Articles Tagged with case analysis

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Carolyn Woodruff, JD, CPA, CVA

In re Lawson, 570 B.R. 563 (Bankr. N.D. Ohio 2017)

Facts: A husband and wife filed divorce proceedings in Ohio. Among the marital assets was the husband’s defined contribution retirement plan. The parties read into the record in the Ohio action an agreement that awarded the wife 50% of the plan account. The court approved the agreement. No DRO was immediately entered.

After the divorce case was filed, the wife filed a petition in bankruptcy. The bankruptcy trustee argued that the wife’s interest in the husband’s retirement plan was part of the estate in bankruptcy. He asked the bankruptcy court to authorize him to seek a DRO in state court and to order the husband not to oppose the DRO.

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Carolyn Woodruff, JD, CPA, CVA

In re Jeffers, No. 14-52328,    B.R., 2017 WL 2838104 (Bankr. N.D. Ohio June 30, 2017)

Facts: A husband and wife divorced in Ohio. The divorce decree awarded the wife an interest in the husband’s retirement benefits.

Before a DRO was entered, the husband filed a petition in bankruptcy under Chapter 13. When a bankruptcy case is filed, all state court actions are automatically stayed. 11 U.S.C. § 362. The wife asked the bankruptcy court to lift the stay so that she could obtain a DRO in state court. The bankruptcy trustee objected.

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Carolyn Woodruff, J.D., C.P.A, C.V.A.

Garcia-Tatupu  v.  Bert  Bell/Peter  Rozelle  NFL  Player  Ret.  Plan,  No.  CV 16-11131-DPW,     F. Supp. 3d   , 2017 WL 1398645 (D. Mass. Apr. 18, 2017)

Facts: The husband, a former NFL football player, was divorced from his wife in Massachusetts in 1997. No DRO was entered at the time. The husband died in 2010; he had not remarried. In 2012, the Massachusetts court issued a DRO, nunc pro tunc back to 1997.

The wife requested benefits from the plan under the DRO, the plan denied benefits, and the wife sued the plan. The plan filed a motion to dismiss.

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Carolyn Woodruff, J.D., C.P.A, C.V.A.

Dullea v. Pension Benefit Guar. Corp., 241 F. Supp. 3d 155 (D.D.C. 2017)

Background: There are two ways in which state courts can make a deferred future division of retirement benefits. The traditional method is the shared interest approach, which awards the nonowning spouse a portion of each future payment received by the owning spouse.

A less traditional but also permissible option is the separate interest approach. With the separate interest approach, the nonowning spouse is awarded a separate and distinct set of benefits under the plan, with a value equal to a stated percentage of the actuarial value of the owning spouse’s benefits. (Actuarial value is the total future benefits expected, times the chance of death before receiving them.) The owning spouse’s benefits are then reduced proportionately.

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Carolyn Woodruff, J.D., C.P.A, C.V.A.

Patterson v. Chrysler Group, LLC, 845 F.3d 756 (6th Cir. 2017)

Facts: A divorce decree awarded the wife an interest in the husband’s retirement and survivor benefits, expressly ordering him not to elect a survivor beneficiary other than the wife. The wife did not obtain a QDRO.

Upon retirement, the husband elected to receive retirement benefits without survivor benefits, thereby violating this provision. The wife sought to enforce the decree by sending a copy to the plan. The plan refused to comply with the decree, finding that the decree did not meet the requirements for a QDRO.

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Yancey v. Comm’r, T.C. Memo. 2017-59, 2017 WL 1289451 (2017)

Facts: A husband and wife filed joint returns. The returns were prepared by the wife. The returns understated the amount of tax due, mostly because they wrongly double-counted certain gambling losses incurred by the husband.

The IRS assessed a deficiency. The wife filed a petition for innocent spouse relief, the IRS denied it, and the wife appealed to the Tax Court.

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            Equitable Distribution, in a nutshell, is giving each party to a marriage what they are entitled regarding property acquired during the marriage.  As one of the pillars of many divorce proceedings, it is commonly the most complex aspects, requiring extensive research into the lives of individuals going through a divorce.  In some instances, the parties to a divorce can amicably agree as to how the property acquired during the marriage shall be distributed, and in some instances where parties fail to agree, distribution may be simple due to the nature, amount, and availability of information regarding marital property. In other instances, the parties cannot agree, and the marital assets are numerous, complex, and difficult to find; this situation can create a very tall task for attorneys in properly representing client interests.

A recent North Carolina case, Uli v. Uli (N.C. App., 2017), breaks down equitable distribution in an effort to comprehensively explain how North Carolina courts are to handle these types of claims.  North Carolina courts conduct a three-step analysis to determine what is marital property, what is divisible property, and how to provide for an equitable distribution between the parties.  First, the court must identify and classify the property as marital or separate based upon evidence presented regarding the nature of the asset.  Next, the court must determine the net value of the marital property as of the date of separation. Lastly, the court must distribute the marital property equitably. Smith v. Smith, 433 S.E.2d 196, 202-203 (1993).

The primary issue presented in Uli is the classification of real property in dispute throughout the proceedings.  Classifying property in an equitable distribution case is no walk in the park.  Courts must determine whether property is marital or separate.  Marital property is “all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of separation of the parties, and presently owned, except property determined to be separate property or divisible property…”  Separate property is “all real and personal property acquired by a spouse before marriage or acquired by a spouse by devise, descent, or gift during the course of the marriage…” N.C. Gen. Stat. §50-20(b)(2015).  “Acquired” is the key term in both definitions. North Carolina courts have adopted a “dynamic” interpretation of the term “acquired” as the courts recognized that acquisition is an on-going process of making payment for a property or contributing to the marital estate, instead of being fixed on the date that legal title to the property is obtained. Wade v. Wade, 330 S.E.2d 616 (1985). With this interpretation, the court realizes that property may have a dual nature consisting of both “separate” and “marital” qualities.

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The two big classifications of property in all equitable distribution cases are “marital” and “separate” property.  These are the ones the get all the attention and are subject to some of the most intense scrutiny and debate; however, there is a third area of property that is equally as important and can at times, prove to be a valuable player equitable distribution cases. Yes, I am talking about “divisible property!”  Continue reading →

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By Carolyn J. Woodruff, North Carolina Family Law Specialist

Winston Salem, North Carolina: Malecek v. Williams (2017)

Derek Williams is a Forsyth County doctor who had an affair apparently, or at least allegedly, with his nurse. Playing doctor-nurse games got them in trouble with the nurse’s husband, Marc Malecek. The nurse’s then-husband Marc sued Derek for alienation of affection and criminal conversation.

What is alienation of affection? This heart balm tort is something like an automobile accident where a marriage is rear-ended. This alienation of affection requires a spouse to prove that he or she had a genuine marital relationship and that marriage relationship was interfered with by a third party paramour, causing damages. What is criminal conversation? That is simpler. That is sex with someone’s spouse creating damages. Frequently the damages might be one dollar, which is required to reward if sex is found with someone else’s spouse. Of course, in North Carolina damages for alienation of affection and criminal conversation has been as much as $30 million.

Interestingly enough, Derek Williams was sued by Marc Malecek in May of 2016. The Honorable Todd Burke dismissed the lawsuit indicating that alienation of affection and criminal conversation were unconstitutional. There had been several other cases wherein judges had found or not found alienation of affection and criminal conversation to be unconstitutional.

For now, the North Carolina Court of Appeals has spoken on the constitutionality of alienation of affection and criminal conversation. These heart balm torts are constitutional, according to Court of Appeals Judge Richard Deitz. Continue reading →

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Jennifer A. Crissman, Attorney

Timing, as they say, is everything, and if you are appealing an Order in North Carolina, this is particularly true. Slaughter v. Slaughter, No. COA16-1153 was decided by the North Carolina Court of Appeals on July 18, 2017. While there were multiple issues on appeal, the issue that sticks out is the timing and issues allowed on cross-appeal.

Cross-appeals are not a rarity. However, the Court had an issue of first impression on whether a cross-appeal should have been dismissed by the trial court. In Slaughter v. Slaughter, the trial court entered an Order Equitable Distribution on March 31, 2016, and Orders on Child Support, and Alimony on April 1, 2016. The husband filed a Notice of Appeal from the Alimony and Equitable Distribution Orders on April 25, 2016, within the thirty-day window for filing.

Wife filed a Notice of cross-appeal on May 3, 2016, from the Child Support Order and the Equitable Distribution Order. While Wife was within the ten-day window for filing a cross-appeal, Husband filed a Motion to Dismiss her cross-appeal regarding the Child Support Order. Husband argued that the ten-day window for filing a cross-appeal under NC Rule of Appellate Procedure 3(c) should not apply as Husband did not appeal the child support order. Husband’s Motion to Dismiss was denied by the trial court, which Husband appealed.

Husband’s argument on Appeal is that firstly, Wife was outside of the thirty-day window to appeal the Child Custody Order, and secondly, that since Husband had not appealed from the child custody order in his timely appeal, Wife should not be allowed to cross-appeal the Child Support Order. It was a matter of first impression if a Notice of Appeal is limited to only the Order specifically designated in the Notice, where a single proceeding has resulted in multiple Orders. It was also a matter of first impression if a cross-appeal is similarly limited to only the Order specified in the original Notice.

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