family-law-1

INTRODUCTION A. Patterns of Employment, Family Responsibilities, & Gender Roles: Ira Mark Ellman: Marriages in which W is sole breadwinner are as uncommon today as a decade ago. The percentage of Ms in the labor force has nearly tripled from 1955 to 2001. Most married Ms work part-time; amount who work full-time declines with increased H income. 2nd-shift: both before and after work, Ms, but not Ds, routinely put in a “2nd shift” at home. Disproportionate domestic burdens are probably far more important than discrimination by employers in explaining the limited success women have had in the workplace. B. Future Directions for Leal Policy: Joan Williams: coined term “domesticity.” The ideal worker norm, framed around the traditional life patterns of men, excludes most Ms. Our society is divided into Ms and others. Domesticity also minimizes Ds’ involvement. Society needs not only market work but also family work, and adults who do family work shouldn’t be marginalized. Martin H. Malin: Men’s role as breadwinners interferes with their involvement with their children. MARRIAGE Movement from status to K (and then back to status?). Don’t worry too much about difference between “void” and “voidable.” A. Entering Marriage: 1. Formal Requirements: a. Licensure & Solemnization (MMDA § 206): All states prescribe certain formalities for marriage entry. While details vary, regulations fall into 2 categories: (1) licensure and (2) solemnization. Contrary to popular belief, generally sexual intercourse isn’t required to solemnize a ceremonial marriage. Most states require a physical examination as a prerequisite for a marriage license. Many states impose a waiting period (of either 3 or 5 days), either between application and issuance of license or between issuance and performance of ceremony. Often the waiting period is waived under certain circumstances. The waiting period requirement, as well as entire licensing procedure, is explained as impressing on parties seriousness of entry into marriage. All states have statutes governing solemnization of marriage. While there’s no explicit format for the marriage ceremony, some statutes require the couple to declare in the presence of the presiding official and the required witnesses that “they take each other as H and W.” While rare, marriage by proxy is necessary if 1 party can’t be present for the ceremony. General rule is that technicalities don’t invalidate marriages; requirements are usually regulatory but not mandatory. b. Common-law Marriage: you’re every bit as married as if you’d gone through the formalities. Only 10 states and DC currently clearly recognize common-law marriages contracted within their borders; PA status isn’t clear. In re Estate of Hall: REASONING: A common-law marriage is the marital joinder of a man and a woman without the benefit of formal papers or procedures. An (1) agreement of marriage in praesenti when made by parties competent to K, (2) accompanied and followed by cohabitation as H and W, (3) they being so treated and reputed in the community and circle in which they move, establishes valid common-law marriage. 1 Fundamental requirement is meeting of the minds between parties who enter into mutual K to presently take each other as spouses. The agreement to marry in praesenti is essential element of common-law marriage. Its absence precludes the establishment of such a relationship. All elements of common-law marriage must be established by clear and convincing evidence. Testimony regarding cohabitation and community reputation tends to raise an inference of the marriage. This inference is given more or less strength according to the circumstances of the particular case. The inference is generally strengthened with the lapse of time during which the parties are living together and cohabiting as man and W. NOTES: Some states are less stringent, requiring only an agreement and not clear and convincing evidence. Traditionally, the sole requirement for a so-called common-law marriage was an agreement to be married. Common-law marriage where recognized isn’t simply “living together.” It’s a real marriage which requires capacity to marry under same regulations applicable to ceremonial marriage. For example, 2 persons of the same sex can’t K a valid common-law marriage. Likewise, a commonlaw marriage isn’t created when 1 party is under the age of consent for marriage, and an existing marriage by either party prevents creation of a valid common-law marriage. There’s no “common-law divorce” concept to parallel “common-law marriage.” If there’s been a marriage (whether ceremonial or common law), death or divorce must dissolve it to free either party to marry again. No state prescribes a minimum cohabitation period. If either party is ignorant of an impediment (e.g., present marriage to someone else) at creation of relationship, a marriage is created immediately upon the impediment’s removal (e.g., divorce). Some courts, acknowledging unlikelihood of new post-removal agreement, don’t require new agreement, but find marriage if parties continue to cohabit and hold themselves out as married. General FF&C Rule: A marriage valid where contracted is generally recognized elsewhere. i. Circle Scenario: where 2 people agree to be married, cohabit and hold themselves out as married in a non-recognizing jurisdiction; then, after spending time in a recognizing jurisdiction, they return home. Many courts find a marriage here, often despite merely ephemeral connection to the common-law marriage state (e.g., visits or vacations). Some cases refusing to recognize marriage here frankly ground their analysis in what is described as a strong forum policy against common-law marriage. ii. Chain Scenario: where a couple, having contracted a common-law marriage in a recognizing state, moves to a non-recognizing state where the marriage’s validity is litigated. Almost all courts recognize the marriage here, particularly if there was a significant connection to the common-law state. iii. Inferred-Continuing-Agreement Scenario: where couple lived together in a non-common-law marriage state and then moves to a recognizing state but there’s no proof of any new agreement in the recognizing state. Courts have found a common-law marriage here based upon an inferred continuing agreement. c. Putative Spouse Doctrine (MMDA § 209): an equitable doctrine that allows court to do equity. In re Estate of Vargas: REASONING: An innocent participant who has duly solemnized a matrimonial union which is void because of some legal infirmity acquires the status of putative spouse. 2 One theory used to justify the award of an interest in a decedent’s estate to a putative spouse is the theory of “quasi-marital property” which equates property rights acquired during a putative marriage with community-property rights acquired during a legal marriage. Another theory used to justify such award treats putative marriage as partnership: In effect, innocent putative spouse was in partnership or joint enterprise with her spouse, contributing her services to common enterprise. Their accumulated property was held in tenancy-incommon in equal shares. Upon death of H, only his half interest is considered as community property, to which the rights of the lawful spouse (i.e., W-1) attach. Courts also sometimes merely resort to general principles of equity (e.g., equitable estoppel) to justify property awards. You have to have the marriage solemnized in order to have a good-faith belief. Putative spousehood terminates on party’s loss of good-faith belief that he or she is married. One court held good faith requires a belief in a legally-recognized marriage; several cases impose a duty to investigate when informed of a partner’s prior marriage. A common-law marriage is a marriage, while a putative marriage isn’t. Thus, common-law marriage is impossible where the parties are ineligible for marriage. On the other hand, divorce is unnecessary to terminate a putative marriage. Common-law spouse can invoke marital testimonial privilege, while a putative spouse can’t. There’s a presumption of the validity of the latest marriage, and this can be used to argue for the validity of a relationship which otherwise would otherwise be a putative spousehood. The presumption is said to be based on the principle that the law presumes innocence, not criminality (bigamy); morality, not immorality; and marriage, not concubinage; and requires the party attacking the later marriage to bear the burden of proof. Thus, the party asserting bigamy faces the difficult task of proving a negative: non-dissolution of the 1st marriage. This is often made more difficult by judicial imposition of a heightened standard of proof. The presumption has been described as 1 of the strongest, if not the strongest, known to law, which increases as the length of the 2nd marriage increases. Failing to find a divorce record in the 1st marriage’s domiciliary state has been found insufficient because there might have been a divorce in another state or country. Courts sometimes acknowledge that appealing facts may weaken the presumption. 2. Substantive Requirements: Supreme Court said marriage is a fundamental right. a. Same-Sex Prohibitions: Goodridge: REASONING: The exclusion of homosexuals from marriage is incompatible with the MA constitution’s principles of respect for individual autonomy and equality under law. The right to marry means little if it doesn’t include the right to marry the person of one’s choice, subject to appropriate government restrictions in the interests of public health, safety, and welfare. History must yield to a more fully developed understanding of the invidious quality of the discrimination. The “marriage is procreation” argument identifies persons by a single trait and then denies them protection across the board. It can’t be rational to penalize children by depriving them of State benefits because the State disapproves of their Ps’ sexual orientation. Recognizing the right of an individual to marry a person of the same sex won’t diminish the validity or dignity of opposite-sex marriage, any more than recognizing the right of an individual to marry a person of a different race devalues the marriage of a person who marries someone of her own race. 3 We construe civil marriage to mean the voluntary union of 2 persons as spouses, to the exclusion of all others. DISSENT, SPINA: The power to regulate marriage lies with the Legislature. The marriage statute creates no distinction between the sexes, but applies to men and women in precisely the same way. Both men and women may only marry people of the opposite sex.. DISSENT, CORDY: The Legislature conceivably could conclude that permitting homosexual participation in marriage would have the unintended effect of undermining to some degree marriage’s ability to serve its social purpose. The purpose of same-sex marriage bans isn’t to maintain social segregation of men or women. It’s rather to make clear that gay relationships are different from, and less favored than, heterosexual relationships. After Lawrence v. Texas that may be a constitutionally suspect goal. Defense of Marriage Act (DOMA): “No state shall be required to give effect to any public act, record or judicial proceeding of any other State respecting a relationship between persons of the same sex that is treated as a marriage under the laws of such other State or a right or claim arising from such relationship.” Almost all states have adopted mini-DOMAs. b. Age: Types of Age Restrictions in Marriage Law: 1. Age of consent when person may choose to marry without permission of anyone. 2. Age when marriage is permitted with approval of a P or P-substitute. 3. Age below the age of parental permission at which, in exceptional circumstances, marriage is authorized. 4. Age of marriage capacity establishing the minimum age of marriageability. Premarital pregnancy is a significant predictor of divorce. c. Monogamy: All states prohibit marriages where either partner is already married. Any such attempted marriage is void and, in most states, a criminal act. d. Consent Requirements: mutual consent is essential. A valid marriage requires both parties’ consent. Such consent necessarily includes capacity to consent. This capacity is often defined as the ability to comprehend the nature of marriage and the duties and responsibilities attendant thereto. While fraudulently induced marriages generally are voidable, courts are reluctant to find fraud. Courts traditionally require a misrepresentation concerning the “essentials” of marriage. The Essentials Test: misrepresentations concerning wealth, temper or character ordinarily aren’t grounds for annulment; misrepresentation about a party’s fertility, or willingness or ability to engage in sexual relations, goes to the “essentials.” A marriage in which the consent of 1 party has been obtained by duress is voidable. There’re relatively few such modern cases. B. Law of the Intact Marriage: 1. Duty to Support: McGuire: REASONING: Living standards of intact family are matter of concern to the household, and not for courts to determine, even though H’s attitude toward his W, according to his wealth and circumstances, leaves little to be said in his behalf. As long as the home is maintained and the parties are living as H and W it may be said that H is legally supporting his W and the purpose of the marriage relation is being carried out. Public policy requires such a holding. NOTES: There’s a hands-off policy, but it’s not universal. Thus, marital agreements (a.k.a. during marriage agreements) are typically unenforceable. Harris: REASONING: 4 Doctrine of Necessaries: common-law duty of H to provide for necessary expenses of W. W is responsible for her own necessaries upon her express K or on equitable principles when H is unable to pay, notwithstanding H’s concurrent liability. The doctrine of necessaries should be applied in a gender-neutral fashion. W is liable for the necessary medical expenses provided for H. NOTES: Who determines what is necessary? Fault-based nature of necessaries doctrine has survived move to no-fault divorce in some states. The necessaries doctrine is utilized surprisingly often, particularly in cases where necessary medical care is provided. 2. Spousal Control over Earnings and Property: i. Under Traditional Common-law Regimes: While marriage is intact, whoever’s name is on it controls it. iii. Under Community-Property Regimes: While marriage is intact, everything (e.g., vehicles, pension plans, etc.) belongs to both spouses equally, regardless of title. Gender-neutral Management means: (1) often either spouse can act alone and bind the other; (2) sometimes both must consent; and (3) sometimes sole management authority is allocated to 1 spouse on a gender-neutral basis. Community Property: typically includes all property acquired by either H or W during marriage except for property that is acquired by gift, devise or descent. This broad definition means every dollar acquired during marriage by either party, including all earnings, belongs to both H and W. There’re 8 community-property states today (+ WI). All others (e.g., MI) are common-law states. 3. Varying the Marriage “K”: Marital Ks: states tend not to enforce these in the intact marriage. Prenuptial/Antenuptial & Separation/Settlement Agreements: states tend to enforce these. DISSOLVING THE MARITAL STATUS Although all states now have no-fault statues, most jurisdictions retain fault-based standards. Although marriage is a fundamental right, Supreme Court hasn’t yet said divorce is a fundamental right. A. Fault-based Divorce: If both П and ∆ proved the other’s fault, neither party was granted a divorce. Within fault-based system, divorce was a remedy available only to an innocent spouse. Domiciliaries of states with fault-based statutes had to prove specific behavior showing ∆’s faults. Collusion: an agreement between H and W for (1) the commission of an offense for the purpose of obtaining a divorce, (2) the introduction of false evidence of an offense not actually committed, or (3) the suppression of a valid defense. B. No-fault Divorce: Types of No-fault Divorce: i. Unilateral No-fault Divorce: where only 1 party wants the divorce. A few states completely bar unilateral divorce. ii. Mutual-consent No-fault Divorce. Summary dissolution procedures are designed to achieve a convenient divorce by mutual consent; they typically dispense with a hearing altogether and are usually available only for childless marriages, or for marriages with no minor children, and require as well that the parties submit affidavits or other sworn statements indicating that they have agreed upon the disposition of any marital property and waive any claim for support. Grounds for No-fault Divorce: apply to both pure and limited no-fault divorces. i. Marital breakdown; or 5 Marital Breakdown Standards: require a finding that the marriage is “irretrievably” or “irremediably” broken; or that the spouses’ relationship is characterized by “incompatibility,” “insupportability,” or by “irreconcilable differences.” ii. Lived “separate and apart” for statutorily-required amount of time. For states which rely on lengthy periods of de facto separation to establish eligibility for no-fault divorce, questions may arise as to what constitutes “living apart.” Some courts say parties have “lived apart” for purpose of these statutes even though they lived in the same home, where they didn’t share a bedroom, didn’t communicate with each other and in general led separate lives. 1. Pure No-Fault Systems (MMDA §§ 302, 305): MI is a pure no-fault regime, but it has a 60-day waiting period. Covenant Marriage: allows partners to choose fault-based divorce regime at time of marriage. 2. Limited No-Fault Systems: There’re several reasons why a spouse might claim fault grounds in a state that provides both fault and no-fault divorce: (1) Spouses who have settled their divorce may agree on a fault ground in order to dissolve their marriage more quickly than is allowed under the no-fault rule prevailing in states that impose a waiting period on no-fault divorce; (2) Where there’s no settlement, a fault divorce may provide 1 party an advantage in settling the financial aspects of the divorce. Parties are even more likely to seek a fault-based divorce in the small number of states that bar unilateral no-fault divorce. C. Re-Evaluating No-Fault, Fault, & the Law’s Role in Promoting Marital Stability: 1. Data on Marriage & Divorce Rates: a. Current Trends: Rates of marriage have dropped in the 2nd half of the 20th century. Between 80-90% of adults in the U.S. are expected to marry at some point in their lives. Present rate of divorce per 1,000 in U.S. population is at lowest level since 1972. The remarriage rate declines with age, particularly for women. Remarriage rates are significantly higher for women who are younger at divorce. Men are more likely to remarry than are women. Remarriages are slightly more likely to end in divorce than 1st marriages. b. Causes of Increased Divorce Rates: No-fault statutes followed, rather than preceded, the rise in divorce rates. No-fault laws were more likely a result of the increasing divorce rate, rather than its cause. Without question, the most commonly-cited factor affecting the divorce rate is the entrance of women into the labor market. Many researchers agree that the decreasing economic dependence of employed women on their Hs made it easier for a couple to end an unhappy marriage. 2. Themes in the Revived Policy Debates on No-Fault: a. Legal Strategies, New & Old: Commitment & Delay: Elizabeth Scott: If marriage is a relationship that can be easily terminated at any time by either party, trust will be impaired and investment will be tentative. Ira Mark Ellman: A waiting period for divorce is really a waiting period for remarriage, for remarriage is the only thing that is truly delayed since the parties will still separate physically, and a court may still grant a legal separation with custody and support provisions. b. The Effects of Divorce on Children: Parental divorce is neither a destructive force that renders most children who encounter it maladjusted, nor is it a life event that is irrelevant to children’s wellbeing. parental divorce is an experience that might best be thought of as introducing certain stressors into C’s life. It places psychological challenges in the path of children. But most children from divorced families function as well as children from married families on various commonly used indices. The post-divorce family has its origins before Ps have divorced, even before they have begun to contemplate marital separation. It begins with the quality of marriage that shapes how children experience family life and subsequently cope with divorce. Research shows that post-divorce adjustment is significantly influenced by the conditions of pre-divorce family life. 6 The effects of divorce on children aren’t irrevocably predetermined. Children’s fates aren’t sealed by virtue of Ps’ decisions to dissolve the marriage. Adjustment to life stressors is a dynamic process that doesn’t occur in 1 moment in time. Environmental factors, particularly healthy supportive relationships with caring adults, can do much to mitigate ill effects. Fault-based standards and long waiting periods are unlikely to prevent divorce. PROPERTY DIVISION UPON DIVORCE Property awards are generally non-modifiable, unless there’s fraud (hidden property) or something like that, based upon principles of res judicata. Most divorces are settled; thus, litigated alimony and property disputes are uncommon. Both property awards and alimony can be structured either as lump-sum payments or as periodic payments (it’s more usual for alimony to be periodic). 1. What’s In the Marital Pot? (ALI § 4.03): Times to Determine What’s In the Pot: Cohabitation. Commencement of marriage. Physical separation. Divorce petition filed. Divorce decree issued. A. Common Law: i. Traditional: There’s nothing in the marital pot to divide—it’s all based upon who has title. There are no traditional common-law states (at divorce) anymore. (There are at marriage.) ii. Contemporary: a. Separate Property: property acquired prior to marriage or by gift or inheritance. Replacement Principle: Whatever property is received in exchange for separate (or marital) property remains separate (or marital) property. b. Marital Property: all property acquired by either spouse during marriage except by gift or inheritance. Everything that’s characterized as marital goes in the pot. Spouse usually can’t unilaterally change marital property into separate property. Possibilities for Creation/Termination of Marital/Community Property: depends on state. 1. Petition Rule: date on which divorce is filed is line between marital and separate. ALI endorses this rule as the presumptive termination date, but allows court to substitute a different date in order to avoid substantial injustice. 2. Decree Rule: date of final divorce decree is line between marital and separate. 3. CA Rule: spousal earnings acquired while spouses live “separate and apart” are separate property; this requires a case-by-case analysis. 4. No Rule: there’s no rule at all; it’s all within trial court’s discretion. ALI (§ 4.12) distinguishes between marital and separate property, but provides that a very gradually increasing share of each spouse’s separate property is recharacterized as marital property as the length of the marriage increases (if parties haven’t taken steps to provide otherwise in a prenuptial agreement). iii. Hotchpot Systems: in a few common-law states all property goes into the pot—even property acquired before marriage or by gift or inheritance. B. Community Property: Underlying idea is that marriage is like a joint venture with equal (50-50) partnership status; it doesn’t matter who has contributed the most in labor. i. Separate Property: same as common-law states. ii. Community Property: same as “marital property” in common-law states. 2. How Do You Allocate It?: 7 A. Common Law: i. Traditional: It all goes to whoever has title—whoever earned it. ii. Contemporary: equitable distribution. Equitable Distribution (a.k.a. Discretionary Distribution): rule in all common-law states today (including MI). Allows courts to distribute marital property on an equitable basis, instead of traditional common-law notions of ownership; gives courts a lot of discretion to determine fairness. Most states give their courts a list of factors to consider in allocating property. Common Themes for Determining an Equitable Distribution: 1. Need: this is the predominant factor. Reliance: goes hand-in-hand with need. 2. Contributions to Marital Property: this is the 2nd-most-important factor. Not really relevant in community-property regimes; maybe more important in common-law states since they still have notions about title being important. Where community/marital property is very large, common-law states are more likely to award an unequal division favoring primary breadwinner. 3. Expectations. 4. Duration of Marriage: this really affects need and contributions. 5. Many common-law states have adopted “homemaker” provisions: these provisions typically add contributions as a homemaker as a factor to consider. 6. Marital Misconduct: some states (e.g., MI) give courts broad authority to consider marital misconduct; this is a wildcard that can lead to unpredictable results. The MMDA and ALI both endorse a no-fault approach to property allocation. 7. Financial Misconduct: all states (even strict no-fault systems) permit courts to consider misconduct (e.g., gambling losses, gifts for paramours) that directly affects the amount/value of property available for distribution. Common-law states don’t necessarily have any presumption that 50-50 is equitable; thus common-law states have more discretion. iii. Hotchpot Systems: equitable distribution. B. Community Property: i. Equal Distribution: traditional view; followed strictly (no discretion) in CA, LA, and NM. CA, LA, & NM require strict equal (50-50) division in all cases, regardless of title. ii. Equitable Distribution: same as in common-law states. In most community-property states there’s a strong presumption that 50-50 is equitable; thus, community-property states have somewhat less discretion. ALI also adopts a strong presumption that equal distribution (50-50) is equitable, but many jurisdictions have rejected ALI’s recommendation. Special Problems: 1. Contingent & Deferred Compensation: the issue isn’t whether the property was acquired during marriage, but whether the right to the property was acquired during marriage. Income earned during marriage is marital property even if receipt is deferred until after divorce. Pensions are the most prominent example. Royalties paid out after divorce on work completed during marriage is another example. Accounts receivable are another example. To the extent income is acquired after divorce it’s separate property. Niroo: REASONING: 1st decide whether the property right was acquired during the marriage; then determine whether it’s equitable to include it as marital property, without regard to whether the right is vested. Contractually vested rights in insurance renewal commissions are marital property. 8 A marital debt is a debt which is directly traceable to the acquisition of marital property. NOTES: Niroo court (like many other courts) say if it’s primarily marital, then it’s all marital; look at when the primary efforts were expended. Where the future compensation, or its amount, is uncertain, a court may: i. Set now the shares each spouse will obtain if and when there’re such payments; ii. Reserve jurisdiction to make an appropriate order when the payments are actually received or their amount established with relative certainty; This is what the ALI recommends. iii. Make an immediate lump-sum payment; or iv. Refuse to allocate future income at all because it’s too speculative. 2. Pensions: A. State Law Issues: All states treat vested pensions as marital property divisible on divorce to the extent they’re acquired during marriage. Basic Options for Treating Vested Pensions: i. Court may defer distribution. ii. Court may establish current value of pension and immediately distribute it. iii. Court may “bifurcate” the pension via the QDRO scheme under ERISA and require pension plan administrator to make monthly payments directly to non-employee spouse of her share of the pension at employee-spouse’s earliest retirement eligibility date (even if employee doesn’t choose to retire at that time). QDROs (under ERISA) takes care of (1) timing issues and (2) collection issues. But you still need to put some rough value on pension benefits at time of divorce; to do this, call an expert. Valuation of pensions earned during marriage depend on whether the pension plan is a “defined-contribution” plan” or a “defined-benefit plan.” Defined-Contribution Plans: contributions to a pension fund employer makes on employee’s behalf. At any time the amount accumulated can be determined. Defined-Benefit Plans: create contractual obligation [not a separate account] of employer to provide benefits. ERISA doesn’t include government/public pension plans, but some states (including MI) have enacted statutes to cover these. (States have their own mini-QDROs.) Where individual begins employment before marriage, continues it during marriage, and remains at it after divorce, that individual’s spouse is entitled to share only in the portion of the pension entitlement earned during the marriage. Apportionment between marital and non-marital portions of pension are made by using variants of either of the following basic methods: i. Relative-Value Rule: provides accurate apportionment method for definedcontribution plans. ii. Relative-Time Rule: apportions pension between its marital- and separate-property components by assuming that all years of labor contributed equally to pension entitlement. (Years of Employment During Marriage ÷ Total Years Employed) × Payment = Marital Property Nearly all states (including MI) now treat unvested pensions as marital property. Basic Options for Treating Unvested Pensions: i. Court may defer pension’s distribution until vesting, when its value becomes certain; or ii. Court may discount value of the pension to reflect risk of nonvesting and distribute now. A retirement benefit may take a variety of forums, and under some circumstances it may be disguised as a gift or a bonus. 9 3. 4. 5. 6. Look to see whether there was a social [→ gift] or a business [→ pension] relationship. B. Federal Preemption of State Law: ERISA specifies that it “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan” covered by it. Social Security Benefit: If you have a non-employee spouse, or a spouse that has worked part-time or seasonally, that spouse might qualify for social security benefits. If your W remarries, she ordinarily loses the right to H’s social security benefits and alimony. Tort & Workers’ Compensation Claims: Generally, personal injury recoveries and workers’ compensation claims are marital property to the extent they provide compensation for loss of a marital asset. Because post-divorce income is separate property, compensation for its loss is separate. Most courts classify compensation for pain and suffering, typically available in tort awards but not in workers’ compensation claims, as separate property, leaving the portion of the tort award intended to replace marital earnings as the main marital property component. Debts: figure marital debt same way as you figure marital property. One takes marital debt into account in valuing marital assets. Generally, debts incurred during the marriage are presumed to be marital debts. It’s only when debts support activities that will have ongoing benefits to 1 spouse only (e.g., educational loans), that courts tend to characterize such debts as separate. To the extent that student loan is taken to pay living expenses during marriage, courts are more likely to say that debt is marital. Where only H’s name is on loan for car, and W gets car at divorce but doesn’t pay off loan, make sure you advise H that he is still potentially liable on the loan. Bankruptcy Reform Act: property transfers at divorce are debts that aren’t dischargeable in bankruptcy. Appreciation of Property: Community-Property States: distinguish appreciation of separate property attributable to either spouse’s labor from property’s “natural increase” in value. In every community-property state the natural increase is separate property. In every community-property state any increase in value of separate property attributable to either spouse’s labor during marriage is community property. Common-law States: Many common-law states apply the same rule as community-property states A few common-law states treat all appreciation as marital property Some common-law states treat the appreciation as marital property (entirely or partially) if appreciation was due in large part to marital funds or efforts of other spouse. Businesses: If a business is worth more at divorce than at time of marriage, the increase must be allocated between (1) the original capital and its natural increase [separate property] and (2) the fruits of the spousal labor [community or marital property]. i. Van Camp Rule: finds no community-property component in the incremental value where the entrepreneur-spouse took compensation from the business during marriage [in which case the value of marital labor was already taken out] which was reasonable in light of market standards for that kind of work. [Thus, it would all be separate property.] Some common-law states follow Van Camp, but others don’t apportion the appreciation of separate property between marital and separate property components, but instead treat the characterization as requiring an all-or-nothing resolution. ii. Pereira Rule: attributes an ordinary rate of return to the separate-property capital, and allocates all the return above this amount to spousal labor. ALI generally favors this approach. Assets Acquired with Both Marital and Separate Capital: Allocation of such assets may be made by: 10 i. Allocating value according to relative proportions of the marital and separate contributions; or ii. Characterizing property as entirely marital or entirely separate by applying inception rule. iii. Leaving it up to the court to do “equity.” 7. Earning Capacity & Professional Credentials (ALI § 4.07): Traditional rule is that earning capacity isn’t property, but this rule isn’t always followed. O’Brien: HOLDING: H’s medical license constitutes marital property and is subject to equitable distribution. REASONING: NY statutes recognize that spouses have equitable claim to things of value arising out of marital relationship and classifies them according to marital status of parties at the time of acquisition. An interest in a profession or professional career potential is marital property which may be represented by direct or indirect contributions of the non-title-holding spouse. NOTES: No other jurisdiction has followed this case (but MI has come close!). Postema: FACTS: MI case involving a law degree. REASONING: Fairness dictates that spouse who didn’t earn degree be compensated whenever degree is the end product of a concerted family effort involving mutual sacrifice and effort by both spouses. The concept “concerted family effort” stresses the fact that it isn’t the degree itself that gives rise to an equitable claim for compensation, but rather the fact of the degree being the end product of the mutual sacrifice, effort, and contribution of both parties as part of a larger, long-range plan intended to benefit the family as a whole. The attainment of an advanced degree is a prolonged undertaking involving considerable expenditure of time, effort, and money, as well as other sacrifices. Where such an undertaking is pursued as part of a concerted family effort, both spouses expect to be compensated by eventually sharing in the fruits of the degree. Where a concerted family effort is involved, a spouse’s entitlement to compensation constitutes a recognized right; it isn’t dependent upon factors related to the need for support. There’re 2 methods of compensating a non-student spouse: i. Classifying degree as marital property and awarding W a percentage share of the present value of the future earnings attributable to the degree [court rejected this method adopted in O’Brien]; or ii. Restitution based upon principles of fairness since there’s a concerted family effort [court chose this method]. Focus of award involving advanced degree is to reimburse that spouse for unrewarded sacrifices, efforts, and contributions toward attainment of degree on ground that it would be equitable do so. NOTES: Starnes said she thinks the court applied neither of the valuation methods it mentioned, but instead applied a type of hybrid reliance-restitution type of scheme. Many states have statutes which expressly authorize the award of alimony [which is modifiable] to the spouse who contributed to the educational opportunities of the other spouse, without regard to need, or to whether the claimant intended to return to school herself. Reimbursement Alimony: a remedy, in some states, which is available without regard to non-student spouse’s educational plans. . . . 8. Goodwill: the excess of a business’s market value over its asset value; business reputation. In contrast to professional licenses, and earning capacity itself, most courts agree that professional goodwill is divisible property, but they differ on rules they adopt with respect to evidence of value. Hanson: REASONING: Goodwill produced in a professional setting is no less property than that in a commercial setting. 11 Several courts have recognized that goodwill is marital property, but only to extent it exists independently of the individual professional’s reputation. We define goodwill within a professional setting to mean the value of the practice which exceeds its tangible assets and which is the result of the tendency of clients/patients to return to and recommend the practice irrespective of the reputation of the individual practitioner. Existence of goodwill is shown only when there’s evidence of recent actual sale of a similarly situated professional practice, an offer to purchase such a practice, or expert testimony and testimony of members of subject profession as to existence of goodwill in similar practice in relevant geographic and professional market. Absent such evidence, 1 can only speculate as to the existence of goodwill. NOTES: The key is to distinguish between personal reputation/goodwill and enterprise goodwill. Enterprise goodwill is subject to marital division, but personal goodwill isn’t. If H left business would it still have value? If so, then that value is enterprise goodwill. ALIMONY UPON DIVORCE Trial courts have a lot of discretion in awarding alimony; they’re not required to even award it. Alimony awards are relatively infrequent in the U.S.A. Many courts believe that if alimony is appropriate, it ought to be short-term and it ought to be for a specific purpose; there’s a renewed emphasis on rehabilitative alimony. 1. Alimony Awards (a.k.a. Spousal Support or Maintenance) (MMDA § 308): A. Qualification Question: How do you qualify for alimony? Rationales for Awarding Alimony: i. Need: may alone be insufficient to justify alimony award. ii. Reliance: focuses upon marital partner’s loss, and then tries to compensate you for that loss. This is like a “victim” model. iii. Restitution: draws upon notions of unjust enrichment and looks at what you have contributed. This is like a “guilt” model: “I’ve benefited you, and now you owe me.” iv. Expectations: says marriage is a joint venture, like a partnership, and you’re a team. This is more like an “equality” model: You both worked together as a team for same purpose. ALI concludes that neither need nor restitution provides a satisfactory explanation of alimony. ALI reconceptualizes alimony as compensation for losses, rather than the meeting of needs. Thus, each of the claims recognized under the ALI is a claim for a different kind of loss. The compensable losses for which claims arise under ALI are limited to financial losses, and such financial losses encompass only those which arise from the marriage’s dissolution (as compared to claims for financial inequities during the marriage). ALI distinguishes separate claims for alimony, with set criteria for each, which when met create a presumption of entitlement to an award of a specified amount. B. Quantification Question: If you qualify, how much do you get and for how long? Common Factors for Setting Amount of Alimony: i. Need: we look at relative need—not absolute need(y). ii. Duration of marriage. iii. Standard of living during marriage. 2. Why Do We Have Alimony?: Clapp: REASONING: Reasonable need isn’t to be judged in relation to subsistence but in light of the standard of living established during the marriage. The term “reasonable need” allows the court to balance equities. One purpose of maintenance is to compensate a homemaker for contributions to family wellbeing not otherwise recognized in the property distribution. 12 Marriage of Wilson: HOLDING: Alimony need not be for life, even when there’s great need for it. NOTES: Need isn’t a necessary condition for an alimony award. It may also sometimes be insufficient. Support Alimony: alimony with no definite termination date; intended to provide obligee with a more comfortable standard of living. Marital duration appears to be a critical factor for most courts granting support alimony. 3. Size & Duration of Awards Following a Long-Term Marriage: There’s no such thing as “permanent” alimony, because alimony is always modifiable; thus we say “indefinite” alimony. ALI suggests that length of time for alimony is length of marriage or for C-care period. Rainwater: REASONING: Marital standard of living has long been listed among the factors pertinent to the duration and amount of spousal maintenance. Because maintenance awards are modifiable, an award of maintenance until death or remarriage doesn’t lock long-term maintenance irrefutably into place. Rather, it places the burden on the paying spouse to prove a later change in circumstances sufficiently substantial to warrant shortening the duration of the award. A fixed-term award, by contrast, places burden on the receiving spouse to prove a change in circumstances sufficiently substantial to warrant extending the award. Hecker: FACTS: Fixed-term award was changed to a permanent award where W couldn’t support herself. NOTES: A court may issue an order setting an alimony award with a termination date based upon the expectation that with reasonable diligence the obligee will by then have become self-supporting. The court can later extend the award beyond the cutoff date for the obligee who hasn’t become selfsupporting despite reasonable diligence. The court must evaluate the particular facts to determine if adequate rehabilitation efforts have been made. Income equalization is an easily understood benchmark, but is rarely adopted by the courts. The marital living standard is an aspiration, not a rule, because divorce often requires a lesser standard of living for both parties. Because alimony awards are modifiable, 1 might think that it matters little whether the initial decree is for an indefinite or fixed term. But the award’s initial characterization determines which party will have the burden of persuasion in any modification proceeding. Even if obligee’s loss or need is indefinite in duration, the obligor’s responsibility to share it may not be. Equity requires that fixed terms based upon projections of the obligee’s future income remain modifiable in case they prove inaccurate. MORE ON ALIMONY & MARITAL PROPERTY DIVISIONS A. Rescission After the Short-Term Marriage: In dissolving short-term marriages, ALI adopts the guiding principle that the divorce court should return the parties to the position they were in before they were married. Rose: FACTS: Couple was married for a year and a half. REASONING: We believe that the disposition arrived at by the trial court put the parties in, as nearly as possible, the financial position they would have occupied had no marriage taken place. We conclude that in marriage of short duration, where there has been no significant commingling of assets between the parties, the trial court may, without abusing its discretion, treat the property division as an action in the nature of rescission, aimed at placing the parties in, as closely as possible, the financial position they would have occupied had no marriage taken place. 13 Idea of rescission comes primarily from area of K law, and its application to family law isn’t entirely comfortable. Even the few jurisdictions that endorse rescission have emphasized that this conclusion should be reached only in cases where marriage has been short and there’s been no significant commingling of funds and there’re no other equitable factors pointing to different sort of division. B. Modification of Awards: 1. Basic Rules (MMDA § 316): Typically property division isn’t modifiable, while maintenance and C support are. Maintenance is presumed to terminate at the remarriage of the receiving spouse, while neither C support nor property settlement is so affected. Courts usually hold reimbursement awards aren’t modifiable and are unaffected by the obligee’s remarriage, even if made under the rubric of “alimony.” The form of the award isn’t necessarily dispositive. For divorce law purposes it’s the actual function and justification of the award, rather than the label attached to it, that normally determines how it’s treated in divorce law for modification purposes. Death of either party terminates maintenance obligations, but not claims based upon the allocation of marital property. Most states provide that C-support obligations die with obligor. Many states require the modification petitioner to prove only that there has been a change in circumstances justifying the modification, and not that there has been a change “so substantial” as to make the existing order “unconscionable.” If a property division award is based upon property rights, then a judgment regarding those property rights should be as final, and non-modifiable, as any other civil judgment, and should survive the parties as assets or liabilities of their respective estates. 2. Remarriage of Obligee: One court has said: “To hold a 1st spouse responsible for continued support of a former spouse who has remarried is tantamount to imposing a legal obligation to support another couple’s marriage.” Most states’ statutes specify automatic termination of alimony upon the obligee’s remarriage. Most states will enforce the parties’ agreement to continue alimony beyond the obligee’s remarriage. General rule is that alimony obligations terminated upon remarriage don’t revive if the remarriage ends in divorce: the former obligee must seek relief from 2nd spouse. Alimony claims against 2nd spouse may fail if 2nd marriage is short. The remedy for the foresighted is K that provides for revival of 1st spouse’s alimony obligation. General rule is that alimony obligations terminated on account of recipient’s remarriage aren’t revived if remarriage is voided [annulled], but some flexibility exists to avoid unreasonable results. ALI has an automatic termination rule, but it also has an exception where termination would work a substantial injustice (but this exception only applies in “rare” situations). 3. Cohabitation of the Obligee: Melletz: FACTS: Agreement said alimony stopped if W cohabited with an unrelated male. REASONING: This agreement attempts to control W’s behavior in terms of suspension of her total alimony, even though the prohibited behavior may have no economic impact on her life. Matters of personal preference, residence, or occupation, insofar as they don’t reflect changes in income or expenses or other matter of mutual concern, simply aren’t business of ex-H. Apart from the economic impact upon either need or the ability to pay, the payor spouse may not through loss or suspension of statutory alimony control the social activities of the payee. If the issue involves conduct, legal for the participants, but detrimental to children in the household, the parties may, of course, agree on generally-recognized standards of social behavior. But these issues are non-economic and can’t be used for economic coercion. Brando: 14 FACTS: Agreement said alimony stops once W even appears to maintain a marital relationship. HOLDING: For H. This wasn’t meant to prevent sexual relations per se by W with others, but to permit H not to have to support 3rd-parties. The traditional rule, surviving in many states, recognizes that the obligee’s cohabitation can be a basis for terminating alimony, apart from its financial impact. Courts are in fairly wide agreement that cohabitation means more than an intimate relationship, and even where parties live together, a minimum duration may be thought necessary to trigger a statutory rule. But, a longer cohabitation may be inadequate lacking other indicia of “cohabitation.” The recent trend appears to favor the financial impact rule: the obligee’s cohabitation is relevant only insofar as it affects her need and thus her financial eligibility for the award. 4. Economic Changes: a. Increase in Obligor’s Income: An increase in alimony can generally not be grounded solely on increase in the obligor’s income, given that the measure of alimony recipient’s needs is ordinarily based on the marital standard of living. The exception is where the original award was set too low (because of obligor’s temporary inability to pay more), and obligor’s increased income allows a modification that merely raises the award to where it should have been originally. Where obligor’s income increases dramatically after the marriage has ended, it seems inevitable that the court will hear the recipient’s claims more sympathetically. There’s a better argument for increasing C support on account of post-marriage increases in the obligor’s income. Children have a right to expect the same support and care they would’ve reasonably expected if their Ps had remained married. b. Obligor’s Retirement or Change in Employment: In deciding whether an income change justifies a modification of an award, the court frequently must decide whether the party whose earning capacity is at issue has acted reasonably. Where retirement occurs at typical retirement age, alimony award almost always should be reduced to reflect reduced earnings. When retirement occurs early, the case is more difficult. One court said: “H isn’t free to plan his future without regard to his obligation to his 1st W. He can’t arbitrarily freeze her out of his future.” One court has held that, where H dedicated his life to being a permanent Torah and Talmud student, H’s study plans amounted to voluntary impoverishment justifying a support award set according to his earning capacity. Courts are sometimes more favorably inclined when the obligor’s educational plans seem likely to enhance his earning capacity, to the eventual economic benefit of his dependents. c. Inflation: It’s sometimes said in passing that inflation doesn’t justify a modification of a support award, since it equally affects both parties. C. Marital Misconduct: e.g., adultery, drunkenness, abuse, imprisonment, etc. Historically, alimony, like marital dissolution itself, was to be a reward to an “innocent and victimized” W and unavailable to a “guilty” W. Some jurisdictions continue to give fault a role in the financial terms of divorce. Fault can be considered as a bar or as a factor. ALI doesn’t consider marital misconduct. Ira Mark Ellman: “Financial Cost” Exceptions: where marital misconduct still affects property disposition and alimony orders even in the most thoroughly no-fault jurisdictions: i. All states recognize the power of dissolution courts to consider, in allocating marital property, misconduct that has affected directly the amount of property available for allocation. 15 ii. Misconduct affects alimony and property allocations to extent it enlarges either spouse’s need, as when domestic violence leaves W with increased medical costs or reduced earning capacity. Classifications of State Law: i. Pure No-fault: states that exclude consideration of marital misconduct entirely, subject to the 2 universal “financial cost” exceptions. ii. Pure No-fault Property: states that adopt a pure no-fault position with regard to property, but may allow some very limited consideration of misconduct with respect to alimony. iii. Almost Pure No-fault: states that seem very much like those in i., but the slight possibility of considering fault that exists under their law applies to both alimony and property allocation. iv. No-fault Property, Fault in Alimony. v. Full-fault: states that give courts discretion to consider marital misconduct in both alimony adjudications and property allocations. C SUPPORT All American jurisdictions recognize a parental duty to support minor children. Most support orders apply equally to non-marital children. The support duty isn’t based upon the obligor’s consent to sexual relations much less intent to conceive C. A. Duty of Support: 1. Duration: a. General Rule: At the very least, Ps must support their children during C’s minority or, in some states, until graduation from high school. b. Post-Majority Support for Disabled Children: Disabled C incapable of self-support is a widely recognized exception to general rule terminating support at C’s majority. But states recognizing duty to support disabled children split on whether disability must exist before C reaches majority. c. Post-Majority Support for Higher Education: Many current statutes specifically authorize award of post-majority support for higher education. Awards for post-majority educational support aren’t necessarily limited to undergraduate school. Some courts refuse to authorize post-majority support for educational purposes, relying on the argument that if the marriage had continued, Ps would have been free to decide not to send C to college, and that divorce shouldn’t deprive them of that discretion. Courts that can’t directly order post-majority college support sometimes employ indirect approaches to achieve this goal, such as maintenance of a trust or insurance policy during minority, with proceeds paid for college education after C reaches majority. ALI makes support for college, along with other important “life opportunities,” dependent upon an inquiry into both the parental resources and the likelihood that such support would have been forthcoming had there been no divorce. d. Pre-Majority Termination of Support: Many states adhere to common-law rule terminating support obligation with the obligor’s death. Emancipation also terminates support obligation before majority. At common law, minor C’s marriage or entry into military terminated or suspended the parental support obligation. Many cases find C emancipated because of his behavior. But generally courts are reluctant to terminate support obligations based on C’s behavior. C’s gainful employment has been held to constitute emancipation. 2. Support of Step-Children: a. General Rule of Non-Liability: Traditionally, the step-relationship itself imposed no legally enforceable support obligation. Some courts held that accepting a step-C into one’s home established an obligation to support because step-P was acting in loco Pis, but this “obligation” was terminable at will by step-P. Today, similar rules are usually provided by statute or judicial decision. 16 No support can be ordered at divorce or separation and, during the marriage between P and stepP, the obligation—like all support obligations in the intact family—is satisfied by minimal support. Practically, of course, step-P in fact does support C by virtue of sharing same home. b. Imposing Liability on Step-Ps: An exception to limited support liability of step-Ps are family expense statutes which protect creditors who provide goods and services to family members including step-children. Step-P support obligations are occasionally imposed through equitable estoppel. Step-Ps have been held liable for post-divorce support via K. 3. Relationship Between Visitation & Support Obligations: Most states treat C support and visitation as independent obligations: P can’t defend a failure to pay support or allow visitation with evidence of other P’s failure to comply with court order. Some state statutes specifically authorize decrees linking visitation and support obligations. A support obligor who engages in self-help and ceases payments when other P refuses to permit visitation may find that the rule against retroactive modification of support arrearages bars consideration of his claim on the merits. B. Establishing the Amount of Support: From Discretion to Guidelines to a Support Order: 1. Existing Guideline Models, & How We Got Here: Traditionally, courts had wide discretion in applying the general duty of support to specific cases. See, e.g., MMDA § 3.09. In the 1980s Congress required, as a condition of federal funding of state welfare programs, that each state create specific C-support guidelines. Family Support Act of 1988 requires guidelines which create a rebuttable presumption in all support proceedings. [The Act requires all support guidelines to identify a presumptive amount of C support.] The states had to develop generally applicable rules designed to produce uniform results in like cases. While federal law doesn’t prescribe support levels set by guidelines, the guideline amount is presumptively correct and courts must justify any award which departs from it. Each state must review its guidelines every 4 years to ensure that they continue to provide for an appropriate C-support award. Continuity-of-Expenditure Rule: norm by which guidelines are constructed is what Ps in intact families in fact spend on children; can best be formulated in percentage rather than dollar terms. While nearly all American states have guidelines based upon the continuity-of-expenditure principle, there’s considerable variation in their implementation of it. i. “Income Shares” Guidelines: incomes of both Ps are used to calculate the total expected parental expenditure on C. Each P is then expected to contribute a pro rata share of that total expenditure; each P’s share is equal to that P’s share of the total parental income. Majority standard. ii. Percentage-of-Obligor-Income (“POOI”) Guidelines: applies a simpler standard percentage to obligor’s income, varying the percentage only according to the number of children. While POOI states typically apply a constant percentage to obligor income across income ranges, incomes shares states generally don’t. Minority standard. 2. Aspects of Support Not Included within the Ordinary Guideline: a. Expenditure for C Care Required by Custodial P’s Gainful Employment: ALI initially apportions Ccare expenses between Ps according to their relative incomes. b. Expenditure for Health Insurance and for Uninsured Health Care Costs: Federal law requires that state guidelines take account of health care costs. c. Postsecondary Education: ALI subsumes postsecondary education in the category of “life opportunities”; in deciding whether to order support for postsecondary education under this standard, the trier of fact must decide: 17 i. Whether P would provide the opportunity if C were residing with P; if yes, then ii. Whether P can now contribute to it without undue hardship to self or to other dependents. 3. Determining the Obligor’s Resources: In re Marriage of Dennis: REASONING: A divorced H should be allowed a fair choice of a means of livelihood and to pursue what he honestly feels are his best opportunities even though he might for the present, at least, be working for a lesser financial return. This rule is subject to reasonableness commensurate with his obligations to his children and his former W. This rule isn’t an absolute prohibition against requiring a divorced supporting spouse to consider a change in livelihood. Until trial court requires ∆ to “seek work” there can be no accurate and informed finding as to his ability to earn. Until that is known, the court has no way of testing the person’s economic worth. Until ∆ and judge know what other work and income is available, there’s no way judge can determine that ∆ can’t do better and there’s no way to determine that ∆ is satisfied with his own lot in life and is willing to allow society to support his children. To obtain definite and meaningful information a seek-work order is reasonable. CONCURRENCE: If court’s order were interpreted as not merely information gathering but as requiring ∆ to get another job, the order may not be within court’s discretion. For court to order ∆ to change his trade so as to increase his income so that court can increase the support order may be a clear abuse of discretion. Without a finding of willfulness or lack of diligence an order directing obligor to take alternative employment raises questions of due process, equal protection, and involuntary servitude. NOTES: Most courts won’t require P to get job in different area. Seek-work orders are also rare. Ordinarily a court or guideline looks to obligor’s income in setting the amount of C-support obligation. When actual earnings are much less than earning capacity, court might use earning capacity rather than actual earnings to set award, thus leaving the obligor to deal with the problem, presumably by finding new work. This is often described as imputing income to the obligor. When court isn’t certain that obligor has earning capacity greater than his current income, a seekwork order might be appropriate. By requiring a search for more lucrative work, the court will presumably find out if, in fact, obligor can obtain it. 4. Customizing C-support Order: You can try to rebut the presumptive amount stated in guidelines. Donohue: REASONING: Statute states: “Deviation from guidelines may be made only upon the entry of specific findings based upon the following factors . . . .” Trial courts must consider the totality of both Ps’ financial condition and the needs of the children before deviating from the statutory guidelines. P’s responsibility to support his [own biological] children is paramount; other debts [such as step-children] are secondary. This includes obligations resulting from remarriage. Federal law specifies that the guideline amount may be rebutted only by a “written finding or specific finding on the record that the application of the guidelines would be unjust or inappropriate in a particular case, as determined under criteria established by the state.” Black-letter law has always provided that an agreement of the parties can’t usurp the authority of the court to ultimately determine C-support award. Many states, however, either via statute or case law, identify an agreement as a circumstance which is appropriate to consider in determining whether to vary from the guideline level of support. Some factors that are often listed in statutory guidelines as being relevant to the question of variance from guideline amounts: 18 i. Joint custody. ii. Extraordinary medical/educational expenses for C. iii. Unusual expenses of obligor or obligee. iv. Transportation for visitation. v. C’s age. vi. In-kind contributions. Hall: FACTS: Very rich D but very poor M. REASONING: The statutory guidelines are a starting point. While the statute provides departure above or below the guidelines amount, a court must make express findings on the reasons for deviation. The court must be cognizant of the fact that to raise M’s standard of living through the vehicle of C support would constitute imposition of an unauthorized obligation on part of D toward M. Also, an award for C support is for C’s current needs based on C’s appropriate standard of living and not for the purpose of saving portions thereof for future needs. NOTES: i. Within POOI model, some guidelines establish a relatively low maximum guideline amount and make the obligor’s high income a factor upon which an upward deviation may be based. ii. Other POOI states set no maximum guideline amount, though court can still consider an obligor’s unusually high income as a factor. iii. ALI (§ 3.07) rejects approach of setting cap on amount of obligor income, but agrees that unusually high income may enter analysis only as rebuttal factor offered by obligor. For ALI the ultimate issue in high income cases isn’t amount of obligor income, but C’s wellbeing. iv. Some Income Shares states provide that if combined parental income exceeds highest amount listed on chart, court should exercise discretion in determining the basic support obligation. Some courts have discretion to award lesser amount than “minimum” on finding of inability to pay. 5. Modification of C-support Awards: C-support judgments are based upon current facts concerning parties’ needs and resources. As continuous obligations, they can be reevaluated if warranted by a change in circumstances. Either obligor or obligee can seek modification. The traditional rule permitted modification upon a “material change in circumstances,” sometimes with the additional requirement that the change be “substantial and continuing.” ALI requires periodic review of all awards at least every 3 years. Custodial P’s remarriage ordinarily isn’t a basis for modifying obligor’s support obligation. Under traditional rule, legal Ps retain primary support obligation, which doesn’t shift to a step-P. Some states provide a fairly firm rule of “1st in time, 1st in right” and reject downward modification motions based on the demands of 2nd family. Other states provide that consideration of obligations to subsequent children is appropriate or required. Many states take an intermediate position. Price: REASONING: Once a court has issued an order for C support, neither P can unilaterally decide upon a different course of action. C support can only be modified prospectively. Unpaid periodical payments for maintenance of children becomes vested when due. Courts are without authority to forgive vested rights in accrued maintenance. If a party wishes to contribute to the support of his children in some manner other than that in which a court has directed the court is always open to a timely application for modification. If he does it without such permission it isn’t incumbent on the court to give him any credit for it. 19 The federal Bradley Amendment bars retroactive modification of C-support payments; there’re no exceptions, but a court may modify a support obligation as of the date on which the modification petition itself was filed. Despite rule against modification, some courts rely on doctrines of equity to estop obligees from seeking arrearages in some situations. C. Enforcement of Support Orders: 1. Enforcement Remedies: a. Income Withholding: not just limited to arrearages. Wage garnishment (a.k.a. income withholding) has become the most important and effective tool for enforcement of support awards. Income withholding orders require obligor’s employer to deduct employee’s obligation from paycheck. Federal law generally requires all withholding be collected in a centralized governmental agency and disbursed to obligee within 2 business days. Federal law requires states to make their income withholding procedures available for interstate collection of support. Federal law mandates that employers comply with income withholding orders of other states. b. Contempt: One traditional enforcement tool is an action alleging ∆ is in contempt of court’s order that P pay C support. Contempt action may be civil or criminal in nature. Jail for contempt is effective in improving support collections. c. Criminal Prosecution: All states criminally punish nonsupport (or abandonment or desertion) of children. Criminal prosecutions for nonsupport are relatively rare, because similar penalties are obtained more easily through contempt proceedings. Model Penal Code (“MPC”) requires more than mere subsistence support. d. Civil Remedies. e. Revocation or Denial of State-Created Privileges: Obligor’s can lose their drivers’ licenses, professional licenses, and/or passports for not paying C support. f. Termination of Parental Rights: The ultimate sanction for failure to support is termination of parental rights. Most states, however, find failure to pay simply 1 factor in determining abandonment. Termination of parental rights for nonsupport is rarely pursued unless adoption seems likely. 2. Defenses to Actions to Collect Arrearages: a. Res judicata: When obligee seeks to collect unpaid arrearages on outstanding support order, res judicata generally precludes attempts to raise substantive objections to order’s existence or amount. b. Mistaken identity. c. Order is for less than obligee claims. d. Prior Payment: Obligor may claim to have already made the payments in question. Usual rule is that support must be rendered according to order’s provisions and nonconforming payments don’t count (e.g., payment in the form of clothes, toys, allowance, etc.). Crediting non-conforming payments would erode the custodial P’s authority to determine the details of C’s upbringing. Equitable considerations may require crediting nonconforming payments, as where custodial P consented to the substituted payment method. e. Custodial Changes: Unless decree provides otherwise, noncustodial P generally isn’t entitled to a support payment deduction for visitation periods. Visitation periods are ordinarily contemplated in the decree and, in any event, most expenses for children don’t decline during a temporary absence from home. 20 Where Ps informally change C’s primary residence without modifying the decree, obligors often find the de facto custodial change is no defense to non-payment of support, even though it may provide grounds for prospective changes in the support award. f. Delay: Some ∆s argue obligee’s failure to pursue support for lengthy period excuses nonpayment. Courts are relatively hostile to such claims. Some ∆s bring a statute of limitations defense; the statute, however, may begin to run only when C reaches majority. The argument that C is now an adult is generally rejected. g. Estoppel: e.g., because of delay, parental agreement, or custodial P’s wrongful hiding of C. h. Nature of Obligor’s Resources: Some federal and state entitlements may be protected form particular types of enforcement. Several cases have held Social Security disability benefits subject to garnishment. i. Bankruptcy: The federal Bankruptcy Code precludes a debtor from discharging debts “to a spouse, former spouse, or C of the debtor, for alimony to, maintenance for, or support of such spouse or C, in connection with a separation agreement, divorce decree or other order of a court.” D. Interstate Support Litigation: The Uniform Reciprocal Enforcement Support Act (“URESA”), which was eventually adopted in some form (like the Revised Act “RURESA”) by every state, has now been replaced by the Uniform Interstate Family Support Act (“UIFSA”), which is now the law in all states. URESA provided a means to establish and enforce support obligations across state lines without requiring the custodial P to travel to any distant forum in which the obligor might reside. 1. Establishing a Support Decree Through UIFSA: UIFSA adopts concept of continuing, exclusive jurisdiction (“CEJ”) to establish and modify levels of C support due to a particular C: Once a court or administrative agency enters a support decree with jurisdiction, it’s the only body entitled to modify it so long as it retains CEJ under the Act. Another state, while required by UIFSA to enforce the existing decree, has no power to modify the original decree or enter a support order at a different level. UIFSA includes several rules designed to speed up the processing of interstate cases. 2. UIFSA Litigation When an Order Exists (UIFSA §§ 205, 611, 613): Under § 401, a petitioner-obligee (or the support enforcement agency) may file a petition to establish an obligation if a support order entitled to recognition hasn’t been issued; once an order covering a particular C has been issued no other court/agency can issue an order for the support of the same C unless UIFSA’s restrictive rules concerning modification are satisfied. Under § 303, once personal jurisdiction over respondent is obtained, responding tribunal is directed to treat the case as it would any other support case that wasn’t interstate in nature. The presence of the non-resident party isn’t required in the responding state and any restrictions imposed by the hearsay rule are trumped by use of federally-mandated forms. The responding tribunal generally applies its own law and support guidelines. § 205 provides that F-1 has CEJ to modify F-1’s order unless certain conditions are met. F-2 Can’t Modify F-1’s Order If: Any party (M, D, or C) currently lives in F-1. F-1 regains CEJ if party leaves F-1 and returns before any modification is issued. F-2 Can Modify F-1’s Order (and Assume CEJ) If (see §§ 611, 613): i. All of the parties have left F-1; or ii. All parties have agreed to a modification determination in F-2; and iii. F-2 is C’s “home state” or has personal jurisdiction over M, D, or C. Once F-2 has issued a modification, it becomes the CEJ court. Under § 603, any state can and must recognize and enforce the support decree of other states. 21 C CUSTODY Legal Custody: authority to make important decisions for C such as those relating to education and medical care. Physical Custody: rights to physical care and control. Tender-years Doctrine: said M is presumed to be more suitable custodian for young children. Best-Interests-of-the-C Standard: majority rule today in child-custody decisions. As a broad discretionary standard, the best-interest test does little to constrain judges; it leads to less predictability, and, as a result, actual adjudication is relatively rare. A. Best-Interest-of-the-C Standard (MMDA § 402): not what’s fair for Ps. Rules-of-Thumb for Determining C’s Best Interests: These rules-of-thumb aren’t etched in stone, but may operate to help judge make a decision where all other things are equal—as a tie-breaker or a factor. 1. Abuse: A P’s abusive conduct toward C will be central (probably dispositive) in a custody decision. Also, almost every state today considers whether a P has engaged in domestic violence in the custody analysis. The clear statutory trend is toward a rebuttable presumption against awarding custody to a P who has engaged in domestic violence. Courts aren’t likely to order joint custody in families with a history of domestic violence. Joint custody requires more contact and cooperation between Ps than sole custody, and even nonviolent conflict can be harmful to the children. Moreover, P who was a victim of marital violence may be subject to intimidation. 2. Gender: generally can’t make considerations based upon gender. 3. Primary-Caretaker Status & Continuity: In general, a P’s experience as C’s primary caretaker is a key consideration in custody determinations. Experts tend to agree on the importance of C’s need for continuity. Burchard: REASONING: Comparative income or economic advantage isn’t a permissible basis for a custody award. If in fact the custodial P’s income is insufficient to provide a proper care for the C, the remedy is to award C support, not to take away custody. The courts must not presume that a working M is a less satisfactory P or less fully committed to the care of her C. A custody determination must be based upon a true assessment of the emotional bonds between P and C. It must reflect also a factual determination of how best to provide continuity of attention, nurturing, and care. 4. Sexual Conduct & Moral Unfitness: Van Driel: FACTS: D appeals court’s award of custody to lesbian M. REASONING: Immoral conduct by 1 P doesn’t automatically render that P unfit to have custody of the children and require an award of custody to the other P. The P’s conduct must be shown to have had some harmful effect on the children. Majority rule with respect to non-marital, heterosexual behavior is that such conduct alone can’t justify denial of custody to a P, unless adverse effects on C are shown. Courts tend to be hard on Ps involved in same-sex relationships, but this is changing; courts are starting to require that harmful effects be shown in this context too. ALI prohibits consideration of both sexual orientation and of extramarital sexual conduct unless shown to have an adverse impact on C. 5. Race & Ethnicity: Palmore: FACTS: M married man of a different race. REASONING: 22 14th Amendment’s purpose is to do away with all governmentally-imposed discrimination based on race. Such classifications are subject to strict scrutiny. The question is whether the reality of private biases and the possible injury they might inflict are permissible considerations for removal of an infant C from the custody of its natural M. We have little difficulty concluding that they aren’t. NOTES: There was no showing of harm here. ALI prohibits consideration of race or ethnicity as a factor in a custody decision. 6. Disabilities: Although physical condition might sometimes be relevant to the custody determination, courts try to weigh carefully how much the condition actually impairs important parenting functions, and to avoid decisions based on prejudiced assumptions about incapacities of disabled persons. 7. Religion: Leppert: REASONING: Although M must not be discounted from consideration as a custodial P simply because of her religious beliefs, this doesn’t mean her religiously motivated actions, which are emotionally and physically harmful to the children, should be ignored when determining the children’s best interests. Only reason for any consideration of religious beliefs when determining the best interests of C is to take into account any harmful impact the belief system may have on C. Although Ps’ religious beliefs per se aren’t considered in custody cases, religious practices may be taken into account under some circumstances. ALI adopts a test that strictly limits the admissibility of evidence of religious practice to situations where the practice threatens severe and almost certain harm. 8. Alienation of C’s Affections: Renaud: REASONING: We’re reluctant to condone any conduct by a P that tends to diminish C’s relationship with the other P. Conduct by P tending to alienate C’s affections from other P is so inimical to C’s welfare as to be grounds for denial of custody to, or change of custody from, that P. Where the evidence discloses a continual and unmitigated course of conduct by a P designed to poison C’s relationship with the other P, a change of custody from the offending P may well be in C’s long-term best interests. Courts should infer an ulterior motive in the filing of abuse charges only where a P knew, or reasonably should have known, that they were groundless. 9. C’s Preferences: Statutes in most jurisdictions identify C’s preference as a factor to be considered in determining custody; some statutes make preferences of older children dispositive. B. Alternative Custody Decision Rules: 1. Joint Custody: Rationale for joint custody is that it promotes C’s best interests. Joint physical custody involves a relatively equal sharing by Ps of physical care of the child: i.e., C’s residential placement. This isn’t the norm today. Joint legal custody involves sharing by Ps of decisions relating to education, medical care and religious training and practice. This is almost the norm today. McCarty: FACTS: Court gave M sole physical custody but M and D joint legal custody. REASONING: Legal custody carries with it the right and obligation to make long range decisions involving education, religious training, discipline, medical care, and other matters of major significance 23 concerning C’s life and welfare. Joint legal custody means that both Ps have an equal voice in making those decisions, and neither P’s rights are superior to the other. Physical custody means the right and obligation to provide a home for C and to make the day-today decisions required during the time C is actually with P having such custody. Joint physical custody is in reality “shared” or “divided custody,” and need not be on a 50/50 basis. Generally, Ps should be willing to undertake joint custody or it shouldn’t be ordered. Rarely, if ever, should joint legal custody be awarded in the absence of a record of mature conduct on the part of Ps evidencing an ability to effectively communicate with each other concerning best interest of C, and then only when it’s possible to make a finding of a strong potential for such conduct in the future. A mere reluctance to participate in an arrangement isn’t tantamount to a refusal to participate and shouldn’t be given the same weight. NOTE: You take a risk by running down the other parent; emphasize your ability to cooperate. 2. Past Parental Caretaking Roles: a. Primary Caretaker Preference: few states have adopted this in place of best-interest standard. b. ALI Standard (a.k.a. Approximation Standard): Physical Custody: allocates physical custody in proportion to each P’s fulfillment of caretaking responsibilities prior to divorce. Legal Custody: creates a rebuttable presumption that Ps will share legal custody if both have been reasonably involved in rearing C. C. Rights of the Noncustodial P: Visitation Rights: Access by both Ps is strongly favored in the law and visitation will be granted unless the custodial P shows that visitation is likely to lead to some serious harm or detriment to C. Noncustodial P’s right to have access to his C is generally considered to be constitutionally grounded. The strong presumption favoring visitation can be overcome in dire situations (e.g., violence or threat of violence, drug addiction, sexual abuse, severe conflict between Ps, and refusal by C to cooperate). When C refuses to cooperate in visitation, some courts have found C in contempt, and other courts have terminated C support. But courts are generally reluctant to harm C by denying C support. Courts give much less weight to C’s preference as to visitation than as to custody. When custodial P tries to frustrate visitation rights, some courts have found P in contempt, transferred custody, reduced alimony or C support, or instituted “makeup visitation” days. Where noncustodial P doesn’t exercise visitation rights, some courts have found P in contempt, ordered compliance, imposed fines, or required counseling. But courts have generally declined to find such a duty. When custodial Ps try to restrict non-custodial Ps’ sexual activities during overnight visitation, courts generally are reluctant to intervene where heterosexual non-marital sexual activities are involved, unless it’s shown that P’s sexual activities are detrimental to C. Courts have been more willing to intervene in cases involving Ps in homosexual relationships. Increasingly courts are finding such restrictions impermissible unless was harmed. Generally courts give less weight to C’s preference in visitation issues than in custodial issues. Although most states continue to recognize parens patriae authority of courts to review custody agreements, evidence suggests that Ps’ custody agreements rarely are set aside, suggesting that courts view arrangements agreed upon by Ps to be more likely to be successful than those imposed by a court. ALI is strongly deferential toward parental custody agreements, directing courts to order custody on the basis of a knowing, voluntary custody agreement unless it’s harmful to C. Parenting Plans: plans Ps make for their children’s future with some specificity; typical plans include provisions for each P’s rights and responsibilities, schedule for living arrangements, and procedures for communication and dispute resolution between Ps. ALI requires all Ps seeking custody to submit parenting plans to the court. D. Modification of Custody: 24 1. Changed Circumstances: the general rule. Burchard: REASONING: The changed-circumstance rule isn’t a different test, but an adjunct to the best-interest test. When custody continues over a significant period, C’s need for continuity and stability assumes an increasingly important role. That need will often dictate the conclusion that maintenance of the current arrangement would be in C’s best interests. The traditional custody modification standard allows modification of an initial custody decree if the court determines that a subsequent, substantial change of circumstances warrants a change of custody in order to promote the best interests of C. As it’s usually described, the rule requires that the changed circumstances must have occurred since decree was entered and have been unanticipated by the parties. Remarriage (or marriage, in the case of unmarried Ps) of either the custodial or noncustodial P is sometimes viewed as a changed circumstance, but generally remarriage alone won’t warrant a change of custody. ALI follows this approach. 2. Relocation: Marriage of Lamusga: REASONING: As with any allegation that “changed circumstances” warrant a modification of an existing custody order, the noncustodial P has a substantial burden to show that some significant change in circumstances indicates that a different arrangement would be in C’s best interest. The paramount need for continuity and stability in custody arrangements weigh heavily in favor of maintaining ongoing custody arrangements. The likely consequences of a proposed change in the residence of C, when considered in the light of all relevant factors, may constitute a change of circumstances that warrants a change in custody, and the detriment to C’s relationship with the noncustodial P that will be caused by the proposed move, when considered in light of all the relevant factors, may warrant denying a request to change C’s residence or changing custody. Among the factors that court ordinarily should consider when deciding whether to modify a custody order in light of custodial P’s proposal to change C’s residence are the following: i. C’s interest in stability and continuity; ii. Distance of the move; iii. C’s age; iv. C’s relationship with both Ps; v. Relationship between Ps including, but not limited to, their ability to communicate and cooperate effectively and their willingness to put C’s interests above their individual interests; vi. C’s preferences, if mature enough for such an inquiry to be appropriate; vii. Reasons for the proposed move; and viii.Extent to which Ps currently are sharing custody. A threshold consideration in many relocation cases is the good faith of either the relocating custodial P or of the noncustodial P who is seeking to block C’s relocation. Whether relocation results in a change of primary custody, it usually will result in some modification of the custody arrangements. ALI treats relocations as a substantial changed circumstance when it impairs either P’s ability to continue to exercise custodial responsibilities. The court is then directed to modify the parenting plan in accordance with C’s best interests. However, where 1 P has had primary custodial responsibility, she will be allowed to relocate if she demonstrates a valid purpose and good faith, and the location is reasonable in light of the purpose. 25 ALI directs courts to recognize the following as valid purposes: i. To be closer to family; ii. To address health problems; iii. To protect C or other family members from harm; iv. To pursue educational or employment opportunities; v. To be with spouse of domestic partner; vi. To significantly improve family’s quality of life. Ps with joint physical custody are generally subject to a restrictive relocation rule. E. Parent—Non-P Disputes: 1. De Facto Ps: V.C.: FACTS: Lesbian couple separated after 1 of them had children. REASONING: De facto Parenthood (a.k.a. Psychological P): requires petitioner to prove all of the following: i. That the biological or adoptive P consented to, and fostered, petitioner’s formation and establishment of a P-like relationship with child; ii. That petitioner and C lived together in same household; iii. That petitioner assumed obligations of parenthood by taking significant responsibility for C’s care, education and development, including contributing towards C’s support, without expectation of financial compensation [petitioner’s contribution to C’s support need not be monetary]; and iv. That petitioner has been in a parental role for a length of time sufficient to have established with C a bonded, dependent relationship parental in nature. Once 3rd party has been determined to be psychological P to C, he stands in parity with the legal P. Custody and visitation issues between them are to be determined on a best-interest standard. Under ordinary circumstances when the evidence concerning C’s best interests (as between a legal P and psychological P) is in equipoise, custody will be awarded to the legal P. Visitation, however, will be the presumptive rule, as would be the case if 2 natural Ps were in conflict. Visitation rights are almost invariably granted to the noncustodial P. The denial of visitation rights should be invoked only where the granting of visitation will cause harm to the children or were it’s demonstrated that P is unfit. NOTES: Once you’re a psychological P, biological P can’t unilaterally absolve your rights as such. If you perform these services for money, then your not a de facto (a.k.a. psychological) P. Many states continue to apply the traditional rule, which holds that a P prevails against a non-P in a dispute over custody, unless P is shown to be unfit or to have abandoned his rights. In most jurisdictions, the parental preference is somewhat weaker, and can be set aside not only where P is unfit, but also on a showing that parental custody will cause substantial harm to C (i.e., not just C’s best interest). ALI says courts can allocate parental responsibility to an individual who has resided with C for a significant period and has performed many parenting functions without financial compensation. ALI emphasizes the acquiescence of the legal P to the development of P-C relationship between de facto P and C. ALI sets a minimum 2-year time period in which the individual must function in a parental role. 2. Grandparent Visitation: Troxel: REASONING: Due Process liberty interest at issue in this case—interest of Ps in the care, custody, and control of their children—is perhaps the oldest of the fundamental liberty interests recognized. 26 So long as P adequately cares for his children (i.e., is fit), there will normally be no reason for state to inject itself into private realm of the family to further question the ability of that P to make the best decisions concerning the rearing of that P’s children. P has fundamental constitutional right to make decisions concerning rearing of her own daughters. Due Process Clause doesn’t permit state to infringe on the fundamental right of Ps to make childrearing decisions simply because a state judge believes a “better” decision could be made. NOTES: The statute here wasn’t found to be unconstitutional on its face but only as applied in this case. There’s a presumption that fit Ps act in C’s best interests. Under ALI, grandparents would have standing to seek a portion of custodial responsibility only if they qualify as de facto Ps or Ps by estoppel—i.e., they must have resided with C and performed many parenting functions with P’s acquiescence. JURISDICTION TO RENDER INITIAL CUSTODY DECREE (UCCJEA & PKPA) Know: UCCJEA §§ 102(7), 201, 202, and 203. A court with § 201 jurisdiction might decline jurisdiction: i. Under § 206 if there’re “dueling proceedings” (apply a 1st in time rule). ii. Under § 207 for forum non conveniens; iii. Under § 208 for unclean hands (i.e., where there’s “unjustifiable conduct”). § 201(a)(1): Welch-Doden: REASONING: UCCJEA § 201 is the statutory starting place for determining initial jurisdiction. The UCCJEA prioritizes home state jurisdiction over any other jurisdictional provisions. UCCJEA completely eliminates determination of “best interests” of C from jurisdictional inquiry. § 201 allows consideration of other substantive factors only if no state qualifies as a “home state.” “Home state” for purposes of determining initial jurisdiction under § 201(a)(1) isn’t limited to the time period of “6 consecutive months immediately before the commencement of C custody proceeding.” Instead, the applicable time period to determine “home state” in such circumstances is “within 6 months before the commencement of C custody proceeding.” § 201(a)(2): The “significant connection” jurisdiction of UCCJEA § 201(a)(2) can be exercised only if there’s no home state or the home state has declined to exercise jurisdiction under § 207 (forum non conveniens) or § 208 (unclean hands). § 201(a)(3): Jurisdiction under UCCJEA § 201(a)(3) can’t be exercised unless all courts with home state or significant connection jurisdiction have deferred to the forum. § 201(a)(4): Jurisdiction under UCCJEA § 201(a)(4) can be exercised only if no courts have jurisdiction under any of the other 3 grounds. § 202: State that renders initial custody order retains CEJ unless nobody lives there anymore. While the UCCJEA and the PKPA both require states to defer to C’s home state in making an initial custody award, sometimes there’s no home state. The PKPA home state jurisdiction provisions extends jurisdiction for 6 months so long as a “contestant” remains in the home state. Indian C Welfare Act: provides for exclusive tribal court jurisdiction over adoptive or foster care placement of Indian children in certain classes of cases, but specifically excludes from its jurisdictional provisions an award, in a divorce proceeding, of custody to 1 of Ps. Substantively the Act’s provisions favor C’s extended family, other members of C’s tribe and other Indians. FIXING THE CONSEQUENCES OF DIVORCE BY AGREEMENT OF THE PARTIES A. Premarital Agreements (a.k.a. Antenuptial/Prenuptial Agreements): made before marriage. 27 1. Introduction: At a minimum a prenuptial agreement must be in writing. The usual rule is that an oral agreement otherwise barred by the Statute of Frauds may be enforceable if 1 of the parties has performed in reliance upon it. Terms concerning non-financial issues (e.g., custody arrangements or the conduct of the marriage) are typically not binding. The UPAA authorizes spouses to K about their rights with respect to the property of either or both of them whenever and wherever acquired or located. While spouses are in a fiduciary/confidential relationship, those just planning their marriage aren’t. But some states say that fiduciary obligations arise in premarital as well as marital agreements. 2. Procedural and Substantive Fairness: Button Standard: Prenuptial agreement must satisfy all of the following requirements: i. Fair and reasonable disclosure of each spouse’s financial status at time of execution of K; If it can be shown that spouse had independent knowledge of opposing spouse’s financial status, this serves as a substitute for disclosure. ii. Voluntary (i.e., meaningful choice) at time of execution of K; and Relevant Factors for Determining Voluntariness: a. Whether each party was represented by independent counsel. b. Whether each party had adequate time to review the agreement. c. Whether the parties understood the terms of the agreement and their effect. d. Whether the parties understood their financial rights in the absence of an agreement. iii. Substantive provisions of agreement are fair (as opposed to unconscionable) to each spouse as of time of execution. If there are changed circumstances, then must be fair as of time of divorce too. Under the Button standard, courts look to see if agreement is fair. [Most intrusive.] Gant: REASONING: We have no problem accepting that prenuptial agreements must be voluntarily and knowledgeably entered and validly procured, but we’re loath to apply a vague and entirely subjective standard of “fairness.” Burden of showing invalidity of prenuptial agreement is on the person who wants to invalidate it. The advice of independent counsel at the time parties enter into a prenuptial agreement isn’t a prerequisite to enforceability when the terms of the agreement are understandable to a reasonably intelligent adult, as long both parties had the opportunity to consult with independent counsel. UPAA Standard: Prenuptial agreement must satisfy the following requirements: i. Voluntary; and ii. Disclosure; or If there’s disclosure, it doesn’t matter that it’s unconscionable. iii. Not unconscionable [at time of execution of K (?)]. Under UPAA standard, courts look to see if agreement is unconscionable. [Least intrusive.] ALI Standard (§§ 7.04(3), 7.05): Prenuptial agreement must satisfy the following requirements: i. Informed consent without duress; ii. Reasonable disclosure; and iii. Not substantively unconscionable. Only look at substantive unconscionability if party resisting enforcement can show: a. More than [10] years have passed since executing K; b. C was born/adopted since executing K; or c. Unforeseeable change in circumstances since executing K. Party seeking to enforce the agreement has the burden of proof as to i. and ii., but there’s a rebuttable presumption that i. and ii. are satisfied if: 28 i. Executed at least 30 days before marriage; and Can’t be on the eve of the wedding. ii. Both were advised to obtain independent counsel and had reasonable opportunity to do so; or Party doesn’t have reasonable opportunity if can’t afford to pay counsel; to obtain the benefit of the presumption of validity, X would have to offer to pay for Y’s independent counsel. iii. Agreement is in plain English. B. Separation Agreements (a.k.a. Settlement Agreements): made once parties have decided to end marriage. 1. Achieving an Agreement: a. The Traditional Bargaining Process: i. Factors Influencing Whether Case is Settled: (1) W’s education, (2) time between separation and divorce, (3) home ownership, (4) H’s income, (5) presence of lawyers. ii. Factors Influencing Terms of a Settlement: Parties to a divorce are more likely than parties to a commercial dispute to have negotiating goals other than the maximization of financial gain. The law of most states requires some form of judicial review of separation agreements before they become incorporated in the divorce decree. b. Mediation as a Means of Achieving Agreement: Mediation; process in which an impartial 3rd party facilitates the resolution of a dispute by promoting voluntary agreement (or self-determination) by the parties to the dispute. In contrast to arbitration, where arbiter decides for the parties, in mediation the mediator facilitates dispute settlement by the parties. Collaborative Lawyering: under this practice, clients K with their lawyers solely to negotiate settlement in a divorce; by K, the lawyers won’t represent these clients in a later divorce, if needed. Here lawyers and clients work exclusively toward settlement. 2. Requirement that Divorce Settlements Be Judicially Approved: a. In General (ALI § 7.09): After reaching agreement on the terms of marital dissolution, divorcing spouses must still obtain a decree from divorce court. Ordinarily, divorce decree will reflect terms of parties’ agreement. Weber: FACTS: District court held property settlement agreement to be unconscionable. REASONING: The district court’s duty to make a just and proper distribution of property includes the authority to rewrite a property settlement agreement for mistake, duress, menace, fraud, undue influence, or unconscionability. Unconscionability: doctrine by which courts may deny K enforcement because of procedural abuses arising out of K formation, or because of substantive abuses relating to K terms. According to ALI, law should enforce separation agreements unless the rules of K, viewed in the context of family dissolution, have been violated, or the terms of the agreement would frustrate some important policy of the law of family dissolution. ALI requires approval of custody and C-support terms, which directly affect children, but concludes that routine review of the property or alimony portions of a separation agreement are usually unnecessary and are unlikely to provide meaningful oversight in any event. Existing law generally doesn’t put courts under any obligation to make unprompted investigations of agreements. Court’s failure to give an agreement meaningful review won’t normally provide a basis for later upsetting the decree which incorporates it. ALI accepts oral stipulations before court as creating binding K, but requires nonjudicial Ks to be in writing. When an agreement is challenged by a party before it has been incorporated into the decree, ALI would subject it to more searching scrutiny than commercial Ks receive. 29 In many states, any confidential relation between spouses may cease to exist once petition is filed, separation occurs, or attorneys are hired, depending upon the law of the particular state. An attorney may be held liable for negligently advising a client to settle. b. Special Rules to Govern Bargaining Over Children: Custody is frequently a bargaining chip in negotiations. It doesn’t appear that standards of professional conduct would bar an attorney from tactical assertions of custody claim intended to obtain some other benefit for the client. ALI says that a distinction between good-faith and bad-faith threats of litigation is unworkable. ALI calls for the court to reject C-support terms unless it determines that the agreement “as a whole” is consistent with the interests of C. 3. Where There’s Only 1 Attorney: a. Joint Representation (MRPC 1.7): In general, enforcement of the agreement can’t be resisted on the basis that a separation agreement was negotiated and executed by parties who are jointly assisted by a single attorney. The fact that each party retained the same attorney doesn’t alone provide basis for rescission. Even the written consent of both clients may be insufficient to permit joint representation in some cases. The lawyer must still reasonably believe that he can provide competent and diligent representation to both of the spouses. The risk of common representation is greater where the attorney has a preexisting relationship with 1 of the spouses. The attorney may not be able to maintain his obligation of confidentiality with respect to information gained in that prior representation without compromising his obligations to the other spouse. b. Where Only 1 Party Is Represented: The MRPC prohibits a lawyer from saying or implying that he is “disinterested,” and requires the lawyer to correct any misunderstandings the unrepresented party may have as to the lawyer’s role. 4. The Impact of the Decree on the Agreement: Of Merger & Modification (ALI § 7.10): The parties’ agreement is normally but a prelude to the divorce decree that incorporates its terms. The usual result is that the agreement is merged into the decree once it has been issued. 1 effect of merger is that the agreement no longer has independent status as a K, and K actions to enforce it therefore become unavailable. The K terms are instead enforceable as terms of the decree. One basis for upsetting a decree already entered is fraud. The traditional rule requires extrinsic fraud to set aside a judgment, but some courts don’t require this. But even with claims of fraud, statutes of limitation may bar later attack on the judgment. Fraud is extrinsic where the defrauded party was deprived of the opportunity to present his claim or defense to the court. Fraud is intrinsic if a party has been given notice of the action and has not been prevented from participating therein, but unreasonably neglected to do so. Some courts treat K-based decrees as more easily modifiable than court-ordered custody decrees. 5. Limitations on the Subject or Terms of Separation Agreements: a. Children: Typical rules exclude terms providing for the support, custody, and visitation of children from the rule that otherwise makes provisions of a separation agreement binding on the court unless it finds them unconscionable. ALI says court should order the custody terms agreed upon by Ps unless the agreement isn’t knowing or voluntary, or would be harmful to C. b. Arbitration Clauses: Parties may provide in their settlement agreement for arbitration of disputes that may arise under it, or of petitions for its modification. These agreements are likely to be accepted today, but some courts still refuse to enforce arbitration awards concerning C custody. c. No-Modification Clauses: The states vary on their enforcement of these clauses regarding alimony. NONMARITAL COHABITATION 30 A. K-Based Remedies: Marvin: REASONING: The courts should enforce express Ks between nonmarital partners except to the extent that the K is explicitly founded on the consideration of meretricious sexual services. In absence of express K, courts should inquire into the conduct of the parties to determine whether that conduct demonstrates an implied K. The courts may also employ the doctrine of quantum meruit, or equitable remedies such as constructive trusts, when warranted by the facts of the case. K between nonmarital partners is unenforceable only to the extent that it explicitly rests upon the immoral and illicit consideration of meretricious sexual services. As long as K doesn’t rest upon illicit meretricious consideration, the parties may order their economic affairs as they choose, and no policy precludes courts from enforcing such Ks. NOTES: This is more like the majority view, except maybe for the equitable-relief prong. Marvin says you’re fine as long as you don’t mention sex in the K. Marvin doesn’t create a marriage-like status between nonmarital cohabitants, nor does it enable the parties to create such a status for themselves; it does, however, allow nonmarital cohabitants to agree on certain financial implications arising out of their relationship. Cohabitation Analysis: Can you show an: i. Express K? (May be either oral or written.) Some states say Statute of Frauds applies, so it has to be in writing. Most states are willing to enforce oral-express Ks, but П must prove K exists. ii. K implied in fact? (Like when you put money in bus meter but don’t say anything.) iii. K implied in law? Most states (except IL, GA, and LA) will, in principle, recognize express or implied-in-fact Ks, and claims grounded in equity. Most courts say cohabitation agreements between same-sex partners are enforceable on same basis as those between heterosexual partners. Hewitt: REASONING: The situation alleged here wasn’t the kind of arms-length bargain envisioned by traditional K principles, but an intimate arrangement of a fundamentally different kind. The question whether change is needed in the law governing the rights of parties in this area is best suited to the superior investigative and fact-finding facilities of the legislative branch. This also appears to practically rehabilitate the doctrine of common-law marriage. NOTES: This is basically the hard-line minority view. B. The Status Alternative to K Remedies (ALI § 6.03): ALI doesn’t require as a predicate to finding the existence of a domestic partnerships, that parties had an implied or express K, or even that facts meet the standard requirements of a quantum meruit claim; instead ALI relies on a status classification. Under ALI, “domestic partners” are treated almost identically to married couples with respect to property claims at dissolution, and claims for post-dissolution income transfers. ALI permits domestic partners to enter into Ks before or during their relationship to alter usual property or support rules. ALI’s recommendations apply equally to opposite-sex and same-sex couples. ALI confers marriage-like rights on parties that have designated status of “domestic partners.” There’s presumption that you’re domestic partner if you share common household for certain period. 31