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Husband Who Lost Lion’s Share of Assets in Divorce Misses Deadline for Appeal by One Day

Talk about being a day late and a dollar short!  In Michael Farren’s 2010 divorce, the trial court found  that Mr. Farren had destroyed his substantial earning capacity by physically attacking his wife and ordered that 75% of the marital assets be awarded to her.

Unhappy with the outcome, Mr. Farren filed a post judgment motion with the trial court on the 20th day after judgment –just under the  wire to preserve his right to appeal the decision.  But there was a problem.  After initially stamping the motion “FILED”, the clerk noticed that Mr. Farren had forgotten to pay the required filing fee for a post judgment motion and faxed the motion back to him.  Mr Farren paid the fee and re-filed the motion the following day but the trial court refused to hear the motion because of the late filing.

After an appeals process that has taken almost three years,  the Connecticut Appellate Court in a decision released  this morning denied his appeal, agreeing with the trail court that one day late is still late.

That wasn’t the only fatal mistake Mr. Farren made regarding the rules of procedure.  The rules required that he file a memorandum of law together with his motion. He hadn’t.  Ms. Farren moved to dismiss the motion and won.  Mr. Farren argued that because he  had corrected the oversight by filing a memorandum after the fact, no harm had been done.  The trial court was not persuaded.   Again, the Appellate  Court agreed with the trial court that rules are rules and strict enforcement of them can never be error.

It is not possible to tell from the decision whether Mr. Farren was representing himself at trial. He appeared pro se in Appellate court but was joined by counsel on the brief.  In a way it doesn’t matter whether the deadlines were missed by a pro se individual or by his lawyer.  The result was the same.

Mr.  Farren may never have  been able to alter the division of assets in his divorce case had be been allowed to bring his appeal on the merits, but he didn’t get the chance.  This was an appeal restricted to issues of procedure.

The role of the Appellate Court in situations like this is not to substitute its judgment for that of the trial judge, but just to determine whether the trial judge committed clear error or an abuse of his or her considerable discretion.  In this case, all the trial judge had done was enforce the rules of court.

Lawyers often speak among themselves about the difference between deadlines and “drop-deadlines.”  In this case, at least for Mr. Farren, failing to file his post-judgment motion within the 20 day appeal period was a drop-deadline — a lesson that took  three years to hit home.  Appeals are long, arduous, and costly and in the case of family law, not often successful.

In this era of increasing pro se litigation, it is important to understand that courts are not necessarily willing to bend the rules depending on the experience or lack thereof of those who appear before them.

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Home Ownership – Breaking Up Can Be Harder for Unmarried Couples

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In a decision  released this week, the Connecticut Appellate Court upheld a ruling by the trial court that the court did not have authority to allow one member of an unmarried couple to buy out the other in order to separate their interests in a jointly held home — a solution routinely applied in divorce cases.

Dean Fusco and Robbin Austin had been in an almost 40 year relationship and for many years had shared a home that they had purchased together.  When they broke up, Dean moved out of the home they had owned together for about 23 years and Robbin remained in the house but ultimately, like many estranged couples, they were unable to see eye-to-eye on a fair way of dividing their possessions including the equity in their house.

Since they were not married,  Dean and Robbin could not take advantage of the relatively short process of  divorce which typically takes between 5 and 12 months to accomplish except in the most hotly contested cases. Instead, they were relegated to the ordinary civil docket which often moves even more slowly.  In order to receive his share of equity in the house, Dean had to file an action for partition — a procedure designed to separate joint ownership in real estate.

Not only is the procedure more cumbersome and, in most cases, more drawn out than divorce litigation, the remedies available are also limited.

Because Robbin was living in the home and wanted to remain there, she asked the court simply to determine what the house was worth and to award Dean his share based on the evidence of what he had contributed over the years both financially and in labor and management.  That was, after all, what any divorce court could do and probably would if the parties were already separated.

The court said no.  Historically, partition in Connecticut can have only two results. One is called ‘partition in kind’ .  That means the property is literally divided up and each party walks away owning his or her part of the whole.  That may work fine with open land or a farm, but can hardly work in a single family home.

The other option is ‘partition by sale’.  This is used when the nature of the property doesn’t lend itself to a line drawn in the sand.  So, because this was a single family home, that is what the court ordered.

Robin, who didn’t want her house sold, appealed the trial court’s  decision.

There is a statute she pointed to that does allow the court to order one party the option of  buying out the other even when they are not married and must go the partition route.

The statute did not apply here.  The problem, according to the Appellate Court who denied the appeal, was that this third option only applies in a small class of cases in which the party to be bought out has an interest deemed to be “minimal”.

Even though Dean had contributed less than Robbin financially, he had worked on the house over the years and the trial court had not considered his interest  to be minimal.

The lesson of this case is not that anyone considering buying a house with a significant other outside of marriage or civil union should marry.  The lesson is  that partners in real estate purchases, whether or not they are in love, need to have a clear written agreement about how their interests will be determined in the event that their partnership some day ends.


Alimony Order Against Unemployed Lawyer Overturned

In a decision to be released next week, Keller vs. Keller,  the Connecticut Appellate Court has overturned a hefty order of alimony and support entered by a Superior Court judge.

The Defendant husband held a law degree from Columbia University and was licensed to practice in two states.  After a brief practice, he had gone into finance and most recently had owned a hedge fund that had , at first, done very well but had later turned sour. At the time the order entered, the fund was closed. The evidence showed that  Attorney Keller had no income and the family was living on borrowed money and the last of their liquid assets.

In Connecticut and elsewhere, judges may make orders of alimony and support based on a finding that the payor has earning capacity even if he or she is unemployed or underemployed.  Tn the Keller case, the judge did just that, finding that Attorney Keller had a gross earning capacity of $25,000 per month.  Based on that finding, the court ordered him to pay combined alimony and support of $9,000 per month during the pendency of the case.

The Appellate Court overturned the order, not because the lower court did not have discretion to consider earning capacity but because the court failed make a finding as to Attorney Keller’s net earning capacity.   Under Connecticut law, orders of alimony and support must be based on net income whether that income is real or merely imputed.

The lesson for litigants hoping to obtain orders against their unemployed or underemployed spouse is to present evidence specifically on the subject of what they believe their spouse could earn after taxes.


ALIMONY IN CONNECTICUT — ARE EARNINGS AND EARNING CAPACITY THE SAME THING IN A BAD ECONOMY?

A new Connecticut Appellate Court case provides us with a window into what  may be a shift in judicial attitudes on the issue of whether to look at earning capacity vs. actual or reported earnings in alimony and support cases.

In 2009 when Sandy and Scott McRae — both small business owners — were divorced, the trial court entered an alimony award based not on  the couple’s respective financial affidavits, but instead on what the court estimated their real earning capacities to be — a higher number for both  husband and wife.  Based on those assumptions, the court entered an order that, in theory at least, equalized their incomes.

Mr. McRae wasted no time petitioning the court to reduce the award.  On his third attempt in 2011, he finally met with success. Judge  Trial Referee  Herbert Berall reduced Mr. McRae’s weekly alimony obligation from $250 to $150 per week. Better still, from Mr. McRae’s point of view, the court allowed one half of that amount, $75 per week, to be treated as payments toward a substantial arrearage Mr. McRae had accumulated by unilaterally reducing his alimony payments without the benefit of a court order.  At that rate,  Mr. McRae’s arrearage would not be fully paid for approximately 7 years and, meanwhile,  even the remaining $75 — the new current order — would drop  away before long under the terms of the original decree.

Sandy McRae appealed the order on a number of grounds.  The question that interests us the most was whether the court erred by comparing apples to oranges — 2009 earning capacity to 2011 reported earnings.   The court made it clear on the record that it  considering Mr. McRae’s financial affidavit and tax returns in deciding whether to modify the  2009 alimony rather than looking beyond  those numbers as the first court had done to consider, instead, Mr. McRae’s earning capacity.

The point is a technical but important one.  Under Connecticut law and the law of most other states as well, courts cannot modify alimony without first finding, as a matter of fact, that there has been a substantial change in the financial circumstances of one or both of the parties.  There were two sides to Ms. McRae’s argument.  If the trial judge had looked at earning capacity rather than his actual reported earnings, then the judge hearing the motion for modification should have done the same thing.

Conversely, she argued, if the  court was considering Mr. McRae’s reported income in 2011, it should compare  it, not with his 2009 earning capacity, but with what he had reported his real earnings to be in 2009 — about  the same number he reported in 2011.   Effectively, her argument was that if the court had compared apples to apples — reported earnings with reported earnings — it should not have modified her alimony because Mr. McRae was reporting about the same level of income in 2011 that  he had reported in 2009.

The appellate court disagreed even though the judge who modified the  order clearly said that he was basing the new order on Mr. McRae’s financial affidavit and recent tax returns.   The judge said this about the 2009 finding that Mr. McRae had higher earning capacity than his real earnings suggested:  ” Well reality set in … [s]o much for predictions.  I will tell you, this court, certainly in the last year and a half, has made no decisions finding people’s earning capacity.”

The appellate court rejected Ms. McRae’s arguments finding essentially that the modifying judge based his decision on an assumption that Mr. McRae’s earnings and earning capacity were one and the same so the order was still based on a comparison between past and present earning capacity.  This despite the lower court judge’s own words.

So what does all this mean?  In part that depends on how many other judges agree that lower incomes are more likely to be the result of economic reality than of divorce game-playing.  The case-law in Connecticut makes it clear that courts have the right to consider a person’s earning capacity if  they believe that the individual is under-employed.  We often encounter clients who insist that their spouses are deliberately under-reporting income or keeping his or her earnings artificially low in order to achieve better results in divorce court.  Now it seems, convincing the court of  that may be harder  in a bad economy than it has been in years past.

This does not mean that earning capacity is lost as a concept in divorce law, but it does mean that the standards of assembling proof, including the use of expert witnesses where appropriate, are higher than ever.


WHO PAYS THE PRICE WHEN EX-SPOUSES CAN’T — OR WON’T — CO-PARENT THEIR CHILDREN?

We see it all the time — divorced or divorcing parents who see every compromise on issues of visitation or custody as a loss and who return to the courts time and again to settle everyday disputes.

In a case to be released next week, Lori Hibbard vs. Tony Hibbard,  the Connecticut Appellate Court upheld the decision of a trial court to pick a side in such a case, and to do so in a big way.

The couple divorced in 2007 returning in less than a year with disputes about money and visitation.  In the next 4 years, the parties filed a total of 30 post-judgment motions between them.  According to the appeals court, the disputes increasingly involved access to their daughter –only two years old at the time of the divorce.

Initially, it appears from the decision that the plaintiff mother had a fair amount of success managing to limit the defendant father’s access more and more.  At various points, this even involved requiring that visits be supervised and that overnight visits be suspended.

By the time they returned to court to litigate their last set of four motions — two filed by each party– visitation by the father had been whittled to one weekday afternoon and two 7-hour weekend visits every other week together with some specified holidays and birthdays.

The mother’s two motions sought further restrictions on the father’s access, the father, for his part, asked that the mother be held in contempt of court for failing to allow him several scheduled visits and –more importantly –asked that custody of their child be granted to him.

The mother defended against the contempt motion claiming that although she had not allowed the visits it was because her daughter had reported being touched inappropriately by a friend of the father during an earlier visit.

The trial court did not find the mother’s  claim to be credible noting in a detailed 20-page decision that, in the past, the mother had made various other unrelated claims that had not been substantiated by investigators or by the child’s therapist.  She had argued that the child was afraid of her father, but again was not backed up the child’s therapist.  The judge further noted that the mother had terminated therapy for the child when the therapist asked to meet with the father and had terminated longstanding daycare arrangements after a worker shared information about the child with the father’s current wife.

Concluding that the mother’s strategy was to eliminate the father from their child’s life, the judge awarded sole custody to the father, granting the mother visitation rights.  Considering that she had originally been awarded custody and had historically succeeded, at least  to some extent, in controlling the father’s access, it is a fair guess that this was an unexpectd result.

The mother appealed  and lost.

In this blog, we have commented before about  the toll  that contentious and protracted custody and visitation litigation takes on families, and especially on children.  The adverse effects of serious and prolonged  parental wrangling on children — not just while it is happening but well into adulthood — has been amply documented.

For most families, the financial toll taken by the cost of serial court appearances makes a difference in the quality of life of the entire family and colors the attitudes of the adults towards each other.  This, in turn, makes it even less likely that the children who are at least the official subject of the fighting, can enjoy a carefree, guilt-free and happy childhood.

We do not claim to be in position to judge  or evaluate the merits of Ms. Hibbard’s attacks on Mr. Hibbard’s parenting.  What we can say, however, from many years of experience, is that once custody and visitation issues have been  addressed and decided  — whether  by  agreement  or  by trial — future efforts to change the deal become subject to increasing skepticism. As lawyers, we must always respect the obligation of parent’s to do what they believe to be in the best interest of their children. At the same time, however, we must always counsel our clients — as the experienced lawyers in this case no doubt did — to consider at every step, whether they are motivated by genuine concern for their children or by relationship issues between the adults.  At a minimum, they should be made aware that this will be a question that the court will consider in every instance.


NEW CONNECTICUT APPELLATE COURT FAMILY CASE ILLUSTRATES PERILS OF DIY APPEAL

After more than 20 years of marriage that ended in divorce in 2003, Connecticut resident Peter Larson seems to have been no stranger to the courts.  When he returned to court in 2010 to seek a reduction of child support and alimony orders, he had two previous efforts at modification under his belt and  probably felt confident that he would win his pro se bid for relief.  After all, his income had gone from about $85,000 in 2003  to about $21,000 and he was unemployed.

And, in fact, he did come away with some degree of success without the help of a lawyer. The trial court recalculated his child support dropping it from its original level of $347 per week to $115 per week. In addition the court reduced his alimony order to $1 per year — not a permanent victory on the alimony front, but still an important win.

Unfortunately, Mr.Larson’s former wife, Matilde, did hire a lawyer who filed a  counter-motion for contempt seeking past due child support and attorney’s fees.  Ultimately, although he received a break in his current orders, Mr. Larson was also ordered to pay almost $100,000 in past-due support and was also ordered to pay almost $27,000 in attorney’s fees.

In a per curiam decision of the Connecticut Appellate Court scheduled for release next week, the Court upheld the trial court’s action.

As he had at the trial court level, Mr. Larson represented himself on appeal. His arguments of error were;

  • The trial court hadn’t reduced child support enough
  • The trial court should not have found him in contempt of prior orders
  • The order of attorneys fees was excessive because the fees were unreasonable

The Court’s response to these claims makes it clear that Mr. Larson would have benefitted from consulting with a lawyer before filing his motion and, later, before filing his appeal.  First, the court stressed the enormous discretion accorded to trial courts by appeals courts in family matters.  It is never enough on appeal that the appellate judges might have decided the case differently.  This means that strategic errors at the trail level can rarely be corrected on appeal.

Second,  Mr Larson would have been cautioned that, because he was not fully in compliance with existing orders,  he should have expected a counter-offense if he chose to seek a modification.  Based on the amount of the arrearage that the court found, it is clear that his former wife had tolerated his non-compliance for a very long time up to the point that he made the first move in 2010.    To the extent that Mr. Larson thought his current financial situation would — or even could — protect him from being held in contempt for falling behind, he was  mistaken and any experienced lawyer would have made that clear to him.

Third, he would have been advised that law that requires courts to consider the respective finances of the parties when allocating responsibility for attorneys fees in divorce cases, does not apply in enforcement proceedings where there has been a finding of willful contempt.  In such cases, attorney’s fees can be shifted to the party who failed to obey a court order as a simple matter of punishment.

While Larson complained that he had not been given a fair chance to challenge the reasonableness of the fees, the appellate court noted that, not only had the trial court afforded him the opportunity to do that, but  had actually scheduled a separate hearing for that very purpose.  Although Larson attended the hearing he did not, according to the court, present any evidence on the subject.  It is not unusual for inexperienced litigants to expect the trial judge to take the lead in a factual inquiry.

In a 201o op-ed piece published in the New York Times entitled “A Nation of Do-It-Yourself Lawyers”  John T Broadrick, chief justice of New Hampshire, and Ronald M. George, chief justice of California, stressed the disadvantages faced by litigants who, for financial reasons, feel compelled to go it alone.  The authors urged members of the bar to step up to help mitigate the problem by offering so-called unbundled legal services so that litigants who could not afford comprehensive representation could nonetheless receive limited assistance in the form of consultation, coaching, and help with document preparation.

What many do not understand is that limited representation can be a minefield for lawyers since the rules in many states do not adequately protect them.  We cannot reasonably expect lawyers who would otherwise be willing to play a supporting role in a lawsuit, to risk taking responsibility for the final outcome of litigation they do not fully control or to be required to provide additional or even comprehensive services without remuneration.

Still, in every community there are lawyers who recognize the problem and who are willing to address it as long as roles are clearly defined and the expectations are clear.  When the stakes are high, it makes sense to seek them out.


TRUTH OR CONSEQUENCES IN DIVORCE COURT – HOW NOT TO COMPOUND MISTAKES MADE DURING MARRIAGE

A recent decision of  the Connecticut Appellate Court in the case of Felicia Pierot Brody vs. Cary Brody illustrates what can happen when the focus of a divorce case shifts from the issues in the marriage to the credibility, or lack thereof, of one of the parties to the case.  In the Brody case, one thing that happened was that a lot of personal information became public – e.g., the husband’s awkward excuse for stashing condoms in his travel bag.  Another consequence: Brody was ordered to pay $2.5 million in lump sum alimony even though his prenuptial agreement was meant to prevent that and even though the court  was unable to ascertain his income.  The trial took place in 2010. Recently the Appellate Court has ruled against Brody on all six issues he raised in his appeal.

For all most of us know, Mr. Brody might have told the truth from start to finish. However, the judge found him not to be credible which, as the finder of fact in a civil case, she was privileged to do.

Any judge will tell you that the best way to appear to be truthful is simply to tell the truth.  Still, any divorce lawyer who’s practiced as long as I  have, has encountered more than one client who is shocked to learn that their lawyer expects them to be honest.

What kind of  lawyer wouldn’t help you hide your assets, understate your income or cover up your extramarital affairs?  The answer:  any good one.  Yet, despite our best efforts, there are plenty of folks who remain unconvinced that honesty is the best policy even when the truth isn’t pretty.

The fact is, there isn’t much that happens in a marriage that the judge hasn’t heard before.  Also, there can be two very different sides to every story even when the story is told by honest people.  Your secret spending or infidelity might have led to enormous drama in your household, but in divorce court, might barely cause a ripple.  Unless, that is, you  deny the deed and the judge isn’t buying it.

Brody was not a divorce between members of the 99% although the basic issues were fairly universal. There was an issue of   irresponsible spending — in this case  buying  one too many Ferrari automobiles , a  wine cellar, and an airplane.  There was an issue of suspected infidelity with no proof other than a few unused condoms.  There was a business purportedly in decline — in this case the Defendant’s hedge fund.  There were some  “he-said-she-said” claims of verbal abuse.  All matters divorce judges deal with day in and day out.

No case in Connecticut goes to trial without first going through at least one formal attempt at settlement usually with the assistance of a judge or court-appointed Special Master.   Most cases settle before trial.  Of the small percentage that do not, only a handful are appealed and those few find little success in overturning the decision of the trial judge.

In this case, the Defendant raised a number of issues that might have served him well during settlement  negotiations.  His business really had been embroiled in litigation with the SEC, for example,  and the prenuptial agreement arguably  offered him protection from a lump sum alimony award that would have to be funded by liquidating personal assets.

At trial, however, the judge found him not to be a credible witness.  For one thing, he had admitted testifying falsely under oath in an earlier divorce proceeding that his wife had commenced but later dropped.  Back then he had denied removing his wife’s jewelery from a safe, but had later come clean.   Added to that was the finding that the Defendant had stonewalled during the discovery phase of the trial  pretending that certain documents sought by the Plaintiff didn’t exist.  With those two strikes against him,  the case was pretty much over.  The Plaintiff, whose  personal net worth at the time of the marriage had been 29 million, and whose dividend income from her separate property was approximately $100,000 annually was awarded alimony and, tacitly, the designation of honest litigant.