March 1:28 Decisions

Thursday, April 26, 2012

Tuch v. Glass
81 Mass.App.Ct. 1125
March 29, 2012

The former husband appealed from the dismissal of his complaint in equity against his former wife, which was filed, essentially, as a result of his loss of assets involved in the Bernard Madoff “Ponzi” scheme.

At the time of the divorce, the parties split “down the middle” mutual assets held in Turbo Investors, LLC, and Turbo Investors, LLC Retirement plan (collectively “Turbo Accounts”); these two companies held investments in Bernard L. Madoff Investment Securities, LLC (BMIS). After the divorce agreement was final, the wife removed her interest from the Turbo Accounts, while the husband left most of his investments with the companies (ultimately losing same).

In his complaint, the husband claimed that there was a mutual mistake in his divorce agreement and the monies divided were essentially “phantom” funds. The Appeals Court disagreed, taking note of the fact that although the Turbo Accounts contained money of new investors, it could not be claimed that the money in the Turbo Accounts did not exist at all such as would be necessary to warrant a reformation of the agreement.  Further, to the extent that it could be argued the accounts did not actually exist, each party received half of the nonexistent accounts, which reflects the intent of both the parties: for each to receive an equal share.  Moreover, the husband failed to assert any facts in his pleading that this situation could be “ascertained” at the time the agreement was made, a requirement of mutual mistake.

The husband further claimed that the wife was unjustly enriched because she removed her funds from the Turbo Accounts and received the benefit of those funds, while he did not. The Court disagreed, holding that both parties had received some value for the funds that were held in the Turbo Accounts, and even if taken as true, and the funds in the Turbo Accounts were part of Madoff's Ponzi scheme, it was not at the husband’s expense that the was potentially unjustly enriched as the money she received was the money of the newest investors, not the husband.

Finally, there was no basis for the husband’s claim for indemnification based on potential “clawback” lawsuits against investors of BMIS as at the time, the husband was facing no suit against him that sought monies received by the wife, thus his claim for indemnification was at best premature, and his only claim was that he could potentially be liable for returning funds in the future.

As such, the motion to dismiss was properly granted by the trial court and the judgment was affirmed.

Ranieri v. McCarron
81 Mass.App.Ct. 11199
March 07, 2012

In this case, the mother appealed from a trial court order finding her in contempt of court for having “willfully neglected and refused to allow the plaintiff visitation with the minor child on May 27, 2010”.

The trial court ordered the father to have parenting time on Thursdays which was to commence by the father picking up the son at counseling.  On the date in question, the father attempted to pick up the son, aged fourteen, from counseling, however the child was hesitant and would not get in the car.  After a short period, the mother ultimately reappeared in her car, and later testified that she had returned as a result of receiving a telephone call from the son while he was at the counselor's office.

The father continued to try to get the son to go for the visit or talk, and tried to include him in a telephone conversation with the father's girlfriend. According to the mother, she waited nearby in her car for about twenty minutes, then asked the son if he wanted her to wait for him. After about twenty to twenty-five minutes more, she asked again. According to the father, the mother said to her son, “Come on, let's go ... [y]ou don't have to talk.... Come on ... we can leave now.” The mother further testified that the current husband called the police, matters degenerated, and there was no further visit between the father and son that evening.

After an evidentiary hearing on the father’s complaint for contempt, which was filed as a result of this incident, the trial court entered an order finding the mother guilty of civil contempt “for having willfully neglected and refused to allow the plaintiff visitation with the minor child on May 27, 2010 by picking up the child after counseling in the parking lot—interfering with the scheduled visit ordered prior thereto.” This order was incorporated into the terms of a judgment, and the judge awarded the father costs and attorney's fees in the amount of $2,193.75.

The Appeals Court held that the mother's return to the parking lot alone did not constitute clear and convincing evidence of a clear and undoubted disobedience of the judge's order, taking note of the fact that a finding of civil contempt requires “a clear and undoubted disobedience of a clear and unequivocal command.” Because the Court could not discern from the record what else the mother did and why she did it, it vacated the judgment of contempt and the order imposing the payment of attorney's fees by the mother.

Mastrocola v. Mastrocola
81 Mass.App.Ct. 1122
March 19, 2012

In this case, the former husband appeals from a judgment of divorce nisi entered by a judge of the Probate and Family Court which, in relevant part, assigned the former wife an interest in the husband's deferred compensation from employment and provided the wife with security in the event the husband died while under an alimony obligation to her.  The Appeals Court vacated so much of the judgment as pertains to the security provision and remand the matter for further proceedings. In all other respects, the judgment was affirmed.

After a marriage of approximately thirty years, the trial court entered a divorce judgment which assigned to each party assets of substantial value and ordered the husband to pay alimony to the wife in the amount of $3,000 a week ($156,000 a year). Alimony was to cease upon the first to occur of the wife's death, the husband's death, or the wife's marriage to another person. The judgment also contained a security provision should the husband die while under an alimony obligation to the wife.

The Appeals Court found no error in the trial court’s order that the husband pay to the wife 32% percent of any gross amount of deferred compensation payments received by him; and that said payments were not to be considered as tax deductible alimony, but rather as a property settlement, where the judge adopted virtually verbatim the husband's proposal.  Further, it was clear that the judge recognized both the nature of the deferred compensation interest as an asset of the marriage that was subject to equitable division and the tax consequences that would result to the husband from the payment of deferred compensation; to impose an additional tax burden on the wife would not result in an equitable treatment.

With respect to the security provision, the judge had noted that while the husband had significant life insurance coverage, he had intentionally made it all (except for a small employer policy) payable to an irrevocable life insurance trust, of which two members of his family (his brothers) are cotrustees.   The trial judge therefore concluded that, “it is equitable to provide for an estate claim for the wife as [the court has] done in [its] judgment”, issuing the following order with respect to security:

“If the husband dies while under an alimony obligation to the wife, she shall have a creditor's claim against the husband's probate and non-probate estate, including his share of property assigned to him under this judgment, to the extent that the trustees of the husband's Irrevocable Insurance Trust do not agree to pay and pay her the net-after-tax equivalent of alimony per year from life insurance payable to the trust during her remaining lifetime and before her[ ] marriage to another person, to a maximum claim of $2,500,000.00.”

The husband challenged the security provision on several grounds, arguing initially that the judge abused his discretion in awarding $2,500,000 of life insurance to secure post-death alimony and noting  that “[t]he general rule in Massachusetts is that an order for the payment of alimony ceases with the death of the party obligated to pay it unless the decree or judgment provides otherwise”, and “to continue the award after the obligor's death would give the obligee a claim on the obligor's accumulated assets rather than on his post-marital earnings.” The husband asserted that that notwithstanding the judge's order that alimony terminate upon his death, the judgment requires him to secure “post-death alimony” and effectively requires him to do so by maintaining life insurance.

The Appeals Court found that although the judgment does not actually order the husband to maintain any life insurance (nor does it order a payout to the wife of $2,500,000 upon the husband's death), the order, by providing the wife with the creditor's claim and by requiring implicitly that the husband's estate remain “active,” runs contrary to the very reasons that ordinarily warrant a termination of alimony.  The Court noted that even were it to assume that there may be circumstances where, although alimony is to terminate upon the support obligor's death, a judge may order as security for alimony that the obligee is to have a creditor's claim against the estate of the obligor, it does not favor such an approach. Rather, the judge should have explored and considered other forms of security for alimony, including, particularly, whether the husband should obtain, if feasible, a separate insurance policy, naming the wife as beneficiary.  This provision of the judgment was therefore remanded.

Varandas v. Varandas
81 Mass.App.Ct. 1121
March 14, 2012

In this case, the former husband appeals from a February 5, 2010, modification judgment increasing his weekly alimony payment from $400 to $500 a week.  The trial court’s decision was affirmed by the Appeals Court.

After twenty-three years of marriage, the parties entered into a separation agreement in 2005 which was incorporated and merged into the divorce judgment of the same date. Said agreement  provided for alimony of $400 a week and child support of $200 a week for two children.  The husband filed a complaint for modification in 2007 which resulted in an April 11, 2008, judgment which incorporated and merged the parties' stipulation reducing the child support for the remaining unemancipated child to $150 a week.

Approximately two weeks later, on April 29, 2008, the husband filed another complaint for modification, seeking to terminate child support. The wife answered and counterclaimed, seeking an increase in her weekly alimony.  After trial, a modification judgment was entered which reduced the husband’s child support obligation to $100 a week and increased his alimony obligation to $500 a week.

The Appeals Court considered the husband's appeal on the limited record before us, discerning that there was nothing that would cause a reversal of the judgment. The trial judge exercised proper discretion in determining that the husband’s testimony regarding the decline in his income was not credible.  Further, the court was not persuaded by the husband’s argument that the “excessive” alimony award constituted an impermissible redistribution of assets, holding that “the award was not excessive” and “on the record before us there is nothing to indicate that the husband would be unable to comply without liquidating all of his assets.”.  Finally, the judge's decision on the proper amount of alimony for the wife was based not just on the husband's failure to seek a decrease in his complaint for modification, but also on his failure to support such a decrease, and the wife's showing that an increase was in order.

Hegarty v. Colen
81 Mass.App.Ct. 1121
March 13, 2012

This case involves a father’s appeal from a judgment, which entered on the mother’s complaints for modification and for contempt, and ordered him to pay child support and toward the college education expenses of the unemancipated children.

Fourteen years after the parties’ divorce, the mother filed a complaint for

Modification seeking child support and that the father contribute to the children's college expenses; she also filed a complaint for contempt, alleging that the father accumulated a substantial child support arrearage.  After hearing, the judge found the father in contempt for failing to pay the court-ordered child support, established the arrears at $7,472.66 and entered a judgment of modification which ordered the father to pay $10,597.99 of the children's college costs and to pay child support for the younger daughter for the January 1, 2009—February 1, 2010 period.

On appeal, the father argued that he was denied the right to legal counsel. The Appeals Court found this argument without as the father expressed his wish to proceed pro se and agreed to have his attorney present solely as a consultant.  The father also challenged the contempt judgment by challenging the mother's testimony that the oldest child was “domiciled” with her during her college years; however the Appeals Court found that the trial judge properly determined the mother’s credibility in concluding that conclude that the child was in college, domiciled with the mother and dependent on her prior to her graduation; therefore, under the terms of the divorce judgment, the father was obligated to pay child support until that time and the finding of contempt against him for his failure to do so was proper.  In reviewing the judge’s ruling on the modification complaint for abuse of discretion, the court found that the judge properly concluded that the youngest child was “domiciled with and dependent on her mother” until February of 2010, concluded that the child’s ongoing mental health issues constituted a material change of circumstance since the time of the divorce, and determined that the provisions of G.L. c. 208, § 28, applied and allowed for imposition of a child support obligation on the father.”  Finally, the judge properly found that because the divorce agreement indicated that the parties generally contemplated college for the children and because the children's college expenses were limited, the father, the mother, and each of the children should pay a third of such expenses.

Talameh v. Talameh
81 Mass.App.Ct. 1119
March 08, 2012

The trial court did not err in issuing a judgment of divorce and and findings of fact, rationale and conclusions of law when after the husband failed to appear at the pre-trial conference or the final pretrial conference when, pursuant to the judge's earlier order, the case went to trial.  Although the husband argued that the court had no personal jurisdiction over him, he waived this claim in the Probate Court when his motion to dismiss was removed from the list at his request and he submitted to the jurisdiction of the court. Thereafter, he filed various pleadings and appeared at several hearings.  As such, his argument is wholly without merit.  Although the husband further challenged both the division of assets and the award of alimony to the wife, he did not appear at trial, nor cause any evidence to be presented on his behalf. On review of the state of the record properly before the court, there was no abuse of discretion or other error of law.

Feeney v. Feeney
81 Mass.App.Ct. 1118
March 02, 2012

This case involved a husband’s appeal from a judgment of contempt and other orders entered by a judge of the Probate and Family Court subsequent to the parties' divorce.  The Appeals Court held that none of the various claims of error advanced by the husband warranted relief and upheld the trial court’s judgment.

The husband filed a complaint for contempt alleging that the wife had violated an order requiring her to pay him fifty percent of income and penalty taxes he incurred as a result of making premature withdrawals from various retirement accounts. In her answer to the complaint, the wife asserted that she was unable to determine the amount that she owed because the husband had failed to produce the relevant tax returns as previously ordered. The wife also filed a counterclaim, alleging that the husband failed to comply with other provisions of the same order and failed to pay child support and attorney's fees as required.

After hearing, the trial court found the wife not guilty of contempt while the husband was found guilty.  A compliance hearing was held some months later, after which the judge issued a second supplemental ordering the wife to pay the husband $3,985.85.

The Appeals Court found that the trial judge did not abuse her discretion by finding the wife not guilty of contempt for failing to pay her share of the taxes because the husband failed to provide her with back tax returns as required by court order, and the husband’s failure to fulfill his court-ordered obligations prevented the wife from being able to comply with the order that she pay him fifty percent of income and penalty taxes.  The Court found no basis for the husband's claim that the judge erred by finding him in contempt as the record clearly shows that the husband had not complied with the order requiring him to pay child support and the wife's attorney's fees.