Family Law Update for September 2017

In this Issue …

A Word from Gregg Herman
DCI seminar: “Putting Children First”

Thoughts on Family Law Video
Growing Up in a Non-traditional Family

Wisconsin Courts Updates
No new cases

Decisions Across The Nation
Effect of commingling marital and non-marital assets, Proximity requirement for custody, Imputing annual bonus, ICARA, Relief from paternity judgement, Economic misconduct and more.

Business Law Valuations
Business Valuation Bench Book

Family Law Online
Shared parenting and overnights for young children

A Word from Gregg Herman …

HermanThe Divorce Cooperation Institute annual seminar will be held on Friday, October 13, 2017 at the Delafield Hotel. The topic will be “Putting Children First.”

The morning session will consist of a psychologist panel with Kip Zirkel, Ph.D. and Christine Harness, Ph.D.

The afternoon panel will be a judicial and GAL panel with practicing GAL’s and Paul Stenzel (AFCC Racine) and Hon. Michael O. Bohren (Circuit Court Judge, Waukesha County). There will also be an ethics presentation.

For more information, please visit the DCI Web site.

• • •

My video series “Herman on Family Law,” which is produced via a partnership with the State Bar of Wisconsin and Pinnacle, now includes four topics and will have more available soon.

For more information, please visit WisBar.

Thoughts on Family Law

This month I discuss the experiences and issues surrounding children who grow up in non-traditional families. I also talk about two books on the topic: Hillbilly Elegy: A Memoir of a Family and Culture in Crisis By J.D. Vance The Glass Castle: A Memoir By Jeannette Walls

Wisconsin Courts Update

— No New Cases

Decisions Across the Nation

The following cases are provided courtesy of Contributing Editor Laura Morgan, Family Law Consulting. Laura is available for consultation, brief writing and research on family law issues throughout the country. She can be reached through her Web site or via e-mail.

Please Note: Most decisions are posted in Adobe Acrobat (PDF) format.

Sturms v. Sturms
No. 1D15-4242
Florida District Court of Appeal, First District
August 21, 2017

Evidence was sufficient to establish that husband’s ownership interest in oil company was marital asset; while company’s primary asset, deep-oil drilling rights, entered marriage as nonmarital, it was comingled with marital assets during marriage when oil company loaned funds to husband’s other company. “Although Husband is correct that Crude Oil’s primary asset, the deep-oil drilling rights, originated as a nonmarital asset, the record evidence supports the trial court’s factual finding that the proceeds from the sale of the drilling rights were commingled when Crude Oil funds were loaned to Development, causing them to lose their nonmarital character, despite the eventual return of the funds to a Crude Oil account. The earnings of Crude Oil are therefore marital assets. Thus, the trial court correctly assigned to Husband the $578,000 earned by Crude Oil in the adjusted cash amount.”

Vanderzon v. Vanderzon
2017 UT App 150
Utah Court of Appeals
August 17, 2017

(1) Trial court’s decree granting mother primary physical custody of children but requiring mother to live within 25 miles of father’s residence in Virginia could not be reasonably interpreted to tether mother’s residence to father’s residence, on pain of automatically losing primary physical custody, where custody evaluator recommended that both parents and children live in Virginia and that parents reside no more than 45-minute drive from each other, trial court determined that children should relocate to Virginia to be closer to father and to extended family, trial court imposed proximity requirement only after careful analysis of custody factors and children’s best interests, and trial court indicated that proximity requirement was initial determination that could be re-evaluated. (2) Report and testimony of vocational expert addressed all factors required by statute to impute income to wife for purposes of determining alimony award, and thus appellate court could infer from report and testimony the necessary findings for imputation of income and affirm in absence of findings, where expert addressed wife’s “potential and probable earnings” based on employment possibilities expert identified as within wife’s capabilities, expert addressed barriers to wife’s employment, but considered such challenges to be relatively “small things,” and expert further addressed wife’s wife’s perceived barriers to employment, including child care needs, re-entering work force after lengthy employment gap, added stress of being working mother, and being able to pursue more education.

Barlow v. Barlow
No. 2D16-1837
Florida District Court of Appeal, Second District
August 16, 2017

Trial court did not have valid basis for imputing former husband’s annual bonus of $133,332.64, rather than his next year’s annual bonus of $45,000, in calculating his gross income for purposes of alimony, child support, and feasibility to maintain marital residence, where the next year’s bonus was most recent bonus, reduction in that bonus was based on his company’s profits, and there was no indication that bonus would increase in near future.

Ahmed v. Ahmed
No. 16-6486
United States Court of Appeals, Sixth Circuit
August 16, 2017

Father filed petition for return under Hague Convention on Civil Aspects of Child Abduction, as implemented by the International Child Abduction Remedies (ICARA), alleging that mother wrongfully retained parties’ children in the United States. Held: Father failed to prove by a preponderance of the evidence, under either the shared intent or acclimatization standard, that United Kingdom was children’s habitual residence when mother traveled with them to the United States. The children’s seven-to-eight week stay in the United Kingdom hardly allowed them to acquire a degree of settled purpose there, and as infants, they were unable to do so anywhere when mother traveled with them to the United States, and there was no shared parental intent as to children’s residence, as parties’ intent was either unclear or absent from time children were conceived until mother retained them in the United States.

Flesch v. Flesch
No. S17F1231
Georgia Supreme Court
August 14, 2017

Wife’s retirement account was marital asset subject to equitable division, even though account predated marriage, where retirement monies earned or saved during course of marriage had been transferred into account, and wife, who was herself an attorney, explicitly acknowledged that she had placed marital assets in the premarital account.

Grove v. Grove
No. 7189 S-16056/S-16075
Alaska Supreme Court
August 11, 2017

Trial court’s characterization of $50,000 of wife’s student loan debt as marital was not clearly erroneous; wife testified that her loans paid for tuition, housing, and living expenses, that about $10,000 of the $60,000 debt was incurred after separation, and that husband had been supportive of her educational endeavors.

McGeehan v. McGeehan
No. 93 Sept. Term 2016
Maryland Court of Appeal
August 10, 2017

Parties’ oral postnuptial agreement to deem certain real property to be wife’s sole and separate property, which oral agreement was made manifest by transfer of title to real property previously titled to parties as tenants by the entirety, to appease wife for loss of her inherited investment portfolio due to husband’s poor investment decisions, was a “valid agreement” excluding such property from being deemed marital property upon parties’ divorce, despite absence of express language in deeds indicating intent to remove property from marital property status or to exempt property from application of the Marital Property Act.

Bisbing v. Bisbing
2017 WL 3392717
New Jersey Supreme Court
August 8, 2017

The best interest of the child standard applied to a trial court’s determination of whether “cause” existed for an order allowing a parent to relocate out of state with child, despite the other parent’s opposition to the child’s interstate move; abrogating Baures v. Lewis, 167 N.J. 91, 770 A.2d 214. The ruling puts the burden of proof on the parent who wants to relocate and it reflects a growing trend in New Jersey to consider the rights of both parents, abrogating the standard that presumed that children were happiest when their custodial parent was the happiest.

Powell-Ferri v. Ferri
326 Conn. 457
Connecticut Supreme Court
August 8, 2017

Trial court did not abuse its discretion in declining to treat trust created by husband’s father as marital asset in divorce action, even though assets in trust had been transferred following husband’s divorce from irrevocable trust that contained marital property, where trustees’ decision to decant was proper, new trust was spendthrift trust, and trial court considered statutory factors, including husband’s ability to earn additional income, when creating its alimony orders and awarded substantially more marital assets to wife, including marital home.

Dennis v. Dennis
No. 2016-CA-00425-SCT
Mississippi Supreme Court
August 3, 2017

Any person who takes a child of another into his home and treats it as a member of his family, providing parental supervision, support and education, as if it were his own child is said to stand in loco parentis. Thus, step great grandfather could not be relieved of his obligation to support child on the basis that he was not child’s parent and had no statutory duty to support child, who had been in custody of step great grandfather and great grandmother pursuant to court order after parents encountered difficulties; step great grandfather knowingly and voluntarily agreed to pay child support for child in child custody, support, and property settlement agreement incorporated into irreconcilable-differences divorce decree during his divorce from great grandmother.

Blackledge v. Blackledge
866 F.3d 169
United States Court of Appeals, Third Circuit
August 3, 2017

Father petitioned for return of his son to Germany pursuant to the Hague Convention on Civil Aspects of Child Abduction, as implemented by the International Child Abduction Remedies (ICARA). Held: Parents’ shared intent supported finding that eight-year-old child was a habitual resident of the United States as of date of his retention, for purposes of father’s petition alleging that mother wrongfully retained child in the United States in violation of the Hague Convention on Civil Aspects of Child Abduction, as implemented by the International Child Abduction Remedies (ICARA); fact that parties understood that child would return to father in Germany after limited duration stay in the United States did not diminish parents’ shared intent, per their express agreement, that child’s move would be accompanied by requisite degree of settled purpose, as child was to remain in the United States for at least a year and settle into a normal routine for a child his age, for the duration of his stay and for future alternating years.

Ashburn v. Rogers
No. 2015-001467
South Carolina Court of Appeals
August 2, 2017

Child’s legal father was entitled to equitable relief from previous order of paternity after genetic testing revealed that he was not child’s biological father; although more than ten years had passed since paternity order, child’s only interest in upholding father’s paternity was financial, the risk of emotional harm to child was low because there was no significant parent-child relationship, mother failed to disclose possibility of other fathers, and public policies promoting reconciliation and discouraging actions that would destroy family unity were not implicated because father and mother were not married and reconciliation was highly unlikely.

Harper v. Harper
No. BCD-16-555
Maine Supreme Court
August 1, 2017

Competent evidence in the record supported trial court’s finding that former husband engaged in economic misconduct in his operation of two businesses prior to court’s entry of divorce judgment; former husband unilaterally incurred significant liabilities, implemented a separate accounting system, systematically retained cash from sales, and refused sales to more than a few certain buyers while managing one business, which had a detrimental impact on the marital estate and for which former husband provided no legitimate business purpose, and former husband’s largely undisputed transactions related to other business unreasonably diminished the value of that marital asset.

Business Law Valuations

The following is provided courtesy of Gregory J. Ksicinski, CPA/ABV, MSTSVA Certified Public Accountants, S.C., Brookfield, WI 53045. You can reach Greg at 262-923-5133 or via e-mail.

The Business Valuation Bench Book

The Business Valuation Bench Book, a new volume by William J. Morrison (WithumSmith+Brown) and Jay E. Fishman (Financial Research Associates), is designed to give judges and attorneys a reference guide of fundamental business valuation concepts. “The authors do an excellent job of ‘pulling back the curtain’ on business valuations, showing judges where they need to spend time querying experts on their appraisals,” says Steve Bravo, a business appraiser and financial expert with Apogee Business Valuations. “This book will prove to be extremely handy and helpful to judges trying to sort out opposing experts’ conclusions of value. It can be equally beneficial to attorneys and experts in their case preparation.”

The book says you can expect some tough questions such as these: Do you have a thorough understanding of the subject business, and have you considered the eight factors of Revenue Ruling 59-60? Why do you believe your determination of the normalized income to capitalize best represents the expected future performance of the company? Under your DCF method, can revenues realistically grow at the projected rates, and do the expenses support the revenues?

For more details, read Steve Bravo’s full review. (PDF)

Family Law Online

After Divorce, Shared Parenting is Best for Children’s Health and Development

“As a young psychology intern in the late 1970s, my first patients were boys from divorced homes, suffering from what was then called “father hunger.” In those days, when parents split up, dads fell by the wayside. Fathers saw their children at the mothers’ discretion. This customary fallout from divorce reflected the belief that mothers are supremely important while fathers are expendable. We’ve come a long way since then.” (STAT)

Contributing Editors

Our contributing editors include:

We Thank Them for Their Contributions!

Attorney Gregg Herman is a founding partner of Loeb & Herman S.C. in Milwaukee, WI. He practices family law exclusively, and can be reached via e-mail or by calling (414) 272-5632.