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December 2024 Case Update

Laura W Morgan

December 2024 Case Update
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Cases

Agreements – Offer and Acceptance - Emails

Shilling v. Shilling, No. 66, 2024 (Delaware Supreme Court, Dec. 4, 2024):

Dust off your first-year contracts outline. “ This case concerns an ex‑wife's failed effort to enforce an agreement that she believed she had reached with her ex‑husband respecting the sale of her interest in certain property acquired by the parties during their marriage. The record shows that, in an exchange of email messages, the ex‑husband offered to purchase the interest, and the ex‑wife accepted the offer. But the Family Court found that the offer and acceptance did not result in an enforceable contract because the parties had not adequately manifested their intent to be bound by what they said in the email exchanges and that the exchanges did not contain all the contractual terms that were material to the parties. In consequence of these findings, the Family Court declined to enforce the putative agreement. We view the matter differently. As we see it, the Family Court overlooked the most relevant evidence of the parties’ intent and the terms they deemed material to the sale of the ex‑wife's interest in the subject property. And this oversight led the court to the erroneous conclusion that the parties’ communications did not form an enforceable contract. We therefore reverse the Family Court's judgment and remand the matter so that the court can consider what relief is appropriate in light of our determination that the parties’ email exchanges gave rise to an enforceable contract.”

Agreements – Premarital Agreement – Ability to Consult Independent Counsel

Olson v. Olson, No. 20240103, 2024 ND 224 (North Dakota Supreme Court, Dec. 5, 2024):

(1) Evidence supported finding that wife had a reasonable time to access independent legal representation before signing premarital agreement, as required to enforce agreement, even though wife and husband signed the agreement two days prior to the wedding; husband had made wife aware of the need for a premarital agreement at least several times, long before their engagement and their wedding, husband had placed a draft of the agreement on the kitchen counter, in keeping with the parties' common practice, approximately three weeks prior to the signing date, and although husband scheduled a signing appointment two days before the wedding, wife still had time to contact an attorney that day or the following day, before the agreement took effect. (2) Evidence supported finding that wife received adequate financial disclosure before signing premarital agreement, as required to enforce agreement; wife and husband began living together five years before marriage and began dating two years before that, since which time wife observed husband's day‑to‑day involvement with his assets, including managing properties and businesses, acquiring a lake residence, and renting properties, they shared a home office, in which wife organized husband's bills, invoices, bank statements, and tax returns, husband openly discussed his earnings, the number of his businesses, and the value of his assets, and the parties completed balance sheets that were attached to agreement at signing, listing assets and liabilities in detail. (3) Evidence supported finding that wife's consent to premarital agreement was voluntary and not a result of duress, thus satisfying a requirement for enforcement of such agreement; wife was an intelligent and competent businessperson who held a college degree with a major in business, wife owned a successful custom blind business and had started a nonprofit animal rescue project, run a website design business, and owned and managed rental properties, wife had the experience of entering into a settlement agreement from a prior marriage, wife acknowledged the disparity between her and husband's wealth, and wife was made aware of the need for the premarital agreement long before the wedding.

Agreements - Premarital Agreement - Protective Order

Smith‑Fullerton v. Fullerton, No. 5D2024‑0855 (Florida District Court of Appeal, Fifth  District, Dec. 6, 2024):

“[T]he parties’ Antenuptial Agreement provided that neither party had a duty to disclose financial information. Without first examining the validity of that agreement per the Wife's motion and request at the hearing, the trial court authorized full financial disclosure and denied the Wife's request for protective order. As such, the Wife has demonstrated irreparable harm. See Allstate Ins. Co. v. Langston, 655 So. 2d 91, 94 (Fla. 1995) (explaining discovery of certain kinds of information “includ[ing] ‘cat out of the bag’ material that could be used to injure another person or party outside the context of the litigation” may cause material injury of irreparable nature)[.] ... Because the trial court made no determination as to the validity of the Antenuptial Agreement, its order departed from the essential requirements of law.”

Agreements - Property Settlement Agreement - Construction - Life Insurance

Sevelitte v. Guardian Life Insurance Company of America, 123 F.4th 53 (United States Court of Appeals, First Circuit, Dec. 12, 2024):

The parties’ separation agreement provided, “Whole Life Insurance Policy shall remain in full force and effect and ownership of said policy is with [husband]”, and that “should [husband] elect to cash in said policy that [wife] shall be entitled to one half of the value of said policy”. Under Massachusetts law, insured's ex‑wife's status as beneficiary under life insurance policy was automatically revoked upon parties' divorce. The parties understood that only way to retain beneficiary status post‑divorce was to explicitly state that purpose, that term “full force and effect” had the simple effect of maintaining existence of described policy, and that provision had effect of giving ex‑wife interest in policy proceeds only if insured cashed in policy during his life. So, oopsie, she does not get the benefit of the policy when he died. 

Child Custody - Hague Convention - Mature Child Exception

De La Cruz v. Garcia, No. 4D2024‑0823 (Florida District Court of Appeal, Fourth District, Dec. 4, 2024):

Upon learning that child was removed from Mexico by mother, father filed petition for return of child to Mexico pursuant to the Hague Convention on the Civil Aspects of International Child Abduction and the International Child Abduction Remedies Act (ICARA), alleging that mother wrongfully removed child from Mexico and retained child in violation of his custody rights. Mother asserted the “mature child” exception to return: this exception provides that the trial court may refuse to order the return of child if it finds that the child objects to being returned and has attained an age and degree of maturity at which it is appropriate to take account of its views. Held: Ten‑year‑old child was not sufficiently mature for purposes of mature child exception. The child's preference to remain with mother in Florida was based primarily on three factors, and these factors were her friends, a desire to attend high school, and upcoming school trip to Orlando, such generic and near‑sighted responses demonstrated child's inability to maturely comprehend or appreciate long‑term impact of her decisions, child provided no significant testimony as to her life in Mexico or how life in Mexico differed from life in United States, and child failed to consider how her relationship with father might change if she remained in United States. The child’s desire to not be separated from mother in Florida was a “custodial preference,” not an affirmative objection to returning to Mexico

(Ed. Note: Please be sure to check Melissa Kucinski’s Family Law Across Borders blog for Hague cases.)

Child Custody - Improper Delegation of Authority

Michael B. v. Patricia S., No. 2024‑02680, 2024 N.Y. Slip Op. 06005 (New York Supreme Court, Appellate Division, First Department, Dec. 3, 2024):

The child did not want to visit with the father. The Family Court ordered that the father “have visitation as agreed between the parties in consultation with the child.” This order “is an impermissible delegation of its authority to the mother and child, and essentially causes the father to have no visitation at all. Furthermore, despite the father's lack of sensitivity to the child, particularly during the October 2022 incident, we cannot find on this record that there was a showing adequate to justify terminating the father's contact with the child; that is, that any form of contact under all circumstances would be harmful to the child's welfare.”

(Ed. Note: See also this month Sulzle v. Sulzle, 318 Neb. 194 (Nebraska Supreme Court, Dec. 20, 2024) in which the court held that the trial court's post‑divorce order giving ex‑wife sole discretion to allow ex‑husband to exercise any parenting time with teenage daughters, upon the court's determination that a material change in circumstances warranted modification of parenting plan, was an unlawful delegation of court's sole responsibility to determine custody and visitation to ex‑wife, as the order allowed ex‑wife to unilaterally terminate ex‑husband's parenting time with daughters as she saw fit.)

Child Custody - UCCJEA - Home State

Dorvil v. Atwell, No. 3D24‑0029 (Florida District Court of Appeal, Third District, Dec. 4, 2024):

After father commenced child custody proceeding in South Carolina, mother filed petition to establish paternity, parental responsibility, time‑sharing, and child support with father. Due to issuance of final order in the South Carolina proceeding, the Florida trial court dismissed mother's petition for lack of jurisdiction. Mother filed notice of appeal. After notice of appeal was filed, the South Carolina court vacated its final order. Mother moved to supplement the record with the vacatur order, and father filed a motion to strike. Held: (1) District Court of Appeal would consider vacatur order from South Carolina court; (2) District Court of Appeal would remand appeal in order for trial court to conduct evidentiary hearing to determine child's home state; and (3) District Court of Appeal would remand appeal in order for trial court to determine whether South Carolina had jurisdiction in accordance with UCCJEA such that trial court was required to communicate with the South Carolina court.

Marriage - Bigamous Marriage - Estoppel

Baxter v. Baxter, No. 1D2023‑1776 (Florida District Court of Appeal of Florida, First District, Dec. 4, 2024):

“Jeanette Valle Baxter appeals the trial court's order in her action for dissolution of marriage that declared her marriage to Kern C. A. Baxter was bigamous and thus void. Jeanette argues that Kern was equitably estopped from challenging the validity of their marriage and that the trial court's failure to apply the doctrine of equitable estoppel requires reversal. We agree and reverse and remand for further proceedings.... Jeanette bases her position on the undisputed facts — as found by the trial court — that the parties lived and acted as if they were legally married for over 25 years and raised two children to adulthood. They owned real property as tenants by the entirety. They filed federal taxes as “married filing jointly,” thereby annually affirming their belief about their marital status under penalty of perjury.3 All in all, the parties held themselves out as husband and wife for the two and a half decades dating from the Ecuadorian divorce and marriage in 1995, until Jeanette filed a petition for dissolution of the marriage in 2020....Turning to the Baxters’ case here, Kern sat on his qualms about the Ecuadorian marriage for more than 25 years. He only retrieved the marriage‑validity argument from his back pocket when a dissolution case was filed. Under these circumstances, Florida law does not permit Kern to question his marriage. Rather, the elements of Jeanette's equitable estoppel argument were established by the trial court's findings.”

Property Division – Dissipation – Transfer to Trust

Matter of Nadeau, 2024 N.H. 68 (New Hampshire Supreme Court, Dec. 19, 2024):

Two properties at issue were transferred to a trust, of which the husband's father was trustee, on June 15, 2009, for little or no consideration. The transfers were made without the wife's knowledge and potentially without the husband's knowledge. Whether or not the husband was aware of the transfers in 2009, both parties became aware of the transfers in 2012, when the wife was contacted by the Attorney General's Office regarding an investigation into whether the husband was involved in fraudulent transfers of real estate. The trial court noted in its order that both the wife and the attorney she consulted at the time of the investigation testified that when the husband learned of the transfers in 2012 he was surprised and upset and “planned to put things right.” The husband acknowledged that he was upset by the deed transfers when they were discovered in 2012, and testified that he did not recall signing the deeds transferring the properties in 2009. However, no subsequent deeds correcting the transfers of the two properties were ever executed. The husband's action (if he transferred the properties in 2009), or inaction (if he failed to correct the transfers in or after 2012), led to a substantial diminution in the value of the marital estate. The trial court treated the State Street and Rye properties as if they were existing marital property and then constructively awarded them to the husband as part of his share of the marital estate. This treatment is consistent with how courts treat dissipated assets and was not error. (This one’s for you, Heather.)

Law Review Articles of Interest

News Items of Interest

President Biden Signs H.R. 82, the Social Security Fairness Act, into law. This bill repeals provisions that reduce Social Security benefits for individuals who receive other benefits, such as a pension from a state or local government. The bill eliminates the government pension offset, which in various instances reduces Social Security benefits for spouses, widows, and widowers who also receive government pensions of their own. The bill also eliminates the windfall elimination provision, which in some instances reduces Social Security benefits for individuals who also receive a pension or disability benefit from an employer that did not withhold Social Security taxes.

How will this effect equitable distribution? Please read the following by Brett R. Turner, of National Legal Research Group.

The Social Security Fairness Act

President Biden has signed into law H.R. 82, the Social Security Fairness Act.  The act removes a provision in federal law which prevents state and local government employees from receiving Social Security.  When the act is fully implemented, state and local government employees will receive Social Security benefits, just like workers in the private sector.

The Act also applies to federal employees who receive benefits under the Civil Service Retirement System (CSRS), the older and more generous retirement plan for federal employees.  The Act does not apply to federal employees who receive benefits under the Federal Employees Retirement System (FERS), the newer and less generous retirement plan, as these employees already participate in Social Security.

The Act has a broad scope, because there are many different types of state and local government employees.  State and local employees include not only direct government workers, but also policemen, firemen and other first responders.  Also, teachers in public schools are generally government employees.

Under prior law, state and local government employees did not receive Social Security benefits.  This created unfairness in property division law when a government employee was divorced from a private sector employee.  The private sector spouse received Social Security, which cannot as a matter of federal law be divided upon divorce.  Brett R. Turner, Equitable Distribution of Property § 6:17 (2024).  The public sector spouse received no similar benefit.

Some states responded to this unfairness by excluding from division a portion of the state employee's retirement benefits, generally equal to a hypothetical Social Security equivalent.  See, e.g., Cornbleth v. Cornbleth, 397 Pa. Super. 421, 580 A.2d 369 (1990).  Other states recognized no classification remedy, but allowed the court to consider the unfairness as a division factor.  See, e.g., Forrester v. Forrester, 953 A.2d 175 (Del. 2008) .  Still other states held that the unfairness was an issue for the legislature.  See, e.g., Olson v. Olson, 445 N.W.2d 1 (N.D. 1989);  see generally Turner, supra, § 6:17, text starting at note 18.

Once the Act is fully implemented, there should be no need for special remedies in most state court divorce cases.  Almost all spouses will receive Social Security, so there should not be many divorce cases in which only one spouse receives Social Security.

In some states, the legislature has created a special retirement benefit for at least some state employees, equal to the amount which they would have received if they participated in Social Security.  See, e.g., Silcox v. Silcox, 6 S.W.3d 899 (Mo. 1999) (including one such benefits).  These special benefits are often not subject to equitable distribution, as they are intended to mimic Social Security benefits.  Once the Act is fully implemented, there would seem to be no need for these special benefits, and state legislatures might come under pressure to repeal them.

The Act applies on its face to benefits payable after December 2023.

The Social Security Administration (SSA) has publicly announced that is "evaluating how to implement the Act" and "will provide more information as soon as available."  Implementation could be a challenge, as the Act, which was signed into law by a Democratic president, must be implemented by a Republican administration.  On the other hand, President-Elect Trump supported the bill before passage, suggesting that implementation could proceed without major problems.

In sum, the Act will not cause any immediate direct change in the litigation of state divorce cases.  But if the Act is fully implemented, public sector spouses should generally receive Social Security, and there should be a large drop in the number of state court divorce cases in which only one spouse participates in Social Security.  Over time, this should make special state law provisions regarding these cases increasingly less likely to apply.

See also https://www.laboelaw.com/the‑social‑security‑fairness‑act‑will‑it‑affect‑you/

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