by Michael F. Callahan

In previous blogs, I discussed the differences in property distribution in a divorce in Maryland, Virginia and DC.  Another area where the law of our three local jurisdictions is not the same is allocation of debt in a divorce.

In the District of Columbia and in Virginia, the divorce court has authority to allocate debt between the parties in a divorce case.  D.C. Code Sec. 16-910(b); Va. Code Sec, 20-107.3.E.7, Turonis v Turonis, 2003 Va. App. LEXIS 130.

In Maryland there is no such general authority to allocate marital debt, although the court may consider the debts of the parties along with other economic circumstances in dividing marital property.  MD Code, Family Law Article 8-205(b)(3). Maryland courts can allocate responsibility for debt related to the family home in connection with use and possession orders, Md. Code Sec. 8-208(c), or orders transferring title to the principal residence of the parties.  Md. Code Sec. 8-205(a)(2)(iii).

A divorce settlement agreement is supposed to take care of everything related to the marriage and divorce, past, present and future.  So lawyers usually take great care in drafting them.  They have to peer into the future, predict everything that can go wrong, and select just the right words for clarity in case some judge is trying to figure out what they meant ten years from now.

Which is what the judge has to do in movie star Michael Douglas’s divorce, reports eonline.com.  His ex-wife, Diandra Douglas, has filed suit for 50% of his income from Wall Street 2.

Her $45 million dollar settlement in 2000 has a provision that states she is entitled to half his earnings from any residuals, merchandising or spinoffs of movies made during the marriage.  She claims that Wall Street 2 is a “spinoff”.  He claims that it is a “sequel”.  What a difference one word makes.  How would you rule if you were the judge?

“Break, break for a thousand years, O Sea,
And still you’ll never be as broke as me.” – Anonymous

If you think the Great Recession is tough on you, pity the poor millionaires who can’t afford their divorces.

Elon Musk, co-founder of PayPal and owner of Tesla Motors, says “about four months ago, I ran out of cash.”   His wife wants stock in Tesla, the house, alimony child support and six million dollars.

Tiki Barber, former New York Giant, lost his $300,000 a year contract with NBC in May of this year after he left his pregnant wife of 11 years for a 23 year old intern.  He says his career is in tatters and he cannot afford to pay the settlement amount demanded by his wife.

Sources:

WalletPop.com

FoxNews.com

If you are curious about how the rich and famous settle, TMZ.com has posted the Stipulated Judgment which contains the settlement agreement between Charlie Sheen and Brooke Mueller.  They will have joint legal custody and Brooke will have primary physical custody of their two children.  Charlie will have them on the first, third and fifth weekends of the month from Saturday at 10 AM until Monday at 10 AM.

Charlie will pay Brooke $55,000 a month for child support, plus other expenses, but not less than the child support paid to Denise Richards.

No alimony, but Brooke will get a million dollars for her share of the house, several bank accounts and other assets.  Both agree not to disparage each other in front of the kids.

by Michael F. Callahan

Jean and Joe had been married a long time but they did not spend much time together.  Jean was the high earner and she spent lots of her time on the road for business. The clearest event establishing the separation was Jean’s purchase of a home in Virginia in her own name seven years ago.  Husband lived in Maryland.

Because the date for determining whether property is marital is separation in Virginia and the trial date in Maryland, Jean’s lawyer decided to file the case in Virginia rather than Maryland. Otherwise Jean might have to divide everything she had acquired over the seven year period that the spouses had lived apart and had completely separate finances.

Joe’s lawyer filed an Answer submitting Joe to the Virginia Court’s jurisdiction and never raised the lack of personal jurisdiction.  If Joe’s lawyer had gotten Jean’s Virginia case dismissed for lack of personal jurisdiction and filed Joe’s complaint in Maryland, everything Jean had accumulated during the seven years of separation up to the date of divorce or would have been marital property.  The case settled on favorable terms to Jean.

by Lois R. Finkelstein

This is the second part of my experience as a lawyer hiring a lawyer.  Because I could never get through to my lawyer, I considered not paying his bills.  But Alan sent bills the same way he returned telephone calls, that is infrequently.

I only had a vague idea of what, if anything, I owed Alan.  I received bills in October, November and December.  However, once 2010 rolled around, I stopped receiving bills with any sort of regularity.  I’d walk to the mailbox slowly somewhere around the fifth of every month and heave a sigh whenever I opened the mailbox.  I wondered if this was the day that I’d be receiving a bill which reflected that Alan or someone in his office had actually worked on my case.

No bill in January and no return telephone call from Alan. No bill in February and no return telephone call from Alan.  And no bill or return telephone call from Alan in March, although I did receive a one-line email in March wishing me happy birthday.  Hurray! At least he hadn’t forgotten me completely and perhaps he actually worked on my case.

Finally, I received a bill in April.  The bill started with a carry-forward balance of $3,500.00 indicating that Alan or someone in his office had done some work on my case.  It was work that was not described in the bill and work that I knew nothing about!

As I looked at the detail of this bill more carefully, I saw something that left me flabbergasted.  Alan had billed me a tenth of an hour for e-mailing me birthday wishes!

(To be continued)

Sounds Like Life to Me

( Darryl Worley, Wynn Varble, Phil O’Donnell )

Got a call last night from an old friend’s wife
Said I hate to bother you
Johnny Ray fell off the wagon
He’s been gone all afternoon
I know my buddy so I drove to Skully’s
And found him at the bar
I say hey man, what’s going on
He said I don’t know where to start

Sarah’s old car’s about to fall apart
And the washer quit last week
We had to put momma in the nursing home
And the baby’s cutting teeth
I didn’t get much work this week
And I got bills to pay
I said I know this ain’t what you wanna hear
But it’s what I’m gonna say

(Chorus)
Sounds like life to me it ain’t no fantasy
It’s just a common case of everyday reality
Man I know it’s tough but you gotta suck it up
To hear you talk you’re caught up in some tragedy
It sounds like life to me

I met Hank this morning at the local coffee shop next to the courthouse where all the lawyers go.  He ordered a cherry Danish and I ordered a blueberry muffin.  Hank was worried about a mediation he had that morning.  He represented the wife.

“The husband has a $100,000 pension and $100,000 in marital debt, “ Hank informed me as he blew on his coffee to cool it.  “So he is basically broke.  He’s offering to take over all the marital debt if the wife will let him keep his pension.  I’m thinking that is a fair deal but I wanted to run it by you to see what you think.”

“I have some questions about the marital debt,” I said, unwrapping my muffin.  Whose name is it in and what form is it in and what was it used to buy?”

Hank explained, “the debt is on three credit card accounts in the husband’s name and it was used for marital expenses, like rent, food and so forth.”

“It’s a good thing you represent the wife then,” I said as I sipped my coffee.

“Why?”

“Because someone is going to have to tell the husband the bad news.  Not all debts are marital.  Marital debt in Maryland means a debt directly traceable to the acquisition of marital property.  His credit card debt was used to buy consumables and there is no marital property from which to subtract it. The court can’t change who owes the credit card companies, and so the judge is going to leave that debt in the husband’s name.  And the court can still divide the pension plan because that is marital property to the extent it was earned during the marriage.”

“Wow,” said Hank.  “You’ve just given me some powerful ammunition for my mediation.  For that advice, I’ll pick up the check.  But you leave the tip.”

I couldn’t make up a better story than this news report at the Times of India.  Kevin Halstead, a 50 year old British bus driver, had a divorce that dragged on for two years.  When it was finally settled, he went out and got drunk with a group of his friends.

The next day, he decided he would use his last quid (about a buck fifty) to buy a lottery ticket.   On Sunday when he got up, he checked the morning paper and, you guessed it, he won.  His prize was 1.15 million pounds (that’s $1,773,990).

His wife Helen took the news well.  “We’ve been separated a long time. We are the best of friends. In fact, we get on better now than when we were married,” she said.  “It couldn’t have happened to a nicer bloke. I wish him all the luck in the world – he deserves it.”

Heather Mills got that much in her divorce settlement with Sir Paul McCartney in 2008.

“Most of it’s been given to charity, gone into ethical businesses or paid for a couple of properties for my daughter’s future security,” said Mills in an interview on Shrink Wrap.

DigitalSpy.com reports the money has all been spent.  It only took two years to spend it.  I wonder how long it took McCartney to earn it?