Thursday, March 22, 2012

A Marriage of Lopsided Means

By Nicole Killoran

Molleur v. Molleur, 2012 VT 8.

Today’s opinion provides a glimpse into how the courts go about equitably divvying up marital property after a divorce; it also gives us a dirty peep into the private disputes between spouses that are inevitably aired during divorce proceedings.


The couple in today’s case was married for approximately twenty years, during which time they raised two children.  During their marriage, they lived rent-free in a home owned by Husband’s father.  Husband served as a recruiter and then active military in the Army National Guard, and otherwise worked for his father’s business.  Wife was a depressed homemaker who worked an occasional part-time sales job when she was not home with the kids, and struggled with alcoholism and mental health issues throughout the marriage.

At the time of divorce, the only significant asset that would count as marital property was Husband’s military pension, which does not kick in until 2013.  As such, when the couple petitioned the trial court for a divorce shortly after the kids left the nest, the only asset the court had to split up was each spouse’s share of the future pension.  In addition to splitting up the marital property, the court also had to determine how much Husband would pay Wife for an ongoing maintenance award. 

The family division of the trial court granted Wife under the property award 75% of the marital component of Husband’s pension—roughly 42% of Husband’s total monthly pension payment, or $1,444—and under the maintenance award $1900-2100/month until retirement, and $500 from Husband’s pension benefits per month thereafter, for life and subject to adjustment for inflation.  The issues on appeal were whether the trial court judge abused his discretion or erred in his conclusions on the property award and the maintenance award. 

Before proceeding to its main analysis, the SCOV makes a “general observation.”  The considerations for property and maintenance awards are governed by two different statutes (property under 15 V.S.A. § 751, and maintenance under 15 V.S.A. § 752).  As such, the courts normally may not “mix property settlement and maintenance award considerations.”  But because the pension is the only marital property and would be the source of the ongoing maintenance once Husband retires, the trial court issued a combined property and maintenance award.  The SCOV declines to take the bait Husband dangles before them, challenging the Trial court’s decision to combine considerations for these two separate components, and instead approves of the trial court’s combination under the circumstances.

The SCOV then turns to the property award where the majority of the drama in this case resides.  On appeal, Husband raised two issues.  He claimed that the trial court erred in concluding that he had approved of Wife remaining unemployed during the bulk of their marriage.  He also claimed that the trial court had abused its discretion by awarding Wife 75% of the marital portion of Husband’s pension payment, because when the trial court weighed the statutory factors under 15 V.S.A. § 751, it gave greater weight to those factors favoring Wife than those factors favoring Husband.

With regards to the mutual decision to allow Wife to remain home and assume the role of homemaker, Husband argues that he neither supported nor agreed to the arrangement, that the decision was not made jointly, and that Wife did a crappy job as a housewife as her emotional problems worsened, forcing him to assume a greater share of domestic duties.  (We call this later point, the Warranty Defense).  Wife also apparently assaulted Husband once ten years prior to the divorce, was “financially irresponsible” while he was deployed to Iraq, and had collected two DUIs as evidence of her continuing alcohol problems. 

Based on these facts, and the relatively paltry contribution Wife provided from an occasional part-time retail sales job, the trial court found that factors (10)–(12) under § 751 weighed in favor of Husband, considering the relative contributions of each spouse to the marital estate, and the “respective merits of the parties.”  In favor of Wife, however, the trial court noted factors (1), (3)–(4), and (6)–(8), considering the length of the marriage, the educational and economical disparities between the spouses, and the opportunities each spouse had to better their circumstances after the divorce.  After weighing these against each other, the Court found that the factors favoring Wife justified the resulting award: 75% of the spousal portion of Husband’s pension payments.

Husband raised several arguments trying to overturn the award, but the SCOV in turn finds no reason to disturb the trial court’s conclusions.  The record supports the trial court’s conclusion that Husband tacitly allowed Wife to remain relatively unemployed and contribute less.  The trial court had broad discretion to grant an award favoring the factors benefitting Wife.  And given the length of the marriage and the disparity between Husband’s future potential (mid-40s, substantial retirement income, college education, and ample opportunity for future employment) and Wife’s future potential (GED high school education, a history of alcoholism and mental health issues, and no job skills beyond retail sales), the Trial court did not err in crafting the award as it did, regardless of Husband’s merits and Wife’s relative contributions to the marital assets.

The SCOV then turns to the maintenance award, noting that it is inextricably synchronized with the property award given the limited marital property.  The statute governing maintenance awards is 15 V.S.A. § 752, but the unique nature of the maintenance award, supported by the property award, causes the SCOV to consider the factors under § 751 in reaching its conclusion.  Thus, the SCOV notes, its analysis will consider past merit (Husband’s greater relative contribution and support where Wife failed) and present need (the length of the marriage and the asymmetry in the parties’ financial circumstances and future prospects).  Again, given the broad discretion granted the trial court in crafting its maintenance award, the SCOV concludes that the totality of the circumstances support the court’s decision regarding the maintenance award.

The SCOV then considers Husband’s argument that the trial court erred in awarding a permanent maintenance award (as opposed to rehabilitative or temporary maintenance).  Here again, the SCOV finds that the trial court did not overstep its broad discretionary bounds.  The court can, if it sees fit, award whatever type of maintenance it believes is necessary to provide for a spouse lacking sufficient income.  Given Wife’s “extremely limited financial prospects,” and the modest award (representing roughly 25% of Husband’s income before retirement, and 42% after retirement), the court was within its discretion to grant the maintenance award as such.

Next, the SCOV examines a point both parties raised: whether the court’s formula for adjusting the award for inflation was proper.  The standard mark for inflationary increases is the Consumer Price Index (CPI).  The trial court ordered an increase of the greater of 7.5% or three times the CPI every three years on the $500 after-retirement maintenance award to Wife. 

The SCOV concludes that this formula does not satisfy either of the court’s requirements for automatic inflation adjustment.  A flat increase of three times the CPI must be based on the percentage change in the CPI over the previous year in order to track inflationary increases in the cost of living, and an increase of 7.5% does not reflect actual inflation any more accurately.  In addition, the formula does not provide a “safety valve” for Husband if his income does not keep pace with inflationary increases in the cost of living.  The SCOV remands to the trial court on the automatic inflation adjustment point, with instructions for how the court can craft the formula to reflect its dual requirements and any future changes in circumstances.

Finally, the SCOV addresses Wife’s request for attorney’s fees and costs by quickly dismissing the request, and directing Wife to take up the issue with the trial court.

The dissent in this case by Justice Burgess, joined by the outgoing Justice Johnson, takes issue with the Trial court’s maintenance award of 75% of the marital portion of Husband’s pension benefits.  The dissent, unlike the majority, does not find support in the record for this “windfall” given Wife’s relatively minors contributions to the marriage and the assets.

The dissent emphasizes the more sordid details of this “lopsided” marriage—it calls the twenty-year marriage “superficial and but a marriage ‘on paper.’” The trial court stated several times in its opinion that Wife failed to contribute meaningfully to child care, and that Husband had to step in on multiple occasions to take over the children’s day-to-day care, in addition to assuming other domestic duties beyond child care.

In particular, the dissent takes issue with the trial court’s conclusion that Husband tacitly accepted Wife’s unemployment.  The court described this unspoken agreement as the result of “the parties’ choice (by attrition, if not positive decision).”  However, the dissent points out, there is no further description in the opinion or evidence in the record of this supposed “erosion by attrition of Husband’s stated preference that wife work.”

The dissent would find that Wife’s failure to contribute domestically, economically, or parentally in the marriage, despite its length, and despite the claimed disparities, means that “Wife had little or no sweat-equity in the marriage to redeem.”  The dissent would not award “the lion’s share” of Husband’s pension to Wife for these reasons.

Because the dissent disfavors the property award, it would also order the Trial court to reassess the maintenance award.  The trial court explicitly avoided considering the “equitable concerns” under § 751 when considering the maintenance award under § 752.  On the one hand, a maintenance award should not be punitive against the supporting spouse, regardless of the circumstances.  On the other hand, the dissent notes, to not take into account a spouse’s responsibility for her own disparate circumstances “serves, rather than defeats, the objective of § 752 to establish a ‘just’ maintenance obligation.”  “[T]he industrious spouse should not be made to pay for the other’s dereliction,” lest the maintenance award continue the subsidy beyond the marriage.

The dissent concludes this half-marathon of an opinion by acknowledging that homemaker contributions have been read into the statutory scheme to account for one spouse’s non-economic contributions to a marriage that enhance the other spouse’s economic capacity.  The dissent finds it consistent with the statutory scheme to temper one spouse’s maintenance obligation where the other spouse has failed to contribute, and would in this situation have found no recompense due where Wife did not prove she sacrificed any opportunity to enhance Husband circumstances and the marriage.

12 comments:

  1. Divorce is always a contentious issue to deal with for the courts and most terms of the divorce favor the wife. That is why pre-nuptial agreements are important because it states whose property belongs to who and protects them against the marriage breaking down. Having a record of conversations should help both parties over questions of staying home to be the homemaker because most cases tend to dwell on those answers.

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  2. This is an interesting case. I find it tragic that the Vermont Courts continuously award the greatest benefits to the parent who works the least. The parent who works the least is awarded custody of children, and is also awarded vast child support, which requires the other spouse to work even more. It is a vicious cycle, and is why I stopped practicing family law. It seems that the Courts also provide huge financial incentives to spouses to not work.

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    1. I concur with this post based on my own experience and newly issued divorce decree. My ex is to receive 48% of my monthly take home pay as spousal maintenance, a severe disincentive to work at all.

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  3. We are interested in compiling a database of awards in Vermont compared with other states. We welcome statement of the total marital estate, wife and husband contributions, length of marriage, the split of the marital estate, relative incomes and maintenance payments

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  4. As Burgess eloquently states some important and sensible conclusions in his dissent. The assumption of a tacit agreement for the wife to avoid work is extremely suspect. How does the court expect a man to establish a record of his expectation that she contribute? Perhaps the expectation is that the industrious spouse routinely serves notices to the workshy spouse notifying them of their moral obligation to contribute.

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  5. Our case has many similarities to this.

    My wife and I were in the process of a reasonably cooperative divorce, intending to maintain a positive relationship for the sake of our children. As my retirement date was near, I proposed a property split that would provide a reasonable income for my wife after the divorce, based on our previous standard of living. Last a judge convinced my wife to seek the legal advice and she was soon persuaded to retain a law firm.

    The lawyer proceeded to make discovery requests requiring hundreds of hours of effort and thousands of pages of documents. A similar number of questions for her client yielded a sparse few pages of carefully filtered data. Specifically this lawyer demanded thousands of pages of detailed and ultimately irrelevant detail while producing only summary information from her client. My request for monthly statements for bank accounts resulted in selective summary data while she demanded infinite detail. After six months of misery, late nights and extensive research I produced the information with particularity and she still has not provided a complete response. I have received several explicit and implicit threats of consequences, sanctions and process costs

    I have just received an insulting settlement proposal where the lawyer, fully aware of my pending retirement is demanding almost all my current earnings as well as a property split that "awards" most liquid asset disproportionately to my wife and leaves the effort and cost of the sale of all property and assets to me. This proposal from her lawyer demanding over half my pre-retirement income in alimony and child support, effectively requires me to work for 10 more years for an effective income little more than poverty level.

    I have a proven history working hard for 40 years, living frugally with the goal of retiring at 55. My wife has given up at least four jobs for trivial reasons and has taken relatively easy jobs with considerable leisure time and undemanding schedules. Despite documented capability and qualifications for a $50,000 a year job, she currently enjoys an easy 32 hours at $9 per hour.

    She has a documented history of being a suicidal alcoholic and admits to contributing little to the marriage. I am reluctant to expose the record of emotional abuse, neglect, passive-aggressive behavior in court due the the post traumatic stress we are both enduring. The process is driving me pro-se to perform a deposition and uncover police records to defend my case, even though the resultant estate will be severely plundered by her lawyer.

    As a reward for a reluctant contribution of about 10% of the family income over the years, this lawyer is shamelessly asking for almost all the marital property to be handed to her client, leaving the work of the sale of houses and cars to me. Her lawyer's greed and egotism is driving us towards complete financial and emotional ruin, and it appears that my final months in this world must be spent fighting for the principle of fairness, which clearly does not factor in many cases

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  6. There are several obvious flaws in the current system allowed by the broad discretionary powers of the court, exploited by the opportunistic participants:

    1. The concept of permanent maintenance of a standard of living based on prior gross income

    2. The assumption that lazy spouses are allowed to live off the hard work of another

    3. The presumption that one spouse tacitly approved of the other not seeking full employment

    4. The acceptance of one spouse enjoying part-time poorly compensated work

    5. The assumption of continuous increase in income of the industrious spouse

    6. The basis of standard of living on gross income, not demonstrated effective income

    7. The failure to terminate all spousal marital obligations at the point of divorce

    Thus the system appears to be forcing the higher wage earner to continue working at an unrealistic pace to keep a less productive spouse at a standard of living based on their spouses capabilities, often disproportionately associated with their own merits.

    The end result of this is that a hardworking, frugal, efficient and productive life can be completely invalidated. This is not a meritocracy, it it is an opportunistic society where laws allow exploitation of the productive by predators and leaches.

    Conclusions:

    Never marry
    Do no assume a long-term partner will contribute equitably to the marriage
    Avoid long-term commitments
    Enjoy your income, savings are futile
    Pay attention to warning signs and get out fast
    Accept death before servitude

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  7. I find our current statutory award system both fair and just. I disagree that the spouse who chooses to stay home with children "works least". I find March 30 9:59 comment disturbing, particularly "death before servitude" in this context. I don't see why the court couldn't have reasonably concluded that the parties had, essentially, savings (retirement) that built up during their marriage and that both were entitled to a share of it. I don't think I'm that unusual in my perspective and I am a male attorney.

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    1. The issue is that the law does not recognize the demands of increased level of responsibility associated with higher paying jobs in industry. Nor does it recognize realistic phases in careers, particularly technology. Professionals are held to extremely high standards and are compensated for actual demonstrated performance or they are eliminated in one way or another. Contrast the "stay at home Mom/Dad". Does (s)he attend 7AM team meetings to discuss production goals for the day? Does (s)he have individual performance metrics to report on daily, weekly, monthly, quarterly? Imagine charts around the house tracking cleanliness, safety, and organization. Are we plotting the children's report cards and providing written plans to obtain straight 'A's. Is his/her compensation based on the quality of college the children attended and starting salaries? The point is that just staying at home and just going to work do not equate to the level of investment in the marriage. In general, the stay at home has more choices and flexibility and arguably a more relaxed life. It is bad enough that the law has no sense of fairness in contribution, indeed often seems to reward the needy (read lazy) spouse with the sacrifeces of the resourceful (read hard-working) spouse. Then instead of recognizing that one has worked fo 30 years at full pace and is burnt out yet the other has reluctantly dabbled at bare minimum jobs and has not reached full potential, the courts are allowed to assume a status quo rather than demand compesatory effort from the "stay at home" spouse. Both should work the same number of years at the same effort level

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  8. First, the statutory award system appears to assume that the value of staying at home to look after children is valued as much as the working spouse's employment, Why would a lawyer's spouse, for example, be compensated more than a dishwasher's spouse in a divorce. The fact that the spouse enjoyed a standard of living during the marriage that was disproportionate to their contribution should be treated as a bonus not a continuing entitlement.

    Secondly, there must be consideration of the quality of each spouse's work. The employed individual must continually perform productive work or face termination. There are many cases of lazy, ineffective spouses who contribute little or nothing to the household or children's development. In this case the settlement should be commensurate with the performance.

    Thirdly, the non-working or underemployed spouse must be expected to develop skills to become a valuable member of society. Even after a long-term marriage, continuing a life of leisure at the working spouse's expense is unreasonable.

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    1. An emerging challenge is making the distinction between stay-at-home parents and underemployed, work-at-home spouses who abuse the designation to secure excessive awards. A lazy, "work shy" spouse can lie on the stand and bring in witnesses who did not observe the daily operations and responsibilites of the family. Weak legal representation can leave the responsible, working spouse (incomprehensibly) without legal custody rights and paying excessive amounts beyond retirement age to the underemployed spouse.

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  9. My case, remarkably similar, was effectively a death sentence. Perhaps the judge was wearing the black cap when she handed all liquid assets and my lifetime savings to my ex-wife. I have no hope of recovering the losses precipitated and exacerbated by this process. The law actually allowed double dipping by facilitating an excessive child support payment and then ignoring considerable direct charging of those same costs from a joint account. After tens of thousands of legal bills, avoidable medical costs, and drinking gambling and smoking costs were charged to my credit card, she had the audacity to suggest that money had disappeared. It did, into her pocket. After living rough for two years, in cars, boats, couches and railroad stations, I face a life of poverty after the results of a lifetime of hard work is drained from my savings. I have been there before and could probably accept that if there was a fragment of fairness in the settlement. Through extremely misleading and manipulative tactics the law was exploited. Critical evidence was suppressed and ignored. The result is that I am left with a grossly overvalued pension and non-realizable assets. The Court seemed to think that in this economy even with an industry downturn one could just walk into another job with a 35 year old technology degree. Even with 3 years re-education it is unlikely an aging worker would be hired. After surviving the last 15 years in a marriage for the sake of the children, I am depressed and two years of persecution in this process leave me an emotional wreck. So penniless, homeless, jobless, hopeless and technically useless, I am expected to rebuild my life. The Vermont Divorce Process not only sapped my resources, lost me a 30 year job, destroyed the moderately cooperative relationship with my spouse, but also drove me to the brink of death several times. Challenging the system evidently is useless, the odds are so stacked against the industrious yet naive spouse. The message is that if you were crazy enough to marry and stay around, work hard and provide her a lifestyle disproportionate to her contribution, then we assume that life can go on like that forever. So the divorce does not even sever the bonds of matrimony, just locks us in to continued unhappiness. One can survive in poverty happily if there is hope for the future, I have done it, but when the plutocrats succeed in forcing servitude then human rights become the unsettling issue. With mediation we could have split a fairly substantial estate and both lived comfortably. Legal interference turned the situation adversarial and destroyed our lives. The children suffer from losing a parent and no amount of material wealth can repair the damage precipitated by the current system. If I can pull through this mental illness, even though my life was destroyed, I will at least be able to inform others contemplating marriage, thinking about separation and preparing for divorce. Basically despite societal and plutocratic pressures, don’t get into it, get out fast and avoid the destructive legal system.

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