Ludwig v Ludwig

February 14, 2017 by  
Filed under Alimony, Divorce, Recent Articles

by Matthew Solomon, Esq.

Ludwig v Ludwig, 15-P-1177 (slip opinion) (2017).

Massachusetts Appeals Court case in which husband appealed a Probate Court’s alimony decision to include unvested stock options as income that had not been included in the parties’ equitable division after the implementation of the time rule laid out in Baccanti v Morton.

The Appeals Court affirmed the Probate Court’s decision on the issue of double-dipping, stating that, “Here, there is no such injustice because the contested shares were not part of the equitable distribution of assets; by operation of the time rule, they were assigned to and retained by the husband outright.” In other words, precisely because the shares were not part of the division of marital assets, they could then be considered a source of income when calculating alimony. The Appeals Court further pointed out that the income for the source of the property assignment was distinguishable from the source of the alimony obligation.

The husband also contested the Probate Court’s ruling as to what date to use under the time rule when determining the value of the unvested stock options. The basic idea is that the later the date used to determine the value translates into a greater number of shares available for distribution. The Probate Court ruled that the date to be used was the date closest to the when the hearing was actually held on the parties’ contested issues because the court found that neither party had acted in any way to drag out the case. The husband argued that the Probate Court should have used the date closest to the date that the parties separated, which was about a year and half prior, arguing that the Probate Court did not make any findings on the wife’s “contribution to the maintenance of the unvested options” subsequent to the parties separation because the parties did not provide evidence or testimony as to the wife’s contribution during that period. The Appeals Court affirmed the Probate Court’s decision as to which date to use under the time rule, stating that the judge was not limited to only considering financial contribution to the acquisition of assets and referenced the language of M.G.L. c. 208 § 34 that identifies the different types of contributions that parties may make to a marriage.

The court discussed situations in which property has been divided, and nonetheless, income earned from the part of the property retained by a husband was part of the income subject to alimony. The court cited two specific cases: In Adams v Adams, 459 Mass. 361 (2011) the SJC supported the ruling of the trial court to identify a husband’s partnership interest as a marital asset to be divided and valued, and to also include any expected future income from this interest when calculating child support. In Champion v Champion, 54 Mass. App. Ct. 215 (2002), the Appeals Court affirmed the ruling of the trial court that assigned a value for husband’s interest in his business for the purposes of division of marital assets, and then considered any future earnings from this business when determining husband’s support obligations.

Share

Hassey v. Hassey, 85 Mass. App. Ct. 518 (2014)

June 30, 2015 by  
Filed under Alimony, New Cases

This was a divorce after an eleven year marriage. Upon divorce, the probate judge ordered husband to pay monthly alimony that was approximately forty-one percent of the difference in incomes, which exceeded the thirty to thirty-five percent range set forth in the Alimony Reform Act. The Appeals Court stated that although such a deviation is “reasonable and lawful” under the Act, the probate court made no “finding as to the amount of alimony the wife needed in order to maintain the lifestyle she enjoyed during the marriage.” Thus, the probate court’s ruling on general support alimony was vacated.

Next, the Appeals Court reviewed the “self-modifying” portion of the alimony order. The Appeals Court detailed two major issues with this part of the order. First, the Appeals Court focused on the fact that the way the modification was ordered, the burden to show a change in circumstances was improperly shifted to the husband. The wife had no corresponding burden.  Second, the Appeals Court found the ‘self-modifying” order gave the Wife access to the Husband’s financial information but did not grant the same right to the Husband.  The husband would not be privy to information regarding the wife’s income and whether a material change had occurred in her needs.

 

 

Share

Are Self-Modifying Alimony Provisions Enforceable?

June 29, 2015 by  
Filed under Alimony, Divorce, Recent Articles

by Matthew Solomon, Esq.

A recent Massachusetts Appeals Court case, Hassey v Hassey, 85 Mass. App. Ct. 518 (2014) addressed whether a provision in an order providing for adjustments in alimony was effective. The Appeals Court found the one in the trial judge’s order in Hassey to be unenforceable.

Husband and wife were married for eleven years. Upon divorce, the probate judge ordered husband to pay monthly alimony and an “additional alimony equal to thirty percent of his gross income in excess of $250,000.00, from all sources…payable quarterly.” The husband was ordered to provide quarterly documentation of his income to the wife. Alimony was to continue until the first of four events: wife’s remarriage or cohabitation; wife’s death; husband’s death; or husband’s retirement as defined by the Alimony Reform Act.

The Appeals Court first looked at the amount of alimony ordered. (Note that this was not a consensual separation agreement entered into by the parties.)

In this case, the probate court failed to include in the findings of fact a consideration of the parties’ ability to maintain the marital lifestyle. This omission by the probate court gave the Appeals Court the opportunity to review the amount of the alimony award. The alimony order of the probate court was approximately forty-one percent of the difference in incomes, which exceeded the thirty to thirty-five percent range set forth in M.G.L. c. 208 §53(b). The Appeals Court stated that although such a deviation is “reasonable and lawful” under §53(b), the probate court made no “finding as to the amount of alimony the wife needed in order to maintain the lifestyle she enjoyed during the marriage.” Thus, the probate court’s ruling on general support alimony was vacated.

Next, the Appeals Court reviewed the “self-modifying” portion of the alimony order. The Appeals Court detailed two major issues with this part of the order. First, the “self-modifying” order was “not based on a judicial determination, supported by subsidiary findings of fact, of an increase in the wife’s need accompanied by the husband’s ability to provide for the same.” The Appeals Court focused on the fact that the way the modification was ordered, the burden to show a change in circumstances was improperly shifted to the husband. The wife had no “corresponding burden and will automatically realize the benefit of any increase to the husband’s income.” Second, the Appeals Court found the ‘self-modifying” order was “inequitable because it requires only the husband to disclose quarterly income to the wife, but imposes no reciprocal duty on the wife.” The husband would not be privy to information regarding the wife’s income and whether a material change had occurred in her needs.

A couple takeaways on this case: (1) drafting of “self-modifying” clauses should be done extremely carefully with as much explanatory language as possible; and (2) consider agreements to deviate from 53(b) alimony amounts. Another takeaway is that if a litigated case, careful reading of the findings of fact should be done to make sure that the lower court has addressed all the statutory factors in determining the initial alimony order.

 

©2015 Matthew Solomon.  All rights reserved.

 

Share