UPDATES IN MICHIGAN FAMILY LAW

Top Mistakes People Make in a Divorce

CNN published an article about the top ten mistakes people make when in the middle of a high net worth divorce. As a family lawyer for thirty years, I maintain that the most important mistakes were listed at numbers 7 through 10! In fact, whether your situation is a high net worth divorce or not, these mistakes are reasons why most divorces cost the parties too much money because they give up assets they either don't know exist or to which they mistakenly believe they have no rights. Am I saying that people should represent themselves in a "simple" divorce? No I am not. In a future post, I will tell you why DIY is not a good idea for most people. The biggest mistakes people make in a divorce? These are the ones, I believe:

1 [formerly 7]. Listening to Friends: “My neighbor got a divorce and she got millions”; “My friend got a divorce and he didn’t have to pay a dime”. Everyone’s situation is different, and everyone’s case is different. Therefore, do not compare your case to anyone else’s. There are different judges, laws change and opposing counsel changes. No two divorces are alike. Deal with yours according to your specific circumstances, and with proper counsel and advice, you will come out ahead.

Bitter Litigant Trashes Divorce Lawyers | Fair Indictment?

As Professor Shaun Martin of the University of San Diego School of Law says on his Blog, California Appellate Report:

"It's tough to figure out who to root for here.

"In the red corner, we have Maryanne Sorge.  In the blue corner, we have Joseph Sorge.  Maryanne and Joseph were married, but are now divorced."

After their divorce, Maryanne, the ex-wife of Joseph, who is a wealthy businessman, sought a modification of a child support order after she learned he'd sold his business for $100 million. Joseph challenged the modification on the grounds that he had invested millions in a start-up company and had significant losses. He wanted the trial court to base his support on the income he actually had, not imputed income. The court determined that it could use the high earning capacity Joseph could have had rather than his actual income in calculating child support. Sorge also appealed the award of sanctions and also of attorney fees.

It seems that Joseph was pretty steamed after a trial court judge ordered him to pay his ex-wife's attorney fees in a post-judgment child support modification. Sorge was ordered to pay $200,000 in legal fees for his ex-wife's attorney during and after a bitter child support modification motion. Subsequently, he was ordered to pay about $60,000 for her appellate attorney fees. Plus sanctions . . .

Business Valuation | Double-Dipping Issues in COA Decision

The Michigan Court of Appeals ["COA"] yesterday decided a case involving some interesting issues: business valuation,  spousal support, double-dipping, property distribution, attorney fee award, and spousal support. The COA affirmed the trial court.

The defendant husband argued that the trial court improperly used the parties’ business income twice, once in property distribution and again in calculating spousal support, resulting in an unfair
“double dip” into the same stream of income. This is an issue that arises often in cases involving division of a business asset and also a spousal support award.

Attorney Fees Not Dischargeable in Bankruptcy | In the Nature of Support

In response to a query for a link to the appellate decisions related to the U.S. 6^th Circuit Court affirmation of a bankruptcy judge’s ruling that attorney fees that were ordered in a particular divorce case were non-dischargeable, as they were a “domestic support obligation”  I post here links to the 6th Circuit Opinion and also to the lower court opinion.

Download Kassicieh_v_Kassicieh6thCircuit

Download Kassicieh_v_Kassicieh.US Bankruptcy Ct SD Ohio

Documents Required to Support Award of Attorney Fees

Both court rule and statute in Michigan allow parties to recover attorney fees for domestic relations cases. Sometimes, those fees and costs are awarded as sanctions under MCR 2.114 or MCR 2.625.

However, the trial court needs to have specific information and evidence before it in order to fashion an appropriate award. Although an evidentiary hearing may be requested, it is not necessary if a court makes the award and in its order allows the party against whom fees and costs are assessed to request an evidentiary hearing to challenge that award. Normally, the judge will make it clear that a challenge may subject the objector to further fees and costs to defend.

Several documents should be submitted by the attorney seeking such an award. Recommended support for such a motion are the following:

Spousal Support, Division of Assets & Whether "Double-Dipping" is Appropriate

In Loutts v Loutts, Court of Appeals Docket No 297427 [For Publication], several issues were presented. The financial issues were complex, and it is apparent that, especially with the valuation and "double-dipping" issue, there was much expert testimony.

The Court  first considered the Appellant's issue regarding failure of the trial court to award attorney fees and costs of expert valuations.

Although the defendant repeatedly requested an award of attorney fees and expert fees during the course of this divorce case, the trial court never addressed her requests. Therefore, the COA held that consideration of the issue was necessary to a proper determination of the appeal, and that the COA had the right to consider it because the trial court’s failure to address the defendant’s repeated requests for an award of attorney and expert fees constituted plain error. This issue was remanded to the trial court.

Attorney's Charging Lien on Entireties Property is Invalid

Law firms negotiating a Fee Agreement with payment secured by a lien against real estate must take care to ensure that the real estate encumbered by the lien is truly valid security. In an unpublished decision, the Michigan Court of Appeals based its decision upon earlier cases holding that neither a husband nor a wife holding title to real estate in a tenancy by the entireties may, without written permission of the other spouse, create a valid lien against that property.

In Smith v Vainik, Linda, a divorced woman, sued her husband Richard's former attorney for quiet title to the former marital dwelling. In 2003, Richard's former attorney had unilaterally granted a lien to his attorneys on his purported “tenant in common interest” in the house for unpaid attorney fees incurred as a result of the firm's representation of him in an earlier divorce action, which was later dismissed.

Texas May Consider "Loser Pays" Law Regarding Legal Fees

According to the New York Times, Texas is considering passage of a "loser pays" law that would force those who lose a lawsuit to pay the legal fees of the opponent. American jurisprudence has long used "The American Rule" [as opposed to "The English Rule"] and each party has paid his or her own legal fees and costs, with some exceptions. The American Rule keeps court access available to poor litigants. A serious consequence of a "loser pays" rule would be that many lawyers would not agree to represent injured people on a contingency fee agreement.

$19 million in divorce attorney fees . . . and counting?

Good grief! A divorce with $19 million dollars in attorney fees? According to
the  LA Times, the divorce between the Dodgers' owner Frank McCourt and his wife Jamie McCourt has already cost that much and the parties haven't even had a trial yet! Teams of lawyers and accountants are working on the case.

According to the Times:

Separate property award | Effect of contribution

In Couvier v Laubernds, Docket No 272842, Michigan Court of Appeals, decided on February 5, 2008, the COA upheld almost all of a judgment entered in Chippewa County, Michigan. The husband appealed the trial court's award of significant property that he claimed as "separate property," including a farm he had owned prior to the marriage, but the COA affirmed. He also appealed the T/C's order that he pay Wife's attorney fees (about $20,000). The COA did correct one minor mistake (well, OK, not so minor:  $63,574.51) mistake in the balancing award made by the trial court to equally divide the marital property between husband and wife.

Can divorce be made more affordable?

Just as I hit "Enter" to post the last article dealing with the dangers consumers face when using Internet websites to do "cheapie divorces,"  incoming email offered a breath of fresh air.

Scott Bassett, a veteran lawyer who practices Michigan family appellate law, had this to say in a post to the Family Law Listserv about how the State of Michigan might better serve innumerable citizens who need and want a divorce and who cannot afford legal representation. He recommended an unusual and practical approach to legal services called "the unbundling of services." Scott Bassett said:

How sanctions can defuse scorched-earth litigation tactics

Yesterday on the Michigan Family Law Section's Listserv, Judge Hammond stated in response to a query about the award of sanctions for bad faith pleading / litigation:

"An old - but still solid - rule is "follow the money".  The pocket-book nerve is the second most sensitive nerve in the human being.  (The kid nerve comes first, in normal people.) Making a client (and even more so, an attorney) pay money for his or her sins is a very effective way of getting someone's attention."

Just prior to his death, Greg Justis sent me an opinion from a case before Judge Johnson in Emmet County.

When Will a Trial Court Order Your Spouse to Pay some or all of your Attorney Fees?

In Michigan, attorney fees in a divorce action are not recoverable as of right. But a statute, MCL 552.13, allows the trial court to order a party “to pay any sums necessary to enable the adverse party to carry on or defend the action, during its pendency.” A court rule, MCR 3.206(C) allows for the award of attorney fees if (1) A party, at any time, requests that the court order the other party to pay all or part of the attorney fees and expenses related to the action, and (2) The party who requests attorney fees and expenses alleges (and proves) facts sufficient to show that the party is unable to bear the expense of the action, and that the other party is able to pay.

Unreasonable conduct that adds to the cost of a divorce by forcing a party to incur fees and costs because of the other party’s unreasonable conduct in the course of the litigation is also grounds for an award of attorney fees.

Examples of unreasonable conduct that has resulted in a trial court awarding fees and costs include the following: (1) The filing of numerous pretrial motions concerning discovery and related to preserving the property ultimately to be divided between the parties; (2) A refusal or failure to pay spousal support as required by the trial court; (3) Discovery abuse that causes the other party to seek court intervention in order to find out what the marital assets and debts really are; (4) The hiding of assets resulting in extra fees and costs in order to discover them.

Do you need help with a paternity or child support case? Find a Michigan Family Lawyer near you.