he is entitled to a credit against the child support in the amount of the apportionment payment sent by the VA on behalf of the child. [Ed.: Same treatment as social security derivative benefits.] 

CHILD SUPPORT - UIFSA - PERSONAL JURISDICTION

M.A.P. v. E.B.A., No. A‑1057‑21 (New Jersey Superior Court, Appellate Division, March 24, 2022)

As we all know, UIFSA’s long-arm statute, UIFSA § 201, allows for assertion of personal jurisdiction over an individual when “the child resides in this state as a result of the acts or directives of the individual[.]” In this case, the mother gave birth to a child in New Jersey in April 2020; the mother claimed the child was conceived during her brief relationship with the father, an Argentine national, in New York City. [Ed.: that would give New York jurisdiction over the defendant under UIFSA § 201(a)(6).] New Jersey asserted jurisdiction over the father, and he appealed, asserting “the child does not reside in New Jersey as a result of [his] acts and directives”; he “does not maintain sufficient minimum contacts with New Jersey”; and “fair play and substantial justice” militate against haling him into court here. Held: You are correct, sir! “The trial judge concluded that subsection (5) allowed for the exertion of personal jurisdiction over [father], even though he and [mother] engaged in sexual relations outside this State, because he knew [mother] was a New Jersey resident. We reject the far too facile view that subsection (5)'s required “act” may be the sexual act that caused conception.” Further, the father’s communications with the mother while she was in New Jersey do not constitute sufficient minimum contacts with New Jersey. Reversed.

DIVORCE - JURISDICTION - RESIDENCY - HEARING

Emerman v. Hetherington, No. A22A0615 (Georgia Court of Appeals, April 21, 2022)

Trial court erred in dismissing husband's complaint for divorce for lack of subject matter jurisdiction without holding an evidentiary hearing prior to dismissal in order to determine whether husband satisfied the residency requirement to file a petition for divorce; husband contended that if given the opportunity to have an evidentiary hearing he would have presented testimony and evidence, including his state driver's license, lease agreement, and rent checks, to satisfy his burden of establishing his state residency, but because the motion to dismiss hearing was limited to legal argument only husband was deprived of the opportunity to prove residency.

PROPERTY DIVISION - CLASSIFICATION - ANNUAL BONUS

In re Marriage of Turner, No. 21CA0663, 2022 COA 39 (Colorado Court of Appeals, Division IV, March 31, 2022)

Because the wife had not obtained an “enforceable right” to bonuses from her employer under the employer’s annual incentive plan or supplemental incentive plan at the time of the permanent‑orders hearing, any potential bonuses were not marital property. This is so even though any bonus would have related to work the wife performed during marriage. There was no evidence that the employer or the wife had satisfied the necessary conditions to trigger the availability of the bonus under any plan, the committee of the employer's executives had the sole discretion to award bonuses under the supplemental plan, and the bonus from the annual plan was within discretion of the wife's manager.

PROPERTY DIVISION - CLASSIFICATION - GAMBLING DEBTS

Autrey v. Autrey, No. A‑1‑CA‑38534 (New Mexico Court of Appeals, April 5, 2022)

The wife argued that the trial court erred by not ordering the husband to reimburse the community for his gambling losses which he incurred and paid with community funds during the marriage. Held: There was no waste of a community asset, because you, Wife, approved of and agreed to all those losses. You went on those gambling trips with him, and you gambled, too, didn’t you? 

PROPERTY DIVISION - CLASSIFICATION - INHERITED HOME

In re Marriage of Coates, 318 Or. App. 772 (Oregon Court of Appeals, April 6, 2022)

Husband argued that the trial court erred in determining that a home he inherited during the parties’ marriage was a marital asset subject to equitable division. Held: The inherited home is marital property. First, under Oregon law, property acquired by one spouse through inheritance may not be subject to a presumption of equal contribution if the court finds that the property has been separately held by that party on a continuing basis from the time of receipt. Here, the evidence showed the parties’ joint use of the property and the intertwined nature of the family finances that were used to maintain and improve the property. Second, even if husband is correct that the property was not a marital asset, the trial court still retained the discretion to divide the property equally based on a consideration of what is just and proper under all the circumstances.

[Ed. Note: For another case on an inheritance in Oregon, this time holding that the inheritance was, indeed, separate property, see In re Marriage of Brush, 319 Or. App. 1 (April 13, 2022.)]

PROPERTY DIVISION - CLASSIFICATION  - MILITARY PENSION - RES JUDICATA

Foster v. Foster, No. 161892 (Michigan Supreme Court, April 5, 2022)

Ex‑wife brought action against ex‑husband to enforce the consent judgment from their divorce, after ex‑husband began receiving Combat Related Special Compensation (CRSC), which decreased the share of his military retirement benefits payable to ex‑wife. The Circuit Court, Dickinson County, found ex‑husband in contempt of court and ordered back payment for the arrearage accrued. Ex‑husband appealed. Held: The provision of the parties’ consent judgment of divorce that divides defendant's military retirement and disability benefits is generally enforceable under the doctrine of res judicata even though it is preempted by federal law, Howell v. Howell nothwithstanding.

PROPERTY DIVISION - CLASSIFICATION - PERSONAL INJURY PROCEEDS

Benoit v. Benoit, No. 2021 CA 0864, 2021‑0864 (Louisiana Court of Appeal, 1st Cir., April 4, 2022)

The proceeds from the settlement of a personal‑injury lawsuit stemming from a motor vehicle accident in which the husband sustained physical injuries were the husband's separate property rather than community property. The wife produced no evidence that any of the settlement funds were for her resulting loss‑of‑consortium or loss‑of‑society claims, the husband lost no work as a result of the accident, and the husband and wife did not claim any portion of the settlement funds on their personal income tax return. Fair enough. What’s a bit more interesting, though, was that the trial court found that all of the funds received from the personal injury settlement were deposited into the husband’s company, which was a community company. The funds were then used directly by the parties to pay for their personal expenses and to pay community obligations. Despite what might have been transmutation, the trial court determined that the husband was entitled to reimbursement for one‑half of those funds expended on behalf of the community. “[The wife] contends that once the settlement proceeds were deposited into the account of Eagle, those funds became the property of Eagle, or alternatively became community property, and thus, should not have been included in Mr. Benoit's reimbursement claims for the use of his separate property to pay community obligations. We find no merit to her arguments.” Nope. “Those ordinary and customary expenses were presumed to be community obligations and Ms. Benoit offered no evidence to rebut this presumption. Therefore, we find no manifest error in the trial court's determination that Mr. Benoit was entitled to reimbursement for one‑half of that amount, regardless of the value of community property received by Ms. Benoit.”

SPOUSAL SUPPORT - INCOME - IMPUTED INCOME (Bad neighbor edition)

Giuliano v. Giuliano, 203 A.D.3d 1473, 2022 N.Y. Slip Op. 02160 (New York Supreme Court, Appellate Division, Third Department, March 31, 2022)

At trial, the wife testified that she was a registered nurse and that she applied for various full‑time nursing jobs. She had worked part time as a nurse but also taught yoga classes. The wife explained that she could not work on a full‑time basis because of the needs of the youngest child. The wife's friend, however, was asked at trial whether the wife made any comment to her to the effect that returning to full‑time work would hurt her divorce case, to which the friend responded, “I believe so.” The friend also testified that she did not tell the wife about nursing opportunities because “[t]here was no interest.” With these facts, the trial court did not err in imputing income to the wife in the amount of $58,000. The court reached this $58,000 amount based upon the wife's capability of full‑time work, her testimony regarding her hourly wage as a nurse, and by taking into account a 40–hour work week.

Pankhurst v. Pankhurst, No. 20200772‑CA (Utah Court of Appeals, March 24, 2022)

Another case demonstrating the maxim, “Don’t flap your lips to your neighbor,” a maxim much like the Stringer Bell Rule (don’t take notes of your illegal activities). The husband claimed that his decrease in income was a substantial change in circumstances, but his neighbor testified that the husband had expressed his intent to artificially deflate his earnings in the event of a divorce. Further, the wife testified that fluctuations in the husband's income had occurred throughout marriage and that they had historically been temporary, the husband offered no evidence indicating that the change in income was permanent, and the only reason the husband cited for the change was the COVID‑19 pandemic, which had not even begun until a few months before the divorce trial and which did not seem to have permanently decreased the price of oil.

NEWS ITEMS OF INTEREST

Joanne Kaufman, Separated but Under the Same Roof (New York Times, April 1, 2022)

Anne Branigin, Who Can Access IVF Benefits? A Gay Couple’s Complaint Seeks an Answer (Washington Post, April 13, 2022)

No‑Fault Divorce: Rush Expected as New Law Introduced in England and Wales (The Guardian, April 3, 2022)

Dylan Mitchell, Kelly Clarkson’s Divorce Brings Family Court Battles Over Vaccinating Kids Against COVID-19 Into Spotlight (Forbes, April 12, 2022)

Naomi Cahn and Sonia Suter, Generations Later, the Rights of Donor-Conceived People Are Becoming Law (The Hill, April 23, 2022)

Tracy Moore, Even at its Best, Co-Parenting is the Worst (The Washington Post, April 14, 2022)

Dov Fox, Donor 9623 and the Strange Business of Making Babies (Audible Blog)

Jonah E. Bromwich, Family Court Lawyers Flee Low-Paying Jobs. Parents and Children Suffer (New York Times, April 29, 2022)

Mark Joseph Stern, Alito’s Leaked Draft Fully Overruling Roe is Jaw-Dropping and Unprecedented (Slate, May 2, 2022)

Finally, from our friends Mark Sullivan and Brett Turner:

On March 1, 2022, the Claims Appeals Board (CAB) rendered a Reconsideration Decision in Claims Case No. 2016‑CL‑091608.3.  The case holds that the Uniformed Services Former Spouses' Protection Act (USFSPA) allows CRDP paid to a disability retiree to be divided as property in a divorce case, since it is the payment of longevity retired pay (not the restoration of disability retired pay).  The essence of the CAB ruling is in the second‑last paragraph of the opinion:

In this case, the member retired under Chapter 61 and subsequently became entitled to receive CDRP.  The restoration of his retired pay under the statute authorizing CRDP, 10 U.S.C. § 1414, is subject to division under the USFSPA.  CRDP is a restoration of retired pay based on longevity, which is 20 years of service.  It is divisible under the USFSPA.  The USFSPA is consistent with the CRDP statute and the implementing regulations contained in Chapter 64 of Volume 7B of the DoDFMR [Department of Defense Financial Management Regulation].  Any contrary interpretation would provide the member with an entitlement or benefit that was not explicitly authorized by Congress. 

(To find the CAB decision, go to the webpage of the Defense Office of Hearings and Appeals, Claims Division.
Click on this decision.)

According to Mr. Sullivan, the folks at DFAS are now “pulling their hair out in large chunks.”

Brett Turner’s analysis:

If I'm understanding the procedure correctly, any denial of benefits by DFAS can be appealed to the CAB.  So if the CAB continues to consistently reach this result, then division of restored retired pay will be possible, at least for spouses with the financial resources to finance the appeal.

But the CAB's authority traces back to the power of the government to settle claims made against it, see the first paragraph of the CAB opinion, and the government's power to settle claims does not prevent a suit in federal court by someone who thinks the government did not act according to law.  E.g., St. Louis, B. & M. R. Co. v. United States, 268 U.S. 169, 174, 45 S. Ct. 472, 474 (1925).  So I'm thinking any party aggrieved by a CAB decision has the right to ask a federal judge to decide the question.

It will be interesting to see what happens when this ruling and the Mansell opinion encounter one another.  Mansell says in effect, CRDP isn't divisible because deductions required by title 5 or 38, or by chapter 61 of title 10, are not disposable retired pay.  10 USC 1408(a)(4)(A)(ii,iii).  The CAB ruling says, in effect, a deduction means only money which the government keeps, so restoration of retired pay is not a valid deduction.  I just read Mansell again and it really doesn't address the point, because CRDP didn't exist yet; the court didn't address the definition of a deduction.

I can see how Mansell and this opinion could potentially co‑exist; but the tone of Howell is that anything that smacks of dividing disability pay violates Mansell.  Howell certainly didn't view the deductions mentioned in 10 USC 1408(a)(4)(A)(ii,iii) as potentially retirement‑related and therefore potentially not valid deductions at all.  In fact they overruled a whole bunch of state court indemnity cases, all of which held the essentially the same thing as this opinion; that the definition of a valid deduction does not include amounts which are really retired pay.

As matter of policy I like this decision a lot; the only thing that really constitutes disability pay is the difference between retired pay and disability pay‑‑‑the extra money which the service member gets, which he would not receive if he had not been disabled.  But the attitude of this opinion is pretty different from the attitude of the courts in Mansell and Howell.  I could easily see a federal judge saying this decision is wrong.