Clients complain about the costs of discovery and experts to value things like pensions, businesses and other assets.  Frequently they waive discovery and valuation and instruct us to skip it altogether.  Steve Linden, who appraises classic automobiles, tells the story of a couple getting divorced and dividing up their martial assets.

The husband had purchased a couple of cars a few years earlier.  One was a beautifully restored 1966 Plymouth Valiant convertible that the wife drove.  The other was a 1970 Plymouth convertible that the husband drove from time to time.

As Linden tells it, “As the divorce proceeded the husband casually suggested that his wife keep the 1966 Plymouth convertible and he keep the 1970 Plymouth convertible. She didn’t see any problem with this and readily agreed. Her attorney however felt that it might be wise to have both cars appraised just to make sure that the value of both cars were similar, even if not exactly the same.”

Linden valued the wife’s care at $15,000.  But the husband’s car turned out to be a very rare and very valuable Hemi Cuda convertible, worth over a million dollars.

by Michael F. Callahan

During their marriage, Mr. Smith’s mother conveyed real estate to her son and his wife, jointly.  In their divorce, we represented Mrs. Smith.  Mr. Smith contended that his mother really intended to give the property to him.  But he told her to make the deed jointly to him and his wife for convenience, so that his wife would not have to go through probate in the event of his death.  The mother was deceased at the time of the trial.

He asked the trial court to give him a monetary award based on his contribution of the real property to the marriage. Contribution to the acquisition of property titled to the parties as tenants by the entirety is a factor that the court must consider in determining whether to make a monetary award. Md. Code, Family Law Article, Sec. 8-205(b)((9).

The trial court ruled the real property was marital and ordered it sold and the proceeds divided equally.  The husband appealed.

The Maryland Court of Special Appeals held that the deed was conclusive evidence that husband’s mother gave the property to both parties.  Therefore the husband’s contribution to acquisition of this property was equal to wife’s, that is zero, and the trial court did not err in declining to grant him a monetary award.  Smith v Smith, 996 A.2d 416; 193 Md.App. 29 (2010).

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.”

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?

A study commissioned by Massachusetts Mutual Life Insurance Company reveals that 60 percent of business owners do not have a plan in place to divorce-proof their companies.   According to PRNewswire.com, the study involved six focus groups and 518 business owners.

“If a company is owned by a couple, a divorce can paralyze the business and create divided allegiances among employees and customers,” said Beth Wood, VP of a Mass Mutual division. “It could also jeopardize a family’s wealth and the owners’ retirements,” she said. “Often, a divorce can force the owners to sell the business, with proceeds being divided by the parties involved.”

“When owners aren’t in business with their spouses, a divorce can still hurt the firm greatly, if an ex-spouse is awarded the business in a divorce settlement, throwing ownership and decision-making into doubt, and distracting employees,” Wood said.

MassMutual suggests the following ways to create a divorce-proof plan for your business:

* Buy-sell agreements that can be triggered by certain events, such as a divorce.
* Prenuptial agreements.
* Postnuptial agreements.
* Trusts.

New York City lawyer, Steven Simkin, paid his ex-wife, Laura Blank, 2.7 million dollars for her half of their investment with Bernard Madoff’s fund as a result of their marital settlement agreement.

When Simkin found out the fund was worthless earlier this year, he sued his ex to get the money back, claiming there was a “mutual mistake of fact” which gave his ex a windfall.

Manhattan Supreme Court Justice Saralee Evans refused to set aside the agreement and dismissed Simkin’s lawsuit.

Read more.

Nelson A. Garcia will present Divorce Legal Seminar in Spanish at the Commission for Women’s Counseling and Career Center in Rockville Maryland on October 13, 2009, from 6:00 to 9:00 pm.  This seminar will help you to learn the different aspects of the process of separation and divorce. You will learn how to choose an attorney, how property is distributed, and how to get a restraining order, in case of domestic violence. How to obtain custody and alimony for your children will also be discussed. At the end of the session, you will have the opportunity to ask questions.  The cost is $30.  Here is the seminar announcement in Spanish.

SUS DERECHOS LEGALES EN EL DIVORCIO:

RESUMEN GENERAL Y TEMAS RELACIONADOS CON LOS HIJOS

Martes, 13 de Octubre, 2009, 6-9 pm

Este seminario, presentado en español, le ayudará a conocer los diferentes aspectos del proceso de separación y divorcio. Se discutirá cómo escoger un abogado, cómo conseguir separación de bienes y la forma de obtener una orden de protección en casos de violencia doméstica. También se discutirá cómo obtener la custodia de sus hijos y asistencia para su manutención. Al cierre de la sesión, habrá oportunidad para preguntas y respuestas.  Costo: $30

Nelson A. García, a family law attorney in the firm of Thyden Gross and Callahan, LLP has volunteered for several years at the Commission for Women as a presenter.  Mr. Garcia also volunteers in free legal clinics at a number of organizations including CASA de Maryland in domestic violence, child custody and divorce matters.  He received his J.D. from Boston College Law School and his B.A. in English and Business co-majors from Florida State University.  He is a member of the Maryland and District of Columbia Bar and is currently Secretary of the Maryland Hispanic Bar Association and a member of its Legislative Committee.

1989:  Steven Spielberg to Amy Irving – $100 million.

1994:  Neil Diamond to Marcia Murphey – $150 million.

2006:  Michael Jordon to Juanita Jordon – $168 million.

2009:  Mel Gibson to Robyn Gibson – possibly $500 million.

As predicted, the New York State Supreme Court has ruled that Dr. Richard Batista, 49, the surgeon who donated a kidney to his wife, Dawnell Bastista, 44, can’t get his kidney back.  As for his claim of damages in the amount of $1.5 million, the court said it was not legal to put a monetary value on a human organ.

“This is a significant decision that clearly finds that human organs are not commodities that can be divided as property in a divorce,” said the wife’s attorney, Douglas Rothkopf.

However the Court did say that Batista’s “sacrifices, magnanimity and devotion” can be taken into account in the case.

Putting a creative spin on the denial of his motion, the husband’s lawyer, Dominic Barbara called the decision a “complete victory” for his client.

Source: Ann Givens at Newsday.Com

James Hresko thought he could prove fraud in his divorce by his ex-wife Marie Heskro.  She told him she had no assets.  They settled their divorce with an agreement that gave her the option of buying him out of the house.  After an uncontested divorce, she exercised her option.  James thought she would have to get a mortgage to buy him out and he was stunned when she paid him $30,000 in cash.

James filed a motion to revise the judgment of divorce claiming that Marie had fraudulently concealed assets.

Thirty days after a divorce is entered in the court records by the clerk, it becomes final and unappealable.  In order to set it aside then, you must show that it was the product of fraud, mistake or irregularity.

But fraud comes in two varieties.  In Maryland, the type of fraud required to reopen a case must be extrinsic fraud and not fraud which is intrinsic to the trial itself.  Think you know how this case turns out?  Stay tuned for more discussion of extrinsic and intrinsic fraud.