Class 7 Case Briefs- Family Law

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Jan 9, 2024

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Class 7 Case Briefs Wolfe v. Wolfe (2012): Facts Douglas Wolfe (plaintiff) and Gillian Wolfe (defendant) married in 1975. After having children, Gillian stopped working as a nurse practitioner and ran the family farm. When Douglas opened an ophthalmology practice, Gillian managed it but did not draw a salary so the couple could claim tax benefits. The couple made financial decisions jointly based on what was best for the family. Douglas had what he called “separate money” in a trust from his grandfather and two accounts that investment advisors managed. Douglas withdrew money to buy the farm and maximize the couple’s retirement contributions but never deposited salary into the investment accounts. Douglas canceled his life insurance because he knew his wife and children would get the trust assets if he died. When the couple separated in 2006, their joint assets totaled $5 million, and the trust totaled $10.3 million. The court split the joint assets equally but awarded all the trust assets to Douglas. Gillian appealed. Issues May equitable factors such as a long- term marriage and making financial decisions jointly warrant dividing a marital asset between spouses even if only one spouse contributed to its acquisition? Rules Equitable factors such as a long-term marriage and making financial decisions jointly may warrant dividing a marital asset between spouses even if only one spouse contributed to its acquisition. Holding Yes. Oregon law presumes that both spouses contributed equally to assets acquired during marriage. Rationale If one spouse effectively rebuts that

presumption by showing the other spouse did not contribute to acquiring an asset, the court must decide how to distribute the asset fairly under the circumstances. Factors considered include ensuring that spouses leave a long-term marriage on equal footing and whether spouses commingled separate property into joint financial affairs. Here, the amount that Douglas’s separate assets appreciated during the marriage is a marital asset, so the presumption that both spouses contributed equally to it applies. However, Douglas successfully rebutted that presumption by showing neither spouse contributed to or actively managed the trust assets. The long-term marriage and Douglas’s commingling trust assets with the couple’s joint financial affairs nonetheless support an equalizing distribution to Gillian. The couple made financial decisions jointly based on what was best for the whole family, and the trust assets influenced those decisions. Douglas treated the trust assets as available to the whole family by using the money to buy the farm, to maximize the couple’s retirement contributions, and as a substitute for life insurance. Therefore, the court modifies the judgment to award Gillian an additional $2 million. Marital Property Property acquired by either spouse from the marriage date until the time of separation. In a majority of states, marital property is the only property subject to equitable distribution if the parties divorce. Equitable Distribution The fair but not necessarily equal division of marital property in a divorce proceeding. Separate Property Property acquired by one spouse before marriage or by gift or inheritance, in which the other spouse has no ownership interest. Property acquired by one spouse

after the date of commencement of a divorce action is also considered separate property. Mennen v. Mennen (2019): Facts Issues Rules Holding Rationale Howard v. Howard (2011): Facts Shane Howard (plaintiff) and Sondra Howard dissolved their marriage and under the divorce decree, Shane was required to pay, among other things, the couple’s car loan. In a separate proceeding, Shane was granted Chapter 7 bankruptcy, discharging his debts. Subsequently, Shane filed an action seeking to reduce his payments under the divorce decree, in part due to the bankruptcy. Sondra, who had been contacted by collection agencies on account of the outstanding car loan, filed a motion to have Shane held in contempt of court for failure to pay down the debt on the car. The trial court granted the motion and the court of appeals affirmed. Shane appealed on the grounds that his bankruptcy discharged car loan debt. Issues Is an obligation to one’s present or former spouse under a divorce decree to make

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payments on a third party debt dischargeable in Chapter 7 bankruptcy? Rules An obligation to one’s present or former spouse under a divorce decree to make payments on a third party debt is not dischargeable in Chapter 7 bankruptcy. Holding No. Even though obligations to third party creditors are generally dischargeable in bankruptcy, an obligation to one’s present or former spouse under a divorce decree to make payments on a third party debt is not dischargeable in Chapter 7 bankruptcy. Rationale Under Chapter 7 bankruptcy, there are certain exceptions to the bankrupt party’s debt being discharged, and one of those is “for a domestic support obligation.” This exception does not require that the obligation be directly to a spouse, former spouse, or child. In the present case, Shane’s obligation to pay the couple’s car loan was not discharged in his Chapter 7 bankruptcy. The obligation was to a third party creditor, but it was an obligation to Sondra as well under their divorce decree. It is irrelevant that Sondra took no action during the bankruptcy proceedings; her rights to enforce the divorce decree still are reserved. Shane is required to continue to pay the car loan. The lower courts finding Shane in contempt of court for failure to pay the loan are affirmed. Divorce Decree A judicial decision or order in a divorce proceeding. Discharge in Bankruptcy A bankrupt debtor’s release from the obligation to pay a debt incurred prior to bankruptcy. Bender v. Bender (2001):

Facts Mr. Bender (defendant) was a firefighter employed by the city of Meridien for more than 19 years, during which time he was married to Mrs. Bender (plaintiff). The marriage deteriorated, in large part because of Mr. Bender’s neglect of his family, adultery, occasional violence, and personal expenditures. Despite Mr. Bender’s strong earnings, the Benders had no significant assets or savings when they divorced. Mr. Bender did have, however, unvested pension benefits that would vest in six years if he continued to work as a firefighter. The trial court granted a divorce to the Benders and awarded Mrs. Bender one-half of Mr. Bender’s future benefits. Mr. Bender appealed. Issues Are a spouse’s unvested pension benefits subject to equitable distribution in divorce? Rules Under Connecticut law, unvested pension benefits are subject to equitable distribution in a divorce where the benefits are sufficiently concrete and their eventual realization is justified and reasonable. Holding Yes. Connecticut law provides for equitable distribution of property upon divorce, but it does not define property. Rationale In recognition of marriage as a joint enterprise the fruits of which are distributable upon dissolution, trial courts have authority to handle matters of property division broadly. In Krafick v. Krafick, 663 A.2d 365 (1995), this court held that vested pension benefits constitute currently existing property interests that are subject to equitable distribution. The Krafick court contrasted vested benefits with mere expectancies, which would not be subject to distribution because of their speculative nature. In

accordance with that distinction, where the expectation of a property interest is overly speculative, it should not be treated as property subject to distribution. Where an expected interest is sufficiently concrete, however, and where its eventual realization is justified and reasonable, the expected interest may be characterized as property subject to distribution. Here, Mr. Bender’s future pension benefits fall into that category. While it is theoretically possible that the benefits will not vest and while it is not clear what their precise value will be, those issues can be dealt with at the time of valuation and distribution. In consideration of the equitable objectives of Connecticut divorce law, the court also takes into account that the 19 years during which Mr. Bender’s benefits have been accruing have been years in which the parties were married. In terms of valuing and distributing future benefits, the trial court has two options. First, it may determine the present value of the future benefits and then offset the allocation made to the employee spouse by such value. This method has the benefit of providing finality. Its weakness is that it fixes a value that might be vastly inaccurate or never come to exist if the future benefits fail to mature. Alternatively, the court may assign a percentage of future benefits to the nonemployee spouse with the monetary value to be determined upon maturity. In accordance with the foregoing, the decision below is affirmed. Dissent (Zarella, J.) The majority opinion redefines property in disregard of precedent and the role of the legislature. The evaluation of whether an interest is subject to equitable distribution should, first, classify the interest as distributable property or not, then determine whether it can be valued and

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what such value is. Here, the court collapsed phases one and two. Based on the determination that unvested pension benefits can be valued, the court reasons that they are therefore property. Instead, the court should have relied on existing precedent, under which the nonemployee spouse could seek a share of the pension benefits after they vested, on the basis of changed circumstances. Vested interest An interest that is realized immediately upon the happening of an event that is certain. Equitable Distribution The fair but not necessarily equal division of marital property in a divorce proceeding. In Re Marriage of Roberts (1996): Facts When Matthew Roberts (plaintiff) and Leigh Anne Roberts (defendant) married in June 1989, Mr. Roberts worked for a bank. The following year, the couple agreed that Mr. Roberts would enter law school full-time while Mrs. Roberts supported them financially and assumed all household responsibilities. The couple separated two months before Mr. Roberts’ graduation, at which point Mrs. Roberts was pregnant. Mr. Roberts obtained a position at a large law firm in Chicago. He filed for divorce in August 1993. The trial court ruled that Mr. Roberts’ law degree was not a marital asset but that his student loans were a marital liability. Mr. Roberts was assigned full responsibility for repayment of his loans. After an allocation of the couple’s gross assets and liabilities, Mr. Roberts was left with a net liability of $2,415.04 and Mrs. Roberts with net assets of $25,534.98. Mrs. Roberts appealed.

Issues If a wife supports her husband financially while he earns a law degree, is the degree—or the husband’s future earnings therefrom—a marital asset? Rules Under Indiana law, a degree earned during marriage—and the expected future earnings therefrom—is not a marital asset but may be considered as a factor in the court’s distribution of marital property. Holding No. Under Indiana law, a degree is not property. It lacks the concreteness that characterizes property and its value is uncertain. Rationale Future earnings are also not property because there is no vested interest in such earnings. The only statutory exception to the rule against treating a degree as property is a provision permitting a spouse to be reimbursed for educational expenses paid toward the other’s higher education. Student loans, on the other hand, are appropriately treated as a marital liability where they are contracted for during the marriage. Mrs. Roberts has no reason to challenge the loans in this case since their repayment was allocated entirely to Mr. Roberts, notwithstanding their characterization as a marital liability. Despite the prohibition against treating a degree as property, the court may consider such degree when dividing the marital estate. Here, the trial court’s decision regarding the assets and liabilities of Mr. and Mrs. Roberts was appropriate. The judgment is affirmed.

Class 7 Case Briefs- Family Law

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