Month: June 2022

No Charm for Florida Alimony Reform

The third time is not a charm for Florida Alimony Reform 2022. Declaring the bill unconstitutional, Governor, Ron DeSantis vetoed SB 1796. This is the third time a Republican governor has vetoed an alimony bill, and comes a few hours after another important decision is made.

Lucky Charm Alimony

No Lucky Charms for Alimony Reform

If politics makes strange bedfellows, what is behind governor DeSantis’s veto? Interestingly, the alimony reform bill was sponsored by the state chairman of his own Republican party, and opposed by the National Organization for Women and the Family Law Section of the Florida Bar.

Even more interesting, the veto was signed mere hours after the U.S. Supreme Court released its long-awaited opinion which overturned Roe v. Wade.

Florida’s own abortion ban, HB 5, is currently before the Florida Supreme Court. But on Friday afternoon, many wonder how the Republican controlled legislature and Gov. DeSantis will react in the era of Dobbs v. Jackson Women’s Health Organization.

The alimony reform bill this year, in part, would have done away with permanent alimony and set up maximum payments based on the duration of marriage. The bill also required a court to prioritize bridge-the-gap alimony first, followed by rehabilitative and durational alimony.

The bill also addressed equal timesharing:

Unless otherwise provided in this section or agreed to by the parties, there is a presumption that equal time-sharing of a minor child is in the best interests of the minor child who is common to the parties.

Finally, the bill provided for bifurcation of a divorce proceeding after 365 days has elapsed since the petition was filed, and authorizes the court to enter temporary orders on substantial issues until such issues can be ultimately decided.

Florida Alimony

I’ve written about alimony reform in Florida. In every Florida divorce case, the court can grant alimony to either party. Not many people realize there are several types of alimony in Florida: bridge-the-gap, rehabilitative, durational, or for the moment, permanent alimony.

Florida courts can also award a combination of alimony types in a divorce. Alimony awards are normally paid in periodic payments, but sometimes the payments can be in a lump sum or both lump sum and periodic payments.

Typically, courts consider any type of earned income or compensation — that is, income resulting from employment or other efforts — along with recurring passive income, such as dividends on your investments, in establishing the amount of support you will be responsible to pay.

In Florida, once a court determines there is a need and the income available to pay alimony – sometimes referred to as the ability to pay alimony – it has to decide the proper type and amount of alimony.

In doing so, the court considers several factors, some of which can include things like: the standard of living established during the marriage; the duration of the marriage, the age and the physical and emotional condition of each party and the financial resources of each party, including the nonmarital and the marital assets and liabilities distributed to each.

Magically Unpalatable

One of the most-controversial parts of SB 1796 was how it changed the process for modifying alimony when people retire. The bill threatened to impoverish older ex-spouses who have been homemakers and depend on the payments.

Commentators remarked that the portions of the bill allowing for modification of alimony based on retirement of the payor were retroactive, and that retroactivity made the bill unconstitutional. In fact, governor DeSantis pointed this out in his letter:

“If CS/CS/SB 1796 were to become law and be given retroactive effect as the Legislature intends, it would unconstitutionally impair vested rights under certain preexisting marital settlement agreements,” the governor wrote.

Many ex-spouses who appeared before legislative committees to speak against the bill said they agreed to give up assets at the time of their divorces in exchange for permanent alimony awards.

The Family Law Section of The Florida Bar, which lobbied against the bill, thanked the governor for understanding the bad precedent the retroactivity of the measure would have established.

A statement attributed to Family Law Section Chair, Philip Wartenberg and immediate past chair, Heather Apicella, stated:

“If signed into law, this legislation would have upended thousands upon thousands of settlements, backlogging the courts and throwing many Floridians’ lives into turmoil”

People and organizations on both sides of the issue heavily lobbied DeSantis’ office. As of last Friday, the governor had received 5,939 emails in support of the bill and 1,250 in opposition, along with 349 phone calls in favor and 289 against the measure.

When asked for a tally of phone calls and emails about the bill, DeSantis’ office also provided excerpts from messages pleading with the governor for a veto.

The WFSU article is here.

New Hague Child Abduction Case

The U.S. Supreme Court issued a new opinion, its fifth, in a case involving the Hague Convention on the Civil Aspects of International Child Abduction. In settling the circuit court conflict, the Supreme Court addressed the undertakings requirement in grave risk cases.

Hague Convention

Last Supper for Undertakings Plus?

Narkis Golan is a U.S. citizen who married Isacco Saada, an Italian citizen in Milan, Italy. She soon moved to Milan, and their son, B.A.S., was born in Milan, They lived in Milan for the first two years of B.A.S.’ life.

But their marriage was violent from the beginning. The two fought on an almost daily basis and, during their arguments, Saada would sometimes push, slap, and grab Golan and pull her hair, yelled and swore at her and frequently insulted her and called her names. Much of Saada’s abuse of Golan occurred in front of his son.

In 2018, Golan flew with B.A.S. to the United States to attend her brother’s wedding. Rather than return as scheduled, she moved into a domestic violence shelter.

Saada filed in Italy a criminal complaint for kidnapping and initiated a civil proceeding seeking sole custody of B.A.S., and also filed a petition under the Hague Convention and ICARA in a New York District Court seeking to return their son to Italy.

The U.S. District Court granted Saada’s petition, determining Italy was the child’s habitual residence and that Golan had wrongfully retained him in violation of Saada’s rights of custody.

But the trial court found returning the child to Italy would expose him to a grave risk of harm because Saada was “violent — physically, psychologically, emotionally, and verbally — to” Golan and the child was present for much of it.

Records also indicated that Italian social services had also concluded that “‘the family situation entails a developmental danger’ for the child and that Saada had demonstrated no “capacity to change his behavior.”

The trial court still ordered the child’s return to Italy based on Second Circuit precedent that it “‘examine the full range of options that might make possible the safe return of a child to the home country’” before denying return. To comply with these precedents, the District Court required the parties to propose “‘ameliorative measures’” for the child’s safe return.

The trial court rejected Golan’s argument that Saada could not be trusted to comply with a court order, expressing confidence in the Italian courts’ abilities to enforce the protective order.

The Second Circuit affirmed, concluding the trial did not clearly err in determining that Saada likely would comply with the Italian protective order, given his compliance with other court orders and the threat of enforcement by Italian authorities of its order.

The U.S. Supreme Court granted certiorari to resolve the circuit split and decide whether ameliorative measures must be considered after a grave risk finding.

Florida Child Abduction

I have written and spoken on international custody and child abduction cases under the Hague Convention. The Convention is supposed to provide remedies for a left-behind parent, like Mr. Saada, to obtain a wrongfully removed or retained child to the country of their habitual residence.

When a child under 16 who was habitually residing in one signatory country is wrongfully removed to, or retained in, another signatory country, the Convention provides that the other country: “order the return of the child forthwith.”

There are defenses though. For example, in the Golan case, the court considered Article 13(b), which states that a court is not bound to order the return of the child if the court finds that return would expose the child to a “grave risk” of physical or psychological harm.

The grave risk defense is narrowly drawn. There is an assumption that courts in the left behind country can protect children, which is why courts in some circuits are required to consider ameliorative measures.

New Hague

Il Duomo di Washington D.C.

The Supreme Court noted that the interpretation of a treaty, like the Hague Convention, begins with its text, and nothing in the Convention’s text either forbids or requires consideration of ameliorative measures.

The Court held that judges may consider ameliorative measures with the grave risk determination, but the Convention does not require it. By requiring ameliorative measures, the Second Circuit’s rule re-wrote the treaty by imposing an atextual, categorical requirement that courts consider all possible ameliorative measures in exercising this discretion, regardless of whether such consideration is consistent with the Convention’s objectives.

The Court also held that a trial court “ordinarily should address ameliorative measures raised by the parties or obviously suggested by the circumstances of the case, such as in the example of the localized epidemic.”

First, any consideration of ameliorative measures must prioritize the child’s physical and psychological safety. Second, consideration of ameliorative measures should abide by the Convention’s requirement that courts addressing return petitions do not usurp the role of the court that will adjudicate the underlying custody dispute. Third, any consideration of ameliorative measures must accord with the Convention’s requirement that courts “act expeditiously in proceedings for the return of children.

The Court then remanded to allow the District Court to apply the proper legal standard. Recognizing that remand would delay the case, the opinion hinted the District Court will move “as expeditiously as possible to reach a final decision without further unnecessary delay.”

The opinion is here.

 

Catastrophic Fraud After Divorce

Fraud can lurk in every divorce case. After the divorce ends, lawyers, professionals, experts, and judges have all moved on to other cases. That is the time many clients and their divorce settlements can be exposed to catastrophic fraud – as one Tennessee woman is reported to have discovered.

divorce fraud

Beale Street Blues

Lawyers act as fiduciaries to their clients during a family law case. Accountants, financial planners, and others can become fiduciaries after the divorce. In a fiduciary relationship, the  duties involved need not be strictly legal; they can also be moral, social, domestic or personal.

In 2003, Ms. Loveland received approximately $1.3 million dollars in connection with her divorce. Knowing that these funds would be vital to her future retirement, she sought out an investment advisor who could manage her assets as she claims she had no knowledge or experience with investments, securities, or financial markets.

Ms. Loveland met with her long-time accountant, who referred her to his friend, Mr. Lentz. She then agreed to allow Lentz to manage her assets. She alleges she informed him that she knew nothing about finance or securities, and that she was relying entirely on his discretion and judgment to manage her investments for her.

Mr. Lentz reassured her that he would take good care of her and would manage her assets in a reasonable and responsible manner, ensuring that she would enjoy some return on her investments while protecting her principal asset base.

However, Ms. Loveland discovered to her shock that Mr. Lentz filled out an Options Account Request Form, purportedly on her behalf, in which he allegedly indicated that her investment objective was “Growth” and that her trading experience was “Extensive.”

According to the lawsuit, Lentz allegedly used “DocuSign” to forge Ms. Loveland’s signature to the Options Account Request, and is also alleged to have cut and pasted customer’s signatures onto forms without their authorization, and arranged to receive Loveland’s financial statements on her behalf.

Last summer, after discussing employment prospects for roughly an hour, Lentz told her:

“now for the bad news . . . you have no money left, it’s all gone.

Loveland’s divorce settlement of around $1.3 million is now worth around $7,000 and she has filed a lawsuit in a Tennessee federal court against Lentz and his companies.

Florida Divorce Fraud

I’ve written about various aspects of divorce fraud before. Interestingly, Ms. Loveland’s case is not about fraud against her ex-husband, but misconduct which occurred after her divorce, involving the loss of her $1.3 million divorce settlement.

What happens if the fraud is caused by a spouse? In Florida, courts distribute the marital assets, such as bank accounts, between parties under the premise that the distribution should be equal, unless there is a justification for an unequal distribution.

Some of the factors to justify an unequal distribution of the property include things like the financial situation the parties, the length of the marriage, whether someone has interrupted their career or an educational opportunity, or how much one spouse contributed to the other’s career or education.

Another important factor is whether one of the parties intentionally dissipated, wasted, depleted, or destroyed any of the marital assets after the filing of the petition or within 2 years prior to the filing of the petition.

Dissipation of marital assets, such as taking money from a joint bank account, happens a lot. Less common are scams like forging names and diverting financial statements. The misconduct may serve as a basis for assigning the dissipated asset to the spending spouse when calculating equitable distribution.

Misconduct, for purposes of dissipation, does not mean mismanagement or simple squandering of marital assets in a manner of which the other spouse disapproves, such as day trading stocks. There has to be evidence of intentional dissipation or destruction.

However, if the fraud is not from a spouse during divorce, but mismanagement of your divorce settlement by anyone who is not your spouse, you are limited to civil causes of action in civil court, as opposed to family court.

Going to Graceland

Ms. Loveland’s lawsuit alleges a lot of damages. She was forced to surrender a Long-Term Care policy that she paid premiums on since 2004 and surrender a $250,000 Life Insurance Policy in which she had invested over $18,000.00 because she can’t pay the nearly $5,000 premiums.

Loveland alleges that as a result of Lentz’ actions:

“now, at the age of sixty-four, forced to work long hours for Uber and DoorDash merely to make ends meet.”

Ms. Loveland has sued in civil court for violation of the Tennessee Securities Act, breach of fiduciary duty, negligence, among other causes of action, and is seeking punitive damages.

The Wealth Professional article is here.

International Child Abduction Case Goes Blue

What happens when a German family court, a Michigan family court, and a U.S. District Court all get involved with the same international child abduction case to return wrongfully removed children at the same time? One Michigan family just found out.

International Child Custody

Going Blue

Father and Mother share two children. The mother, alleged that the children were wrongfully removed from Germany to the state of Michigan by their Father.

From the time of their births, the children lived with both parents in Plymouth, Michigan – about 20 miles from Michigan Stadium in Ann Arbor. Then the family moved to Germany in 2014. The children visited the United States multiple times during the time they lived in Germany.

The parties agreed that the father could take the children to visit relatives in the United States for the summer of 2020 until early September. However, the Father never returned to Germany with the children despite the Mother’s demands that he do so.

In November, the Mother filed a Hague return petition in U.S. District Court in Michigan. They tried mediation, but mediation was a failure.

Concurrently with the federal Hague action, [Mother] also filed a UCCJEA action in the family division of the Wayne County Circuit Court to register and enforce a Germany custody order requiring the return of the children from Michigan to their home state in Germany.

In December, a Wayne County family court judge ordered the Father to bring the children to state court so the Mother could return to Germany with the children in compliance with the German family court order awarding the Mother custody of the children.

In January, the Mother filed a motion to voluntarily dismiss the Hague return action because the federal Hague petition as moot after the children were returned to Germany in accordance with the Wayne County family court ruling.

But incredibly, the father opposed the dismissal of the mother’s Hague petition.

Florida International Child Custody

I’ve written and spoken about international child custody cases under the Hague Convention and the UCCJEA before. The Hague Convention seeks to deter child abductions by a parent by eliminating their primary motivation for doing so: to “deprive the abduction parent’s actions of any practical or juridical consequences.”

The removal or the retention of a child is to be considered wrongful where it is in breach of rights of custody attributed to a person, an institution or any other body, either jointly or alone, under the law of the State in which the child was habitually resident immediately before the removal or retention; and at the time of removal or retention those rights were actually exercised, either jointly or alone, or would have been so exercised but for the removal or retention.

The Hague Convention is implemented in the United States through the International Child Abduction Remedies Act. What is unique about the Act is that Congress expressly provided for both original and concurrent federal jurisdiction. This means a parent has the option of either filing the petition in a state family court, or a federal U.S. district court.

Unlike the U.S. however, many countries are not signatories or treaty partners with us in the Hague Convention. That means that you cannot file a Hague return petition here, because both countries have to be treaty partners. Fortunately, when one of the countries is not a signatory to the Hague Convention, the UCCJEA may provide relief in state court.

Florida, Michigan, and almost all U.S. states passed the UCCJEA into law. The most fundamental aspect of the UCCJEA is the approach to the jurisdiction needed to start a case. In part, the UCCJEA requires a court have some jurisdiction vis-a-vis the child.

That jurisdiction is based on where the child is, and the significant connections the child has with the forum state, let’s say Michigan. The ultimate determining factor in a Michigan case then, is what is the “home state” of the child.

Alternatively, Michigan could possibly hear the case if it was the Home State of the child within 6-months before filing or the children are in Michigan and the court has emergency jurisdiction.

Defense!

Back in Michigan federal court, on March 15, 2022, a U.S. Magistrate Judge issued a report recommending that the mother’s motion to dismiss be granted, and that this matter be dismissed with prejudice.

The Magistrate Judge explained that the only relief available under the Hague Convention petition is return of the children to Germany. Because this relief has already been affected by the Wayne County family court judge, the federal Hague petition is moot.

The father could not, as the respondent, obtain return of the children to the United States by continuing to litigate the Mother’s petition. Nevertheless, the father objected to the Magistrate Judge’s Report and Recommendation and asked for a trial.

The U.S. District Judge reviewed the Father’s objection, noted that it had failed to include any argument or cite to any legal authority holding contrary to the conclusions reached by the Magistrate Judge, and failed to identify any specific factual issues the Magistrate Judge erred on.

Accordingly, the Father was found to have waived any objection to the substantive analysis of the Magistrate Judge’s Report and Recommendation.

The Magistrate Judge’s order is here.