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State Bar of Texas Section Report - Family Law - Fall 2007

by Jimmy L. Verner, Jr.

Alimony: A Missouri trial court properly awarded alimony of $550 per month to an unemployed, disabled wife, aged 55, with a 9th-grade education and no computer or clerical skills, despite the husband's insistence that he could not pay that much from his monthly earnings of $3,900. Russum v. Russum, 2007 Mo. App. LEXIS 275 (Feb. 20, 2007). The North Dakota Supreme Court refused to reduce alimony payments of $5,000 per month when the ex-husband's income dropped from $400,000 to $250,000 per annum. Rothberg v. Rothberg, 727 N.W.2d 771 (N.D. 2007).

Characterization: A North Carolina trial court did not believe a father's claim that he intended to give a mobile home park to his son when the deed recited that consideration had been paid. Joyce v. Joyce, 2006 N.C. App. LEXIS 2502 (Dec. 19, 2006). An Illinois court denied a stepfather's claim that his wife's child support judgment against her prior husband should be part of the marital estate because the stepfather had supported the wife's children during the wife's marriage to him. In re: Edwards, No. 5-06-0046 (Ill. App. Nov. 29, 2006). A trial court's mere recitation that various witnesses had testified to certain facts did not constitute findings of fact supporting a wife's reimbursement claims to the marital home. Stone v. Stone, 2007 N.C. App. LEXIS 394 (Feb. 20, 2007).

Child support: The New Hampshire Supreme Court held that employer-provided housing, vehicle and other benefits do not constitute "gross income" for child support purposes although they can be considered under a "special circumstances" statute. In re: Clark, No. 2005-531 (N.H. Nov. 29, 2006). A New Jersey court held that neither employer contributions to a 401k plan nor accretions of plan income are income for child support purposes because they are subject to penalties on early withdrawal and "would punish the father for investing wisely to secure a stable retirement." Forrestall v. Forrestall, 2006 N.J. Super. LEXIS 319 (Nov. 28, 2006). A federal court's restitution requirement for back child support, imposed after conviction under the federal Child Support Recovery Act, does not constitute a ceiling on a state court's back child support award. Giordano v. Giordano, 2007 N.J. Super. LEXIS 3 (Jan. 9, 2007). A lump-sum Social Security disability award to a disabled obligor's child can offset the obligor's child support obligation. Diehl v. Diehl, 2006 N.J. Super. LEXIS 339 (Dec. 21, 2006). K-1 income is not necessarily income for child support purposes because "how federal income taxation statutes define 'income' is of little relevance to our interpretation of gross income under the child support guidelines." In re: Albert, 2007 N.H. LEXIS 54 (Apr. 18, 2007). Depreciation on rental property cannot be deducted from annual gross income for child support purposes. Asfaw v. Woldberhan, 2007 Cal. App. LEXIS 269 (Feb. 27, 2007).

Grandparents: A maternal grandmother who served as a surrogate mother to her grandchild for five years after the mother's death prevailed in a grandparent suit after the father curtailed visitation. E.S. v. P.D., 2007 N.Y. Slip. Op. 01336 (N.Y. Feb. 15, 2007). A paternal grandmother who occasionally babysat her two-year-old grandson failed to obtain visitation more often than the child's mother would permit because she "failed to establish even a prima facie case of the requisite harm . . . to rebut the presumption in favor of parental decision-making." Rente v. Rente, 2007 N.J. Super. LEXIS 48 (Feb. 15, 2007).

Imputing income: Courts in Connecticut and California held that for child support purposes, a court may impute a higher than actual return to an underperforming investment. Weinstein v. Weinstein, 2007 Conn. LEXIS 4 (Jan. 2, 2007) (2.96% return imputed on investment yielding 1.24%); In re: Schlafly, 2007 Cal. App. LEXIS 521 (Apr. 10, 2007) (3% return imputed on investment yielding 1.6%). But the California court refused to impute $3,000 per month as rental FMV when the obligor lived in his mortgage-free house. In Carolan v. Bell, No. And-06-332 (Me. Mar. 1, 2007), a trial court declined to impute $300 per month income to a daughter who rented a house from her parents at $1,000 per month even though the house previously rented for $1,300 per month.

Religion: When unmarried parents disagree whether a child should attend a religious or a secular school, the court must decide the matter but without taking into account conflicting religious preferences. Yordy v. Osterman, No. 95,203 (Kan. App. Jan. 19, 2007). An Arizona trial court properly granted a motion to dismiss based on absolute immunity when a mother sued the state and a court conciliator under 42 U.S.C. § 1983, alleging that the court conciliator recommended the father as primary custodian so that the child would attend the LDS church. Burk v. State, No. 1 CA-CV 06-0029 (Az. App. Mar. 12, 2007). In a divorce between Orthodox Jews, a court had no jurisdiction to consider the wife's contention that the husband's obtaining a "heter" - ecclesiastical permission to remarry without first giving the wife a "get," or religious divorce - effectively prevented the wife from remarrying. Sieger v. Sieger, 2007 N.Y. Slip Op. 01286 (App. Div. Feb. 13, 2007).

Relocation: A mother who took the parties' child from Idaho to Montana where she made a false report of domestic violence lost custody to the father. Hopper v. Hopper, 2007 Ida. LEXIS 61 (Mar. 19, 2007). A relocation agreement by Illinois parents became subject to a "best interests" determination by the court when the father accused the mother of breaching the agreement. In re: Boehmer, No. 2-06-0796 (Ill. App. Mar. 8, 2007). When an ex-spouse marries or becomes engaged to a person living in another state, Massachusetts requires the ex-spouse to prove "a real advantage" to moving (query: when would moving not be "a real advantage" to the ex-spouse?) and that the move would be in the child's best interest. Pizzino v. Miller, 2006 Mass. App. LEXIS 1327 (Dec. 26, 2006) (trial court allowed move; reversed and remanded for redetermination); Abbott v. Virusso, 2007 Mass. App. LEXIS 209 (Feb. 28, 2007) (trial court denied move; reversed and remanded for redetermination). In In re: Matchen, 2007 Ill. App. LEXIS 339 (Apr. 11, 2007), the court affirmed denial of permission to move because of the child's close relationship with the father. Dissent: A father should not have veto power over his ex-wife's proposed move.

Same-sex: A lesbian domestic partner who filed a custody suit in Vermont failed in her bid to prohibit Virginia's full faith and credit recognition of the Vermont judgment even though a Virginia statute declares "void" any recognition of same-sex rights originating in other states. A Virginia appellate court said that Virginia's statute did not apply, and even it it did, it would be preempted by the federal Parental Kidnapping Prevention Act. Miller-Jenkins v. Miller-Jenkins, 2006 Va. App. LEXIS 539 (Nov. 28, 2006).

Valuation: The Georgia Supreme Court held that a buy-sell provision in a stockholder agreement is not conclusive of stock value upon divorce - especially when the other spouse did not sign it - because "the buy-sell price in a closely-held corporation can be manipulated and does not necessarily reflect true market value." Barton v. Barton, 2007 Ga. LEXIS 21 (Jan. 8, 2007). In contrast, a New York court affirmed a business valuation because it relied, in part, "on the yearly valuations made pursuant to the shareholders' agreement between the defendant and his brother." Daddino v. Daddino, 2007 N.Y. Slip Op. 01241 (App. Div. Feb. 13, 2007). Under the "capitalization of excess earnings" valuation method, the cost of an employee to replace the owner must be subtracted from the business' value; anything over that cost is personal goodwill. A California appellate court upheld a trial court's finding of $544,000 as an owner's replacement salary. In re: Ackerman, 2006 Cal. App. LEXIS 2056 (Dec. 27, 2006). The Iowa Supreme Court reversed a valuation of $5 million placed on trademarks owned by a business, finding the valuation to be speculative. In re: Keener, No. 05-1257 (Iowa Feb. 9, 2007).

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State Bar of Texas Section Report - Family Law - Fall 2006

by Jimmy L. Verner, Jr.

Jurisdiction: The Vermont Supreme Court refused to extend full faith and credit to a Virginia order that cut off a same-sex partner’s visitation with the couple’s child because Virginia “violated” the UCCJA and PKPA by issuing an order when Vermont had prior jurisdiction. Miller-Jenkins v. Miller-Jenkins, 2006 Vt. LEXIS 159 (Aug. 4, 2006). The PKPA’s six-month requirement applies to a habeas corpus petition for possession of a child. E.N. v. E.S., 852 N.E.2d 1104 (Mass. App. 2006). A New York court lacked jurisdiction to terminate a support order when the obligor subsequently obtained an out-of-state divorce decree from a state without in personam jurisdiction over the New York-domiciled obligee. Sannuto v. Palma-Sannuto, 820 N.Y.S.2d 112 (App. Div. 2006). In Pennsylvania, a trial court’s desire to “effectuate economic justice” did not justify the court’s sua sponte joinder of an ex-husband’s Hong Kong-domiciled paramour as a party and failure to serve her with process because neither court rules nor due process requirements are “optional.” Mayer v. Garman, 2006 Pa. LEXIS 1438 (Aug. 4, 2006).

Paternity/maternity: A Kentucky mother was estopped to deny her husband’s paternity of her child when divorce proceedings became bitter, given that the child’s birth certificate listed the husband as the father, and the mother previously had filed a verified petition identifying the husband as the father. Hinshaw v. Hinshaw, 2006 Ky. App. LEXIS 275 (Sept. 1, 2006). The biological father of a child born to a married woman has a vested parental right once parentage is established, a right that “may only be stripped pursuant to the statutory parental termination procedures - it may not be forfeited in a balancing test or to another man who may appear to be a more ideal father.” In re: T.K.Y., 2006 Tenn. LEXIS 757 (Aug. 28, 2006). The Michigan Supreme Court found a recitation in a default divorce decree that there were no children born of the marriage insufficient to establish that a child was not issue of the marriage and therefore to confer standing to establish paternity upon the man who fathered the child during the mother’s marriage. Barnes v. Jeudevine, 718 N.W.2d 311 (Mich. 2006). A California appellate court refused to allow “the wife of a man who fathered a child in an extramarital relationship to assert status as the child's mother, when the child’s biological mother has come forward promptly to assert her maternal rights.” Amy G. v. M.W., 47 Cal. Rptr. 3d 297 (Cal. App. 2006).

Be nice: A Mississippi appellate court granted primary physical custody of a five year old child to her Navy meteorologist father who had orders to report to San Diego when the ex-wife admitted she had prevented the new wife from picking up the child from day care, planned to change the child’s surname by hyphenation and refused to sign a therapy consent form. The father testified that the mother denied him visitation, called his new wife a “dirty whore” in the child’s presence and  would not allow the child “to speak of” her little brother who had been born to husband’s new wife. Giannaris v. Giannaris, 2006 Miss. App. LEXIS 668 (Sept. 12, 2006). A California appellate court held that a husband did not transmute property interests to his wife by signing a writing literally dictated to him by the wife because the wife subjected the husband to duress and undue influence via “a continuous barrage of yelling and threats of divorce” and threatened to obstruct his relationship with the minor children if he refused to sign. In re: Balcof, 7 Cal. Rptr. 3d 183 (Cal. App. 2006).

Child Support: A New Mexico child support order registered in California that showed no arrearage did not bind the obligee when the obligor actually owed over $3,000. DeLeon v. Jenkins, 2006 Cal. App. LEXIS 1450 (Sept. 21, 2006). An Iowa court acted properly when averaging the obligor’s income over three years for child support purposes when the obligor’s overtime varied. In re: Anglin, 2006 Iowa App. LEXIS 1000 (Aug. 23, 2006). The military’s “Basic Allowance Housing” and “Basic Allowance Subsistence,” which grant extra money for housing and food when personnel live off-base, should be included as income for child support purposes. In re: D.F., 934 So. 2d 687 (La. 2006). A Kentucky appellate court rejected an equal protection challenge (prior-born v. later-born children) when an obligor complained that his child support was “increased directly as a result of the failure of the father of the other parent’s prior-born child to pay child support.” Kimbrough v. Kentucky, 2006 Ky. App. LEXIS 226 (July 21, 2006).

Private school: The Missouri Court of Appeals for the Western District affirmed the cost of attendance at Life Christian Academy as “extraordinary child rearing costs” when the mother moved the child to the school because of the child’s ADD. Nelson v. Nelson, 195 S.W.3d 502 (Mo. App. 2006). Two months later, the Missouri Court of Appeals for the Eastern District reversed a trial court for ordering that a child attend Catholic School and requiring additional child support for tuition when the husband “failed to prove that attendance at the Catholic School will meet any particular educational needs of Child.” Seyler v. Seyler, 2006 Mo. App. LEXIS 1354 (Sept. 12, 2006).

Same-sex update: The New York Court of Appeals rejected a state constitutional challenge to permitting only opposite-sex marriage, concluding that “a rational legislature could decide that these benefits should be given to members of opposite-sex couples, but not same-sex couples.” Hernandez v. Robles, 2006 N.Y. LEXIS 1836 (July 6, 2006). Washington State, citing the New York decision, followed suit in Andersen v. King County, 138 P.3d 963 (Wash. 2006). In California, a suit for dissolution of a domestic partnership was dismissed when the parties failed to register with the California Secretary of State, as required by the Domestic Partner Act. Velez v. Smith, 142 Cal. App. 4th 1154 (2006).

Retirement: A trial court had no jurisdiction to hear an ex-wife’s claim to survivor benefits under her deceased ex-husband’s pension, even though the ex-husband had told the Plan that the ex-wife had died, because the ex-wife never had become a beneficiary of the Plan. Cobb v. Central States, Southwest and Southeast Areas Pension Fund, 461 F.3d 632 (5th Cir. 2006). The Federal Circuit held an ex-wife entitled to a survivor annuity when the only mention of such an annuity in the divorce decree read: “The assignment of benefits to the Alternate Payee shall not be reduced, abated or terminated as a result of the death of the participant.” Snyder v. Office of Personnel Management, 2006 U.S. App. LEXIS (Fed. Cir. Sept. 13, 2006).

Insurance settlement: The New Hampshire Supreme Court affirmed a trial court’s decision to calculate the child support to be paid by the recipient of a lump sum personal injury settlement by “dividing his personal injury settlement over his projected lifetime to impute an income figure for the purpose of calculating child support.” In re: State of New Hampshire and Taylor, 904 A.2d 619 (N.H. 2006). In New York, a trial court did not err by dividing the marital estate equally,  despite the estate’s receipt of a $240,000 personal injury settlement after wife’s injury, when proceeds of the settlement “were commingled with marital funds and thereafter spent on marital debt and numerous marital assets, including a vacant lot where the parties built a new home.” Ruzicka v. Ruzicka, 817 N.Y.S.2d 770 (App. Div. 2006).

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State Bar of Texas Section Report - Family Law - Spring 2006

by Jimmy L. Verner, Jr.

Troxel tweaked: Troxel (530 U.S. 57) continues to ripple through the states. In Pennsylvania, “non-biological grandparents” who stand in loco parentis to a child’s parent have standing to seek visitation rights despite Troxel. Peters v. Costello, 891 A.2d 705 (Pa. 2005). A Kansas appellate court engrafted Troxel’s requirements onto Kansas’ stepparent visitation statute to make it constitutional. Riggs v. Hem, 129 P.3d 601 (Kan. App. 2006) (after musing whether it would “offend botanists” by “grafting the branch of a pear tree onto an apple tree”). Absent an allegation of parental unfitness, forcing a parent to defend against a grandparent visitation claim itself violates parents’ rights to make decisions about their children. E.g., Conlogue v. Conlogue, 890 A.2d 691 (Me. 2006) (collecting cases). However, a fit parent seeking to regain custody of a child does not enjoy Troxel’s protections because Troxel applies only to a parent who has custody of a child. In re: L.V., 38 Cal. Rptr. 3d 894 (Cal. App. 2006).

So far away: Moving to Indiana to make video documentaries for a fundamentalist missionary can lose custody for a mother in Alabama. Ex parte Snider, 2005 Ala. LEXIS 205 (Nov. 18, 2005). An Oregon court allowed the children to accompany their mother to Norway when it found that the father played “a far more limited role” in caring for the children than did the mother. Hamilton-Waller v. Waller, 123 P.3d 310 (Ore. App. 2005). When a New York mother moved to Colorado without first telling the father - and said she was staying whether or not the child returned - the trial court properly granted custody to the father. Willis-March v. Wilkerson, 803 N.Y.S.2d 231 (App. Div. 2005).

QDROs and death: When divorced and remarried father died, second wife received his survivor benefits as against children from first marriage because there was no QDRO to effectuate assignment of rights awarded to first wife in divorce. Hamilton v. Wash. State Plumbing & Pipefitting Indus. Pension Plan, 433 F.3d 1091 (9th Cir. 2006). A Maryland court allowed a post-mortem amendment to a QDRO caused by “inadvertent drafting mistakes.” Eller v. Bolton, 2006 Md. App. LEXIS 38 (Mar. 31, 2006).

Same-sex relationships: A challenge to the Defense of Marriage Act (permits a state to deny full faith and credit to same-sex marriages from another state) failed because the same-sex couple wasn’t married in any state. Smelt v. County of Orange, California, 2006 U.S. App. LEXIS 11243 (9th Cir. Apr. 4, 2006). In Massachusetts, where same-sex marriage is allowed, nonresident same-sex couples have no right to issuance of a marriage license. Cote-Whitacre v. Department of Public Health, 844 N.E.2d 623 (Mass. 2006). In two recent cases, lesbian partners have been allowed to proceed with parental rights suits against former partners despite fact that partners were not “parents” because their former partners were inseminated artificially by third persons. In re: Parentage of L.B.,122 P.3d 161 (Wash. 2005) (en banc); In re: Parentage of A.B., 837 N.E.2d 965 (Ind. 2005).

Parentage disputes: Paternity fraud is intrinsic (not extrinsic) fraud, so Florida’s one-year limitations statute barred a suit to recoup child support. Parker v. Parker, 916 So. 2d 926 (Fla. App. 2005). South Carolina’s Supreme Court held that there is no limitations period for a paternity suit. Smith v. Doe, 623 S.E.2d 370 (S.C. 2005) (mother filed suit in behalf of mentally handicapped 34-year-old). After a wife’s death, her former lover was equitably estopped from seeking a determination of parentage against widower when former lover had reason to know he was child’s father and widower married wife knowing she was pregnant by another man. Robert P. v. Vito C., 804 N.Y.S.2d 802 (App. Div. 2005). When surrogate parents “decided to keep the triplets for themselves,” an Ohio appellate court made them pay back their $20,000 fee and $24,000 in expenses plus awarded attorney’s fees against them. J.F. v. D.B., 2006 Ohio App. LEXIS 1074 (Mar. 15, 2006) (quite a saga - four lawsuits, conflicting interstate rulings).

Termination: An agreement to terminate parental rights (along with child support obligation) is void as against public policy in California. Kristine M. v. David P., 37 Cal. Rptr. 3d 748 (Cal. App. 2006). In Georgia, a court should reject such an agreement when it is not in the child’s best interest. Taylor v. Taylor, 623 S.E.2d 477 (Ga. 2005). Being convicted of a felony in itself does not justify termination, says a California appellate court. The facts underlying the felony must show parental unfitness. In re: Baby Girl M., 38 Cal. Rptr. 3d 484 (Cal. App. 2006).

Prenuptials: After 18 years of marriage and four children, with husband’s net worth in excess of $22 million, the Georgia Supreme Court enforced a prenuptial agreement that granted wife $2,900 per month of alimony for four years and husband all the marital assets. Mallen v. Mallen, 622 S.E.2d 812 (Ga. 2005). In another case, the Georgia Supreme Court held that husband’s failure to disclose his income was material to wife’s decision to waive alimony and thus affirmed trial court’s denial of husband’s summary judgment motion. Corbett v. Corbett, 2006 Ga. LEXIS 204 (Mar. 27, 2006). A North Carolina court reversed a summary judgment for husband when wife questioned the voluntariness of the prenuptial agreement which was presented to her while en route to the wedding. Kornegay v. Robinson, 625 S.E.2d 805 (N.C. App. 2006).  An Oregon appellate court held that a choice-of-law clause in a premarital agreement meant that California law governed construction of the agreement but Oregon law applied to the property division. Procter v. Mavis, 125 P.3d 801 (Ore. App. 2005).

Child support: A California trial court erred when it included the value of stock as income for child support purposes because the stock - unlike stock options - was given in exchange for a capital asset, not as part of an employee compensation package. In re: Marriage of Pearlstein, 40 Cal. Rptr. 3d 910 (Cal. App. 2006). An attorney who filed suit for fees against his former client’s estate accepted an assignment of the former client’s interest in a child support arrearage owed by the former client’s ex-husband, but a Florida court held that the child support arrearage belonged to the children, not the estate. Thurlow v. LaFata, 915 So. 2d 737 (Fla. App. 2005). In California, a portion of a lump-sum unallocated personal injury settlement can be considered as income for child support purposes when it includes compensation for lost income and earning capacity. In re: Marriage of Heiner, 39 Cal. Rptr. 3d 730 (Cal. App. 2006). A change in exchange rates for Swiss francs constituted a material change of circumstances for child support purposes. Hixson v. Sarkesian, 123 P.3d 1072 (Alas. 2005).

Characterization: Stock options given to a husband three days before he filed for divorce were not part of the marital estate because the husband acquired them after the parties separated and to induce him to take a new job. Robertson v. Robertson, 885 A.2d 470 (N.J. Super. App. 2005). A Florida trial court was reversed for failing to consider 100% of a husband’s vacation time as a marital asset subject to division on divorce. Purpura v. Kelly, 913 So. 2d 110 (Fla. App. 2005).

Valuation: A trial court erred by failing to make “an active appreciation analysis” with respect to the increase in value of a business owned 95% as husband’s separate property, but trial court did not err by refusing to apply minority discount to wife’s 5% share of business because husband was buying out wife’s interest. Hanson v. Hanson, 125 P.3d 299 (Alas. 2005). Personal goodwill should not have been included in a Louisiana court’s valuation of a separately incorporated endoscopy center because it served merely as an extension of husband’s medical practice. Rao v. Rao, 2005 La. App. LEXIS 2354 (Nov. 4, 2005).  

Division: A Pennsylvania appellate court affirmed an award of 100% of the martial estate plus equitable reimbursement of $83,830 to wife after husband obtained his M.D. and Ph.D. and completed his residency during marriage. Wang v. Feng, 888 A.2d 882 (N.J. Super. 2005). A California wife who siphoned off nearly all the husband’s IRA to pay bills and taxes during marriage could not be held liable for breach of fiduciary duty because legislature enacted statute creating the duty after parties’ marriage. In re: Walker, 2006 Cal. App. LEXIS 613 (Apr. 27, 2006). When parties both delayed transfer of part of 401k to wife, and the 401k declined in value, an Alabama court required the parties to share the loss. Buchanan v. Buchanan, 2005 Ala. Civ. App. LEXIS 736 (Dec. 9, 2005).

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