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.
by Matthew Solomon, Esq.
In one of the most awaited and watched divorce cases of this past year, the Supreme Judicial Court has overturned a lower court’s decision in the case Pfannenstiehl v Pfannenstiehl that a husband’s beneficial interest in an irrevocable, discretionary spendthrift trust should be included as a marital asset in a divorce. In its unanimous rejection of both the Appeals Court and the Probate judge’s rulings, the SJC has made a clear statement about trust interest and marital property in Massachusetts.
At the heart of the SJC’s decision was that the husband’s interest in the trust was merely an expectancy. The SJC found this to be so because the husband was a member of an open class of beneficiaries with changing needs. The class of beneficiaries was “open” as it consisted of all the issue of the husband’s father, in any generation (at present time 11). As such the number of beneficiaries could increase or (decrease) due to deaths and births. The court called it a “discretionary” trust which creasted “nothing more than an eligibility for distributions.” The SJC distinguished the present case from Comins v Comins, which the wife’s argument relied upon, because in Comins the divorcing wife was only beneficiary of the trust.
In addition, the SJC found that the language of the trust gave the trustees total discretion as to whether to make distributions to any of the beneficiaries and in unequal proportions. The beneficiaries had no right to income or principal, and the trustees could distribute funds to them in unequal portions. In fact, until the divorce, the husband and his siblings received distributions, the husband receiving a total of $800,000 from the trust during the period April, 2008 until August 2010. The husband’s distributions ended upon his filing for divorce.
The SJC’s ruling was in direct contrast to the Appeals Court’s decision. The Appeals court found that the trustees manipulated the trust by terminating the husband’s distributions upon the filing of the divorce complaint. One of the other important aspects of the lower court’s ruling was its determination as to how to value the husband’s interest in the trust. The lower court had ruled that the husband’s share of the trust should be calculated as 1/11 of the trust assets and awarded 60% of that value to the wife.
As discussed above, the fact that there was an open class of beneficiaries helped convince the SJC that the husband’s interest could not be determined. The SJC noted the discretionary aspect of the trust, and that the intent of the trust settlor was not to benefit the wife. The SJC further determined that the support language of the trust (the trustee had total discretion to use trust principal or income for a beneficiary’s “comfortable support, health, maintenance, welfare and education”) did not create a “present enforceable right to distributions” for the husband because there were 10 other beneficiaries who had changing needs as well as potential future beneficiaries. This made valuation of the husband’s share of the trust speculative.
The key distinction between the SJC and the lower court is what each focused on to determine the donor’s intent. The lower court’s decision that the ascertainable standard in the trust actually required that the trustees make distributions seemed to be based more on the unpleasant facts of the case then on the intent of the donor. The SJC examined that same language of the trust and found that this standard did indeed limit the trustees’ discretion and that it was the donor’s intent to benefit his children and later generations. By doing so, the SJC reaffirmed the established law regarding intent and trust language. This is a relief to those who draft trusts for the purpose of “asset protection,” as the lower court ruling seemed to question the reliable and standard language employed by these drafters to shelter their client’s assets.
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.
by Laurie Israel
Mediation is not one monolithic technique. Mediators and mediation theorists may categorize different types of mediation techniques into different theoretical boxes, such as “facilitative,” “evaluative” and “transformational.” But the categories all seem to bleed into each other.
At its core, mediation has as much variety as there are mediators, mediation clients and issues being mediated. Because of this variety and variability, mediation seems more like art than science, with unpredictable pathways through the process, and surprising results, if the mediator gives the clients space to evolve in their understanding of each other and the dispute.
There are various philosophies that swirl around mediation. One says that mediation is “client-directed.” Whatever the clients want, that’s what the mediator arranges in settling the clients’ agreement. The problem with client-directed mediation, is that the skills, background, and experience of the mediator are discounted and not taken advantage of by the clients.
This is true especially in an area such as divorce mediation or prenuptial agreement mediation, where the mediator (generally) has extensive knowledge of the operant law and the possibilities of resolution for each of the issues involved. There is no reason to expect a mediation client to be an expert in divorce law or the laws pertaining to prenuptial agreements. An understanding of these laws are important for the clients, and can enlighten and enrich the process of dealing with the practicalities inherent in ending a marriage or formulating a prenuptial agreement.
But what about that mediation rule that mediators are not supposed to give legal “advice” during the course of a mediation, but can provide legal “information.” What is the difference between legal “advice” and legal “information”? That’s a slippery slope that all mediators deal with on a daily basis.
A mediator cannot pretend that he or she knows nothing about divorce law or the law of prenuptial agreements. That would be absurd, because many of the issues that the clients are addressing are legal ones, and certainly, the clients are not supposed to be experts in the law. So, legal information must be rendered by the mediator, at least initially, subject to input by the clients’ reviewing attorneys (if they have any).
What about the “elephant in the room” that sometimes comes up in mediation? This is the little but very important fact that is unsaid, but lingers in the background, infusing the entire mediation with an element of untruthfulness. That elephant may need to be acknowledged and discussed openly in order to have all the relevant information accessible to make a well thought-out agreement by the clients.
How, when (and should) the mediator bring up the “elephant in the room”? Some of these elephants are quite large and important. Not saying something reminds me of the Hans Christian Andersen tale “The Emperor’s New Clothes.” We as mediators frequently face this issue. Should the mediator say something when he or she sees something, even if the clients have not brought it up, like the message in the subway, “If you see something, say something.” Or should the mediator remain silent until (and unless) the clients bring it up?
Clients engage us as mediators for many reasons. Sometimes they simply view mediation as a money-saving way to resolve their dispute. At times they choose us because they are afraid that engaging attorneys will make their disagreements more difficult to resolve and may be detrimental to their ongoing relationship. They generally, carefully choose their mediator based on the mediator’s experience and background, and also their sense of whether the mediator’s personality and approach will be compatible to theirs.
Mediation clients don’t choose a computer program or a machine. They choose a real person, with intellect, his or her own background and experience, and knowledge of the operant law in their dispute or issue. How silent should the mediator be in the process? When should the mediator follow and when should the mediator lead? Should the mediator say the “truth” as he or she sees it when an issue comes up that the parties may not understand clearly? Or should the mediator remain silent?
The danger being a “truthsayer” when you’re a mediator, is that your “truth” (sometimes unbeknownst by you) may support or give the appearance of supporting the position or view of one or another of the clients. This can happen even if the connection between the “truth” said and a party’s position is quite attenuated, because mediation clients can sometimes be very fragile. As a result, the mediator becomes tainted with perception of bias or lack of neutrality. Usually, this immediately ends the success of the mediation. So being a mediator “truthsayer” can pose great risks to the process.
However, there are also strong benefits for saying the “truth” as you see it, at least sometimes. Mediators often try to appease both sides of the mediation. In doing so, the mediator can be perceived as untruthful, and both sides can lose respect for the mediator and the mediation process weakens. For this reason, a word of “truthfulness” by the mediator can have a powerful effect in mediation — perhaps leading to a resolution, even if it temporarily seems to support the position of one side rather than the other. Both sides can feel like there is a person in the room that can provide feedback that can help them resolve their dispute.
The mediator’s truthfulness should always be balanced with a demonstration of support and respect for other mediation client and should include an explanation of why the mediator sees the issue that way. It’s dangerous, but can move things strongly forward.
If it’s done in a non-threatening way, the other party will also have a chance to express and clarify his or her view. As a result, greater mutual understanding on the issue by the clients can occur. Even small changes in view might lead to resolution on the issue and could have a ripple effect to lead to other agreements in the mediation. Bringing the parties to agreement may be better served by an active mediator, even though much of the activity might be subtle.
The most important factor in mediation success and not allowing the mediator’s “truth” derail the process is that the mediator has respect for both clients. This respect should be evident and actual — demonstrated by words, listening, comments, and structure — or else the moment of “truth” might be too dangerous.
In this safe setting of respect, when the mediator offers his or her “truth” in the right way at strategic times in the mediation, the small changes and cumulative understandings that can make the mediation successful can be greatly facilitated.
© Laurie Israel 2013
by Matthew Solomon, Esq.
In a March of 2015 ruling that is as groundbreaking as it is inevitable, a judge in New York (in the case, Baidoo v. Blood-Dzraku) allowed a woman to serve divorce papers on her estranged husband of six years. What might, at first, seem like a bizarre and unwise decision by a lower court judge actually is a well-structured and rational ruling that seeks to adapt a procedural aspect of divorce to the technology of social media.
The first step in a divorce is for the plaintiff to “serve” the defendant. In other words, the person filing the divorce is required to notify their current spouse that they have filed paperwork with the court by delivering a copy of the paperwork to the other spouse. One of the most common problems that people have is locating the person they are trying to have served. Given that divorce can be time-consuming and expensive, any delay in service will only add to the cost and time involved.
The plaintiff in New York had a particularly challenging situation because her husband had no known address, no known place of work or business, and no known relatives. New York’s Domestic Relations Law allows plaintiffs to request permission to use one of three alternative methods of service rather than the traditional in-hand delivery method. The first two methods require that a plaintiff know of a defendant’s “actual place of business, dwelling or usual abode.” The third method involves publication of the paperwork in a newspaper selected by the court, once a week for three weeks. The plaintiff in Baidoo attempted the first two methods of service, but was unable to locate her husband. Further, the court agreed with the Wife that the chance that the defendant would ever see the publication in a newspaper was slim to none regardless of what newspaper the Wife publicized in and did not require that the Wife publicize at all.
Fortunately for the wife in Baidoo, plaintiffs in New York also have the option to request alternate service in addition to the three already mentioned methods. That is exactly what the wife did, and the court permitted her to create her own method of service that was appropriate for this particular situation. In making its decision, the court determined that it was an “impossibility” to personally deliver the summons on the defendant. The court also stated that the plaintiff had to prove that sending the summons through Facebook can reasonably be expected to give the defendant actual notice that he is being sued for divorce.
The court also had to address the Federal constitutional principles underlying services of process. As the court said, “The central question is whether the method by which the plaintiff seeks to serve the defendant comports with the fundamentals of due process by being reasonably calculated to provide defendant with notice of the divorce.” The Wife was granted permission to serve the defendant with the divorce summons using a private message through Facebook. The transmittal of the summons was to be done by Wife’s attorney, and was to be repeated once a week for three consecutive weeks or until acknowledged by the defendant.
There is no denying the role that technology plays in the world and there is no slowing down its impact on all aspects of our lives. For the court to recognize these facts, apply it to this procedural problem in divorces, and then carve a limited exception that seems to understand how social media can be a valuable tool to the courts is extremely encouraging and exciting.
As this is a lower court New York state decision, anyone contemplating Facebook service should consult with an attorney in the state of the divorce action, and rely on the court’s specific ordering, and conditioning of the order with other requirements, if any. And it is important not to attempt Facebook service until you have a court order permitting it in hand.
©2015 Matthew Solomon. All rights reserved.
by Matthew Solomon, Esq.
Rule 412 (actually Supplemental Probate and Family Court Rule 412) permits parties to divorce or post-divorce actions to make certain changes in orders and judgments by administrative action by a judge instead of having to go to court for a hearing. However, many papers must be filed –and filed correctly in order for the court to act administratively. If any of these are missing or questioned, the parties (and their attorneys) will need to come into court for a hearing. If the parties’ agreement and accompanying packet of forms is complete (and if the judge has no questions), the parties can expect to receive an order from the court within thirty days of filing.
It should be noted that the process, though not as stressful and time-consuming as a day in court, does require the parties to submit more than just a joint agreement to the court. Here are some of the forms that are needed:
- An agreement (generally notarized) which must state many particulars as specifically required by Rule 412.
- Accurate and complete court-form Rule 401 Financial Statements with supporting documentation.
- A complete and accurate Child Support Guidelines Worksheet, if child support or medical, dental r vision insurance is being modified;
- A proposed Child Support Findings form if the parties are deviating from the child support guidelines calculation
The parties will be notified of a hearing date if the court believes a hearing is necessary or helpful to resolve the matter.
Despite the clear intent behind Rule 412 to make things cheaper and easier for parties, it still is recommended that you consult with an attorney prior to filing. An attorney can help assess the complexity of the issue you are attempting to modify and attorneys have more familiarity with probate forms and how they need to be filled out.
by Matthew Solomon, Esq.
If you’re a fan of good music and you’ve never heard Marvin Gaye’s 1978 record, “Here, My Dear”, then I strongly suggest that you take a listen. If you’re a fan of good music and also someone going through a divorce, or thinking about divorcing, then listening to this album is a must. This is a record crafted and created straight from the pain, anger, narcissism, embarrassment, and resentment that many family lawyers see in their clients.
Marvin Gaye married Anna Gordy in 1962. Anna was seventeen years older than Marvin, who was twenty-two at the time they married. At this point in his musical career, Marvin was very young and inexperienced and had only one studio album under his belt. After fourteen years of marriage, Anna filed for divorce. The couple had already been living apart for two years and both were accusing the other of infidelity. As the divorce proceedings dragged on, Marvin’s personal assets dwindled and he was in arrears for back taxes as well as temporary alimony payments.
According to Curtis Shaw (Marvin’s lawyer at the time), the house that Marvin was living in with another woman and his kids was about to be padlocked due to his financial troubles. Attorney Shaw came up with a unique and creative idea on how the couple could reach an agreement with regard to the financial aspect of their divorce. This is what he said:
“There weren’t many joint-estate assets because during the Marvin/Anna years they lived high on the hog…Meanwhile, Anna was demanding a million dollars. How was this ever going to get resolved? I came up with a plan. Marvin was getting $305,000.00 advance per album at this point, and I suggested that he pay the next album’s advance to Anna, plus the first $295,000 of earnings. That meant she’d have $600,000. Anna went for the idea. I got Marvin to go along, and the judge wrote up the order.”
From this solution, Marvin Gaye’s album “Here, My Dear” was born.
Part 2 will delve deeper into the individual tracks of the album and examine how Marvin’s lyrics imitated the language he heard from the judge and the lawyers.
by Matthew Solomon, Esq.
When the Massachusetts legislature enacted the Alimony Reform Act of 2011 (the “Act”), attorneys and previously divorced individuals were left with uncertainty as to how this law would affect prior alimony agreements and judgments. (For simplicity here, I’ll refer to both as “judgments”)
Just recently, in three separate cases (in each, a ex-spouse seeking retroactive application of the Act to end spousal support), the Supreme Judicial Court held that terms of the Act does not apply retroactively to alimony judgments entered before the effective date of the Act — March 1, 2012. These three cases involved separation agreements that were incorporated into the judgment of divorce and were merged into it, which means the provisions of the agreement regarding alimony were potentially changeable by their terms under the jurisdiction of the Family and Probate Court.
In all of these cases the person paying alimony sought to terminate his alimony payment obligations based on the Act’s language that alimony “shall terminate upon the payor attaining the full retirement age.” G.L. c. 208, §49(f). In one of the cases, the ex-husband also sought to terminate his alimony obligation based on the Act’s language that alimony, “shall be suspended, reduced or terminated upon the cohabitation of the recipient spouse…” G.L. c. 208, §49(d). The SJC delivered a consistent and unambiguous conclusion in all three cases: the retirement and cohabitation provisions of the Act do not apply to divorces that were final before the effective date of the Act, even if the alimony provision was merged into the judgment
In Chin v Merriot SJC-11715 (Jan. 30, 2015), the ex-husband had already reached the age of retirement when his divorced was finalized 2011. In addition to claiming termination due to his retirement, he raised the cohabitation provision under M.G.L. ch. 208, section 49(d) as a reason for termination of alimony. The SJC held that both provisions were prospective only. Since in his case, the alimony provision was merged into the judgment of divorce, the ex-husband could have shown a material change of circumstance warranting modification or termination of his alimony obligation, but did not meet that burden of proof. This option under the pre-Act law of modification is still available for ex-spouses with merged alimony judgments, because the issue of alimony remains under the continuing jurisdiction of the Probate and Family Court.
In Doktor v Doktor, SJC-11727 (Jan. 30, 2015), the ex-husband reached retirement age after the 1992 divorce. The alimony provision merged into the judgment. The SCJ held that presumptive termination of alimony at full retirement age in the Alimony Reform Act is prospective and does not apply to cases that were concluded before the law went into effect. In this case, the ex-husband did not establish that there had been a material change in circumstances that should warrant modification of the alimony provision. The court also said that permissible changes in pre-Act merged judgments due to difference in “durational limits” between a divorce judgment and the Act within the meaning of M.G.L. ch. 208, section 4(b) does not include an event such as remarriage, cohabitation, or reaching the age of retirement.
In Rodman v Rodman, SJC-11726 (Jan. 30, 2015), the alimony provision in the 2008 divorce also was in a separation agreement that merged into the judgment. The ex-husband argued (unsuccessfully) that that in such a case the Act applies, because a merged judgment is “prospective” in effect. The Court held that the section 49(f) provision presumptively ending alimony at retirement age for social security is not applicable, and does not apply retroactively to both merged and surviving pre-Act separation agreements. The Court further explained that the only subset of divorce cases that went to judgment before the act went into effect that are modifiable pursuant to the terms of the Alimony Reform Act are those where the alimony order (1) merged into the underlying judgment, and (2) exceed the durational limits for support provided under the act.
The decisions in these three cases had been highly anticipated by family law lawyers. At this point, it seems that any party to a divorce that was final prior to March 1, 2012 seeking to terminate alimony payments under the new retirement and cohabitation provisions of the Alimony Reform Act should be advised that their chances of success are slim to none. However, a payor who believes there has been a material change in circumstances may still apply to the Court in the form of a modification action for a reduction or elimination of alimony payments, if the alimony provision has merged into the judgment, subject to the Family and Probate Court’s continuing jurisdiction.
By speaking so decidedly and unequivocally, the SJC has provided attorneys with a precise framework within which they can advise clients seeking to modify or terminate their alimony payments on the basis of retirement or co-habitation, and also to contest duration of alimony for pre-Act divorces where the alimony judgment merged.
Note that under Section 4 (c) of the Act, as in pre-Act law, no litigant may seek modification of an existing alimony judgment in which the parties have agreed is not modifiable, and which “survive” the judgment. This puts divorced individuals who bargained and negotiated prior to new alimony provisions contacted within the Act in a permanently unfavorable position, compared with individuals who had negotiated merged pre-Act judgments, and those in post-Act divorces.
By Laurie Israel, lawyer/mediator, Brookline, MA
Alimony is a highly-charged word. Discussions of alimony generally get the strongest reactions from both men and women when working out the terms of a divorce. Believe it or not, it’s generally more contentious than custody disputes over children or property division.
“Your Divorce, Idiomatically Speaking”, published on March 15, 2012, Huffington Post.
Lawyers often use idioms rather than legal terms to explain concepts and strategies in divorce law to our clients. Somehow, these idiomatic terms are more descriptive and powerful in describing the dynamics and techniques that are present in a divorce than any other type of language. Lately I have been collecting a number of these terms that I frequently use in my divorce practice. What follows are my favorite and most often used idioms, and what they mean for my divorcing clients.