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Monthly archive February, 2012

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Paternity Judged by New Standard in Child Support Cases – Best Interests – Says Supreme Court

by bvertz on Feb 26, 2012 • Comments Closed • , , , , ,

With a breathtaking sweep of their pens (or keyboards), four Justices of the Pennsylvania Supreme Court last week swept away decades of decisional law concerning paternity by estoppel, ushering a new era of parentage litigation, in KEM v. PCS, No. 67 MAP 2011 (February 21, 2012). The facts were relatively simple and commonplace: a married woman had an affair resulting in the birth of a child, who was four years old when she decided to sue the biological father for child support. Mother and her husband were separated, but neither had initiated a divorce action. The “other man” had occasional contact with the child and provided gifts from time to time. Genetic testing had been performed privately, ruling out the mother’s husband as the child’s father.

The York County trial court considered the labyrinthine intersection of case law concerning the presumption of paternity and paternity by estoppel. These two distinct but related concepts attribute parentage to a man who is not the child’s biological father under circumstances where equity dictates. The presumption of paternity is one of the “strongest presumptions in the law,” which designates the mother’s husband as the legal father of a child who is born to an intact marriage, unless the husband lacked access to the mother or was impotent at the time of conception. Brinkley v. King, 549 Pa. 241, 701 A.2d 176 (1997). Paternity by estoppel is a legal concept that prevents a man who assumes the duties of a child’s father, such as supporting the child financially, from denying his paternity.  Fish v. Behers, 559 A.2d 523, 741 A.2d 721 (1999).

The law surrounding these equitable principles was by no means clear. A vast array of complex fact patterns brought before our Courts resulted in a tangled web of decisions that required careful study to glean the controlling legal concepts. Still, it was reasonably clear that our Courts would not allow genetic testing if the child enjoyed the benefit of a father who was its mother’s husband or acted as the child’s father by supporting the child and being actively involved in the child’s life.

In KEM, the mother of the child appealed the trial court’s decision to dismiss a support action against the mother’s paramour, based on a finding that the child was born to a marriage that was somewhat intact and mother had treated her husband as the child’s father, which precluded her from suing her paramour for child support. (This permutation of the “paternity by estoppel” principle was intended to prevent mothers who enjoyed the benefits of an intact marriage from supplementing their family resources by suing an outsider for financial support.) The Superior Court affirmed the trial court’s decision on the basis of patenity by estoppel but not the presumption of paternity, reasoning that the latter principle would not protect the marriage since everyone knew that the mother’s husband was not the child’s biological father. Thus, in the Supreme Court, the only question certified on appeal was whether the mother was estopped from denying her husband’s paternity.

The majority opinion (5-1-2) was written by Justice Saylor. After an exhaustive review of existing case law and the parties’ legal and policy arguments, Justice Saylor determined that existing case law does not adequately address modern circumstances, such as the prevalent availability of genetic testing and the erosion of social stigma associated with illegitimacy. In place of the traditional criteria, Justice Saylor established a “best interests of the child” standard for judging paternity by estoppel in child support cases. This new standard will require both fathers (the husband and the paramour) to testify in paternity proceedings if possible, consider the relationship of the child to each, and perhaps look at the financial resources of each father and prospects for maintaining relationships with the mother and child. The Court stated that a guardian ad litem can be appointed to advocate the best interests of the child, and genetic testing can be performed to impose the costs of a GAL on the biological father (even if he has no other financial obligation to the child). The Court explicitly acknowledged that its decision “will obviously require development [of jurisdprudence] through multiple cases as different fact patterns arise.” To guide those decisions, the Court advised that presumptions should retain their greatest force in cases where as intact family exists, and in cases where no solid relationship has developed between the child and any putative father, the responsibility for fatherhood should lie with the biological parent. The Supreme Court remanded this case to the York County trial court for a more thorough assessment of the child’s best interests.

In a concurring opinion, Justice Orie Melvin scolded the trial court for not developing a more complete record. She also endorsed the dissenting opinion filed in the Superior Court appeal, wherein then-Judge McCaffery wrote the majority opinion affirming the trial court’s decision. Judge Orie Melvin responded to the dissenting opinion by Justices Baer and McCaffery, arguing that the existing case law is outmoded in light of modern technology and social mores.

Justice Baer wrote a dissenting opinion, in which he did not defend existing case law, but advocated the outright abolition of presumptions. Citing the realities of modern life, Justice Baer wrote that most children born of an affair will eventually learn their true paternity. In those circumstances, the mother and paramour should be precluded from denying the husband’s paternity only if he invokes the doctrine to maintain his status as the child’s legal father.

Reading these opinions, one must wonder what effect the decision will have on a large and growing of body of cases involving families on public assistance, same-sex couples, children born by surrogacy, and other non-traditional family constellations where the child’s “best interests” are especially complex. The Court’s decision converts a child support proceeding into a mini-custody hearing in some respects by focusing on a criteria never before considered in the child support proceedings. Perhaps the Court’s call for legislative action on this topic are overdue.

Cohabitant Cannot Prove Common Law Marriage after Denial of Spousal Support

by bvertz on Feb 25, 2012 • Comments Closed • , , , , ,

A parent who cohabited with her children’s father sued for child support and spousal support in 2007. The parents lived together but never got a marriage license or held a formal marriage ceremony. Nevertheless, the children’s mother considered herself to have a common law marriage to the father. Her request for child support was granted in 2007, but the hearing officer denied her request for spousal support, finding that she was unable to prove a common law marriage. She did not file exceptions or take an appeal at that time.

Four years later, the mother filed a complaint for divorce against the father. The father denied that the parents were married, and asked the court to enter a judgment declaring that they were never married. The trial court agreed with father, holding that the mother lost her opportunity to prove a marriage when she failed to pursue the issue in the 2007 support proceeding. Mother appealed, arguing that she was not precluded from raising the issue again because the support proceeding was not the proper forum to decide the question of common law marriage.

On appeal, the Superior Court affirmed the trial court’s decision in Vignola v. Vignola, 2012 Pa.Super. 26 (2/17/2012). In its opinion, the Superior Court held that a declaratory judgment action was not the exclusive forum for determining common law marriage. Since the mother raised the issue in the 2007 support proceedings, and did not appeal the adverse ruling, she was collaterally estopped from contesting it four years later.

 

Women Unchained: the Struggle to Secure a Jewish Get

by bvertz on Feb 19, 2012 • Comments Closed • , ,

Jewish women of the Orthodox faith may encounter obstacles unknown to most women when divorcing. A new documentary film, Women Unchained (2011), explores the plight of Jewish women to obtain a religious divorce, or “get.” Women whose husbands refuse to grant them a divorce,  known as “agunot” (from the Hebrew word meaning “chained”), cannot remarry in their faith and may be ostracized from their religious communities. Their husbands have learned to exploit their advantage for financial gain or simply vengeance. This problem faces Jewish women not only in Israel, where divorces may be governed by conservative rabbinical courts, but also in the United States and elsewhere. Even husbands who have committed adultery or domestic violence hold the keys to a Jewish religious divorce.

Women Unchained reveals the struggle of Jewish women who exist in limbo after civil divorce, and suggests strategies for overcoming their dilemmas. The film was one of the most-discussed features of last year’s J-Film, the Pittsburgh Jewish Film Festival. Now it’s available for sale from the National Jewish Film Institute (click here). Shot in New York, New Jersey, Chicago, Miami, Los Angeles and Israel, Women Unchained includes illuminating interviews with leading women’s rights advocates, rabbis and experts. The film provides helpful historical background on the state of women’s rights in Judaism and details of “get-o-nomics” and the outlandish extortion schemes levied against some women.

Rental Real Estate Valuation in Divorce

by bvertz on Feb 10, 2012 • Comments Closed • , , , , , ,

Valuation of commercial real estate and rental properties is an issue that arises in high-asset divorce proceedings. Real estate appraisal is sometimes performed within a business valuation, if the business owns real estate. In 2011, the U.S. Tax Court issued an opinion addressing real estate valuation in a case where competing experts offered two different methods. Like most Tax Court cases, this opinion involved an owner who had passed away, leaving property that was subject to death taxes. Still, the principles enunciated in this decision resonate in divorce proceedings.

In Estate of Mitchell, T.C. Memo. 2011-94, the owner of a California cattle ranch and oceanfront property passed away, leaving the real estate to his heirs. The estate’s CPA valued the properties by capitalizing their rental income streams, much as a business is valued. The IRS employed an expert who valued the properties by looking at their value in a sale (comparables) and then deducting the sum that a buyer might have to pay to terminate the lease.

Before jumping to a conclusion, consider the following facts: The oceanfront property was a 2 acre parcel with a 4,000 square foot house in a gated community, guesthouse, and nearly 200 feet of private beach on the Pacific Ocean near Santa Barbara. It was rented to tenants under a 20 year lease for $15,000 per month plus annual COLA.  The ranch was a 4,000 acre parcel in Santa Ynez Valley, one of the largest ranches in California. While it was partially used for cattle grazing, it also hosted CEOs and U.S. Presidents for an annual horse-riding event. It was leased to a family that operated the ranch under a twenty-four year lease for $32,000 per year. The estate valued the properties at $6 million and $2.6 million, compared to the IRS valuations of $13 million and $11 million. Thus, the capitalized rents were far less than what the properties could be sold for, in the opinion of the IRS. The IRS argued that selling the property would bring greater value than continuing to rent them, even if the buyer would have to pay the tenant to terminate the leases.

Still, the Tax Court held that the income capitalization method was appropriate and rejected the IRS method for valuing these rental properties. The Tax Court disagreed with the IRS expert, who testified that the income capitalization method should be limited to commercial properties and not residential leases. In its opinion, the Tax Court relied on prior decisions and an Appraisal Institute publication for its decision to reject the method advocated by the IRS expert. The Court also observed that the properties were leased under long-term leases, and the owner treated them as income-producing properties rather than personal residences. The Tax Court refused to accept the assumption that the tenants would agree to be bought out, and found that the expert’s estimate of the buy-out payment was too speculative. The Tax Court noted that this method had never been adopted in any other published decision.

New Child Support Rule Requires Informed Consent

by bvertz on Feb 2, 2012 • Comments Closed •

The child support guidelines were amended in December 2011, when the Supreme Court Domestic Relations Rules Committee enacted Rule 1910.11(d)(3). The new rule, which is targeted at cases where one or both parties are unrepresented, requires the court to perform a calculation of the child support guidelines even if the parents have an agreement. The Rule was not intended to thwart settlements between parents, but “so that they can enter an agreement knowingly.” By requiring the court to calculate the child support guideline, it is hoped that unrepresented parents will understand better what they are getting or giving up in their settlements.