The Bare Necessities

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Diana James married Jon James in 1974.  During the marriage neither of them was employed and the couple lived off the interest generated by Diana’s trust fund set up by her father, which was over $500,000 a year when Diana left Jon in 1990.

Jon asked for pendente lite alimony (temporary support) in the divorce which included future tuition payments so that he could obtain a PhD in psychology.  He already had a Masters Degree.   The court granted his request and awarded him $8,000 a month in pendente lite alimony for living expense, education and suit money.

The Maryland Court of Special Appeals reversed, saying that future education expenses were not necessary to preserve the status quo of Jon’s lifestyle while the suit was pending.  Therefore, while they could be considered in determining statutory alimony at the divorce trial, they could not be awarded as pendente lite alimony before the trial.

James v. James, 96 Md. App. 439; 625 A.2d 381 (1993)

/by James J. Gross

The Difference Between Statutory and Pendente Lite Alimony

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Time

  • Statutory alimony may be indefinite or rehabilitative or both.  Indefinite alimony means until either spouse dies or the payee remarries.  Rehabilitative alimony means for a fixed period of time.
  • Pendente lite alimony is paid during the legal proceedings until the divorce trial.  Pendente lite alimony is also called temporary alimony.

Purpose

  • The purpose of statutory alimony is to enable a person to become financially able to support theirself.
  • The purpose of pendente lite alimony is to maintain the status quo until trial.

Elements

  • To determine statutory alimony, the court must consider various factors, including fault.
  • To determine pendente lite alimony, the court considers the payee’s needs and the payor’s ability to pay.

When Decided

  • Statutory alimony is decided at the divorce trial.
  • Pendente lite alimony is decided at the Pendente Lite Hearing.
/by James J. Gross

Is Retirement Foreseeable?

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           The Court of Appeals of Virginia answered this question in the negative in Dailey v Dailey, 59 Va. App 734, 722 SE 2d 321, 2012 Va. App LEXIS 57. 

            The parties had an agreement that provided for alimony of $1,000 per month, modifiable upon a material change in circumstance.    The agreement was silent on whether Mr. Dailey’s retirement constituted a material change in circumstances.   The agreement was incorporated in the final decree of divorce entered in September 2009.

            In November 2010, Mr. Dailey retired, Ms. Dailey began receiving her share of the pension as agreed, $2900 per month, and Mr. Dailey moved to terminate or reduce spousal support.  The parties stipulated that the retirement was a material change in circumstances.  Ms. Dailey argued successfully that it did not warrant a termination or reduction of spousal support because while retirement was a material change, it was also one that was entirely foreseeable.  The trial court denied Mr. Dailey’s motion.

            The Court of Appeals agreed that retirement is foreseeable in the sense that most people eventually retire.  The court noted, however, that Mr. Dailey testified that he had no plans to retire at the time of the divorce.  And the Court reasoned that the effect of retirement was not necessarily foreseeable.  It was noted, for example, that the Agreement provided that Ms. Dailey would be paid her share of the retirement if, as and when Mr. Dailey’s pension was paid out, and that this particular pension plan had no survivor benefits if the participant died before retirement.

            The Court of Appeals held termination or reduction of spousal support upon retirement was not barred under the Agreement on the basis that retirement was foreseeable and therefore not a triggering material change in circumstances.  The Court of Appeals sent the case back to the trial court to determine whether or not to terminate or reduce spousal support.

            Does this mean that in the next Virginia case with a pension with a pre-retirement survivor’s benefit, the spousal support payer’s retirement, and its effect, will be foreseeable and therefore not grounds for a termination or reduction of support?   It is not clear.  Does this mean that a support payer with a pension cannot leave this issue open in the marital settlement agreements because of that risk? Probably so.  It is certainly something we will be looking at very carefully, and in appropriate cases,  negotiating what happens when the support payer retires.  This is especially important in a case like this one where, at the time of divorce, the payer had 29 years of creditable service, and he ended up retiring the very next year.

/by Michael Callahan

Debtor’s Prison

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“If your guy doesn’t pay his alimony, we’ll file a motion for contempt and you can tell him we’ll be asking for jail time,” said Sobel, who was representing the ex-wife.  He didn’t like the ex-husband’s attorney, Caster, ever since he had yelled at Sobel and hung up on him in another case years ago.  Sobel had a long memory.

“Come on, Sobel,” Castor said.  “The judge is not going to put my guy in jail.  It’s contractual alimony, not court ordered alimony.”

“Whadya mean, Castor?  The Agreement is incorporated into the Divorce Decree.  That makes it a court order.  And your client has failed to comply with it.”

“Well there is no imprisonment for debt in Maryland.  Check the state constitution, Sobel.”

“You check it, Castor.  I’ve got it right here.  Section 398 of Article III says ‘No person shall be imprisoned for debt, but a valid decree of a court of competent jurisdiction or agreement approved by decree of said court for the support of a wife or dependent children or for alimony shall not constitute a debt within the meaning of this section.’

“Sobel, me and my client will, as they say, see you in court.”

“Tell your client to bring his checkbook or a toothbrush, Castor, for when he goes to the slammer.”

/by James J. Gross

WHEN I GET IT: Country Songs We Wish We’d Written

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WHEN I GET IT

by

Craig Campbell

My ex-wife’s at the door a-knockin’
Lord that woman won’t leave me alone
Same question, where’s my money
Well, honey, you can’t get blood from a stone

When I get it, you get it
Times are tough, get in line and wait
When I get it, you get it
And that’s all you’re gettin’ today, yeah.

/by James J. Gross

Schwarzenegger Says No Alimony

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Arnold Schwarzenegger does not agree that he should have to pay alimony or attorney fees for Maria Shriver according to divorce pleadings filed by his attorney in response to her complaint for divorce.

The pleadings may not make much difference if the couple settles out of court.

Both parties are asking the court for joint custody of their sons, age 17 and 13.  Child support will also have to be addressed in the settlement.

Source:  Bakersfieldnow.com

/by James J. Gross

Alimony and the Use of Guidelines and Calculators

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Various alimony guidelines have been developed around the country.  The American Academy of Matrimonial Lawyers (AAML) has developed a guideline that uses incomes and length of marriage to calculate the starting point for determining alimony.  The Kaufman guidelines, developed by a Michigan divorce attorney and initially published locally by the Montgomery County Commission for Women, use income, length of marriage, education, income potential and child custody to generate a  recommended amount and duration of alimony.  Last year, the Maryland Court of Appeals approved a trial judge’s reference to the AAML alimony guidelines for informational purposes in Boemio v Boemio, 414 Md. 118, 994 A.2d 911 (2010) .

In Virginia, the Fairfax County Circuit Court has by rule adopted guidelines for pendente lite alimony determinations.  It is commonly understood that those guidelines have some influence on final alimony settlements and determinations.

There may someday be statutory alimony guidelines in each state the way there are now statutory child support guidelines but it is not likely to be anytime soon.  The driving force behind the universal adoption of statutory child support guidelines was the federal interest in making child support more predictable and more collectible across state lines.   It does not appear there is any similar overriding federal concern with alimony.  So divorcing spouses and divorce lawyers will continue to settle alimony cases based on all the circumstances with non-statutory guidelines playing an increasingly important role in negotiations.  Those cases that do not settle will be tried before judges who may or may not consider the various guidelines in deciding the cases.

/by Michael Callahan

Two Exceptions for Permanent Alimony

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In the Holston case, the Maryland Court of Special Appeals explained the general rule that alimony is for the purpose of helping a dependent spouse become self supporting so it should be for a limited time and not permanent in most cases.  But there are some circumstances when that may be impractical or unfair.  The exceptions are in Article 16, § 1(c)(1) of the Maryland Code, which provides:

The court may award alimony for an indefinite period when it finds as a fact that:

(i) the party seeking alimony, by reason of age, illness, infirmity, or disability, cannot reasonably be expected to make substantial progress toward becoming self-supporting; or

(ii) Even after the receiving party will have made as much progress toward self-support as can reasonably be expected, the respective standards of living of the two parties will be unconscionably disparate.

The Court of Appeals found from the evidence that the trial court’s award of alimony for three years would have left Mrs. Holston with a standard of living greatly below that enjoyed during the marriage and unconscionably disparate from the standard of living available to Dr. Holston.  Therefore the judges remanded the case to the lower court with instructions to grant Mrs. Holston permanent alimony.

Holston v. Holston, 58 Md. App. 308; 473 A.2d 459 (1984),  Cert. Denied (1984).

/by James J. Gross

Alimony Is Not a Lifetime Pension

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When Eileen Holston appealed her alimony award of $150 a week for three years, the Maryland Court of Special Appeals said that alimony in Maryland used to be for the joint lives of the parties so that the dependent spouse could maintain the same standard of living as when married.  That changed with the enactment of Md.Ann. Code Art. 16, § 1 in 1980, so that the principal function of alimony is now rehabilitation.  The Court said:

“Thus, when awarding alimony, the chancellor is required to consider not only those factors relating to the financial situation, age and health of each party, their standards of living, the duration of marriage and the contribution of each party to its well being but also the ability of the party seeking alimony to be wholly or partially self-supporting and the time deemed necessary for the party seeking alimony to gain sufficient education or training to enable that party to find suitable employment. It is apparent, therefore, that the concept of  alimony as a lifetime pension enabling the financially dependent spouse to maintain an accustomed standard of living has largely been superseded by the concept that the economically dependent spouse should be required to become self-supporting, even though that might result in a reduced standard of living.”

There are some exceptions, however, and I’ll discuss those next week.

/by James J. Gross

The Holston Alimony Case

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When Eileen and Alvan Holston were married in 1967, she was a secretary making $5,000 a year and he was in dental school.  They had five children together.  When they got divorced in 1982, Eileen had not worked for years and Alvin was a dentist and a professor making over $86,000 a year.

The chancellor awarded Eileen alimony for three years at a rate of $ 150 per week in order “to allow her the opportunity to either go back and complete her education, since she did not finish college . . . or to train herself or retrain herself for appropriate work,  because ultimately there is no question she has to provide for herself .”

Eileen appealed, claiming she should have been awarded indefinite alimony.  Let me know how you think this case turned out in the comments section.  Next week, I’ll tell you what happened.

/by James J. Gross