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State Farm Life & Assurance Co. v. Goecks, F. Supp. 3d       , 2016 WL 1715205 (W.D. Wis. 2016)

Facts: A Wisconsin divorce decree provided:

The respondent [Gary] shall be required to maintain the petitioner [Sharon] as the primary, irrevocable beneficiary on one third of the face value of all his life insurance policies in effect as of the date of the final hearing or in the amount of Seventy Five Thousand Dollars ($75,000) of the face value of said policies, whichever sum is greater. Respondent shall provide the petitioner proof of said insurance and beneficiary designations. Petitioner shall pay the respondent the sum of Twenty Five Dollars ($25.00) per month toward the cost of said insurance. The parties further agree to designate the children as primary beneficiaries of all life insurance policies except as set forth above.  2016 WL 1715205, at *1. The divorce decree was not submitted to the employer for qualification as a QDRO.

The husband initially complied with the above provision, but later changed the beneficiary on some of his life insurance to his new wife. Upon his death, the insurers paid some of the benefits to the new wife, and interpleaded the remainder. Both wives asserted competing claims to the proceeds.

Of the various insurance policies at issue, one was an employer-provided policy regulated by ERISA.

Issue: Who is entitled to the proceeds from the employer-provided policy?

Answer to Issue: The husband’s wife at the time of his death.

Summary of Rationale: The court first held that the husband had breached the contract, rejecting a rather weak state law argument that the agreement only required the husband to name his former wife and children as a beneficiary of the insurance, and not as the exclusive beneficiary.

The employer-provided life insurance policy was part of a benefit plan, and it was therefore subject to ERISA. Benefits regulated by ERISA can be transferred only under terms of a QDRO. No QDRO was ever submitted. Thus, federal law preempted state law and barred enforcement of the decree with regard to the ERISA- regulated policy.

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Benjamin N. Neece, Attorney, Woodruff Family Law Group

               In 2017, communities exist both in the physical and virtual world. Whether you call a metropolis like Greensboro, or a small town such as Asheboro, home, there exist reasonable limits to the extent you will interact with certain individuals, the peer groups you will associate with, and how information will be transmitted. In the virtual world, those limitations are effectively eliminated and with that, an increased risk when it comes to revealing what would otherwise remain personal information. It is important for clients to understand the dangers that exist in regards to their cases when maintaining an active social media presence.

A divorce is probably one of the most difficult and emotional experiences may experience. There will be times when emotions may get the best of an individual, and there seems to be no way to express yourself and attain the peace that you seek, and often individuals may resort to releasing their emotions over social media. Whatever the reason, using this medium to obtain peace of mind during this time can be very damaging to your case and reduce your chance of success at the conclusion of the process. A common theme amongst social media outbursts results in revealing too much information.

Revealing information may be intentional or unintentional, which is why it is very important to make sure you are consciously thinking about how the information you release is perceived by not only a casual bystander but by your estranged spouse and their legal counsel. People are attracted to drama, and if you are the source, then it can lead to more eyes beholding what you have released which lead to a wider dissemination of this information. Additionally, what you may think is harmless may be easily manipulated by a trained professional to paint a picture you never intended to portray. A great way to avoid this risk is to limit the amount of information you put out there; controlling the narrative is an essential part of any legal proceeding, especially in divorce.

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Jennifer A. Crissman, Attorney, Woodruff Family Law Group

          One thing that parents from all walks of life can commiserate over is the struggle to find child care. If you are a new parent, expecting your first child, new to the area, or just considering a change in care, there is a lot to consider when choosing a child care provider. There are several crucial criteria to keep in mind when searching for a daycare or preschool: curriculum, ratings, and your gut.

Curriculum

          Some daycares are just that – care for the child during the day. At the daycare, there may be a schedule for naps, feeding, and playtime, but no set curriculum. What differentiates a daycare from a preschool is the curriculum. While it may sound ludicrous, it is important that all children (yes, even infants) have a curriculum. So, when I first heard of this concept, all I could picture was a child who could barely speak taking a pop quiz on shapes, colors and the alphabet. But this is not what curriculum is all about.

The primary purpose of a curriculum is to identify when teachers should be introducing new concepts, tasks, and challenges to your child at certain developmental milestones. For example, if your child is having trouble walking and is frequently stumbling then the curriculum would address your child’s gross motor skills. Teachers can provide the child with uneven surfaces to walk on or navigate to help your child’s balance and coordination develop. A curriculum is just a plan to help your child grow, and as a parent, you should never feel nervous asking a potential provider for a copy of their curriculum.

Ratings

          Parents who have a child already enrolled in a facility are likely familiar with the star rating system in North Carolina. The North Carolina Division of Child Development and Early Education developed a star rating system for licensed facilities to help parents quickly identify the standards their provider is meeting. The star ratings range from one to five, with five stars being the highest rated licensed facilities. Facilities earn their stars based on their staff education and their program standards. The state also has a website where parents can search for a provider in their county and refine by special requirements. A link to this site is provided at the bottom of this article.

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Benjamin N. Neece, Attorney, Woodruff Family Law Group

The information gathering stage of the legal process is commonly referred to as the “Discovery Process.” Discovery is generally guided by Rule 26 of the Federal Rules of Civil Procedure and is the way that information is gathered by associated parties to litigation. It is during this time that each party submits various requests for information from adverse parties through a variety of common methods: interrogatories (questions), request for admissions, and request for production of documents.  While it is the hope of all parties involved that each party will, in good faith, cooperate with their requests for information, there are times when that is not the case and court intervention is necessary for proper recourse; enter: Rule 37.

Where a party has failed to comply with the discovery procedures set forth by court order, party ask for discovery may ask the Court for an order compelling the requested action.  Before such a motion may be entered, it must be indicated that the moving party has in good faith contacted the party failing to make the discovery to try and secure the information without court action.  This requirement supports the keeping of unnecessary proceedings out of the court system and promoting judicial efficiency. If such a motion is granted the court will typically award reasonable costs incurred by the moving party and place the burden on nonmoving party; this burden is shifted if the court denies the motion unless there is a finding that such motion was substantially justified or other factors, make award of expenses unjust.  This is the most common form of award afforded by the courts, as in these circumstances the court is not trying to punish either party, they are merely incentivizing parties to comply with orders of the court.

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By: Jennifer A. Crissman, Woodruff Family Law Group

          Whether you are a North Carolina law student, newly admitted to the practice of law, or a layperson involved in a civil lawsuit, you will hear quite a bit about service, service of process and certificates of service. In previous blogs, we have reviewed the basics of Rules 4 and 5 of The North Carolina Rules of Civil Procedure, but for those just becoming acquainted with the Rules, it ‘s hard to differentiate which rule applies, and when. For those who are involved in a lawsuit, it is always best to hire an attorney who can answer your questions fully and advise you of your rights. However, as a way to learn more about Rules 4 and 5 let’s look at some scenarios, and how these Rules regarding service are applied.

Scenario 1 – I want to keep my lawsuit as amiable as possible. Can I just hand all of the documents to the opposing party rather than getting a sheriff involved or mailing everything to them?

Yes, in theory, but it is ill-advised to do so with service of process. Rule 4 is all about getting personal jurisdiction over the opposing party so the court may enter orders in your case. Rule 5 is about giving appropriate notice to the opposing party of pleadings and other papers filed with the court. While both of these aspects are important, if you screw up service of process (serving the opposing party with your Summons and Complaint) your entire case can be dismissed for lack of personal jurisdiction. It is better to get the Sheriff to try to serve the opposing party so there is a neutral third party who can attest to the fact that the opposing party is properly served. With all subsequent pleadings, you can serve these by hand, but you must file a Certificate of Service with the Court to document this service.

Scenario 2 – My crazy ex has refused to move out of the house, even though I have asked her to leave. I want to serve her with a Complaint for Divorce from Bed and Board. Can I just leave it for her on the kitchen counter so I can avoid the extra drama?

No. Since this is a new filing Rule 4 will apply on how to serve the opposing party with the Summons and Complaint. It is important to remember that just leaving documents where the opposing party might find them is never proper under either Rule 4 or Rule 5.

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Leesa M. Poag, Attorney, Woodruff Family Law Group

While Rule 4 of the North Carolina Rules of Civil Procedure proscribes the method for the filing and service of the original complaint in an action, Rule 5 deals with the filing and service of orders, pleadings, and other documents that follow that initial complaint.

The purpose behind Rule 5 is to provide notice to the opposing party of the proceedings in the case, and to provide the opposing party an opportunity to be heard by the Court before any relief is granted in the case.

This rule provides for three methods of service – hand delivery, mail, or facsimile. Hand delivery is typically accomplished in open court, but can also be satisfied by delivering documents to the opposing party’s attorney. Service by mail is the most common method used if the opposing party is proceeding pro se.  Service by mail, it is important to note, is accomplished as of the date that the document is placed in the care of the United States Postal Service, not when the documents are received by the opposing party.  When serving by mail, the party is granted three additional days within which the opposing party must receive the documents. However, only if the documents are sent through the postal service is this the case, and does not extend to any overnight delivery services.  If a party is represented by counsel, service will often be accomplished through facsimile. Documents that are to be served via fax must be sent by 5pm on a business day.  If the document is sent after 5pm, it will be deemed to have been served on the following business day.  If there is a dispute as to the date of service, the fax confirmation report will be controlling to determine the date of service.  As such, this confirmation report should be attached to any documents that are served on opposing counsel by facsimile.

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Benjamin N. Neece, Attorney, Woodruff Family Law Group

“Behind the Bar” is a multi-part blog series that will focus on specific aspects of the practice of law ranging from the Rules of Evidence, Rules of Civil Procedure, and other important legal practice technicalities in an effort to provide readers a better understanding of regularly overlooked and misunderstood concepts that lawyers are faced with on a day-to-day basis. 

In our previous installment of “Behind the Bar” we touched on the first part of Rule 4: Service of process, and the requirements involving the “who” and “what” aspects of the rule. In this installment we will complete our review of Rule 4 by discussing the “when,” “where,” and “how;” relating to proper service of a Summons.

Proper service to a “natural person” can be attained by delivering a copy of the Summons and Complaint (S&C) to the individual personally, or leaving copies at the dwelling house or regular abode with “someone of suitable age/discretion residing therein.” It can also be accomplished by delivering a copy of the S&C to an agent authorized by appointment (an Attorney) or law to be served or accept service; mailing a copy by certified mail or registered mail, return receipt requested, addressed to party, and delivering it; or using a designated delivery service authorized under the law to effectuate process and obtaining a delivery receipt. There exist many other potential types of parties to legal proceedings, each requiring slight variations to the rule; but regardless of who the party to receive process is, Rule 4 provides many avenues to meet the requirements set forth therein.

Even in this day and age, with all the advantages of technology and information, the circumstance may arise where personal execution of service upon an individual is effectively impossible because they are unable to be located.  In this situation, where a party cannot, with due diligence be served by normal means, they may be served by publication.  Service by this means consists of publishing notice of service once a week for three consecutive weeks in a newspaper which is qualified for legal advertising which is circulated in the area where party to be served is reasonably believed to be located, or if that information is unknown, in the county where action is pending.  In either case, proof of service must be completed by means of submitting affidavits with the court showing that service was properly executed and where service was via publication, the affidavit must state why publication was necessary and proof of said publication.

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Published on:

Benjamin N. Neece, Attorney, Woodruff Family Law Group

“Behind the Bar” is a multi-part blog series that will focus on specific aspects of the practice of law ranging from the Rules of Evidence, Rules of Civil Procedure, and other important legal practice technicalities in an effort to provide readers a better understanding of regularly overlooked and misunderstood concepts that lawyers are faced with on a day-to-day basis.

No two legal proceedings are alike, each has a different set of facts, parties, circumstances, and inevitably, different outcomes.  One thing most share, however, is the seemingly endless number of steps and hoops to climb and jump through in reaching a conclusion. Why, you might ask, does the legal process take so long and be so complicated?  A big part of the answer to this question involves behind the scenes activity known as the “Rules of Civil Procedure,” which comprehensively regulates every aspect of legal proceedings in extensive detail. Rule 4 is one of the most basic and fundamental rules that regulates Summons’, the process of service, and the consequences of failing to follow proper procedure.

By design, Rule 4 provides a detailed roadmap of how to effectuate service of process while providing a framework for providing notice of claims and proceedings to adverse parties. While purely a technical aspect of the legal process, the vitality of abiding by this rule cannot be understated as no court has jurisdiction to proceed with a legal matter until proper service occurs. Simply put, it does not matter how many other boxes are checked in the legal process, failure to meet the requirements under Rule 4 will keep your case on the sidelines until they are met. Continue reading →

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Family Chiropractic Sports Injury & Rehab Clinic, v. Comm’r, T.C. Memo. 2016-10, 2016 WL 234515 (2016)

Facts: Husband and wife operated a chiropractic The practice had an Employee Stock Ownership Plan (“ESOP”). Husband and wife were the only participants.

The parties were divorced in Iowa. The decree was silent on the ESOP, but the wife agreed to transfer her interest in the ESOP to the husband. She later did so.

The IRS decertified the ESOP, resulting in the loss of valuable tax benefits, on the ground that the transfer to the wife violated the antiassignment provision of the plan and the antiassignment provision of ERISA. The practice filed a declaratory judgment action questioning the decertification.

Issue: Did the IRS err in decertifying the ESOP?

Answer to Issue: No.

Summary of Rationale: The plan provided that vested benefits could not be transferred. There was no divorce exception. The wife’s vested benefits were transferred to the husband. Therefore, the provision was violated and the ESOP was correctly decertified.

Observations: Continue reading →

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Dahl Aerospace Employees’ Ret. Plan of Aerospace Corp., 122 F. Supp. 3d 453 (E.D. Va. 2015)

Facts: A Virginia divorce decree, incorporating a settlement agreement, gave each spouse the option to elect survivor benefits under the retirement plan of the other This provision was not immediately stated in a DRO or qualified by the plan.

The husband’s pension plan allowed him, upon retirement, to elect a 50%, 75%, or 100% survivor benefit.

The husband retired on July 31, 2014, 11 years after the divorce decree. He did not notify his former wife in advance, or give her any option to elect survivor benefits. Instead, he elected his current wife as 50% survivor beneficiary. He stated in his election that no outstanding court order required him to name another person as survivor beneficiary—a blatantly false statement.

Upon learning of the husband’s retirement, the former wife’s counsel prepared a draft DRO requiring the husband’s employer to act as if the husband had elected 100% survivor benefits for his former wife. The retirement plan refused to qualify this order, on the grounds that the husband had already elected a 50% benefit for his current wife and he was only permitted to name one survivor beneficiary.

The former wife sued the plan and the husband in federal court, seeking a declaratory judgment that the husband’s election of his current wife as survivor beneficiary was void for fraud, and that the plan was required to qualify an appropriate DRO naming the former wife as survivor beneficiary. The plan and the husband moved to dismiss the wife’s action.

Issue: Should the wife’s action be dismissed?

Answer to Issue: Yes.

Summary of Rationale: The plan argued that the wife lacked standing, because she was not an actual plan But a person with a claim to benefits is also entitled to sue the plan. The former wife had a colorable claim to benefits.

At the time the husband retired, there was no QDRO in effect limiting his choice of survivor beneficiary. Therefore, the former wife could prevail only by establishing that the husband’s survivor benefit election was void. She cited no case law holding that an election of survivor benefits is void if a false statement is made which defrauds a former spouse who has not yet obtained a QDRO. In the absence of such law, the court refused to hold that the survivor benefit election was void.

Because the former wife did not obtain a QDRO, the husband’s election of his current wife was enforceable under ERISA, even though the election violated a state court order.

Observations:

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