Family Law Update for April 2017

In this Issue …

A Word from Gregg Herman
Referee appointment

Wisconsin Courts Updates
Supreme court case on appointment of referee, non-published (but citeable) Court of Appeals decisions on contempt remedy and effect of incarceration.

Decisions Across The Nation
Burden of proof for purpose of relocation, Bonus received prior to divorce, Change of mandatory retirement age and effect on maintenance, Two cases on the Hague Convention on Civil Aspects of International Child Abduction, Comity for Swedish divorce judgement, Grandparent visitation, Lifestyle amounting to cohabitation, Imputing income for computing child support.

Family Law Online
U.S. Divorce rate at 40 year low

A Word from Gregg Herman …

Gregg Herman The Wisconsin Supreme Court decided an important case on March 29 (just in time for FLU – thank you!) regarding the power of a circuit court to appoint a referee in discovery and other matters.

This case has implications in family law as third parties are used for placement and custody issues – and sometimes for financial issues as well.

I intend to devote my next column in InsideTrack, the online publication of the Wisconsin State Bar, to this subject. But, since that publication date is May 18, I’ve devoted this month’s video segment to a few thoughts about the implications of that decision to family law.

Play Video

Wisconsin Courts Update

On March 29, 2017, the Supreme Court of Wisconsin issued their opinion in Universal Processing Services v. Circuit Court of Milwaukee County, No. 2016AP923-W (March 29, 2017).

Universal Processing Services argued that the circuit court’s order appointing a referee expanded the role of referee into the role of de facto circuit court judge in violation of the Wisconsin Constitution and Wis. Stat. §805.06. The Supreme Court concluded, among other things, that 1) the order appointing the referee impermissibly delegated judicial power constitutionally vested in Wisconsin’s unified court system and 2) the circuit court’s order, which provided that the circuit court’s review of the referee’s rulings shall be based only on the referee’s erroneous exercise of discretion, contravenes the constitution, statutes, and rules regarding circuit court and appellate court authority and practice.

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Editor’s Note: The following case is not recommended for publication, but may be cited for its persuasive value under Wis. Stat. 809.23(3).

On March 22, 2017, the District II Court of Appeals issued their opinion in Breuer v. Kearns, No. 2016AP1407, which affirmed the orders rendered by the Honorable James G. Pouros (Washington County).

Steven Kearns and Jean Breuer were divorced in March 2013. At issue is the portion of the MSA addressing a cash settlement to be made by Kearns to Breuer as part of the property division. The MSA decreed that if Kearns did not pay Breuer all the money owed to her, Breuer was awarded the two Florida condominiums plus Kearns interest in Matrix Title Company, LLC. Kearns failed to make a portion of the final payment. Kearns filed a motion asking the court to order Breuer to accept the final payment for property division under the judgment of divorce and Breuer responded with her own motion to enforce the judgment of divorce. The court held an evidentiary hearing on the competing motions. The court ordered Kearns arrested and committed to jail for three months, but stayed it to allow Kearns to comply with the purge condition of paying the remaining $225,000 with interest. The court did not order Kearns to transfer his interest in Matrix Title, LLC, or the remaining Florida property. Breuer appealed.

Breuer claimed that the trial court failed to impose the remedy contained in the Judgment of Divorce and asserted that the court effectively modified the judgment of the court by allowing Kearns to make a late-payment rather then forfeit the property. When examining the actual sanctions imposed, the court noted that family court is a court of equity, and, as such, it is able to make a flexible and tailored response to the needs of a particular couple. Here, the circuit court merely construed the judgment of divorce to clarify the parties’ intent that Breuer receive her $1,000,000 equalization payment, with interest and attorneys’ fees.

• • •

Editor’s Note: The following case is not recommended for publication, but may be cited for its persuasive value under Wis. Stat. 809.23(3).

On March 21, 2017, the District III Court of Appeals issued their opinion in Dudas v. Dudas, No. 2016AP326, which modified and, as modified, affirmed the orders rendered by the Honorable John Zakowski (Outagamie County).

David and Jill were married in 1989 and had five children. David worked as a civil litigation attorney and Jill primarily stayed home to care for the children. David was convicted of twenty-eight felonies and two misdemeanors following an incident at the parties home in 2013. David was sentenced to thirty years’ initial confinement, followed by ten years’ extended supervision. Jill filed for divorce. Following a four-day final hearing, the circuit court issued a thirty-eight-page written decision addressing the disputed issues. The court awarded primary physical placement of the minor children to Jill. The court declined to order placement or specific time with David and instead held that the children should have control with the option of whether they want to see their father. With respect to property division, the circuit court determined it was appropriate to deviate from an equal division and awarded the vast majority of the parties’ property to Jill. As for child support, the circuit court determined David’s earning capacity and used the standard guidelines to determine his total child support obligation. In order to fund David’s child support obligation, the court ordered David’s share of an account his law firm held at BMO Harris Bank transferred into a segregated account at the same bank. The circuit court determined Jill was entitled to maintenance and awarded her a rental property in view of David’s maintenance obligations and in the event David succeeded in his criminal appeal, the court held open maintenance for two years. David appealed.

David argued the circuit court erred by declining to award him periods of physical placement with his minor children without first finding that such placement would endanger the children’s physical, mental, or emotional health. This argument failed because the circuit court did not, in fact, decline to award the children physical placement with David. Rather, the circuit court indicated it was empowering the children to make their own decisions about whether to have contact with David. The circuit court’s rulings were amply supported by Beth Young-Verkuilen, a marriage and family therapist who the court appointed to assess the parties’ children, and the GAL’s recommendation, and they constituted a proper exercise of the circuit court’s discretion. Although the court did not expressly frame its conclusions regarding placement in terms of the children’s best interest, it is clear from the context the court determined the children’s best interest would be served by allowing them to decide whether to have contact with David.

David next argued the circuit court erroneously exercised its discretion by awarding virtually all of the parties’ property to Jill, without requiring her to make an equalization payment. The court recognized the property division in this case was vastly unequal. Nevertheless, under the unique circumstances of this case, the court concluded the circuit court did not erroneously exercise its discretion. Here, the circuit court conducted a detailed analysis of the factors set forth in Wis. Stat. § 767.61(3) before ordering an unequal property division. For example, under the catch-all factor which permits the court to consider such other factors as the court may in each individual case determine to be relevant, the circuit court stressed that, due to his own voluntary actions, David would be incarcerated for thirty years. The circuit court noted that, while it could not consider misconduct that causes the failure of the marriage when dividing the parties’ property, it could consider destruction or waste of marital assets. Under the unique circumstances of this case, the court rejected David’s argument that the unequal division of the parties’ property was excessive.

Finally, David argued the circuit court erroneously exercised its discretion with respect to child support and maintenance. His argument regarding child support failed because the court did not order an unequal property division in lieu of child support as he suggested. Rather, the court determined David’s child support obligation and awarded certain assets that were awarded to David in the property division to be placed in a segregated account to fund his child support obligation because David was incarcerated and therefore had no income. Turning to maintenance, David’s arguments were undeveloped and therefore rejected by the court.

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.

In re Marriage of Heroy
2017 IL 120205
Illinois Supreme Court
March 24, 2017

(1) The inability to pay standard was never intended to limit awards of attorney fees in a marriage dissolution action to those situations in which a party could show a $0 bank balance, but rather, a party is unable to pay if, after consideration of all the relevant statutory factors, the court finds that requiring the party to pay the entirety of the fees would undermine his or her financial stability; (2) Evidence was sufficient to support trial court’s reduction in former husband’s monthly maintenance payment from $35,000 per month to $27,500 per month; both parties presented extensive evidence about former husband’s income, former wife conceded that former husband’s income had decreased, and although experts disagreed about the extent of the income reduction, the trial court concluded that, even according to former wife’s expert’s calculations, former husband’s cash flow had declined significantly, a finding well supported by the record and not challenged by former wife in her appeal.

Aragon v. Aragon
No. M2014-02292-SC-R11-CV
Tennessee Supreme Court
March 16, 2017

Trial court improperly placed burden of proof on father to show that there was a reasonable purpose for proposed relocation with child to Arizona, rather than on mother, as party opposing relocation, to show there was no reasonable purpose; court commented that there was “no proof” that father “has better job opportunities, greater salary opportunities or career advancement opportunities” in Arizona and “no proof whatsoever” as to comparable job opportunities in Tennessee. Father had “reasonable purpose” for proposed post-divorce relocation with daughter to Arizona, where father had secured an advantageous nursing job at a facility in Arizona where his mother had worked for some 30 years, in an area where he and daughter would live near his parents and his extended family and have their support, and where he and daughter would live near some of mother’s extended family as well.

King v. Howard
No. 412, 2016
Delaware Supreme Court
March 15, 2017

Entirety of substantial bonus payment received by wife after parties’ separation but prior to divorce was marital property subject to equitable division in divorce proceedings, rather than only one third of payment; although two thirds of payment was subject to forfeiture if wife’s employment was terminated for cause in the future, wife was paid full amount of bonus during the marriage, and wife had vested right to payment of the bonus following closing of sale of employer, which occurred during marriage.

In re Brace
BAP No. CC-16-1041-LNTa, Bk. No. 6:11-26154-SY, Adv. No. 6:11-02053-SY
United States Bankruptcy Appellate Panel of the Ninth Circuit

Mere fact that Chapter 7 debtor-husband and his non-debtor wife had taken title to real property that they acquired during the marriage as joint tenants was insufficient under California law to rebut community property presumption, such that when trustee set aside subsequent transfer of this property, this recovered community property asset entered bankruptcy estate in its entirety, and not just debtor-husband’s one-half interest as joint tenant.

Savage v. Savage
2017 ME 47
Maine Supreme Court
March 9, 2017

The divorce decree, issued in 2008 pursuant to the parties’ agreement, required Steven to pay Victoria monthly spousal support of $3,000 until he turned sixty years old, at which time support would be reduced to $1 per year. Pursuant to a federal law that went into effect shortly before the entry of the divorce judgment, Steven’s mandatory retirement age increased from age sixty to sixty-five. Victoria testified that at the time of the divorce, she believed that Steven was required to retire at age sixty, and did not learn of the increased age limit until after the divorce. Steven continued working after turning sixty and remained employed at the time of the motion hearing. Held: Ex-husband’s current mandatory retirement age was a substantial change from the “baseline” of what the court and the parties anticipated when the divorce judgment was issued, and thus, there had been a substantial change in circumstances so as to warrant modifying spousal support; at the time of the divorce, the parties had anticipated that ex-husband would retire at age 60, and structure of the divorce judgment tied the reduction of ex-husband’s support obligation to his sixtieth birthday.

Smith v. Cooks
2017 N.Y. Slip Op. 01701
New York Supreme Court, Appellate Division, Second Department
March 8, 2017

Custody petition by child’s maternal grandmother, based on expectation that mother, who had residential custody of the child, would shortly being serving term of incarceration, did not sufficiently allege existence of extraordinary circumstances relating to father, who had joint custody of the child, and thus dismissing petition for lack of standing, without hearing, was warranted.

Dawn M. v. Michael M.
2017 N.Y. Slip Op. 27073, 47 N.Y.S.3d 898
New York Supreme Court, Suffolk County
March 8, 2017

Best interests of child warranted granting wife, who was non-biological, non-adoptive mother, shared legal custody, or “tri-custody,” of child with husband, who was biological father, and biological mother; wife, husband, and biological mother had previously lived together and agreed to have the child together to be raised with two mothers and one father, for more than 18 months after child’s birth the husband, wife, and biological mother continued to reside together, after marriage became strained the wife continued to reside with biological mother and child, child was raised with two mothers and continued to call both “mommy,” child was raised in loving environment, and biological mother supported wife’s request.

Padilla v. Troxell
850 F.3d 168
United States Court of Appeals, Fourth Circuit
March 8, 2017

Consent and acquiescence are two separate and analytically distinct affirmative defenses to a petition for return of a wrongfully removed child under the Hague Convention on Civil Aspects of International Child Abduction, and its implementing statute, the International Child Abduction Remedies Act (ICARA). Whereas the consent defense concerns the petitioner’s conduct before the contested removal or retention of the child, the acquiescence defense concerns whether the petitioner subsequently agreed to or accepted the removal or retention. Evidence was sufficient to prove that mother consented to child’s removal to the United States by designated legal father: testimony demonstrated that mother willingly accompanied father to obtain child’s passport and agreed to surrender custody to father so that the child could have a better life, and text messages exchanged between the parties reinforced mother’s consent.

Kayla L. v. Kelvin D.
No. S-16355
Alaska Supreme Court
March 8, 2017

Father did not have a history of domestic violence such that he needed to overcome a rebuttable presumption that a violent parent could not be awarded any type of child custody, where a court had denied mother’s request for a domestic violence protective order against father, and domestic violence charges against father had been dismissed.

Lynch v. Lynch
Docket: Sag-16-100
Maine Supreme Court
March 7, 2017

While the Swedish divorce action, initiated by husband, was still in the reconsideration period, wife initiated an action for divorce in Maine. The trial court dismissed wife’s divorce complaint for lack of subject matter jurisdiction because a Swedish judgment divorcing the parties precluded litigation of the action in Maine, and wife appealed. Held: Although Swedish divorce judgment was entitled to comity, insofar as it dissolved the parties’ marriage, it was premature for the Maine court to address issues of property distribution or spousal support.

Nein v. Columbia
No. 2016-CA-000681-ME
Kentucky Court of Appeals
March 3, 2017

Paternal grandparents rebutted the presumption that mother was acting in child’s best interest when she reduced the time child spent with grandparents and expressed an intent to eliminate all visitation with grandparents, in grandparents action seeking visitation rights; grandparents had been the primary daycare providers for child, they had almost daily contact with child, mother acknowledged that child had a stronger bond with grandfather than an average grandfather-grandson relationship, grandparents paid for child’s medical treatment and extracurricular activities, they paid the tuition at child’s school, and child’s teacher testified as to the negative impact the lack of grandparent visitation has had on child.

Coulson v. Steiner
Supreme Court No. S-16167
Alaska Supreme Court
March 3, 2017

Ex-husband, whose wife had affair during their marriage, sued ex-wife’s lover, claiming alienation of affections, fraud and civil conspiracy, and intentional and negligent infliction of emotional distress. Held: As matter of apparent first impression, alienation of affections is not a valid cause of action, and furthermore, ex-husband’s claims for fraud and civil conspiracy and for intentional and negligent infliction of emotional distress were for damages caused by fraudulent misrepresentations made during the divorce proceedings. To the extent ex-husband’s claims against ex-wife’s lover alleged harm arising out of lover’s role in causing the divorce, they were barred by court’s refusal to recognize claims for economic losses resulting from divorce, but, to the extent these claims alleged harm instead arising out of lover’s conduct during the divorce proceeding, they were not so barred.

Czalkiewicz v. Czalkiewicz
No. 104654, 2017-Ohio-747
Ohio Court of Appeals, Eighth District, Cuyahoga County
March 2, 2017

Lifestyle of former wife and her boyfriend amounted to cohabitation, and thus former husband’s spousal support obligation to wife terminated, as provided by divorce decree; wife testified that she had been in relationship with boyfriend for four or five years, that she stayed at his house four or five nights per week, during which time boyfriend provided food, and that the two had frequent sexual relations, and boyfriend cosigned for wife’s vehicle, paid for travel expenses, and provided $20,000 over eight months for certain expenses.

Hough v. Brooks
No. 34,572
New Mexico Court of Appeals
March 2, 2017

After father filed petition to determine paternity, custody, visitation, and child support, the trial court entered a stipulated interim order permitting mother to relocate to Arizona with parties’ minor children. The trial court then subsequently entered a court-ordered parenting plan granting mother and father joint legal custody of all children, and granting father primary physical custody. Mother appealed. Held: Reversed. The trial court’s stipulated interim order created sole custody arrangement, and the trial court was thus required to find substantial and material change in circumstances before modifying custody; the trial court abused its discretion by entering parenting plan without considering whether there was substantial and material change in circumstances affecting best interests of children; the trial court abused its discretion by modifying custody of minor children without analyzing whether modification was in best interests of children; and the trial court’s modification of custody was not supported by substantial evidence.

Decker v. Decker
2017 N.Y. Slip Op. 01614
New York Supreme Court, Appellate Division, Third Department
March 2, 2017

Supreme Court did not abuse its discretion in imputing $125,000 of annual income to father for purposes of calculating child support, after finding that he possessed master’s degree in civil and environmental engineering and that his past employment history demonstrated that he could earn well in excess of imputed amount; trial court highlighted father’s questionable decision to work for his wife’s company at significantly lower salary than he was capable of earning, as well as the fact that he resided in very expensive housing having view of the Pacific Ocean.

Lindsey v. Lindsey
833 Utah Adv. Rep. 16, 2017 UT App 38
Utah Court of Appeals
March 2, 2017

Wife’s household and family responsibilities, and her intermittent assistance in entertaining and hosting husband’s business clients, did not require husband’s separate-property business interests to be equitably distributed, since wife was not involved in creation, organization, or ongoing affairs of husband’s business, wife did not enhance, maintain, or protect business interests, and even though wife helped husband strengthen relationships with his clientele, she did not identify any concrete benefit that accrued to husband’s business interests due to her efforts, she did not point to any other involvement with or services she allegedly provided to business, and she never acted as employee of business.

Gafycz v. Gafycz
2017 N.Y. Slip Op. 01537
New York Supreme Court, Appellate Division, Second Department
March 1, 2017

Award of 100 percent of marital properties in two locations to wife was proper, in divorce action; court properly took into consideration its finding that husband secreted assets, wilfully failed to comply with court orders, and was deliberatively evasive in his testimony in fashioning its equitable distribution award of marital property.

Ovalle v. Perez
No. 16-16568
United States Court of Appeals, Eleventh Circuit
March 1, 2017

Mother, a Guatemalan citizen, petitioned for relief under Hague Convention on the Civil Aspects of International Child Abduction, alleging that her child’s father, an American citizen, abducted child and wrongfully retained him in Florida. Held: Mother, a Guatemalan citizen, had custody rights over child under Guatemalan law at time father removed child to Florida, as required for child to be returned to Guatemala under Hague Convention; mother and father were unwed, and Guatemalan law granted parental power of children to mother when parents were unwed.

And as an added bonus, here’s the best title on a court document ever

Family Law Online

Divorce Rate in U.S. Drops to Nearly 40-Year Low

“The U.S. divorce rate dropped for the third year in a row, reaching its lowest point in nearly 40 years, according to [recently released] data.” (TIME)

Contributing Editors

Our contributing editors include:

We Thank Them for Their Contributions!

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